FILED PURSUANT TO RULE 424B(3)
FILE NO. 33-78790
CNL AMERICAN PROPERTIES FUND, INC.
Supplement No. 7, dated October 18, 1996
to Prospectus, dated April 26, 1996
This Supplement is part of, and should be read in conjunction with, the
Prospectus dated April 26, 1996. This Supplement replaces all prior Supplements
to the Prospectus. Capitalized terms used in this Supplement have the same
meaning as in the Prospectus unless otherwise stated herein.
Information as to proposed properties for which the Company has
received initial commitments and as to the number and types of Properties
acquired by the Company is presented as of October 3, 1996, and all references
to commitments or Property acquisitions should be read in that context. Proposed
properties for which the Company receives initial commitments, as well as
property acquisitions that occur after October 3, 1996, will be reported in a
subsequent Supplement.
THE OFFERING
As of October 3, 1996, the Company had received aggregate subscription
proceeds of $104,484,211 (10,448,421 Shares) from 5,788 stockholders, including
$391,348 (39,135 Shares) issued pursuant to the Reinvestment Plan. As of October
3, 1996, the Company had invested or committed for investment approximately
$80,000,000 of such proceeds in 83 Properties (including one Property through a
joint venture arrangement which consists of land and building, six Properties
which consist of building only, 33 Properties which consist of land only and 43
Properties which consist of land and building), in providing mortgage financing
to the tenants of the 33 Properties consisting of land only and to pay
Acquisition Fees and Acquisition Expenses, leaving approximately $11,900,000 in
offering proceeds available for investment in Properties and Mortgage Loans. As
of October 3, 1996, the Company had incurred $4,701,789 in Acquisition Fees to
the Advisor.
BUSINESS
PROPERTY ACQUISITIONS
Between April 10, 1996 and October 3, 1996, the Company acquired 35
Properties, including three Properties consisting of building only, 22
Properties consisting of land and building and ten Properties consisting of land
only. The Properties are one TGI Friday's Property (in Hamden, Connecticut),
three Wendy's Properties (one in each of Knoxville and Sevierville, Tennessee,
and Camarillo, California), two Golden Corral Properties (one in each of Port
Richey, Florida, and Brooklyn, Ohio), two Denny's Properties (one in each of
Hillsboro and McKinney, Texas), eight Boston Market Properties (one in each of
Ellisville and Florissant, Missouri; Upland, La Quinta and Merced, California;
Golden Valley, Minnesota; Corvallis, Oregon; and Rockwall, Texas), three Jack in
the Box Properties (one in Humble and two in Houston, Texas), two Arby's
Properties (one in each of Kendallville and Avon, Indiana), two Applebee's
Properties (one in each of Montclair and Salinas, California), one Ryan's Family
Steak House Property (in Spring Hill, Florida), one Burger King Property (in
Chicago, Illinois) and ten Pizza Hut Properties (one in each of Beaver,
Bluefield, Huntington, Hurricane, Milton, Ronceverte, Beckley, Belle and Cross
Lanes, West Virginia, and Marietta, Ohio) (hereinafter referred to as the "Ten
Pizza Hut Properties"). For information regarding the 48 Properties acquired by
the Company prior to April 10, 1996, see the Prospectus dated April 26, 1996.
<PAGE>
The Denny's Property in McKinney, Texas, and the Boston Market Property
in Merced, California, were acquired from an Affiliate of the Company. The
Affiliate had purchased and temporarily held title to these Properties in order
to facilitate the acquisition of the Properties by the Company. The Properties
were acquired by the Company for an aggregate purchase price of $1,536,938,
representing the cost of the Properties to the Affiliate (including carrying
costs) due to the fact that these amounts were less than the Properties'
appraised values.
In connection with the purchase of the TGI Friday's, the Wendy's and
the Golden Corral Properties in Hamden, Connecticut, Sevierville, Tennessee, and
Brooklyn, Ohio, respectively, which are building only, the Company, as lessor,
entered into long-term lease agreements with unaffiliated lessees. The general
terms of the lease agreements are described in the section of the Prospectus
entitled "Business - Description of Property Leases." In connection with the
purchase of the TGI Friday's and the Wendy's Properties, which are to be
constructed, the Company has entered into development and indemnification and
put agreements with the lessees. The general terms of these agreements are
described in the section of the Prospectus entitled "Business - Site Selection
and Acquisition of Properties - Construction and Renovation." In connection with
these acquisitions, the Company has also entered into tri-party agreements with
the lessees and the owners of the land. The tri-party agreements provide that
the ground lessees are responsible for all obligations under the ground leases
and provide certain rights to the Company relating to the maintenance of its
interests in the buildings in the event of a default by the lessees under the
terms of the ground leases. In connection with the purchase of the Golden Corral
Property, the Company has entered into an assignment of an interest in the
ground lease with the lessee and the owner of the land. The assignment provides
that the ground lessee is responsible for all obligations under the ground lease
and provides certain rights to the Company relating to the maintenance of its
interest in the building in the event of a default by the lessee under the terms
of the ground lease.
In connection with the purchase of the Wendy's Properties in Knoxville,
Tennessee, and Camarillo, California, the Golden Corral Property in Port Richey,
Florida, the Denny's Properties, the Boston Market Properties, the Jack in the
Box Properties, the Arby's Properties, the Applebee's Properties, the Ryan's
Family Steak House Property and the Burger King Property, which are land and
building, the Company, as lessor entered into long-term lease agreements with
unaffiliated lessees. The general terms of the lease agreements are described in
the section of the Prospectus entitled "Business - Description of Property
Leases." For the Properties that are to be constructed, the Company has entered
into development and indemnification and put agreements with the lessees. The
general terms of these agreements are described in the section of the Prospectus
entitled "Business - Site Selection and Acquisition of Properties - Construction
and Renovation."
In connection with the acquisition of the Golden Corral Property in
Port Richey, Florida, which is undeveloped land on which a restaurant will be
constructed, the Company will incur a Development/Construction Management Fee
payable to an Affiliate of the Company as an Acquisition Fee, subject to the
approval of a majority of the Board of Directors including a majority of the
Independent Directors. See the sections of the Prospectus entitled "Management
Compensation" and "Business - Site Selection and Acquisition of Properties."
In connection with the Ten Pizza Hut Properties, which are land only,
the Company acquired the land and is leasing these ten parcels to the lessee,
Castle Hill Holdings VI, L.L.C. ("Castle Hill"), pursuant to a master lease
agreement (the "Master Lease Agreement"). Castle Hill has subleased the Ten
Pizza Hut Properties to one of its affiliates, Midland Food Services L.L.C.,
which is the operator of the restaurants. The general terms of the Master Lease
Agreement are similar to those described in the section of the Prospectus
entitled "Business - Description of Property Leases." If the lessee does not
exercise its option to purchase the Properties upon termination of the Master
Lease Agreement, the sublessee and lessee will surrender possession of the
Properties to the Company, together with any improvements on such Properties.
The lessee owns the buildings located on the Ten Pizza Hut Properties. In
connection with the acquisition of the Ten Pizza Hut Properties, the Company
provided mortgage financing of $3,888,000 to the lessee pursuant to a Mortgage
Loan evidenced by a master mortgage note (the "Master Mortgage Note") which is
collateralized by the building improvements on the Ten Pizza Hut Properties. The
Master Mortgage Note bears interest at a rate of 10.75% per annum and principal
and interest are due in equal monthly installments over 20 years starting July
1, 1996.
- 2 -
<PAGE>
The Master Mortgage Note equals approximately 85 percent of the appraised value
of the related buildings. Management believes that, due to the fact that the
Company owns the underlying land relating to the Ten Pizza Hut Properties and
due to other underwriting criteria, the Company has sufficient collateral for
the Master Mortgage Note.
As of October 3, 1996, the Company had initial commitments to acquire
seven properties, including four properties which consist of land and building,
one property which consists of building only and two properties which consist of
land only. The acquisition of each of these properties is subject to the
fulfillment of certain conditions, including, but not limited to, a satisfactory
environmental survey and property appraisal. There can be no assurance that any
or all of the conditions will be satisfied or, if satisfied, that one or more of
these properties will be acquired by the Company. If acquired, the leases of all
seven of these properties are expected to be entered into on substantially the
same terms described in the section of the Prospectus entitled "Business -
Description of Property Leases," except as described below.
In connection with the Wendy's property in San Diego, California, the
Company anticipates owning only the building and not the underlying land.
However, the Company anticipates entering into a tri-party agreement with the
lessee and the landlord of the land in order to provide the Company with certain
rights with respect to the land on which the building is located.
In connection with the two Pizza Hut properties, the Company
anticipates acquiring the land and leasing it to the tenant, Castle Hill,
pursuant to a master lease agreement for these two properties. The tenant is
expected to own the buildings for these two Pizza Hut properties. In connection
therewith, the Company anticipates providing mortgage financing to the tenant
which will be collateralized by the building improvements. If the mortgage note
is executed, it is expected to be executed under substantially the same terms
described in the section of the Prospectus entitled "Business - Mortgage Loans."
Set forth below are summarized terms expected to apply to the leases
for each of the properties. More detailed information relating to a property and
its related lease will be provided at such time, if any, as the property is
acquired.
-3-
<PAGE>
<TABLE>
<CAPTION>
Lease Term and
Property Renewal Options Minimum Annual Rent
<S> <C>
Boston Market 15 years; five five-year renewal 10.38% of Total Cost (1);
Atlanta, GA options increases by 10% after the
Restaurant to be constructed fifth lease year and after
every five years thereafter
during the lease term
Burger King 20 years; two five-year renewal 11% of Total Cost (1)
Chattanooga, TN options
Restaurant to be constructed
Jack in the Box 18 years; four five-year renewal 10.75% of Total Cost (1);
Humble, TX options increases by 8% after the fifth
Restaurant to be constructed lease year and by 10% after
every five years thereafter
during the lease term
Shoney's 20 years; two five-year renewal 11.75% of Total Cost (1);
Fort Myers, FL options increases by 10% after the
Restaurant to be constructed fifth lease year and after
every five years thereafter
during the lease term
Wendy's (2) 15 years; three five-year renewal 13.26% of Total Cost (1);
San Diego, CA options increases by 8% after the fifth
Restaurant to be constructed lease year and after every five
years thereafter during the
lease term
Pizza Hut (5)(6) 20 years; two ten-year renewal 11% of the Company's total cost
Bowling Green, OH options to purchase the land; increases
Land only by 10% after the fifth and
tenth lease years and 12% after
the fifteenth lease year (7)
Pizza Hut (5)(6) 20 years; two ten-year renewal 11% of the Company's total cost
Toledo, OH options to purchase the land; increases
Land only by 10% after the fifth and
tenth lease years and 12% after
the fifteenth lease year (7)
<CAPTION>
Property Percentage Rent Option to Purchase
<S> <C>
Boston Market for each lease year after the at any time after the fifth
Atlanta, GA fifth lease year, (i) 5% of lease year
Restaurant to be constructed annual gross sales minus (ii)
the minimum annual rent for
such lease year
Burger King for each lease year, (i) 8.5% None
Chattanooga, TN of annual gross sales minus
Restaurant to be constructed (ii) the minimum annual rent
for such lease year
Jack in the Box for each lease year, (i) 5% at any time after the
Humble, TX of annual gross sales minus seventh lease year
Restaurant to be constructed (ii) the minimum annual rent
for such lease year
Shoney's for each lease year, (i) 6% at any time after the
Fort Myers, FL of annual gross sales minus seventh lease year
Restaurant to be constructed (ii) the minimum annual rent
for such lease year
Wendy's (2) for each lease year, (i) 6% upon the expiration of the
San Diego, CA of annual gross sales times initial term of the lease
Restaurant to be constructed the Building Overage and during any renewal
Multiplier (4) minus (ii) the period thereafter (3)
minimum annual rent for such
lease year
Pizza Hut (5)(6) None at any time after the
Bowling Green, OH seventh year
Land only
Pizza Hut (5)(6) None at any time after the
Toledo, OH seventh year
Land only
</TABLE>
<PAGE>
FOOTNOTES:
(1) The "Total Cost" is equal to the sum of (i) the purchase price of the
property, (ii) closing costs, and (iii) actual development costs
incurred under the development agreement.
(2) The Company anticipates owning the building only for this property. The
Company will not own the underlying land; although, the Company
anticipates entering into a tri-party agreement with the lessee and the
landlord of the land in order to provide the Company with certain
rights with respect to the land on which the building is located.
(3) In the event that the aggregate amount of percentage rent paid by the
lessee to the Company over the term of the lease shall equal or exceed
15% of the purchase price paid by the Company, then the option purchase
price shall equal one dollar. In the event that the aggregate
percentage rent paid shall be less than 15% of the purchase price paid
by the Company, then the option purchase price shall equal the
difference of 15% of the purchase price, less the aggregate percentage
rent paid to the landlord by the lessee under the lease.
(4) The "Building Overage Multiplier" is calculated as follows:
Building Overage Multiplier = (purchase price of the
building)/[purchase price of the building + (annual rent due
under the land lease/land lease cap rate)]
(5) The lease relating to this property is a land lease only. The Company
anticipates entering into a master mortgage note receivable
collateralized by the Bowling Green and Toledo, Ohio building
improvements.
(6) The Company anticipates entering into a master lease agreement for the
Bowling Green and Toledo, Ohio properties.
(7) If the lessee exercises one or both of its renewal options, minimum
annual rent will increase by 12% after the expiration of the original
lease term and after five years thereafter during any subsequent lease
term.
- 5 -
<PAGE>
The following table sets forth the location of the 35 Properties
acquired by the Company, including the Ten Pizza Hut Properties in which the
Company acquired the land only, 22 Properties in which the Company acquired the
land and building and the three Properties in which the Company acquired the
building only, from April 10, 1996 through October 3, 1996, a description of the
competition, and a summary of the principal terms of the acquisition and lease
of each Property.
- 6 -
<PAGE>
PROPERTY ACQUISITIONS
From April 10, 1996 through October 3, 1996
<TABLE>
<CAPTION> Lease Expira-
Purchase Date tion and
Property Location and Competition Price (1) Acquired Renewal Options
<S> <C>
TGI Friday's (3) 04/24/96 09/2008; no
(the "Hamden Property") (3) renewal options
Restaurant to be constructed
The Hamden Property is located at the
southeast quadrant of Skiff Street and
Route 10 in Hamden, New Haven County,
Connecticut, in an area of mixed retail,
commercial, and residential development.
Other fast-food and family-style
restaurants located in proximity to the
Hamden Property include a China Buffet, a
Chili's, a Red Lobster, a McDonald's, a
Wendy's, and several local restaurants.
Wendy's (14) $322,292 05/08/96 05/2016; two
(the "Knoxville Property") (excluding five-year renewal
Restaurant to be constructed closing and options
development
The Knoxville Property is located on the costs) (3)
north side of Western Avenue in Knoxville,
Knox County, Tennessee, in an area of
mixed retail, commercial, and residential
development. Other fast-food and family-
style restaurants located in proximity to
the Knoxville Property include a KFC, a
McDonald's, a Taco Bell, a Kenny Rogers
Roasters, a Long John Silver's, a Krystal,
a Hardee's, a Shoney's, and several local
restaurants.
</TABLE>
<TABLE>
<CAPTION>
Minimum Option
Property Location and Competition Annual Rent (2) Percentage Rent To Purchase
<S> <C>
TGI Friday's 15.043% of Total Cost (4); None at any time
(the "Hamden Property") increases by 10% after the after the
Restaurant to be constructed fifth lease year and after third lease
every five years thereafter year (5)
The Hamden Property is located at the during the lease term
southeast quadrant of Skiff Street and
Route 10 in Hamden, New Haven County,
Connecticut, in an area of mixed retail,
commercial, and residential development.
Other fast-food and family-style
restaurants located in proximity to the
Hamden Property include a China Buffet, a
Chili's, a Red Lobster, a McDonald's, a
Wendy's, and several local restaurants.
Wendy's (14) 10.25% of Total Cost; increases for each lease at any time
(the "Knoxville Property") to 10.76% of Total Cost during year, (i) 6% of after the
Restaurant to be constructed the fourth through sixth lease annual gross seventh lease
years, increases to 11.95% of sales minus (ii) year
The Knoxville Property is located on the Total Cost during the seventh the minimum
north side of Western Avenue in Knoxville, through tenth lease years, annual rent for
Knox County, Tennessee, in an area of increases to 12.70% of Total such lease year
mixed retail, commercial, and residential Cost during the eleventh
development. Other fast-food and family- through fifteenth lease years
style restaurants located in proximity to and increases to 13.97% of
the Knoxville Property include a KFC, a Total Cost during the sixteenth
McDonald's, a Taco Bell, a Kenny Rogers through twentieth lease years
Roasters, a Long John Silver's, a Krystal, (4)
a Hardee's, a Shoney's, and several local
restaurants.
</TABLE>
-11-
<PAGE>
<TABLE>
<CAPTION> Lease Expira-
Purchase Date tion and
Property Location and Competition Price (1) Acquired Renewal Options
<S> <C>
Golden Corral $586,687 05/08/96 10/2011; two
(the "Port Richey Property") (excluding five-year renewal
Restaurant to be constructed closing and options
development
The Port Richey Property is located on the costs) (3)
southeast quadrant of the intersection of
U.S. 19 and Stone Road, Port Richey, Pasco
County, Florida, in an area of mixed
retail, commercial, and residential
development. Other fast-food and family-
style restaurants located in proximity to
the Port Richey Property include a Boston
Market, a Morrison's, a Burger King, a
Checkers, a Bob Evans, a Wendy's, a KFC, a
Chili's, and several local restaurants.
Ten Pizza Hut Properties - Land only - $1,512,000 05/17/96 05/2016; two ten-
(8)(10) located in Beaver, West Virginia (excluding year renewal
(the "Beaver Property"), Bluefield, West closing options
Virginia (the "Bluefield Property"), costs)
Huntington, West Virginia (the"Hunting-
ton Property"), Hurricane, West Virginia
(the "Hurricane Property"), Milton, West
Virginia (the "Milton Property"),
Ronceverte, West Virginia (the "Ronceverte
Property"), Beckley, West Virginia (the
"Beckley Property"), Belle, West Virginia
(the "Belle Property"), Cross Lanes, West
Virginia (the "Cross Lanes Property") and
Marietta, Ohio (the "Marietta Property").
<CAPTION>
Minimum Option
Property Location and Competition Annual Rent (2) Percentage Rent To Purchase
<S> <C>
Golden Corral 11.25% of Total Cost (4); for each lease during the
(the "Port Richey Property") increases by 8% after the fifth year, commencing eighth and
Restaurant to be constructed lease year and after every five in the second ninth lease
years thereafter during the lease year (i) 5% years only
The Port Richey Property is located on the lease term of annual gross (7)
southeast quadrant of the intersection of sales minus (ii)
U.S. 19 and Stone Road, Port Richey, Pasco the minimum
County, Florida, in an area of mixed annual rent for
retail, commercial, and residential such lease year
development. Other fast-food and family- (6)
style restaurants located in proximity to
the Port Richey Property include a Boston
Market, a Morrison's, a Burger King, a
Checkers, a Bob Evans, a Wendy's, a KFC, a
Chili's, and several local restaurants.
Ten Pizza Hut Properties - Land only - $166,320; increases by 10% None at any time
(8)(10) located in Beaver, West Virginia after the fifth and tenth lease after the
(the "Beaver Property"), Bluefield, West years and 12% after the seventh lease
Virginia (the "Bluefield Property"), fifteenth lease year (9) year
Huntington, West Virginia (the"Hunting-
ton Property"), Hurricane, West Virginia
(the "Hurricane Property"), Milton, West
Virginia (the "Milton Property"),
Ronceverte, West Virginia (the "Ronceverte
Property"), Beckley, West Virginia (the
"Beckley Property"), Belle, West Virginia
(the "Belle Property"), Cross Lanes, West
Virginia (the "Cross Lanes Property") and
Marietta, Ohio (the "Marietta Property").
- 12 -
<PAGE>
<CAPTION> Lease Expira-
Purchase Date tion and Minimum Option
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
<S> <C>
The Beaver Property is located on the
north side of U.S. Route 19 in Beaver,
Raleigh County, West Virginia, in an area
of mixed retail, commercial, and
residential development. Other fast-food
and family-style restaurants located in
proximity to the Beaver Property include a
McDonald's, a Hardee's, a Wendy's, and a
Long John Silver's.
The Bluefield Property is located on the
north side of Bluefield Avenue in
Bluefield, Mercer County, West Virginia,
in an area of mixed retail, commercial,
and residential development. Other fast-
food and family-style restaurants located
in proximity to the Bluefield Property
include a McDonald's, a Hardee's, a
Captain D's, and a Shoney's. (11)
The Huntington Property is located on the
south side of Madison Avenue in
Huntington, Cabell County, West Virginia,
in an area of mixed retail, commercial,
and residential development. Other fast-
food and family-style restaurants located
in proximity to the Huntington Property
include an Arby's, three Burger Kings, a
Chi Chi's, two Dairy Queens, a Hardee's, a
KFC, a Long John Silver's, two McDonald's,
a Papa John's, a Rax, a Red Lobster, a
Steak & Ale, a Taco Bell, and several
local restaurants.
- 13 -
<PAGE>
<CAPTION>
Lease Expira-
Purchase Date tion and Minimum Option
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
<S> <C>
The Hurricane Property is located on the
southwest side of Hurricane Creek Road in
Hurricane, Putnam County, West Virginia,
in an area of mixed retail, commercial,
and residential development. Other fast-
food and family-style restaurants located
in proximity to the Hurricane Property
include a McDonald's, a Subway Sandwich
Shop, and several local restaurants. (11)
The Milton Property is located on the
northeast corner of East Main Street and
Brickyard Avenue in Milton, Cabell County,
West Virginia, in an area of mixed retail,
commercial, and residential development.
Other fast-food and family-style
restaurants located in proximity to the
Milton Property include a McDonald's, a
Subway Sandwich Shop, a Dairy Queen, and
several local restaurants.
The Ronceverte Property is located on the
north side of Seneca Trail in Ronceverte,
Greenbrier County, West Virginia, in an
area of mixed retail, commercial, and
residential development. Other fast-food
and family-style restaurants located in
proximity to the Ronceverte Property
include a KFC, a Long John Silver's, a
Subway Sandwich Shop, and several local
restaurants.
- 14 -
<PAGE>
<CAPTION>
Lease Expira-
Purchase Date tion and Minimum Option
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
<S> <C>
The Beckley Property is located on the
north side of Harper Road in Beckley,
Raleigh County, West Virginia, in an area
of mixed retail, commercial, and
residential development. Other fast-food
and family-style restaurants located in
proximity to the Beckley Property include
a McDonald's, a Long John Silver's, a
Wendy's, a Shoney's, a Bob Evans, a Subway
Sandwich Shop, a Hardee's, and several
local restaurants.
The Belle Property is located on the
southwest side of Dupont Avenue in Belle,
Kanawha County, West Virginia, in an area
of mixed retail, commercial, and
residential development. Other fast-food
and family-style restaurants located in
proximity to the Belle Property include
several local restaurants.
The Cross Lanes Property is located on the
northwest side of Goff Mountain Road in
Cross Lanes, Kanawha County, West
Virginia, in an area of mixed retail,
commercial, and residential development.
Other fast-food and family-style
restaurants located in proximity to the
Cross Lanes Property include a Hardee's, a
Papa John's, a Captain D's, a McDonald's,
a Taco Bell, a Bob Evans, a Wendy's, a
Shoney's a KFC, and several local
restaurants.
- 15 -
<PAGE>
<CAPTION> Lease Expira-
Purchase Date tion and
Property Location and Competition Price (1) Acquired Renewal Options
<S> <C>
The Marietta Property is located on the
east side of Acme Street in Marietta,
Washington County, Ohio, in an area of
mixed retail, commercial, and residential
development. Other fast-food and family-
style restaurants located in proximity to
the Marietta Property include a Burger
King, a Captain D's, a Dairy Queen, an
Elby's Big Boy, a KFC, a Long John
Silver's, a McDonald's, a Papa John's, a
Subway Sandwich Shop, a Taco Bell, a
Wendy's, and several local restaurants.
(11)
Denny's (17) $367,672 06/05/96 06/2016; two
(the "Hillsboro Property") (excluding five-year renewal
Restaurant to be constructed closing and options
development
The Hillsboro Property is located on the costs) (3)
south side of Highway 22 in Hillsboro,
Hill County, Texas, in an area of mixed
retail, commercial, and residential
development. Other fast-food and family-
style restaurants located in proximity to
the Hillsboro Property include a
McDonald's, an Arby's, a Whataburger, a
KFC, a Golden Corral, and a Grandy's.
<CAPTION>
Minimum Option
Property Location and Competition Annual Rent (2) Percentage Rent To Purchase
<S> <C>
Denny's (17) 10.625% of Total Cost (4); for each lease during the
(the "Hillsboro Property") increases by 11% after the year, (i) 5% of eighth,
Restaurant to be constructed fifth lease year and after annual gross tenth, and
every five years thereafter sales minus (ii) twelfth lease
The Hillsboro Property is located on the during the lease term the minimum years only
south side of Highway 22 in Hillsboro, annual rent for
Hill County, Texas, in an area of mixed such lease year
retail, commercial, and residential
development. Other fast-food and family-
style restaurants located in proximity to
the Hillsboro Property include a
McDonald's, an Arby's, a Whataburger, a
KFC, a Golden Corral, and a Grandy's.
- 16 -
<PAGE>
<CAPTION> Lease Expira-
Purchase Date tion and
Property Location and Competition Price (1) Acquired Renewal Options
<S> <C>
Denny's (17) $977,256 06/05/96 12/2015; two
(the "McKinney Property") (excluding five-year renewal
Existing restaurant closing options
costs)
The McKinney Property is located at the
southwest quadrant of the intersection of
White Avenue and U.S. 75 in McKinney,
Collin County, Texas, in an area of mixed
retail, commercial, and residential
development. Other fast-food and family-
style restaurants located in proximity to
the McKinney Property include an
Applebee's, an Arby's, a Boston Market, a
Jack in the Box, a Chili's, a Dairy Queen,
an IHOP, a Golden Corral, a Pizza Hut, and
several local restaurants.
Wendy's (14) $586,143 06/05/96 06/2016; two
(the "Camarillo Property") (excluding five-year renewal
Restaurant to be constructed closing and options
development
The Camarillo Property is located at the costs) (3)
southwest quadrant of Las Posas Road and
the Ventura Freeway in Camarillo, Ventura
County, California, in an area of mixed
retail, commercial, and residential
development. Other fast-food and family-
style restaurants located in proximity to
the Camarillo Property include an
Applebee's, a Del Taco, a McDonald's, and
several local restaurants.
<CAPTION>
Minimum Option
Property Location and Competition Annual Rent (2) Percentage Rent To Purchase
<S> <C>
Denny's (17) $104,013; increases by 11% for each lease during the
(the "McKinney Property") after the fifth lease year and year, (i) 5% of eighth,
Existing restaurant after every five years annual gross tenth, and
thereafter during the lease sales minus (ii) twelfth lease
The McKinney Property is located at the term the minimum years only
southwest quadrant of the intersection of annual rent for
White Avenue and U.S. 75 in McKinney, such lease year
Collin County, Texas, in an area of mixed (6)
retail, commercial, and residential
development. Other fast-food and family-
style restaurants located in proximity to
the McKinney Property include an
Applebee's, an Arby's, a Boston Market, a
Jack in the Box, a Chili's, a Dairy Queen,
an IHOP, a Golden Corral, a Pizza Hut, and
several local restaurants.
Wendy's (14) 10.25% of Total Cost; increases for each lease at any time
(the "Camarillo Property") to 10.76% of Total Cost during year, (i) 6% of after the
Restaurant to be constructed the fourth through sixth lease annual gross seventh lease
years, increases to 11.95% of sales minus (ii) year
The Camarillo Property is located at the Total Cost during the seventh the minimum
southwest quadrant of Las Posas Road and through tenth lease years, annual rent for
the Ventura Freeway in Camarillo, Ventura increases to 12.70% of Total such lease year
County, California, in an area of mixed Cost during the eleventh
retail, commercial, and residential through fifteenth lease years
development. Other fast-food and family- and increases to 13.97% of
style restaurants located in proximity to Total Cost during the sixteenth
the Camarillo Property include an through twentieth lease years
Applebee's, a Del Taco, a McDonald's, and (4)
several local restaurants.
<PAGE>
<CAPTION> Lease Expira-
Purchase Date tion and
Property Location and Competition Price (1) Acquired Renewal Options
<S> <C>
Wendy's (14) $66,153 06/05/96 05/2015; two
(the "Sevierville Property") (excluding (3) five-year renewal
Restaurant to be constructed closing and options followed
development by one fifteen-
The Sevierville Property is located on the costs) (3) year renewal
west side of Highway 441 in Sevierville, option
Sevier County, Tennessee, in an area of
mixed retail, commercial, and residential
development. Other fast-food and family-
style restaurants located in proximity to
the Sevierville Property include a Damon's
Ribs, an IHOP, a Ruby Tuesday's, and
several local restaurants.
Boston Market (15) $408,879 06/18/96 06/2011; five
(the "Ellisville Property") (excluding five-year renewal
Restaurant to be constructed closing and options
development
The Ellisville Property is located on the costs) (3)
north side of Manchester Road, in
Ellisville, St. Louis County, Missouri,
in an area of mixed retail, commercial,
and residential development. Other fast-
food and family-style restaurants located
in proximity to the Ellisville Property
include a KFC, a Burger King, a Ponderosa,
a Taco Bell, a McDonald's, a Long John
Silver's, a Pizza Hut, a Hardee's, a Steak
and Shake, a Red Lobster, and several
local restaurants.
<CAPTION>
Minimum Option
Property Location and Competition Annual Rent (2) Percentage Rent To Purchase
<S> <C>
Wendy's (14) 12.204% of Total Cost (4); for each lease upon the
(the "Sevierville Property") increases by 8% after the fifth year, (i) 6% of expiration of
Restaurant to be constructed lease year and after every five annual gross the initial
years thereafter during the sales times the term of the
The Sevierville Property is located on the lease term Building Overage lease and
west side of Highway 441 in Sevierville, Multiplier (12) during any
Sevier County, Tennessee, in an area of minus (ii) the renewal
mixed retail, commercial, and residential minimum annual period
development. Other fast-food and family- rent for such thereafter
style restaurants located in proximity to lease year (13)
the Sevierville Property include a Damon's
Ribs, an IHOP, a Ruby Tuesday's, and
several local restaurants.
Boston Market (15) 10.40% of Total Cost (4); for each lease at any time
(the "Ellisville Property") increases by 10% after the year after the after the
Restaurant to be constructed fifth lease year and after fifth lease year, fifth lease
every five years thereafter (i) 5% of annual year
The Ellisville Property is located on the during the lease term gross sales minus
north side of Manchester Road, in (ii) the minimum
Ellisville, St. Louis County, Missouri, annual rent for
in an area of mixed retail, commercial, such lease year
and residential development. Other fast-
food and family-style restaurants located
in proximity to the Ellisville Property
include a KFC, a Burger King, a Ponderosa,
a Taco Bell, a McDonald's, a Long John
Silver's, a Pizza Hut, a Hardee's, a Steak
and Shake, a Red Lobster, and several
local restaurants.
-18-
<PAGE>
<CAPTION>
Lease Expirat-
Purchase Date tion and
Property Location and Competition Price (1) Acquired Renewal Options
<S> <C>
Boston Market (15) $603,386 06/19/96 06/2011; five
(the "Golden Valley Property") Restaurant (excluding five-year renewal
to be constructed closing and options
development
The Golden Valley Property is located on costs) (3)
the north side of Highway 55 at Rhode
Island Avenue in Golden Valley, Hennepin
County, Minnesota, in an area of mixed
retail, commercial, and residential
development. Other fast-food and family-
style restaurants located in proximity to
the Golden Valley Property include a
McDonald's, a Perkins, and several local
restaurants.
Jack in the Box (16) $396,646 06/19/96 06/2014; four
(the "Humble #1 Property") (excluding five-year renewal
Restaurant to be constructed closing and options
development
The Humble #1 Property is located at the costs) (3)
north side of FM 1960 East in Humble,
Harris County, Texas, in an area of mixed
retail, commercial, and residential
development. Other fast-food and family-
style restaurants located in proximity to
the Humble Property include a KFC, a
McDonald's, a Taco Bell, a Wendy's, and a
Burger King.
<CAPTION>
Minimum Option
Property Location and Competition Annual Rent (2) Percentage Rent To Purchase
<S> <C>
Boston Market (15) 10.40% of Total Cost (4); for each lease at any time
(the "Golden Valley Property") Restaurant increases by 10% after the year after the after the
to be constructed fifth lease year and after fifth lease year, fifth lease
every five years thereafter (i) 5% of annual year
The Golden Valley Property is located on during the lease term gross sales minus
the north side of Highway 55 at Rhode (ii) the minimum
Island Avenue in Golden Valley, Hennepin annual rent for
County, Minnesota, in an area of mixed such lease year
retail, commercial, and residential
development. Other fast-food and family-
style restaurants located in proximity to
the Golden Valley Property include a
McDonald's, a Perkins, and several local
restaurants.
Jack in the Box (16) 10.75% of Total Cost (4); for each lease at any time
(the "Humble #1 Property") increases by 8% after the fifth year, (i) 5% of after the
Restaurant to be constructed lease year and by 10% after annual gross seventh lease
every five years thereafter sales minus (ii) year
The Humble #1 Property is located at the during the lease term the minimum
north side of FM 1960 East in Humble, annual rent for
Harris County, Texas, in an area of mixed such lease year
retail, commercial, and residential (6)
development. Other fast-food and family-
style restaurants located in proximity to
the Humble Property include a KFC, a
McDonald's, a Taco Bell, a Wendy's, and a
Burger King.
- 19 -
<PAGE>
<CAPTION>
Lease Expira-
Purchase Date tion and
Property Location and Competition Price (1) Acquired Renewal Options
<S> <C>
Boston Market $350,358 07/09/96 07/2011; five
(the "Corvallis Property") (excluding five-year renewal
Restaurant to be constructed closing and options
development
costs) (3)
The Corvallis Property is located at the
southeast quadrant of the intersection of
Highway 99 and Northeast Circle Boulevard
in Corvallis, Benton County, Oregon, in an
area of mixed retail, commercial, and
residential development. Other fast-food
and family-style restaurants located in
proximity to the Corvallis Property
include a KFC, a Wendy's, a Subway
Sandwich Shop, a Sizzler, a McDonald's, a
Burger King, a Taco Bell, and several
local restaurants.
Jack in the Box (16) $343,160 07/09/96 07/2014; four
(the "Houston #1 Property") (excluding five-year renewal
Restaurant to be constructed closing and options
development
The Houston #1 Property is located on the costs) (3)
east side of Veterans Memorial Drive with
an access easement on Beltway 8 in
Houston, Harris County, Texas, in an area
of mixed retail, commercial, and
residential development. Other fast-food
and family-style restaurants located in
proximity to the Houston #1 Property
include a Whataburger, an Arby's, a KFC, a
Burger King, and several local
restaurants.
<CAPTION>
Minimum Option
Property Location and Competition Annual Rent (2) Percentage Rent To Purchase
<S> <C>
Boston Market 10.38% of Total Cost (4); for each lease at any time
(the "Corvallis Property") increases by 10% after the year after the after the
Restaurant to be constructed fifth lease year and after fifth lease year, fifth lease
every five years thereafter (i) 5% of annual year
during the lease term gross sales minus
The Corvallis Property is located at the (ii) the minimum
southeast quadrant of the intersection of annual rent for
Highway 99 and Northeast Circle Boulevard such lease year
in Corvallis, Benton County, Oregon, in an
area of mixed retail, commercial, and
residential development. Other fast-food
and family-style restaurants located in
proximity to the Corvallis Property
include a KFC, a Wendy's, a Subway
Sandwich Shop, a Sizzler, a McDonald's, a
Burger King, a Taco Bell, and several
local restaurants.
Jack in the Box (16) 10.75% of Total Cost (4); for each lease at any time
(the "Houston #1 Property") increases by 8% after the fifth year, (i) 5% of after the
Restaurant to be constructed lease year and by 10% after annual gross seventh lease
every five years thereafter sales minus (ii) year
The Houston #1 Property is located on the during the lease term the minimum
east side of Veterans Memorial Drive with annual rent for
an access easement on Beltway 8 in such lease year
Houston, Harris County, Texas, in an area (6)
of mixed retail, commercial, and
residential development. Other fast-food
and family-style restaurants located in
proximity to the Houston #1 Property
include a Whataburger, an Arby's, a KFC, a
Burger King, and several local
restaurants.
- 20 -
<PAGE>
<CAPTION>
Lease Expira-
Purchase Date tion and
Property Location and Competition Price (1) Acquired Renewal Options
<S> <C>
Arby's (18) $739,628 07/10/96 07/2016; two
(the "Kendallville Property") (excluding five-year renewal
Existing restaurant closing options
costs)
The Kendallville Property is located on
the north side of West North Street in
Kendallville, Noble County, Indiana, in an
area of mixed retail, commercial and
residential development. Other fast-food
and family-style restaurants located in
proximity to the Kendallville Property
include a KFC, a McDonald's, a Wendy's, a
Pizza Hut, a Subway Sandwich Shop, and
several local restaurants
Boston Market $499,820 07/15/96 07/2011; five
(the "Rockwall Property") (excluding five-year renewal
Restaurant to be constructed closing and options
development
The Rockwall Property is located on the costs) (3)
northeast corner of FM 740 and the to be
constructed Steger Town Drive in Rockwall,
Rockwall County, Texas, in an area of
mixed retail, commercial, and residential
development. Other fast-food and family-
style restaurants located in proximity to
the Rockwall Property include an Arby's, a
Jack in the Box, a Dairy Queen, a KFC, a
McDonald's, a Pizza Hut, a Sonic Drive-In,
a Whataburger, a Wendy's, a Chili's, a
Taco Bell, and several local restaurants.
<CAPTION>
Minimum Option
Property Location and Competition Annual Rent (2) Percentage Rent To Purchase
<S> <C>
<S> <C>
Arby's (18) $75,812; increases by 4.14% for each lease during the
(the "Kendallville Property") after the third lease year and year, (i) 4% of seventh and
Existing restaurant after every three years annual gross tenth lease
thereafter during the lease sales minus (ii) years only
The Kendallville Property is located on term the minimum
the north side of West North Street in annual rent for
Kendallville, Noble County, Indiana, in an such lease year
area of mixed retail, commercial and
residential development. Other fast-food
and family-style restaurants located in
proximity to the Kendallville Property
include a KFC, a McDonald's, a Wendy's, a
Pizza Hut, a Subway Sandwich Shop, and
several local restaurants
Boston Market 10.38% of Total Cost (4); for each lease at any time
(the "Rockwall Property") increases by 10% after the year after the after the
Restaurant to be constructed fifth lease year and after fifth lease year, fifth lease
every five years thereafter (i) 4% of annual year
The Rockwall Property is located on the during the lease term gross sales minus
northeast corner of FM 740 and the to be (ii) the minimum
constructed Steger Town Drive in Rockwall, annual rent for
Rockwall County, Texas, in an area of such lease year
mixed retail, commercial, and residential
development. Other fast-food and family-
style restaurants located in proximity to
the Rockwall Property include an Arby's, a
Jack in the Box, a Dairy Queen, a KFC, a
McDonald's, a Pizza Hut, a Sonic Drive-In,
a Whataburger, a Wendy's, a Chili's, a
Taco Bell, and several local restaurants.
-21-
<PAGE>
<CAPTION>
Lease Expira-
Purchase Date tion and
Property Location and Competition Price (1) Acquired Renewal Options
<S> <C>
Boston Market (19) $762,737 07/24/96 07/2011; five
(the "Upland Property") (excluding five-year renewal
Restaurant to be constructed closing and options
development
The Upland Property is located at the costs) (3)
northeast quadrant of the intersection of
Mountain Avenue and Foothill Boulevard,
Upland, San Bernardino County, California
in an area of mixed retail, commercial,
and residential development. Other fast-
food and family-style restaurants located
in proximity to the Upland Property
include an Burger King, a Taco Bell, a
KFC, two Del Taco's, a Jack in the Box, a
McDonald's, an Outback Steakhouse and
several local restaurants.
Jack in the Box (16) $387,621 08/05/96 07/2014; four
(the "Houston #2 Property") (excluding five-year renewal
Restaurant to be constructed closing and options
development
The Houston #2 Property is located on the costs (3)
south side of Interstate 45 and U.S.
Highway 90A in Houston, Harris County,
Texas, in an area of mixed retail,
commercial, and residential development.
Other fast-food and family-style
restaurants located in proximity to the
Houston #2 Property include two
Whataburger's, a Taco Bell, a Wendy's, a
Pizza Hut, a Little Caesar's, a
McDonald's, and a local restaurant.
<CAPTION>
Minimum Option
Property Location and Competition Annual Rent (2) Percentage Rent To Purchase
<S> <C>
Boston Market (19) 10.38% of Total Cost (4); for each lease at any time
(the "Upland Property") increases by 10% after the year after the after the
Restaurant to be constructed fifth lease year and after fifth lease year, fifth lease
every five years thereafter (i) 4% of annual year
The Upland Property is located at the during the lease term gross sales minus
northeast quadrant of the intersection of (ii) the minimum
Mountain Avenue and Foothill Boulevard, annual rent for
Upland, San Bernardino County, California such lease year
in an area of mixed retail, commercial,
and residential development. Other fast-
food and family-style restaurants located
in proximity to the Upland Property
include an Burger King, a Taco Bell, a
KFC, two Del Taco's, a Jack in the Box, a
McDonald's, an Outback Steakhouse and
several local restaurants.
Jack in the Box (16) 10.75% of Total Cost (4); for each lease at any time
(the "Houston #2 Property") increases by 8% after the fifth year, (i) 5% of after the
Restaurant to be constructed lease year and by 10% after annual gross seventh lease
every five years thereafter sales minus (ii) year
The Houston #2 Property is located on the during the lease term the minimum
south side of Interstate 45 and U.S. annual rent for
Highway 90A in Houston, Harris County, such lease year
Texas, in an area of mixed retail, (6)
commercial, and residential development.
Other fast-food and family-style
restaurants located in proximity to the
Houston #2 Property include two
Whataburger's, a Taco Bell, a Wendy's, a
Pizza Hut, a Little Caesar's, a
McDonald's, and a local restaurant.
- 22 -
<PAGE>
<CAPTION>
Lease Expira-
Purchase Date tion and
Property Location and Competition Price (1) Acquired Renewal Options
<S> <C>
Applebee's $879,753 08/23/96 08/2016; two
(the "Montclair Property") (excluding five-year renewal
Restaurant to be constructed closing and options
development
The Montclair Property is located on a pad costs) (3)
site within the Montclair Plaza Regional
Mall, on the east side of Montevista
Avenue, north of I-10, in Montclair, San
Bernardino County, California, in an area
of mixed retail, commercial, and
residential development. Other fast-food
and family-style restaurants located in
proximity to the Montclair Property
include an Olive Garden, a Tony Roma's, a
Red Lobster, and a local restaurant.
Golden Corral $997,296 08/23/96 05/2010; three
(the "Brooklyn Property") (excluding (21) five-year renewal
Existing restaurant closing options
costs)
The Brooklyn Property is located at
Northcliff Avenue and Ridge Road in
Brooklyn, Cuyahoga County, Ohio, in an
area of mixed retail, commercial, and
residential development. Other fast-food
and family-style restaurants located in
proximity to the Brooklyn Property include
an Applebee's, a McDonald's, a Dunkin
Donuts, a Boston Market, and several local
restaurants.
<CAPTION>
Minimum Option
Property Location and Competition Annual Rent (2) Percentage Rent To Purchase
<S> <C>
Applebee's 11% of Total Cost (4); for each lease at any time
(the "Montclair Property") increases by 10% after the year, (i) 5% of after the
Restaurant to be constructed fifth lease year and after annual gross fifth lease
every five years thereafter sales minus (ii) year (20)
The Montclair Property is located on a pad during the lease term the minimum
site within the Montclair Plaza Regional annual rent for
Mall, on the east side of Montevista such lease year
Avenue, north of I-10, in Montclair, San
Bernardino County, California, in an area
of mixed retail, commercial, and
residential development. Other fast-food
and family-style restaurants located in
proximity to the Montclair Property
include an Olive Garden, a Tony Roma's, a
Red Lobster, and a local restaurant.
Golden Corral $142,823; increases by 10% for each lease upon the
(the "Brooklyn Property") after the fifth lease year and year, (i) 4% of expiration of
Existing restaurant after every five years annual gross the lease
thereafter during the lease sales minus (ii) (13)
The Brooklyn Property is located at term the minimum
Northcliff Avenue and Ridge Road in annual rent for
Brooklyn, Cuyahoga County, Ohio, in an such lease year
area of mixed retail, commercial, and
residential development. Other fast-food
and family-style restaurants located in
proximity to the Brooklyn Property include
an Applebee's, a McDonald's, a Dunkin
Donuts, a Boston Market, and several local
restaurants.
- 23 -
<PAGE>
<CAPTION>
Lease Expira-
Purchase Date tion and
Property Location and Competition Price (1) Acquired Renewal Options
<S> <C>
Boston Market (19) $664,898 09/06/96 09/2011; five
(the "La Quinta Property") (excluding five-year renewal
Restaurant to be constructed closing and options
development
The La Quinta Property is located on a pad costs) (3)
site within the Albertson's/Walmart
Shopping Center, at the northeast quadrant
of State Highway 111 and Simon Drive, in
La Quinta, Riverside County, California,
in an area of mixed retail, commercial,
residential, and recreational development.
Other fast-food and family-style
restaurants located in proximity to the La
Quinta Property include a Taco Bell, a
McDonald's, and several local restaurants.
Boston Market $559,682 09/17/96 07/2011; five
(the "Merced Property") (excluding five-year renewal
Restaurant to be constructed closing and options
development
The Merced Property is located at the costs) (3)
northwest corner of the intersection of
"M" Street and Olive Avenue in Merced,
Merced County, California, in an area of
mixed retail, commercial, and residential
development. Other fast-food and family-
style restaurants located in proximity to
the Merced Property include a Burger King,
an IHOP, a Jack in the Box, a McDonald's,
a Pizza Hut, a Red Lobster, and several
local restaurants.
<CAPTION>
Minimum Option
Property Location and Competition Annual Rent (2) Percentage Rent To Purchase
<S> <C>
Boston Market (19) 10.38% of Total Cost (4); for each lease at any time
(the "La Quinta Property") increases by 10% after the year after the after the
Restaurant to be constructed fifth lease year and after fifth lease year, fifth lease
every five years thereafter (i) 4% of annual year
The La Quinta Property is located on a pad during the lease term gross sales minus
site within the Albertson's/Walmart (ii) the minimum
Shopping Center, at the northeast quadrant annual rent for
of State Highway 111 and Simon Drive, in such lease year
La Quinta, Riverside County, California,
in an area of mixed retail, commercial,
residential, and recreational development.
Other fast-food and family-style
restaurants located in proximity to the La
Quinta Property include a Taco Bell, a
McDonald's, and several local restaurants.
Boston Market 10.38% of Total Cost (4); for each lease at any time
(the "Merced Property") increases by 10% after the year after the after the
Restaurant to be constructed fifth lease year and after fifth lease year fifth lease
every five years thereafter (i) 4% of annual year
The Merced Property is located at the during the lease term gross sales minus
northwest corner of the intersection of (ii) the minimum
"M" Street and Olive Avenue in Merced, annual rent for
Merced County, California, in an area of such lease year
mixed retail, commercial, and residential
development. Other fast-food and family-
style restaurants located in proximity to
the Merced Property include a Burger King,
an IHOP, a Jack in the Box, a McDonald's,
a Pizza Hut, a Red Lobster, and several
local restaurants.
- 24 -
<PAGE>
<CAPTION>
Lease Expira-
Purchase Date tion and
Property Location and Competition Price (1) Acquired Renewal Options
<S> <C>
Ryan's Family Steak House $654,588 09/18/96 09/2016; two
(the "Spring Hill Property") (excluding five-year renewal
Restaurant to be constructed closing and options
development
The Spring Hill Property is located at the costs) (3)
northwest corner of Cortez Boulevard and
Chambord Street in Spring Hill, Hernando
County, Florida, in an area of mixed
retail, commercial, and residential
development. Other fast-food and family-
style restaurants located in proximity to
the Spring Hill Property include an
Arby's, a McDonald's, a Subway Sandwich
Shop, a Wendy's, and a local restaurant.
Arby's (18) $790,676 09/18/96 09/2016; two
(the "Avon Property") (excluding five-year renewal
Existing restaurant closing options
costs)
The Avon Property is located on the
southwest corner of Avon Crossing Drive
and Merchants Drive in the Avon Crossing
Shopping Center, in Avon, Hendricks
County, Indiana, in an area of mixed
retail, commercial, and residential
development. Other fast-food and family-
style restaurants located in proximity to
the Avon Property include a Burger King, a
McDonald's, a Noble Roman's Pizza, a Taco
Bell, a Wendy's, and several local
restaurants.
<CAPTION>
Minimum Option
Property Location and Competition Annual Rent (2) Percentage Rent To Purchase
<S> <C>
Ryan's Family Steak House 10.875% of Total Cost (4); for each lease at any time
(the "Spring Hill Property") increases by 12% after the year, (i) 5% of after the
Restaurant to be constructed fifth lease year and after annual gross tenth lease
every five years thereafter sales minus (ii) year
The Spring Hill Property is located at the during the lease term the minimum
northwest corner of Cortez Boulevard and annual rent for
Chambord Street in Spring Hill, Hernando such lease year
County, Florida, in an area of mixed
retail, commercial, and residential
development. Other fast-food and family-
style restaurants located in proximity to
the Spring Hill Property include an
Arby's, a McDonald's, a Subway Sandwich
Shop, a Wendy's, and a local restaurant.
Arby's (18) $81,044; increases by 4.14% for each lease during the
(the "Avon Property") after the third lease year and year, (i) 4% of seventh and
Existing restaurant after every three years annual gross tenth lease
thereafter during the lease sales minus (ii) years only
The Avon Property is located on the term the minimum
southwest corner of Avon Crossing Drive annual rent for
and Merchants Drive in the Avon Crossing such lease year
Shopping Center, in Avon, Hendricks
County, Indiana, in an area of mixed
retail, commercial, and residential
development. Other fast-food and family-
style restaurants located in proximity to
the Avon Property include a Burger King, a
McDonald's, a Noble Roman's Pizza, a Taco
Bell, a Wendy's, and several local
restaurants.
- 25 -
<PAGE>
<CAPTION>
Lease Expira-
Purchase Date tion and
Property Location and Competition Price (1) Acquired Renewal Options
<S> <C>
Boston Market (15) $697,652 09/19/96 09/2011; five
(the "Florissant Property") (excluding five-year renewal
Restaurant to be constructed closing and options
development
The Florissant Property is located on the costs) (3)
north side of U.S. Highway 67 North,
northeast of the intersection of North
Waterford Road and U.S. Highway 67, in
Florissant, St. Louis County, Missouri, in
an area of mixed retail, commercial, and
residential development. Other fast-food
and family-style restaurants located in
proximity to the Florissant Property
include an Applebee's, a Burger King, a
Church's Fried Chicken, a Dairy Queen, a
Denny's, a Domino's, a KFC, a McDonald's,
a Ponderosa, a Rally's, a Shoney's, a
Subway Sandwich Shop, two Taco Bell's, a
Wendy's, a White Castle, and several local
restaurants.
Applebee's $732,477 09/19/96 09/2016; two
(the "Salinas Property") (excluding five-year renewal
Restaurant to be constructed closing and options
development
The Salinas Property is located on the costs) (3)
west side of North Davis Road in the
Westridge Shopping Center, in Salinas,
Monterey County, California, in an area of
mixed retail, commercial, and residential
development. Other fast-food and family-
style restaurants located in proximity to
the Salinas Property include an IHOP, and
several local restaurants.
<CAPTION>
Minimum Option
Property Location and Competition Annual Rent (2) Percentage Rent To Purchase
<S> <C>
Boston Market (15) 10.38% of Total Cost (4); for each lease at any time
(the "Florissant Property") increases by 10% after the year after the after the
Restaurant to be constructed fifth lease year and after fifth lease year fifth lease
every five years thereafter (i) 5% of annual year
The Florissant Property is located on the during the lease term gross sales minus
north side of U.S. Highway 67 North, (ii) the minimum
northeast of the intersection of North annual rent for
Waterford Road and U.S. Highway 67, in such lease year
Florissant, St. Louis County, Missouri, in
an area of mixed retail, commercial, and
residential development. Other fast-food
and family-style restaurants located in
proximity to the Florissant Property
include an Applebee's, a Burger King, a
Church's Fried Chicken, a Dairy Queen, a
Denny's, a Domino's, a KFC, a McDonald's,
a Ponderosa, a Rally's, a Shoney's, a
Subway Sandwich Shop, two Taco Bell's, a
Wendy's, a White Castle, and several local
restaurants.
Applebee's 10.87% of Total Cost (4); for each lease at any time
(the "Salinas Property") increases by 10% after the year, (i) 5% of after the
Restaurant to be constructed fifth lease year and after annual gross seventh lease
every five years thereafter sales minus (ii) year
The Salinas Property is located on the during the lease term the minimum
west side of North Davis Road in the annual rent for
Westridge Shopping Center, in Salinas, such lease year
Monterey County, California, in an area of
mixed retail, commercial, and residential
development. Other fast-food and family-
style restaurants located in proximity to
the Salinas Property include an IHOP, and
several local restaurants.
- 26 -
<PAGE>
<CAPTION>
Lease Expira-
Purchase Date tion and
Property Location and Competition Price (1) Acquired Renewal Options
<S> <C>
Burger King $940,934 10/02/96 12/2016; two
(the "Chicago Property") (excluding five-year renewal
Restaurant to be constructed closing and options
development
The Chicago Property is located on the costs)(3)
southwest corner of 40th Street and
Pulaski Road, in Chicago, Cook County,
Illinois, in an area of mixed retail,
commercial, and residential development.
Other fast-food and family-style
restaurants located in proximity to the
Chicago Property include an Arby's, a Long
John Silver's, and a local restaurant.
<CAPTION>
Minimum Option
Property Location and Competition Annual Rent (2) Percentage Rent To Purchase
<S> <C>
Burger King 11% of Total Cost (4) for each lease None
(the "Chicago Property") year, (i) 8.5% of
Restaurant to be constructed annual gross
sales minus (ii)
The Chicago Property is located on the the minimum
southwest corner of 40th Street and annual rent for
Pulaski Road, in Chicago, Cook County, such lease year
Illinois, in an area of mixed retail,
commercial, and residential development.
Other fast-food and family-style
restaurants located in proximity to the
Chicago Property include an Arby's, a Long
John Silver's, and a local restaurant.
</TABLE>
FOOTNOTES:
(1) The estimated federal income tax basis of the depreciable portion (the
building portion) of each of the Properties acquired, and for
construction Properties, once the buildings are constructed, is set
forth below:
<TABLE>
<CAPTION>
Property Federal Tax Basis Property Federal Tax Basis
<S> <C>
Hamden Property $1,195,000 Rockwall Property $ 422,000
Knoxville Property 510,000 Upland Property 433,000
Port Richey Property 1,208,000 Houston #2 Property 595,000
Hillsboro Property 742,000 Montclair Property 825,000
McKinney Property 627,000 Brooklyn Property 1,040,000
Camarillo Property 672,000 La Quinta Property 485,000
Sevierville Property 519,000 Merced Property 401,000
Ellisville Property 635,000 Spring Hill Property 1,363,000
Golden Valley Property 529,000 Avon Property 484,000
Humble #1 Property 610,000 Florissant Property 618,000
Corvallis Property 624,000 Salinas Property 648,000
Houston #1 Property 620,000 Chicago Property 753,000
Kendallville Property 304,000
<PAGE>
</TABLE>
(2) Minimum annual rent for each of the Properties became payable on the
effective date of the lease, except as indicated below. For the
Hamden, Port Richey and Hillsboro Properties, minimum annual rent will
become due and payable on the earlier of (i) the date the certificate
of occupancy for the restaurant is issued, (ii) the date the restaurant
opens for business to the public or (iii) a specified number of days
(ranging from 150 to 180) after execution of the lease. For the
Knoxville, Camarillo, Sevierville, Montclair, Spring Hill and Salinas
Properties, minimum annual rent will become due and payable on the
earlier of (i) the date the certificate of occupancy for the restaurant
is issued, (ii) the date the restaurant opens for business to the
public, (iii) a specified number of days (ranging from 120 to 180)
after execution of the lease or (iv) the date the tenant receives from
the landlord its final funding of the construction costs. For the
Corvallis, Ellisville, Golden Valley and Rockwall Properties, minimum
annual rent will become due and payable on the earlier of (i) 180 days
after execution of the lease or (ii) the date the tenant receives from
the landlord its final funding of the construction costs. For the
Humble #1, Houston #1 and Houston #2 Properties, minimum annual rent
will become due and payable on the earlier of (i) the date the
restaurant opens for business to the public or (ii) 180 days after the
execution of the lease. For the Upland, La Quinta, Merced and
Florissant Properties, minimum annual rent will become due and payable
on the date the tenant receives from the landlord its final funding of
the construction costs. For the Chicago Property, minimum annual rent
will become due and payable on the possession date, which is December
28, 1996 (the "Possession Date"). During the period commencing with
the effective date of the lease to the date minimum annual rent becomes
payable for the Knoxville, Camarillo, Sevierville, Ellisville, Golden
Valley, Humble #1, Corvallis, Houston #1, Rockwall, Upland, Houston #2,
Montclair, La Quinta, Merced, Spring Hill, Florissant and Salinas
Properties, as described above, the tenant shall pay monthly "interim
rent" equal to a specified rate per annum (ranging from 10.25% to 11%)
of the amount funded by the Company in connection with the purchase and
construction of the Properties. For the Chicago Property, "interim
rent" equal to 11 percent per annum of the amount funded by the Company
in connection with the purchase and construction of the Property shall
accrue prior to the Possession Date and shall be payable in a single
lump sum at the time of final funding of the construction costs.
(3) The Company accepted an assignment of an interest in the ground lease
relating to the Hamden and Sevierville Properties effective April 24,
1996 and June 5, 1996, respectively, in consideration of its funding of
certain preliminary development costs and its agreement to fund
remaining development costs not in excess of the amounts specified
below. The development agreements for the Properties which are to be
constructed provide that construction must be completed no later than
the dates set forth below. The maximum cost to the Company, (including
the purchase price of the land (if applicable), development costs (if
applicable), and closing and acquisition costs) is not expected to, but
may, exceed the amounts set forth below:
<TABLE>
<CAPTION>
Property Estimated Maximum Cost Estimated Final Completion Date
<S> <C>
Hamden Property $1,200,972 Opened for business August 26, 1996
Knoxville Property 830,966 Opened for business July 8, 1996
Port Richey Property 1,675,000 Opened for business September 30, 1996
Hillsboro Property 1,119,248 April 1, 1997
Camarillo Property 1,264,789 Opened for business July 28, 1996
Sevierville Property 517,571 Opened for business June 13, 1996
Ellisville Property 1,026,746 Opened for business September 3, 1996
Golden Valley Property 1,128,899 Opened for business September 30, 1996
Humble #1 Property 949,413 Opened for business September 12, 1996
Corvallis Property 952,684 Opened for business October 6, 1996
Houston #1 Property 926,397 Opened for business September 25, 1996
Rockwall Property 795,087 January 11, 1997
Upland Property 977,643 Opened for business September 30, 1996
Houston #2 Property 926,235 Opened for business July 14, 1996
Montclair Property 1,654,545 February 19, 1997
La Quinta Property 951,872 March 5, 1997
</TABLE>
- 24 -
<PAGE>
<TABLE>
<CAPTION>
Property Estimated Maximum Cost Estimated Final Completion Date
<S> <C>
Merced Property 930,834 March 16, 1997
Spring Hill Property 1,881,818 February 15, 1997
Florissant Property 1,264,986 March 18, 1997
Salinas Property 1,339,000 February 6, 1997
Chicago Property 1,613,636 December 28, 1996
</TABLE>
(4) The "Total Cost" is equal to the sum of (i) the purchase price of the
Property, (ii) closing costs, and (iii) actual development costs
incurred under the development agreement, and in the case of the
Hamden, Port Richey and Hillsboro Properties, (iv) "construction
financing costs" during the development period.
(5) If the lessee exercises its purchase option after the third lease year
and before the eleventh lease year, the purchase price to be paid by
the lessee shall be equal to the net present value of the monthly lease
rental payments for the remainder of the lease term (including previous
and scheduled rent increases) discounted at the lesser of (i) 11% per
annum, or (ii) the then-current annual yield on 7-year Treasury
securities plus 4.5%, plus the full amount of any late fees, default
interest, enforcement costs or other sums otherwise due or payable by
the lessee under the lease. If the lessee exercises its option after
the tenth lease year, the purchase price to be paid by the lessee shall
be equal to the net present value of the monthly lease payments for the
remainder of the lease term (based, however, for purposes hereof on the
initial monthly installment amount of annual rental and not including
previous and scheduled increases) discounted at 11% per annum, plus the
full amount of any late fees, default interest, enforcement costs or
other sums otherwise due or payable by the lessee under the lease.
(6) Percentage rent shall be calculated on a calendar year basis (January 1
to December 31).
(7) If the Property is not producing percentage rent and the lessee
determines, in good faith, that the restaurant has become uneconomic
and unsuitable the lessee may elect, during the first through seventh
and again during the tenth through 15th lease years:
(i) to purchase the Property for a purchase price, net of closing
costs, equal to the greater of (a) the then fair-market value of the
Property as determined by an independent appraisal, or (b) 100% of the
Company's original cost for the Property if the Company is successful
in effectuating the lessee's purchase through a tax-free "like-kind"
exchange, or 120% of the Company's original cost for the Property if a
tax-free, "like-kind" exchange is not effectuated; or
(ii) to sublet the Property as described in the section of the
Prospectus entitled "Description of Property Leases - Assignment and
Sublease;" or
(iii) to substitute the Property for another Golden Corral restaurant
property on terms similar to those described in the section of the
Prospectus entitled "Description of Property Leases - Substitution of
Properties."
(8) The lease relating to this Property is a land lease only. The Company
entered into a Mortgage Loan evidenced by a Master Mortgage Note for
$3,888,000 collateralized by building improvements. The Master Mortgage
Note bears interest at a rate of 10.75% per annum and principal and
interest will be collected in equal monthly installments over 20 years
beginning in July 1996.
(9) If the lessee exercises one or both of its renewal options, minimum
annual rent will increase by 12% after the expiration of the original
lease term and after five years thereafter during any subsequent lease
term.
(10) The Company entered into a Master Lease Agreement for the Beaver,
Bluefield, Huntington, Hurricane, Milton, Ronceverte, Beckley, Belle,
Cross Lanes and Marietta Properties.
- 25 -
<PAGE>
(11) The Company and the lessee entered into remediation and indemnity
agreements on May 17, 1996, with the seller of the land and an adjacent
site owner/operator (the "Indemnitors") due to Phase I and Phase II
environmental testing results indicating that there were action levels
of environmental contamination on the Bluefield, Hurricane and Marrieta
Properties relating to underground gasoline storage tanks from one
property adjacent to the Hurricane Property and past use of the other
two Properties. Under the remediation and indemnity agreements, the
Indemnitors have agreed to notify all applicable federal, state, or
local government agencies or authorities of the environmental
contamination, to undertake all remediation work on these sites at no
expense to the Company or lessee, and to indemnify, defend and hold
harmless the Company, the lessee and investors from losses arising out
of or related to any claim, action, proceeding, lawsuit, notice of
violation or demand by any (i) governmental authority in connection
with the presence of any environmental contamination, (ii) failure of
the Indemnitors to notify any applicable governmental authorities,
(iii) remediation work, and (iv) claim, action, proceeding, lawsuit, or
demand by third parties who are not the successors in interest of the
indemnified parties and are not affiliated with the indemnified
parties. If as to any of the affected sites, the remediation work is
not satisfactorily completed within two years after the effective date,
such that the Company is willing, in its discretion, to remain the
owner of a particular affected site, the Company may "put" the
particular affected site back to the seller, and the seller will
purchase the Company's ownership interest in the affected site.
(12) The "Building Overage Multiplier" is calculated as follows:
Building Overage Multiplier = (purchase price of the
building)/[purchase price of the building + (annual rent due under the
land lease/land lease cap rate)]
(13) In the event that the aggregate amount of percentage rent paid by the
lessee to the Company over the term of the lease shall equal or exceed
15% of the purchase price paid by the Company, then the option purchase
price shall equal one dollar. In the event that the aggregate
percentage rent paid shall be less than 15% of the purchase price paid
by the Company, then the option purchase price shall equal the
difference of 15% of the purchase price, less the aggregate percentage
rent paid to the landlord by the lessee under the lease.
(14) The lessee of the Knoxville, Camarillo, and Sevierville Properties is
the same unaffiliated lessee.
(15) The lessee of the Ellisville, Golden Valley and Florissant Properties
is the same unaffiliated lessee.
(16) The lessee of the Humble #1, Houston #1 and Houston #2 Properties is
the same unaffiliated lessee.
(17) The lessee of the Hillsboro and McKinney Properties is the same
unaffiliated lessee.
(18) The lessee of the Kendallville and Avon Properties is the same
unaffiliated lessee.
(19) The lessee of the Upland and La Quinta Properties is the same
unaffiliated lessee.
(20) The lessee also has the option to purchase the Property after the
lessee operates at least five Applebee's restaurants.
(21) The Company accepted an assignment of an interest in the ground lease
relating to the Brooklyn Property effective August 23, 1996.
- 26 -
<PAGE>
BORROWING AND SECURED EQUIPMENT LEASES
Between April 10, 1996 and October 3, 1996, the Company obtained six
advances totalling $2,364,072 under its $15,000,000 Loan. The proceeds of the
advances were used to acquire Equipment for five restaurant properties at a cost
of approximately $2,364,072, including Secured Equipment Lease Servicing Fees of
$46,292 to the Advisor. Four of the six advances are fully amortizing term loans
repayable over six years and bear interest at a rate per annum equal to 215
basis points above the Reserve Adjusted LIBOR Rate (as defined in the Loan). The
two remaining advances relating to the Winnemucca Secured Equipment Lease are
considered to be an interest only loan for the first three months and upon
obtaining an additional advance prior to the fourth month (December 1996) will
become a fully amortizing term loan repayable over the duration of the
Winnemucca Secured Equipment Lease, but in no event greater than six years. The
advances will bear interest at a rate per annum equal to 215 basis points above
the Reserve Adjusted LIBOR Rate (as defined in the Loan).
The following table sets forth a summary of the principal terms of the
acquisition and lease of the Equipment.
- 27 -
<PAGE>
SECURED EQUIPMENT LEASES
From April 10, 1996 through October 3, 1996
<TABLE>
<CAPTION>
Description Purchase Price (1) Date Acquired Lease Expiration
<S> <C>
Equipment for Golden Corral $538,790 06/14/96 06/2003
restaurant in Middleburg Heights, (excluding closing
Ohio (8)(10) costs and Secured
(The "Middleburg Heights Secured Equipment Lease
Equipment Lease") Servicing Fee)
Equipment for Golden Corral $560,411 (excluding 07/02/96 07/2003
restaurant in Brooklyn, closing costs and
Ohio (8) Secured Equipment
(The "Brooklyn Secured Equipment Lease Servicing Fee)
Lease")
Equipment for TGI Friday's $509,573 (excluding 07/15/96 07/2001
restaurant in Hazlet, New closing costs and
Jersey (9) Secured Equipment
(The "Hazlet Secured Equipment Lease Servicing Fee)
Lease")
Equipment for TGI Friday's $562,742 (excluding 08/09/96 08/2001
restaurant in Marlboro, New Jersey (9) closing costs and
(The "Marlboro Secured Equipment Secured Equipment
Lease") Lease Servicing Fee)
Equipment for Denny's restaurant in $143,075 (5) (5) (6)
Winnemucca, Nevada (excluding closing
(The "Winnemucca Secured Equipment costs and Secured
Lease") Equipment Lease
Servicing Fee)
<CAPTION>
Description Annual Rent (2) To Purchase
<S> <C>
Equipment for Golden Corral $109,617 (3)
restaurant in Middleburg Heights,
Ohio (8)(10)
(The "Middleburg Heights Secured
Equipment Lease")
Equipment for Golden Corral $113,994 (3)
restaurant in Brooklyn,
Ohio (8)
(The "Brooklyn Secured Equipment
Lease")
Equipment for TGI Friday's $132,664 (4)
restaurant in Hazlet, New
Jersey (9)
(The "Hazlet Secured Equipment
Lease")
Equipment for TGI Friday's $146,484 (2) (4)
restaurant in Marlboro, New Jersey (9)
(The "Marlboro Secured Equipment
Lease")
Equipment for Denny's restaurant in (6) (7)
Winnemucca, Nevada
(The "Winnemucca Secured Equipment
Lease")
</TABLE>
<PAGE>
- --------------------------------------------------------------------
FOOTNOTES:
(1) The Secured Equipment Lease is expected to be treated as a loan secured
by personal property for federal income tax purposes.
(2) Rental payments due under the Secured Equipment Lease are payable
monthly, commencing on the effective date of the lease.
(3) At the end of the lease term, if no event of default has occurred under
the terms of the Secured Equipment Lease, the lessee will have the
option to purchase the Equipment for $1.
(4) Lessee may purchase the Equipment prior to the expiration of the
Secured Equipment Lease, at the then present value of the remaining
rental payments, discounted at a rate of ten percent per annum.
(5) On August 28, 1996, the Company obtained an advance of $102,570 for
partial funding of the Equipment for a restaurant property in
Winnemucca, Nevada. On September 30, 1996, the Company obtained another
advance of $44,157 for additional funding of the Equipment for the
restaurant property. The Company anticipates obtaining another advance
under its Loan totalling $146,727 to fund the balance of the
acquisition price of the Equipment within four months of obtaining the
initial advance of $102,570 described above.
(6) The temporary Secured Equipment Lease entered into on August 28, 1996,
had a term of four months and required the payment of monthly rent of
$913. On September 30, 1996, the temporary Secured Equipment Lease was
amended to have a term of three months and requires the payment of
monthly rent of $1,306. Upon funding the balance of the Equipment
purchase price, which is expected to occur in the fourth month
following the initial Equipment funding, the Company will enter into a
final Secured Equipment Lease. The final Secured Equipment Lease is
expected to have a term of approximately seven years and provide for
the payment of rent (payable monthly) in an amount equal to the total
purchase price of the Equipment plus interest at a rate of 10.68% per
annum.
(7) Lessee may purchase the Equipment prior to the expiration of the final
Secured Equipment Lease, at the then present value of the remaining
rental payments, discounted at a rate of 10.68% per annum.
(8) The lessee of the Middleburg Heights and Brooklyn Secured Equipment
Leases is the same unaffiliated lessee.
(9) The lessee of the Hazlet and Marlboro Secured Equipment Leases is the
same unaffiliated lessee.
(10) The lessee of the Middleburg Heights Secured Equipment Lease leases the
restaurant property from an Affiliate of the Advisor.
- 29 -
<PAGE>
MANAGEMENT COMPENSATION
FEES AND EXPENSES PAID TO THE
ADVISOR AND ITS AFFILIATES
Selling Commissions and Marketing Support and Due Diligence Expense
Reimbursement Fee. In connection with the formation of the Company and the
offering of the Shares, the Managing Dealer will receive Selling Commissions of
7.5% (a maximum of $11,250,000 if 15,000,000 Shares are sold), and a marketing
support and due diligence expense reimbursement fee of 0.5% (a maximum of
$750,000 if 15,000,000 Shares are sold), of the total amount raised from the
sale of Shares, computed at $10.00 per Share sold ("Gross Proceeds"). The
Managing Dealer in turn may reallow Selling Commissions of up to 7% on Shares
sold, and all or a portion of the 0.5% marketing support and due diligence
expense reimbursement fee to certain Soliciting Dealers, who are not Affiliates
of the Company. As of June 30, 1996, the Company had incurred $5,761,249 for
Selling Commissions due to the Managing Dealer, a substantial portion
($5,285,916) of which has been paid as commissions to other Soliciting Dealers.
In addition, as of June 30, 1996, the Company had incurred $384,083 in marketing
support and due diligence expense reimbursement fees due to the Managing Dealer.
A portion of these fees has been reallowed to other Soliciting Dealers, and all
due diligence expenses will be paid from such fees.
Soliciting Dealer Servicing Fee. The Company will incur a Soliciting
Dealer Servicing Fee in the amount of .20% of Invested Capital (a maximum of
$300,000 if 15,000,000 Shares are sold). The Soliciting Dealer Servicing Fee
will be payable on December 31 of each year, commencing on December 31 of the
year following the year in which the offering terminates, and generally will be
payable to the Managing Dealer, which in turn may reallow all or a portion of
such fee to Soliciting Dealers whose clients held Shares on such date. The
Company has determined, however, that the Company may pay the Soliciting Dealer
Servicing Fee directly to any Soliciting Dealer exempt from registration as a
broker-dealer and whose clients held Shares on such date. As of June 30, 1996,
no such fees had been incurred by the Company.
Acquisition Fees. The Advisor is entitled to receive acquisition fees
for services in identifying the Properties and structuring the terms of the
acquisition and leases of the Properties equal to 4.5% of Gross Proceeds,
payable by the Company as Acquisition Fees. As of June 30, 1996, the Company had
incurred $3,456,749 in such acquisition fees payable to the Advisor. Acquisition
fees incurred by the Company as of June 30, 1996, are included as part of the
cost of land and buildings on operating leases, net investment in direct
financing lease and other assets.
Development/Construction Management Fees to Affiliates of the Company.
In connection with the acquisition of Properties that have been constructed or
renovated by Affiliates, the Company will incur development/construction
management fees of generally 5% to 10% of the cost of constructing or renovating
a Property, payable to Affiliates of the Company as Acquisition Fees. Such fees
will be included in the purchase price of Properties purchased from developers
that are Affiliates of the Company. See "Business Site Selection and Acquisition
of Properties." Development/construction management fees, which are based on the
number of Properties purchased from developers that are Affiliates of the
Company, the cost of construction or renovation of such Properties and the
percentage amount of each development/construction management fee, are not
determinable at this time. As of June 30, 1996, no such fees had been incurred
by the Company.
Construction Financing Fees to Affiliates of the Company. In connection
with the acquisition of Properties from affiliated or unaffiliated developers,
to whom Affiliates of the Company have provided construction financing, the
Company will incur construction financing fees, payable to Affiliates of the
Company as Acquisition Fees. Such fees will be in an amount equal to generally
1% to 2% of the total amount of each loan plus the difference between the
Affiliate - lender's cost of funds and the amount of interest charged to the
developer with such difference determined by applying an annual percentage rate
of generally 1.5% to 3% throughout the duration of the loan to the outstanding
amount of the loan. Such fees will be
- 30 -
<PAGE>
included in the purchase price of Properties purchased from developers that
receive such loans. See "Business Site Selection and Acquisition of Properties."
Construction loan fees, which are based on the number of Properties for which
Affiliates of the Company provide construction financing, the amount and
duration of such loans and the amount of each construction financing fee, are
not determinable at this time. As of June 30, 1996, no such fees had been
incurred by the Company.
The total of all Acquisition Fees and Acquisition Expenses shall be
reasonable and shall not exceed an amount equal to 6% of the Real Estate Asset
Value of a Property unless a majority of the Board of Directors, including a
majority of the Independent Directors, not otherwise interested in the
transaction approves fees in excess of these limits subject to a determination
that the transaction is commercially competitive, fair and reasonable to the
Company.
Asset Management Fee. For managing the Properties, the Advisor will be
entitled to receive a monthly Asset Management Fee of one-twelfth of .60% of the
Company's Real Estate Asset Value (generally, the total amount invested in the
Properties, exclusive of Acquisition Fees and Acquisition Expenses) as of the
end of the preceding month. As of June 30, 1996, the Company had incurred
105,375 of such fees, $7,725 of which has been capitalized as part of the cost
of building for Properties under construction.
Mortgage Management Fee. For managing mortgage loans, the Advisor will
be entitled to receive a monthly Mortgage Management Fee of one-twelfth of .60%
of the total principal amount of the Mortgage Loans as of the end of the
preceding month. As of June 30, 1996, the Company had incurred $23,101 of such
fees.
Secured Equipment Lease Servicing Fee. For negotiating Secured
Equipment Leases and supervising the Secured Equipment Lease program, the
Advisor will be entitled to receive from the Company a one-time Secured
Equipment Lease Servicing Fee of 2% of the purchase price of the Equipment that
is the subject of a Secured Equipment Lease. As of June 30, 1996, the Company
had incurred $10,776 of such fees.
Real Estate Disposition Fee. Prior to Listing, the Advisor may receive
a real estate disposition fee of 3% of the gross sales price of one or more
Properties for providing substantial services in connection with the Sale, which
will be deferred and subordinated until the stockholders have received
Distributions equal to the sum of 100% of the stockholders' aggregate Invested
Capital plus an aggregate, annual, cumulative, noncompounded 8% return on their
Invested Capital, excluding Distributions attributable to proceeds of the Sale
of a Property (the "Stockholders' 8% Return"). Upon Listing, if the Advisor has
accrued but not been paid such real estate disposition fee, then for purposes of
determining whether the subordination conditions have been satisfied,
stockholders will be deemed to have received a Distribution in an amount equal
to the product of the total number of Shares outstanding and the average closing
prices of the Shares over a period, beginning 180 days after Listing, of 30 days
during which the Shares are traded. See "The Advisor and The Advisory Agreement
- -The Advisory Agreement." As of June 30, 1996, no such fees had been incurred by
the Company.
Subordinated Share of Net Sales Proceeds. A subordinated share of Net
Sales Proceeds will be paid to the Advisor upon the Sale of one or more
Properties or Secured Equipment Leases in an amount equal to 10% of Net Sales
Proceeds. This amount will be subordinated and paid only after the stockholders
have received Distributions equal to the sum of 100% of the stockholders'
aggregate Invested Capital, plus the Stockholders' 8% Return. As of June 30,
1996, no such amounts had been incurred by the Company.
Administrative and Other Expenses. The Advisor provides accounting and
administrative services (including accounting and administrative services in
connection with the Offering of Shares) to the Company on a day-to-day basis. As
of June 30, 1996, the Company had incurred $1,136,195 of such costs that are
included in stock issuance costs and $222,034 of such costs that are included in
general and administrative expenses.
- 31 -
<PAGE>
Reimbursement of Out-of-Pocket Expenses. The Advisor and its Affiliates
are entitled to receive reimbursement, at cost, for expenses they incur for
Organizational and Offering Expenses, Acquisition Expenses and Operating
Expenses. As of June 30, 1996, the Advisor and its Affiliates had incurred
$3,061,811, $239,012, and $204,036 on behalf of the Company for Organizational
and Offering Expenses, Acquisition Expenses, and Operating Expenses,
respectively.
SELECTED FINANCIAL DATA
The following table sets forth certain financial information for CNL
American Properties Fund, Inc., and should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Financial Statements included in Exhibit B to this
Prospectus Supplement and Exhibit B to the Prospectus.
<TABLE>
<CAPTION>
May 2,
1994 (Date
Six Months Ended of Inception)
June 30, Year Ended through
1996 December 31, December 31,
(Unaudited) 1995 1994
------------------ --------------- ---------
<S> <C>
Revenues $2,381,472 $ 659,131 $ -
Net earnings 1,689,042 368,779 -
Cash distributions declared (1) 1,868,487 638,618 -
Funds from operations (2) 1,892,079 470,592 -
Earnings per Share 0.30 0.19 -
Cash distributions declared per Share 0.33 0.34 -
Funds from operations per Share (2) 0.33 0.25 -
Weighted average number of Shares
outstanding (3) 5,649,041 1,898,350 -
</TABLE>
June 30,
1996 December 31, December 31,
(Unaudited) 1995 1994
----------- ------------- ------------
Total assets $70,597,609 $33,603,084 $929,585
Total equity 66,240,326 31,980,648 200,000
(1) Approximately 15 percent and 40 percent of cash distributions
($0.05 and $0.14 per Share) for the six months ended June 30,
1996 and the year ended December 31, 1995, respectively,
represents a return of capital in accordance with generally
accepted accounting principles ("GAAP"). Cash distributions
treated as a return of capital on a GAAP basis represent the
amount of cash distributions in excess of accumulated net
earnings on a GAAP basis. The Company has not treated such
amount as a return of capital for purposes of calculating the
stockholders' Invested Capital and the Stockholders' 8%
Return, as described in the Prospectus.
(2) Funds from operations are net earnings, excluding depreciation
of $199,860 and $100,318 and amortization expense of joint
venture capitalized costs of $3,177 and $1,495 for the six
months ended June 30, 1996 and the year ended December 31,
1995, respectively. Funds from operations are generally
considered by industry analysts to be the most appropriate
- 32 -
<PAGE>
measure of performance and do not necessarily represent cash
provided by operating activities in accordance with generally
accepted accounting principles and are not necessarily
indicative of cash available to meed cash needs.
(3) The weighted average number of Shares outstanding is based
upon the period the Company was operational.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
INTRODUCTION
The Company is a Maryland corporation that was organized on May 2,
1994, to acquire Properties, directly or indirectly through Joint Venture or
co-tenancy arrangements, to be leased on a long-term, "triple- net" basis to
operators of certain Restaurant Chains. In addition, the Company may provide
Mortgage Loans for the purchase of buildings, generally by tenants that lease
the underlying land from the Company. To a lesser extent, the Company intends to
offer Secured Equipment Leases to operators of Restaurant Chains. Secured
Equipment Leases will be funded from the proceeds of the Loan, in an amount up
to 10% of Gross Proceeds from the offering, which the Company has obtained.
As of June 30, 1996, the Company owned 68 Properties (including one
Property through a joint venture arrangement consisting of land and building, 29
consisting of land and building, five consisting of building only and 33
consisting of land only and in connection with which the Company provided
Mortgage Loans to the tenant for the purchase of the buildings on the
Properties). Of the 68 Properties, 14 were under construction at June 30, 1996.
In addition, as of June 30, 1996, the Company had entered into one Secured
Equipment Lease.
LIQUIDITY AND CAPITAL RESOURCES
In April 1995, the Company commenced an offering of its Shares of
common stock. As of June 30, 1996, the Company had received subscription
proceeds of $76,816,648 (7,681,665 Shares) from the offering, including $243,167
(24,317 Shares) through the Reinvestment Plan.
As of June 30, 1996, net proceeds to the Company from its offering of
Shares and capital contributions from the Advisor after deduction of Selling
Commissions, Marketing Support and Due Diligence Expense Reimbursement Fees and
Organizational and Offering Expenses, totalled $66,669,610. As of June 30, 1996,
approximately $63,189,000 had been used to invest, or committed for investment,
in 68 Properties (14 of which were undeveloped land on which a restaurant was
being constructed), in providing mortgage financing of $12,363,000 to the
tenants of the 33 Properties consisting of land only and to pay Acquisition Fees
to the Advisor totalling $3,456,749 and certain Acquisition Expenses. The
Company acquired 11 of the 68 Properties from Affiliates, for purchase prices
totalling approximately $8,419,000. The Affiliates had purchased and temporarily
held title to these Properties in order to facilitate the acquisition of the
Properties by the Company. Each Property was acquired at a cost no greater than
the lesser of the cost of the Property to the Affiliate (including carrying
costs) or the Property's appraised value. The Company expects to use Net
Offering Proceeds from the sale of Shares to purchase additional Properties, to
fund construction costs relating to the Properties under construction and to
make Mortgage Loans. The number of Properties to be acquired and Mortgage Loans
to be entered into will depend upon the amount of Net Offering Proceeds
available to the Company.
On March 5, 1996, the Company entered into a line of credit (the
"Loan") and security agreement with a bank. The Loan is to be used by the
Company to offer Secured Equipment Leases. The Loan provides that the Company
will be able to receive advances of up to $15,000,000 until March 4, 1998.
Generally, advances under the Loan will be fully amortizing term loans repayable
in terms equal to the duration of the Secured
- 33 -
<PAGE>
Equipment Leases, but in no event greater than 72 months. In addition, advances
for short-term needs (to acquire equipment to be leased under Secured Equipment
Leases) may be requested in an aggregate amount which does not exceed the
Revolving Sublimit (defined in the Loan as $1,000,000) and such advances may be
repaid and readvanced; provided, however, that advances made pursuant to the
Revolving Sublimit shall be converted to term loans the earlier of (i) the end
of each 60 day period following the closing date (defined in the Loan as March
5, 1996), or (ii) when the aggregate amount outstanding equals or exceeds
$1,000,000. Interest on advances made pursuant to the Revolving Sublimit shall
be paid monthly in arrears. In addition, principal amounts under advances
pursuant to the Revolving Sublimit, if not sooner paid or converted into term
loans, shall be paid, together with any unpaid interest relating to such
advances, to the bank on March 5, 1998. Generally, all advances under the Loan
will bear interest at either (i) a rate per annum equal to 215 basis points
above the Reserve Adjusted LIBOR Rate (as defined in the Loan) or (ii) a rate
per annum equal to the bank's prime rate, whichever the Company selects at the
time advances are made. As a condition of obtaining the Loan, the Company agreed
to grant to the bank a first security interest in the Secured Equipment Leases.
In connection with the Loan, the Company incurred a commitment fee, legal fees
and closing costs of $53,500 relating to the Loan. As of June 30, 1996, the
Company had obtained two advances totalling $603,745 relating to the Loan. The
proceeds were used to fund a Secured Equipment Lease at a cost of approximately
$550,000, including a Secured Equipment Lease Servicing Fee of $10,776 to the
Advisor and to pay loan costs of $53,500 described above. The Company expects to
use the proceeds of the Loan to fund the Secured Equipment Lease program, as
described above. The Company intends to limit advances under the Loan to 10% of
Gross Proceeds of the offering.
The Company has entered into various development agreements with
tenants which provide terms and specifications for the construction of buildings
the tenants have agreed to lease once construction is completed. The agreements
provide a maximum amount of development costs (including the purchase price of
the land and closing costs) to be paid by the Company. The aggregate maximum
development costs the Company has agreed to pay is approximately $17,499,600, of
which approximately $11,111,000 in land and other costs had been incurred as of
June 30, 1996. The buildings under construction as of June 30, 1996, are
expected to be operational by October 1996. In connection with the purchase of
each Property, the Company, as lessor, entered into a long-term lease agreement.
During the period July 1, 1996 through October 3, 1996, the Company
acquired 15 additional Properties (two Properties consisting of land and
building, 12 Properties consisting of undeveloped land on which restaurants are
being constructed and one Property consisting of building only) for cash at a
total cost of approximately $10,001,000, excluding development and closing
costs. The development costs (including the purchase of the land and closing
costs) to be paid by the Company relating to the 12 Properties under
construction are estimated to be approximately $14,215,000. The buildings under
construction are expected to be operational by March 1997.
The Company presently is negotiating to acquire additional Properties,
but as of October 3, 1996, had not acquired any such Properties.
In addition, during the period July 1, 1996 through October 3, 1996,
the Company obtained four additional advances totalling approximately $1,814,000
under its $15,000,000 Loan. The proceeds of the advances were used to fund three
Secured Equipment Leases at a cost of approximately $1,814,000, including
Secured Equipment Lease Servicing Fees of $35,516 paid to the Advisor.
In connection with the Company's advances under the Loan, as of October
3, 1996, the Company had converted a total of approximately $2,271,000 from
variable rate advances to fixed rate advances (at rates ranging from 8.75% to
nine percent per annum).
- 34 -
<PAGE>
As of October 3, 1996, the Company had received subscription proceeds
of $104,484,211 (10,448,421 Shares) from 5,788 stockholders, including $391,348
(39,135 Shares) issued pursuant to the Reinvestment Plan. As of October 3, 1996,
the Company had invested, or committed for investment, approximately $80,000,000
of such proceeds in 83 Properties, had provided mortgage financing to the
tenants of the 33 Properties consisting of land only through Mortgage Loans, and
had paid Acquisition Fees and Acquisition Expenses, leaving approximately
$11,900,000 in Net Offering Proceeds available for investment in Properties and
Mortgage Loans. As of October 3, 1996, the Company had incurred $4,701,789 in
Acquisition Fees due to the Advisor.
Properties are and will be leased on a triple-net basis, meaning that
tenants are generally required to pay all repairs and maintenance, property
taxes, insurance and utilities. Rental payments under the leases are expected to
exceed the Company's operating expenses. For these reasons, no short-term or
long-term liquidity problems currently are anticipated by management.
Until Properties are acquired, or Mortgage Loans are entered into, by
the Company, all offering proceeds are held in short-term, highly liquid
investments which management believes to have appropriate safety of principal.
This investment strategy provides high liquidity in order to facilitate the
Company's use of these funds to acquire Properties at such time as Properties
suitable for acquisition are located or to fund Mortgage Loans. At June 30,
1996, the Company had $13,369,577 invested in such short-term investments as
compared to $11,508,445 at December 31, 1995. The increase in the amount
invested in short-term investments reflects subscription proceeds derived from
the sale of shares during the six months ended June 30, 1996. These funds will
be used primarily to purchase and develop or renovate Properties (directly or
indirectly through joint venture arrangements), to make Mortgage Loans, to pay
organization and offering and acquisition costs, to pay Distributions to
stockholders, to meet Company expenses and, in management's discretion, to
create cash reserves.
During the six months ended June 30, 1996 and 1995, Affiliates of the
Company incurred on behalf of the Company $495,800 and $222,894, respectively,
for certain Organizational and Offering Expenses. In addition, during the six
months ended June 30, 1996 and 1995, Affiliates of the Company incurred on
behalf of the Company $107,383 and $42,703 for certain Acquisition Expenses and
$149,802 and $12,680 for certain Operating Expenses. As of June 30, 1996, the
Company owed the Advisor $121,283 for such amounts, accounting and
administrative expenses and Acquisition Fees. As of August 6, 1996, the Company
had reimbursed all such amounts. The Advisor has agreed to pay or reimburse to
the Company all Organizational and Offering Expenses in excess of three percent
of gross offering proceeds. Other liabilities to unrelated parties increased to
$3,852,773 at June 30, 1996, from $1,173,776 at December 31, 1995, primarily as
a result of the accrual of construction costs incurred and unpaid as of June 30,
1996.
During the six months ended June 30, 1996 and 1995, the Company
generated cash from operations (which includes cash received from tenants and
interest and other income received, less cash paid for operating expenses) of
$1,568,399 and $7,970, respectively. Based on current and anticipated future
cash from operations, the Company declared Distributions to the stockholders of
$1,868,487 and $15,148 during the six months ended June 30, 1996 and 1995,
respectively ($1,100,354 and $15,148 for the quarters ended June 30, 1996 and
1995, respectively). On July 1, 1996, August 1, 1996, and September 1, 1996, the
Company declared Distributions to its stockholders totalling $458,646, $515,906
and $559,599, respectively, payable in September 1996. In addition, on October
1, 1996, the Company declared Distributions to its stockholders totalling
$615,914 payable in December 1996. For the six months ended June 30, 1996,
approximately 85 percent of the Distributions received by stockholders were
considered to be ordinary income and 15 percent were considered a return of
capital for federal income tax purposes. However, no amounts distributed or to
be distributed to the stockholders as of October 3, 1996, are required to be or
have been treated by the Company as a return of capital for purposes of
calculating the stockholders' return on their Invested Capital.
- 35 -
<PAGE>
Management believes that the Properties are adequately covered by
insurance. The Advisor has obtained contingent liability and property coverage
for the Company. This insurance policy is intended to reduce the Company's
exposure in the unlikely event a tenant's insurance policy lapses or is
insufficient to cover a claim relating to the Property.
The Company's investment strategy of acquiring Properties for cash and
leasing them under triple-net leases to operators who meet specified financial
standards is expected to minimize the Company's Operating Expenses. Accordingly,
management believes that any anticipated decrease in the Company's liquidity in
1996, due to its investment of available Net Offering Proceeds in Properties and
Mortgage Loans, will not have an adverse effect on the Company's operations.
During the operational stage, management believes that the leases will generate
cash flow in excess of Operating Expenses. Since the leases are expected
generally to have an initial term of 15 to 20 years, with two or more five-year
renewal options, and provide for specified percentage rent in addition to the
annual base rent and, in certain cases, increases in the base rent at specified
times during the terms of the leases, it is anticipated that rental income will
increase over time.
Due to anticipated low Operating Expenses, rental income expected to be
obtained from Properties after they are acquired, the fact that as of October 3,
1996, the Company had entered into Secured Equipment Leases for amounts borrowed
under the Loan and the fact that payments due to the Company from the Secured
Equipment Leases are expected to exceed debt service requirements for the Loan,
management does not believe that working capital reserves will be necessary at
this time. Management has the right to cause the Company to maintain reserves
if, in their discretion, they determine such reserves are required to meet the
Company's working capital needs.
Management expects that the cash generated from operations will be
adequate to pay Operating Expenses.
RESULTS OF OPERATIONS
No significant operations commenced until the Company received the
minimum offering proceeds of $1,500,000 on June 1, 1995.
As of June 30, 1996, the Company and its consolidated joint venture had
purchased 68 Properties, including one which is owned through a Joint Venture
consisting of land and building, 29 Properties consisting of land and building,
five Properties consisting of building only and 33 Properties consisting of land
only, and entered into lease agreements relating to these Properties. The leases
provide for minimum base annual rental payments (payable in monthly
installments) ranging from approximately $89,700 to $467,500. In addition,
certain leases provide for percentage rent based on sales in excess of a
specified amount. The majority of the leases also provide that, commencing in
generally the sixth lease year, the annual base rent required under the terms of
the leases will increase.
During the six months ended June 30, 1996 and 1995, the Company and its
consolidated joint venture, CNL/Corral South Joint Venture, earned $1,704,185
and $369, respectively, in rental income from operating leases and earned income
from the direct financing lease from 54 Properties and "interim rent" for nine
of the 14 Properties under construction at June 30, 1996, $905,104 and $369 of
which was earned during the quarters ended June 30, 1996 and 1995, respectively.
No rental income was earned for five of the 14 Properties under construction as
of June 30, 1996, due to the fact that rent does not generally commence until
the earlier of (i) the date the restaurant opens for business to the public,
(ii) the date the certificate of occupancy for the restaurant is issued or (iii)
a specified time after the execution of the lease (ranging from 150 to 180
days). As of October 3, 1996, four of these Properties were operational and
rental payments had commenced. The
- 36 -
<PAGE>
fifth Property is expected to be operational by April 1997. Because the Company
did not commence significant operations until it received the minimum offering
proceeds on June 1, 1995, and has not yet acquired all of its Properties,
revenues for the six months ended June 30, 1996, represent only a portion of
revenues which the Company is expected to earn in future periods in which the
Company's Properties are operational.
During the six months ended June 30, 1996, the Company entered into two
Mortgage Loans in the principal sum of $12,363,000, collateralized by a mortgage
on the buildings relating to 33 Pizza Hut Properties. The Mortgage Loans bear
interest at a rate of 10.75% per annum and are being collected in 240 equal
monthly installments totalling $125,513. In connection therewith, the Company
earned $465,498 in interest income relating to such Mortgage Loans during the
six months ended June 30, 1996, $280,549 of which was earned during the quarter
ended June 30, 1996.
During the quarter ended June 30, 1996, two lessees, or groups of
affiliated lessees of the Company, Golden Corral Corporation and Castle Hill
Holdings V, L.L.C. and Castle Hill Holdings VI, L.L.C. (hereinafter referred to
as Castle Hill), each contributed more than ten percent of the Company's total
rental income. Golden Corral Corporation is the lessee under leases relating to
five restaurants and Castle Hill is the lessee under leases relating to 33
restaurants. During the quarter ended June 30, 1996, the Company also earned
$280,549 in interest income from mortgage notes receivable under which Castle
Hill is the borrower. In addition, two restaurant chains, Golden Corral Family
Steakhouse and Pizza Hut each accounted for more than ten percent of the
Company's total rental income during the quarter ended June 30, 1996. Because
the Company has not yet completed its acquisition of Properties, it is not
possible to determine which lessees or Restaurant Chains will contribute more
than ten percent of the Company's rental income during the remainder of 1996 and
subsequent years, with the exception of Castle Hill and Pizza Hut, both of which
the Company anticipates will contribute more than ten percent of the Company's
income during the remainder of 1996 and subsequent years. In the event that
certain lessees, borrowers or Restaurant Chains contribute more than ten percent
of the Company's total income in the current and future years, any failure of
such lessees, borrowers or Restaurants Chains could materially affect the
Company's income.
During the six months ended June 30, 1996 and 1995, the Company also
earned $211,789 and $7,828, respectively, in interest income from investments in
money market accounts or other short-term, highly liquid investments and other
income, $135,940 and $7,828 of which was earned during the quarters ended June
30, 1996 and 1995, respectively. Interest income from investing in money market
accounts or other short-term, highly liquid investments is expected to increase
as the Company invests subscription proceeds in highly liquid investments
pending the acquisition of Properties or investing in Mortgage Loans. However,
as Net Offering Proceeds are invested in Properties and used to make Mortgage
Loans, interest income from investments in money market accounts or other
short-term, highly liquid investments is expected to decrease.
Operating expenses, including depreciation and amortization expense,
were $670,107 and $3,742 for the six months ended June 30, 1996 and 1995,
respectively, of which $369,568 and $3,742 were incurred during the quarters
ended June 30, 1996 and 1995, respectively. Operating expenses increased during
the quarter and six months ended June 30, 1996, as compared to the quarter and
six months ended June 30, 1995, primarily as a result of the fact that the
Company did not commence operations until June 1, 1995. General and
administrative expenses as a percentage of total revenues is expected to
decrease as the Company acquires additional Properties and the Properties under
construction become operational. However, depreciation and amortization expense
is expected to increase as the Company acquires additional Properties.
- 37 -
<PAGE>
THE ADVISOR AND THE ADVISORY AGREEMENT
THE ADVISORY AGREEMENT
The Advisory Agreement was renewed for a period of one year with the
unanimous approval of the Board of Directors, including the Independent
Directors, and shall expire on April 19, 1997, subject to successive one-year
renewals upon mutual consent of the parties.
SUMMARY OF THE
ARTICLES OF INCORPORATION AND BYLAWS
DESCRIPTION OF CAPITAL STOCK
The Company will not issue share certificates except to stockholders
who make a written request to the Company.
- 38 -
<PAGE>
ADDENDUM TO
EXHIBIT B
FINANCIAL INFORMATION
THE UPDATED PRO FORMA FINANCIAL STATEMENTS AND THE UNAUDITED FINANCIAL
STATEMENTS OF CNL AMERICAN PROPERTIES FUND, INC. CONTAINED IN THIS ADDENDUM
SHOULD BE READ IN CONJUNCTION WITH EXHIBIT B TO THE ATTACHED PROSPECTUS, DATED
APRIL 26, 1996.
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
INDEX TO UPDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Pro Forma Consolidated Financial Information (unaudited):
Pro Forma Consolidated Balance Sheet as of June 30, 1996 B-2
Pro Forma Consolidated Statement of Earnings for the six months ended June 30, 1996 B-3
Pro Forma Consolidated Statement of Earnings for the year ended December 31, 1995 B-4
Notes to Pro Forma Consolidated Financial Statements for the six months ended
June 30, 1996 and the year ended December 31, 1995 B-5
Updated Unaudited Condensed Consolidated Financial Statements:
Condensed Consolidated Balance Sheets as of June 30, 1996 and December 31, 1995 B-9
Condensed Consolidated Statements of Earnings for the six months ended June 30, 1996
and 1995 B-10
Condensed Consolidated Statements of Stockholders' Equity for the six months
ended June 30, 1996 and the year ended December 31, 1995 B-11
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 1996
and 1995 B-12
Notes to Condensed Consolidated Financial Statements for the six months ended June 30,
1996 and 1995 B-14
</TABLE>
<PAGE>
PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The following Pro Forma Consolidated Balance Sheet of the Company gives
effect to (i) property acquisition transactions from inception through June 30,
1996, including the receipt of $76,816,648 in gross offering proceeds from the
sale of 7,681,665 shares of common stock pursuant to a Form S-11 under the
Securities Act of 1933, as amended, effective March 29, 1995, and the
application of such proceeds to purchase 68 properties (including 29 properties
which consist of land and building, one property through a joint venture
arrangement which consists of land and building, five properties which consist
of building only and 33 properties consisting of land only), 14 of which were
under construction at June 30, 1996, to provide mortgage financing to the
lessees of the 33 properties consisting of land only, and to pay organizational
and offering expenses, acquisition fees and miscellaneous acquisition expenses,
(ii) the receipt of $27,667,563 in gross offering proceeds from the sale of
2,766,756 additional shares of common stock during the period July 1, 1996
through October 3, 1996, and (iii) the application of such funds and $1,124,908
of cash and cash equivalents at June 30, 1996, to purchase 15 additional
properties acquired during the period July 1, 1996 through October 3, 1996 (12
of which are under construction and consist of land and building, two properties
which consist of land and building and one property which consists of building
only), to pay additional costs for the 14 properties under construction at June
30, 1996, and to pay offering expenses, acquisition fees and miscellaneous
acquisition expenses, all as reflected in the pro forma adjustments described in
the related notes. The Pro Forma Consolidated Balance Sheet as of June 30, 1996,
includes the transactions described in (i) above from its historical
consolidated balance sheet, adjusted to give effect to the transactions in (ii)
and (iii) above, as if they had occurred on June 30, 1996.
The Pro Forma Consolidated Statements of Earnings for the six months
ended June 30, 1996 and the year ended December 31, 1995, include the historical
operating results of the properties described in (i) above from the dates of
their acquisitions plus operating results for the seven of the 83 properties
that were owned by the Company as of October 3, 1996, and had a previous rental
history prior to the Company's acquisition of such properties, from (A) the
later of (1) the date the property became operational as a rental property by
the previous owner or (2) June 2, 1995 (the date the Company became
operational), to (B) the earlier of (1) the date the property was acquired by
the Company or (2) the end of the pro forma period presented. No pro forma
adjustments have been made to the Pro Forma Consolidated Statements of Earnings
for the remaining 76 properties owned by the Company as of October 3, 1996, due
to the fact that these properties did not have a previous rental history.
This pro forma consolidated financial information is presented for
informational purposes only and does not purport to be indicative of the
Company's financial results or condition if the various events and transactions
reflected therein had occurred on the dates, or been in effect during the
periods, indicated. This pro forma consolidated financial information should not
be viewed as predictive of the Company's financial results or conditions in the
future.
B-1
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
JUNE 30, 1996
<TABLE>
<CAPTION>
Pro Forma
ASSETS Historical Adjustments Pro Forma
<S> <C>
Land and buildings on operating
leases, less accumulated depreciation $39,754,572 $15,942,807 (a) $55,697,379
Net investment in direct
financing leases (b) 3,071,035 7,484,840 (a) 10,555,875
Cash and cash equivalents 13,369,577 (1,124,908)(a) 12,244,669
Receivables 114,842 114,842
Mortgage notes receivable 12,432,362 12,432,362
Prepaid expenses 31,396 31,396
Organization costs, less accumulated
amortization 15,682 15,682
Loan costs, less accumulated amortization 44,871 44,871
Accrued rental income 215,222 215,222
Other assets 1,548,050 53,804 (a) 1,601,854
----------- ----------- -----------
$70,597,609 $22,356,543 $92,954,152
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Note payable $ 603,745 $ 603,745
Accrued interest payable 2,462 2,462
Accrued construction costs payable 3,097,615 $(3,097,615)(a) -
Accounts payable and accrued expenses 74,460 74,460
Escrowed real estate taxes payable 9,696 9,696
Due to related parties 206,702 206,702
Deferred financing income 42,518 42,518
Rents paid in advance 22,277 22,277
----------- ----------- -----------
Total liabilities 4,059,475 (3,097,615) 961,860
----------- ----------- -----------
Minority interest 297,808 - 297,808
----------- ----------- -----------
Stockholders' equity:
Preferred stock, without par value.
Authorized and unissued 3,000,000
shares - -
Excess shares, $.01 par value per
share. Authorized and unissued
23,000,000 shares - -
Common stock, $.01 par value per share.
Authorized 20,000,000 shares; issued
and outstanding 7,701,665 shares;
issued and outstanding, as adjusted,
10,468,421 shares 77,017 27,668 (a) 104,685
Capital in excess of par value 66,612,593 25,426,490 (a) 92,039,083
Accumulated distributions in excess
of net earnings (449,284) (449,284)
----------- ----------- -----------
66,240,326 25,454,158 91,694,484
----------- ----------- -----------
$70,597,609 $22,356,543 $92,954,152
=========== =========== ===========
</TABLE>
See accompanying notes to unaudited pro forma consolidated financial statements.
B-2
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
SIX MONTHS ENDED JUNE 30, 1996
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
<S> <C>
Revenues:
Rental income from
operating leases $1,618,001 $ 43,538 (1) $1,661,539
Earned income from
direct financing leases (2) 86,184 34,282 (1) 120,466
Interest income from
mortgage notes receivable 465,498 465,498
Other interest and income 211,789 (16,508)(3) 195,281
---------- ---------- ----------
2,381,472 61,312 2,442,784
---------- ---------- ----------
Expenses:
General operating and
administrative 269,319 269,319
Professional services 48,391 48,391
Asset and mortgage management
fees to related party 97,673 4,352 (4) 102,025
State and other taxes 12,384 1,129 (5) 13,513
Interest expense 3,578 3,578
Depreciation and amortization 238,762 3,300 (6) 242,062
---------- ---------- ----------
670,107 8,781 678,888
---------- ---------- ----------
Earnings Before Minority
Interest in Earnings of
Consolidated Joint Venture 1,711,365 52,531 1,763,896
Minority Interest in Earnings of
Consolidated Joint Venture (22,323) (22,323)
---------- ---------- ----------
Net Earnings $1,689,042 $ 52,531 $1,741,573
========== ========== ==========
Earnings Per Share of
Common Stock $ .30 $ .31
========== ==========
Weighted Average Number of
Shares of Common Stock
Outstanding 5,649,041 5,649,041
========== ==========
</TABLE>
See accompanying notes to unaudited pro forma consolidated financial statements.
B-3
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
YEAR ENDED DECEMBER 31, 1995
Pro Forma
Historical Adjustments Pro Forma
Revenues:
Rental income from
operating leases $ 498,817 $ 96,945 (1) $ 595,762
Earned income from direct
financing leases (2) 28,935 28,935
Contingent rental income 12,024 12,024
Interest income 119,355 (29,664)(3) 89,691
--------- --------- ---------
659,131 67,281 726,412
--------- --------- ---------
Expenses:
General operating and
administrative 134,759 134,759
Professional services 8,119 8,119
Asset management fee to
related party 23,078 4,368 (4) 27,446
State taxes 20,189 1,769 (5) 21,958
Depreciation and amortization 104,131 14,700 (6) 118,831
--------- --------- ---------
290,276 20,837 311,113
--------- --------- ---------
Earnings Before Minority
Interest in Earnings of
Consolidated Joint Venture 368,855 46,444 415,299
Minority Interest in Earnings
of Consolidated Joint Venture (76) (76)
--------- --------- ---------
Net Earnings $ 368,779 $ 46,444 $ 415,223
========= ========= =========
Earnings Per Share of
Common Stock (7) $ .19 $ .22
========= =========
Weighted Average Number
of Shares of Common Stock
Outstanding (7) 1,898,350 1,905,970
========= =========
See accompanying notes to unaudited pro forma consolidated financial statements.
B-4
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
AND THE YEAR ENDED DECEMBER 31, 1995
Pro Forma Consolidated Balance Sheet:
(a) Represents gross proceeds of $27,667,563 from the issuance of 2,766,756
shares of common stock during the period July 1, 1996 through October
3, 1996 and $1,124,908 of cash and cash equivalents at June 30, 1996,
used (i) to acquire 15 properties for $16,423,219 (of which one
property consists of building only and 14 properties consist of land
and building), (ii) to fund estimated construction costs of $8,910,807
($3,097,615 of which was accrued as construction costs payable at June
30, 1996) relating to 14 wholly-owned properties under construction at
June 30, 1996, (iii) to pay acquisition fees of $1,245,040 ($1,191,236
of which was allocated to properties and $53,804 of which was
classified as other assets and will be allocated to future properties)
and to pay selling commissions and offering expenses (stock issuance
costs) of $2,213,405, which have been netted against capital in excess
of par value.
The pro forma adjustments to land and buildings on operating leases and
net investment in direct financing leases as a result of the above
transactions were as follows:
<TABLE>
<CAPTION>
Estimated
purchase price
(including con-
struction and Acquisition
closing costs) fees
and additional allocated
construction costs to property Total
<S> <C>
Boston Market in Corvallis, OR $ 906,684 $ 48,573 $ 955,257
Jack in the Box in Houston, TX 893,681 47,876 941,557
Arby's in Kendallville, IN 738,326 39,553 777,879
Boston Market in Rockwall, TX 758,432 40,630 799,062
Boston Market in Upland, CA 969,780 51,953 1,021,733
Jack in the Box in Houston, TX 911,104 48,809 959,913
Applebee's in Montclair, CA 1,593,906 85,388 1,679,294
Golden Corral in Brooklyn, OH 986,780 52,863 1,039,643
Boston Market in La Quinta, CA 943,388 50,539 993,927
Boston Market in Merced, CA 923,356 49,465 972,821
Arby's in Avon, IN 789,676 42,304 831,980
Ryan's in Spring Hill, FL 1,852,027 99,215 1,951,242
Applebee's in Salinas, CA 1,325,026 70,983 1,396,009
Boston Market in Florissant, MO 1,253,881 67,172 1,321,053
Burger King in Chicago, IL 1,577,172 84,491 1,661,663
Fourteen wholly owned properties
under construction at
June 30, 1996 5,813,192 311,422 6,124,614
----------- ----------- -----------
$22,236,411 $ 1,191,236 $23,427,647
=========== =========== ===========
Adjustment classified
as follows:
Land and buildings on
operating leases $15,942,807
Net investment in
direct financing
leases 7,484,840
----------
$23,427,647
===========
</TABLE>
B-5
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
STATEMENTS - CONTINUED
FOR THE SIX MONTHS ENDED JUNE 30, 1996
AND THE YEAR ENDED DECEMBER 31, 1995
Pro Forma Consolidated Balance Sheet - Continued:
(b) In accordance with generally accepted accounting principles, leases in
which the present value of future minimum lease payments equals or
exceeds 90 percent of the value of the related properties are treated
as direct financing leases rather than as land and buildings. The
categorization of the leases has no effect on rental revenues received.
The building portions of ten of the properties have been classified as
direct financing leases.
Pro Forma Consolidated Statements of Earnings:
(1) Represents rental income from operating leases and earned income from
direct financing leases for the seven of the 83 properties acquired
during the period June 2, 1995 (the date the Company began operations)
through October 3, 1996 which had a previous rental history prior to
the acquisition of the property by the Company (the "Pro Forma
Properties"), for the period commencing (A) the later of (i) the date
the Pro Forma Property became operational as a rental property by the
previous owner or (ii) June 2, 1995 (the date the Company became
operational), to (B) the earlier of (i) the date the Pro Forma Property
was acquired by the Company or (ii) the end of the pro forma period
presented. Each of the seven Pro Forma Properties was acquired from an
affiliate who had purchased and temporarily held title to the property.
The noncancellable leases for the Pro Forma Properties in place during
the period the affiliate owned the properties were assigned to the
Company at the time the Company acquired the properties. The following
presents the actual date the Pro Forma Properties were acquired by the
Company as compared to the date the Pro Forma Properties were treated
as becoming operational as a rental property for purposes of the Pro
Forma Consolidated Statements of Earnings.
Date Pro Forma
Date Placed Property Became
in Service Operational as
By the Company Rental Property
Jack in the Box in
Los Angeles, CA June 1995 June 1995
Kenny Rogers Roasters in
Grand Rapids, MI August 1995 June 1995
Kenny Rogers Roasters in
Franklin, TN August 1995 June 1995
Denny's in Pasadena, TX September 1995 August 1995
Denny's in Shawnee, OK September 1995 August 1995
Denny's in Grand Rapids, MI March 1996 September 1995
Denny's in McKinney, TX June 1996 December 1995
B-6
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
STATEMENTS - CONTINUED
FOR THE SIX MONTHS ENDED JUNE 30, 1996
AND THE YEAR ENDED DECEMBER 31, 1995
Pro Forma Consolidated Statements of Earnings - Continued:
In accordance with generally accepted accounting principles, lease
revenue from leases accounted for under the operating method is
recognized over the terms of the leases. For operating leases providing
escalating guaranteed minimum rents, income is reported on a
straight-line basis over the terms of the leases. For leases accounted
for as direct financing leases, future minimum lease payments are
recorded as a receivable. The difference between the receivable and the
estimated residual values less the cost of the properties is recorded
as unearned income. The unearned income is amortized over the lease
terms to provide a constant rate of return. Accordingly, pro forma
rental income from operating leases and earned income from direct
financing leases does not necessarily represent rental payments that
would have been received if the properties had been operational for the
full pro forma period.
Generally, the leases provide for the payment of percentage rent in
addition to base rental income. However, due to the fact that no
percentage rent was due under the leases for the Pro Forma Properties
during the portion of 1996 and 1995 that the previous owners held the
properties, no pro forma adjustment was made for percentage rental
income for the six months ended June 30, 1996 and the year ended
December 31, 1995.
(2) See Note (b) under "Pro Forma Consolidated Balance Sheet" above for a
description of direct financing leases.
(3) Represents adjustment to interest income due to the decrease in the
amount of cash available for investment in interest bearing accounts
during the periods commencing (A) on the later of (i) the dates the Pro
Forma Properties became operational as rental properties by the
previous owners or (ii) June 2, 1995 (the date the Company became
operational), through (B) the earlier of (i) the actual dates of
acquisition by the Company or the end of the pro forma period
presented, as described in Note (1) above. The estimated pro forma
adjustment is based upon the fact that interest income on interest
bearing accounts was earned at a rate of approximately four percent per
annum by the Company during the six months ended June 30, 1996 and the
year ended December 31, 1995.
(4) Represents incremental increase in asset management fees relating to
the Pro Forma Properties for the period commencing (A) on the later of
(i) the date the Pro Forma Properties became operational as rental
properties by the previous owners or (ii) June 2, 1995 (the date the
Company became operational), through (B) the earlier of (i) the date
the Pro Forma Properties were acquired by the Company or (ii) the end
of the pro forma period presented, as described in Note (1) above.
Asset management fees are equal to 0.60% of the Company's Real Estate
Asset Value (estimated to be approximately $6,219,000 and $5,241,000
for the Pro Forma Properties for the six months ended June 30, 1996 and
the year ended December 31, 1995, respectively), as defined in the
Company's prospectus.
(5) Represents adjustment to state tax expense due to the incremental
increase in rental revenues of Pro Forma Properties. Estimated pro
forma state tax expense was calculated based on an analysis of state
laws of the various states in which the Company has acquired the Pro
Forma Properties. The estimated pro forma state taxes consist
primarily of income and franchise taxes ranging from zero to
approximately five percent of the Company's pro forma rental income of
each Pro Forma Property. Due to the fact that the Company's leases are
triple net, the Company has not included any amounts for real estate
taxes in the pro forma statement of earnings.
B-7
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
STATEMENTS - CONTINUED
FOR THE SIX MONTHS ENDED JUNE 30, 1996
AND THE YEAR ENDED DECEMBER 31, 1995
Pro Forma Consolidated Statements of Earnings - Continued:
(6) Represents incremental increase in depreciation expense of the building
portions of the Pro Forma Properties accounted for as operating leases
using the straight-line method over an estimated useful life of 30
years.
(7) Historical earnings per share were calculated based upon the weighted
average number of shares of common stock outstanding during the six
months ended June 30, 1996, and during the period the Company was
operational, June 2, 1995 (the date following when the Company received
the minimum offering proceeds and funds were released from escrow)
through December 31, 1995.
As a result of three of the six Pro Forma Properties being treated in
the Pro Forma Consolidated Statement of Earnings for the year ended
December 31, 1995, as placed in service on June 2, 1995 (the date the
Company became operational), the Company assumed approximately 347,100
shares of common stock were sold, and the net offering proceeds were
available for investment, on June 2, 1995. Due to the fact that
approximately 184,800 of these shares of common stock were actually
sold subsequently, during the period June 3, 1995 through June 20,
1995, the weighted average number of shares outstanding for the pro
forma period was adjusted. Pro forma earnings per share were calculated
based upon the weighted average number of shares of common stock
outstanding, as adjusted, during the period the Company was
operational, June 2, 1995 through December 31, 1995.
B-8
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, December 31,
ASSETS 1996 1995
----------- -----------
Land and buildings on operating leases,
less accumulated depreciation $39,754,572 $19,723,726
Net investment in direct financing leases 3,071,035 1,373,882
Cash and cash equivalents 13,369,577 11,508,445
Receivables 114,842 113,613
Mortgage notes receivable 12,432,362 -
Prepaid expenses 31,396 8,090
Organization costs, less accumulated
amortization of $4,318 and $2,318 15,682 17,682
Loan costs, less accumulated amorti-
zation of $8,629 at June 30, 1996 44,871 -
Accrued rental income 215,222 39,142
Other assets 1,548,050 818,504
----------- -----------
$70,597,609 $33,603,084
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Note payable $ 603,745 $ -
Accrued interest payable 2,462 -
Accrued construction costs payable 3,097,615 1,058,825
Accounts payable and accrued expenses 74,460 79,904
Escrowed real estate taxes payable 9,696 9,696
Due to related parties 206,702 248,584
Deferred financing income 42,518 -
Rents paid in advance 22,277 25,351
----------- -----------
Total liabilities 4,059,475 1,422,360
----------- -----------
Minority interest 297,808 200,076
----------- -----------
Commitments (Note 13)
Stockholders' equity:
Preferred stock, without par value.
Authorized and unissued 3,000,000
shares - -
Excess shares, $.01 par value per share.
Authorized and unissued 23,000,000
shares - -
Common stock, $.01 par value per share.
Authorized 20,000,000 shares, issued
and outstanding 7,701,665 and 3,865,416,
respectively 77,017 38,654
Capital in excess of par value 66,612,593 32,211,833
Accumulated distributions in excess of
net earnings (449,284) (269,839)
----------- -----------
Total stockholders' equity 66,240,326 31,980,648
----------- -----------
$70,597,609 $33,603,084
=========== ===========
See accompanying notes to condensed consolidated financial statements.
B-9
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C>
Revenues:
Rental income from
operating leases $ 854,846 $ 369 $1,618,001 $ 369
Earned income from
direct financing
lease 50,258 - 86,184 -
Interest income from
mortgage notes
receivable 280,549 - 465,498 -
Other interest and
income 135,940 7,828 211,789 7,828
---------- ---------- ---------- ----------
1,321,593 8,197 2,381,472 8,197
---------- ---------- ---------- ----------
Expenses:
General operating and
administrative 140,371 3,352 269,319 3,352
Professional services 18,699 - 48,391 -
Asset and mortgage
management fees to
related party 57,303 - 97,673 -
State and other taxes 9,486 19 12,384 19
Interest expense 3,419 - 3,578 -
Depreciation and
amortization 140,290 371 238,762 371
---------- ---------- ---------- ----------
369,568 3,742 670,107 3,742
---------- ---------- ---------- ----------
Earnings Before Minority
Interest in Income of
Consolidated Joint
Venture 952,025 4,455 1,711,365 4,455
Minority Interest in
Income of Consolidated
Joint Venture (7,571) - (22,323) -
---------- ---------- ---------- ---------
Net Earnings $ 944,454 $ 4,455 $1,689,042 $ 4,455
========== ========== ========== ==========
Earnings Per Share of
Common Stock $ .14 $ .01 $ .30 $ .01
========== ========== ========== ==========
Weighted Average Number
of Shares of Common
Stock Outstanding 6,649,040 340,541 5,649,041 340,541
========== ========== ========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
B-10
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Six Months Ended June 30, 1996 and
Year Ended December 31, 1995
<TABLE>
<CAPTION>
Accumulated
Common stock distributions
------------------- Capital in in excess
Number Par excess of of net
of shares value par value earnings Total
<S> <C>
Balance at
December 31, 1994 20,000 $ 200 $ 199,800 $ - $ 200,000
Subscriptions
received for
common stock
through public
offering and
distribution
reinvestment
plan 3,845,416 38,454 38,415,704 - 38,454,158
Stock issuance
costs - - (6,403,671) - (6,403,671)
Net earnings - - - 368,779 368,779
Distributions
declared and
paid ($.03
to $.06 per
share) - - - (638,618) (638,618)
--------- ------- ----------- --------- -----------
Balance at
December 31, 1995 3,865,416 38,654 32,211,833 (269,839) 31,980,648
Subscriptions
received for
common stock
through public
offering and
distribution
reinvestment
plan 3,836,249 38,363 38,324,127 - 38,362,490
Stock issuance
costs - - (3,923,367) - (3,923,367)
Net earnings - - - 1,689,042 1,689,042
Distributions
declared and
paid ($.06
per share) - - - (1,868,487) (1,868,487)
--------- ------- ----------- ----------- -----------
Balance at
June 30, 1996 7,701,665 $77,017 $66,612,593 $(449,284) $66,240,326
========= ======= =========== =========== ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
B-11
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended
June 30,
1996 1995
------------ ------------
Increase (Decrease) in Cash and Cash
Equivalents:
Net cash provided by operating
activities $ 1,573,575 $ 7,970
------------ ------------
Cash Flows From Investing Activities:
Additions to land and buildings
on operating leases (18,316,555) (1,192,053)
Investment in direct financing
leases (1,555,641) -
Investment in mortgage notes
receivable (12,363,000) -
Collection of deferred financing
income 43,270 -
Collection of mortgage notes
payments 41,022 -
Increase in other assets (644,752) (168,293)
------------ ------------
Net cash used in investing
activities (32,795,656) (1,360,346)
------------ ------------
Cash Flows From Financing Activities:
Reimbursement of acquisition,
organization and stock issuance
costs paid by related parties
on behalf of the Company (556,511) (1,288,234)
Proceeds of borrowing on line
of credit 603,745 -
Payment of loan costs (53,500) -
Contribution from minority
interest of consolidated
joint venture 97,419 -
Subscriptions received from
stockholders 38,362,490 4,849,410
Distribution to minority interest (22,010) -
Distributions to stockholders (1,871,820) -
Payment of stock issuance costs (3,502,100) (377,764)
Other 25,500 -
------------ -----------
Net cash provided by
financing activities 33,083,213 3,183,412
------------ ------------
Net Increase in Cash and Cash Equivalents 1,861,132 1,831,036
Cash and Cash Equivalents at Beginning
of Period 11,508,445 945
------------ ------------
Cash and Cash Equivalents at End
of Period $ 13,369,577 $ 1,831,981
============ ============
See accompanying notes to condensed consolidated financial statements.
B-12
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
Six Months Ended
June 30,
1996 1995
------------ ------------
Supplemental Schedule of Non-Cash
Investing and Financing Activities:
Related parties paid certain
acquisition, organization and
stock issuance costs on behalf
of the Company as follows:
Acquisition costs $ 107,383 $ 42,703
Organization costs - 20,000
Stock issuance costs 495,800 518,363
------------ ------------
$ 603,183 $ 581,066
============ ============
Land, building and other costs
incurred and unpaid at end of
period $ 3,155,108 $ 11,311
============ ============
Commissions, marketing support and
due diligence expense reimbursement
fee, and other stock issuance costs
incurred and unpaid at end of period $ 102,398 $ 565,954
============ ============
Distributions declared and unpaid at
end of period $ - $ 15,148
============ ============
See accompanying notes to condensed consolidated financial statements.
B-13
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Quarters and Six Months Ended June 30,
1996 and 1995
1. Organization and Nature of Business:
CNL American Properties Fund, Inc. (the "Company") was organized in
Maryland on May 2, 1994, for the purpose of acquiring, directly or
indirectly through joint venture or co-tenancy arrangements, restaurant
properties (the "Properties") to be leased on a long-term, triple-net
basis to operators of certain national and regional fast-food,
family-style and casual dining restaurant chains. To a lesser extent,
the Company intends to offer furniture, fixtures and equipment
financing ("Secured Equipment Leases") to operators of restaurant
chains. Secured Equipment Leases will be funded from the proceeds of a
loan of up to ten percent of the gross offering proceeds.
2. Basis of Presentation:
The accompanying unaudited condensed consolidated 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 the Company's
Form 10-K for the year ended December 31, 1995.
The Company was a development stage enterprise from May 2, 1994 through
June 1, 1995. Since operations had not begun, activities through June
1, 1995, were devoted to organization of the Company.
The Company accounts for its 85.47% interest in CNL/Corral South Joint
Venture using the consolidation method. Minority interest represents
the minority joint venture partner's proportionate share of the equity
in the Company's consolidated joint venture. All significant
intercompany accounts and transactions have been eliminated.
B-14
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30,
1996 and 1995
2. Basis of Presentation - Continued:
Effective January 1, 1996, the Company 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 Company's financial position or results of
operations.
Cash and Cash Equivalents - The Company considers all highly liquid
investments with a maturity of three months or less when purchased to
be cash equivalents. Cash and cash equivalents consist of demand
deposits at commercial banks, certificates of deposit and money market
funds (some of which are backed by government securities). Cash
equivalents are stated at cost plus accrued interest, which
approximates market value.
Cash accounts maintained on behalf of the Company in demand deposits at
commercial banks, money market funds and certificates of deposit may
exceed federally insured levels; however, the Company has not
experienced any losses in such accounts. The Company limits investment
of temporary cash investments to financial institutions with high
credit standing; therefore, management believes it is not exposed to
any significant credit risk on cash and cash equivalents.
Earnings Per Share - Earnings per share are calculated based upon the
weighted average number of shares of common stock outstanding during
the period the Company was operational.
3. Leases:
The Company leases its land, buildings and equipment subject to Secured
Equipment Leases primarily to operators or franchisees of national and
regional fast-food, family-style and casual dining restaurants. The
leases are accounted for under the provisions of Statement of Financial
Accounting Standards No. 13, "Accounting for Leases." The leases
relating to 65 of the Company's Properties have been classified as
operating leases (including the leases relating to 14 Properties under
construction as of June 30, 1996) and the leases relating to three
Properties and one Secured Equipment Lease have been classified as
direct financing leases. For the leases classified as direct financing
leases,
B-15
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30,
1996 and 1995
3. Leases - Continued:
the building portions of the leases are accounted for as direct
financing leases while the land portion of one of these leases is
accounted for as an operating lease.
4. Land and Buildings on Operating Leases:
Land and buildings on operating leases consisted of the following at:
June 30, December 31,
1996 1995
-------- -----------
Land $22,032,580 $ 8,890,471
Buildings 12,639,571 10,049,032
----------- -----------
34,672,151 18,939,503
Less accumulated
depreciation (300,179) (100,318)
----------- -----------
34,371,972 18,839,185
Construction in
progress 5,382,600 884,541
----------- -----------
$39,754,572 $19,723,726
=========== ===========
Some leases provide for escalating guaranteed minimum rents throughout
the lease term. Income from these scheduled rent increases is
recognized on a straight-line basis over the terms of the leases. For
the quarter and six months ended June 30, 1996, the Company recognized
$63,175 and $176,080, respectively, and for the quarter and six months
ended June 30, 1995, the Company recognized $50, of such rental income.
The following is a schedule of future minimum lease payments to be
received on the noncancellable operating leases at June 30, 1996:
1996 $ 1,335,207
1997 2,949,196
1998 2,953,978
1999 2,960,672
2000 2,975,837
Thereafter 42,990,911
-----------
$56,165,801
===========
These amounts do not include minimum lease payments that will become
due when Properties under development are completed (See Note 13).
B-16
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30,
1996 and 1995
5. Net Investment in Direct Financing Leases:
The following lists the components of the net investment in direct
financing leases at:
June 30, December 31,
1996 1995
------- ------------
Minimum lease payments
receivable $ 6,179,502 $ 2,498,881
Estimated residual
values 163,176 343,740
Less unearned income (3,271,643) (1,468,739)
----------- -----------
Net investment in
direct financing
leases $ 3,071,035 $ 1,373,882
=========== ===========
The following is a schedule of future minimum lease payments to be
received on the direct financing leases at June 30, 1996:
1996 $ 230,098
1997 456,288
1998 456,288
1999 456,288
2000 459,607
Thereafter 4,120,933
----------
$6,179,502
==========
6. Mortgage Notes Receivable:
In January 1996, in connection with the acquisition of land for 23
Pizza Hut restaurants in Ohio and Michigan, the Company accepted a
promissory note in the principal sum of $8,475,000, collateralized by a
mortgage on the buildings on the 23 Pizza Hut Properties. The
promissory note bears interest at a rate of 10.75% per annum and is
being collected in 240 equal monthly installments of $86,041. As of
June 30, 1996, $8,509,532 was outstanding relating to this note,
including $75,554 in accrued interest.
In addition, in May 1996, in connection with the acquisition of land
for 10 Pizza Hut restaurants in West Virginia and Ohio, the Company
accepted a promissory note in the principal sum of $3,888,000,
collateralized by a mortgage on the buildings on the 10 Pizza Hut
Properties. The promissory note bears interest at a rate of 10.75% per
annum and is being
B-17
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30,
1996 and 1995
6. Mortgage Notes Receivable - Continued:
collected in 240 equal monthly installments of $39,472. As of June 30,
1996, $3,922,830 was outstanding relating to this note, including
$34,830 in accrued interest.
Statement of Financial Accounting Standards No. 107, "Disclosures About
Fair Value of Financial Instruments," requires disclosure of the fair
value of significant financial instruments. Management believes, based
upon the current terms, that the estimated fair value of the Company's
mortgage notes receivable as of June 30, 1996, was $12,432,362, the
same as its carrying value.
7. Other Assets:
Other assets consisted of the following at:
June 30, December 31,
1996 1995
-------- ------------
Acquisition fees and
miscellaneous acqui-
sition expenses to
be allocated to
future properties $ 844,419 $ 806,504
Deferred costs relating
to mortgage notes
receivable 642,506 -
Other 89,835 12,000
---------- ----------
$1,576,760 $ 818,504
========== ==========
8. Note Payable:
On March 5, 1996, the Company entered into a line of credit (the
"Loan") and security agreement with a bank. The Loan is to be used by
the Company to offer Secured Equipment Leases. The Loan provides that
the Company will be able to receive advances of up to $15,000,000 until
March 4, 1998. Generally, advances under the Loan will be fully
amortizing term loans repayable in terms equal to the duration of the
Secured Equipment Leases, but in no event greater than 72 months. In
addition, advances for short-term needs (to acquire equipment to be
leased under Secured Equipment Leases) may be requested in an aggregate
amount which does not exceed the Revolving Sublimit (defined in the
Loan as $1,000,000) and such advances may be repaid and readvanced;
provided, however, that advances made pursuant to the Revolving
Sublimit shall be converted to term loans the earlier of (i) the end of
each 60
B-18
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30,
1996 and 1995
8. Note Payable - Continued:
day period following the closing date (defined in the Loan as March 5,
1996), or (ii) when the aggregate amount outstanding equals or exceeds
$1,000,000. Interest on advances made pursuant to the Revolving
Sublimit shall be paid monthly in arrears. In addition, principal
amounts under advances pursuant to the Revolving Sublimit, if not
sooner paid or converted into term loans, shall be paid, together with
any unpaid interest relating to such advances, to the bank on March 5,
1998. Generally, all advances under the Loan will bear interest at
either (i) a rate per annum equal to 215 basis points above the Reserve
Adjusted LIBOR Rate (as defined in the Loan) or (ii) a rate per annum
equal to the bank's prime rate, whichever the Company selects at the
time advances are made. As a condition of obtaining the Loan, the
Company agreed to grant to the bank a first security interest in the
Secured Equipment Leases. In connection with the Loan, the Company
incurred a commitment fee, legal fees and closing costs of $53,500. As
of June 30, 1996, the Company had obtained two advances totalling
$603,745 relating to the Loan. The proceeds of the advances were used
to fund a Secured Equipment Lease at a cost of approximately $550,000
and to pay $53,500 in loan costs described above. As of June 30, 1996,
$606,207 was outstanding relating to the Loan, including $2,462 of
accrued interest. As of June 30, 1996, the Company had not yet
converted the outstanding principal amounts to term loans, as described
above. The Company intends to limit advances under the Loan to 10% of
gross proceeds of the offering.
9. Stock Issuance Costs:
The Company has incurred certain expenses of its offering of shares,
including commissions, marketing support and due diligence expense
reimbursement fees, filing fees, legal, accounting, printing and escrow
fees, which have been deducted from the gross proceeds of the offering.
Preliminary costs incurred prior to raising capital were advanced by
CNL Fund Advisors, Inc. (the "Advisor"). The Advisor has agreed to pay
all organizational and offering expenses (excluding commissions and
marketing support and due diligence expense reimbursement fees) which
exceed three percent of the gross offering proceeds received from the
sale of shares of the Company.
As of June 30, 1996 and December 31, 1995, the Company had incurred a
total of $10,347,038 and $6,423,671, respectively, in organizational
and offering costs, including $6,145,332 and $3,076,333, respectively,
in commissions and marketing support
B-19
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30,
1996 and 1995
9. Stock Issuance Costs - Continued:
and due diligence expense reimbursement fees (see Note 11). Of these
amounts as of June 30, 1996 and December 31, 1995, $10,327,038 and
$6,403,671, respectively, has been treated as stock issuance costs and
$20,000 has been treated as organization costs. The stock issuance
costs have been charged to stockholders' equity subject to the three
percent cap described above.
10. Distributions:
Distributions declared for the six months ended June 30, 1996,
represent approximately $1,574,000 of ordinary income and approximately
$294,000 of return of capital to stockholders for federal income tax
purposes. No amounts distributed to the stockholders for the six months
ended June 30, 1996, are required to be or have been treated by the
Company as a return of capital for purposes of calculating the
stockholders' return on their invested capital. The characterization
for tax purposes of distributions declared for the six months ended
June 30, 1996, may not be indicative of the results that may be
expected for the year ending December 31, 1996.
11. Related Party Transactions:
During the six months ended June 30, 1996, the Company incurred
$2,877,187 in selling commissions due to CNL Securities Corp. for
services in connection with the offering of shares. A substantial
portion of this amount ($2,603,613) was or will be paid as commissions
to other broker-dealers.
In addition, CNL Securities Corp. is entitled to receive a marketing
support and due diligence expense reimbursement fee equal to 0.5% of
the total amount raised from the sale of shares, a portion of which may
be reallowed to other broker-dealers. During the six months ended June
30, 1996, the Company incurred $191,812 of such fees.
The Advisor is entitled to receive acquisition fees for services in
identifying the Properties and structuring the terms of the acquisition
and leases of the Properties equal to 4.5% of the total amount raised
from the sale of shares. During the six months ended June 30, 1996, the
Company incurred $1,726,312 of such fees. Such fees are included in
land and buildings on operating leases, net investment in direct
financing leases and other assets.
B-20
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30,
1996 and 1995
11. Related Party Transactions - Continued:
For negotiating Secured Equipment Leases and supervising the Secured
Equipment Lease program, the Advisor will be entitled to receive from
the Company a one-time secured equipment lease servicing fee of two
percent of the purchase price of the equipment that is the subject of a
Secured Equipment Lease. During the quarter and six months ended June
30, 1996, the Company incurred $10,776 in secured equipment lease
servicing fees. Such fees are included in net investment in direct
financing leases.
The Company and the Advisor have entered into an advisory agreement
pursuant to which the Advisor will receive a monthly asset and mortgage
management fee of one-twelfth of 0.60% of the Company's real estate
asset value (generally, the total amount invested in the Properties as
of the end of the preceding month, exclusive of acquisition fees and
acquisition expenses), plus one-twelfth of .60% of the Company's total
principal amount of the mortgage loans as of the end of the preceding
month. The management fee, which will not exceed fees which are
competitive for similar services in the same geographic area, may or
may not be taken, in whole or in part as to any year, in the sole
discretion of the Advisor. All or any portion of the management fee not
taken as to any fiscal year shall be deferred without interest and may
be taken in such other fiscal year as the Advisor shall determine.
During the quarter and six months ended June 30, 1996, the Company
incurred $58,762 and $100,526, respectively, in total asset and
mortgage management fees, $1,459 and $2,853, respectively, of which was
capitalized as part of the cost of building for Properties under
construction. No asset or mortgage management fees were incurred for
the quarter and six months ended June 30, 1995.
The Advisor and its affiliates provide accounting and administrative
services to the Company (including accounting and administrative
services in connection with the offering of shares) on a day-to-day
basis. For the six months ended June 30, 1996 and 1995, the expenses
incurred for these services were classified as follows:
1996 1995
-------- ------
Stock issuance costs $379,090 $200,492
General operating and
administrative expenses 154,018 330
-------- --------
$533,108 $200,822
======== ========
B-21
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30,
1996 and 1995
11. Related Party Transactions - Continued:
During the six months ended June 30, 1996, the Company acquired two
Properties for an aggregate purchase price of approximately $1,798,000
from affiliates of the Company. The affiliates had purchased and
temporarily held title to these Properties in order to facilitate the
acquisition of the Properties by the Company. Each Property was
acquired at a cost equal to the cost of the Property to the affiliate
(including carrying costs) due to the fact that these amounts were less
than each Property's appraised value.
The due to related parties consisted of the following at:
June 30, December 31,
1996 1995
-------- ------------
Due to the Advisor:
Expenditures incurred
on behalf of the
Company and accounting
and administrative
services $ 73,221 $108,316
Acquisition fees 48,062 45,118
Asset and mortgage
management fees - 9,108
Distributions - 3,332
-------- --------
121,283 165,874
-------- --------
Due to CNL Securities Corp:
Commissions 80,079 75,197
Marketing support and due
diligence expense reim-
bursement fees 5,340 5,013
-------- --------
85,419 80,210
-------- --------
Other - 2,500
-------- --------
$206,702 $248,584
======== ========
B-22
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30,
1996 and 1995
12. Concentration of Credit Risk:
The following schedule presents total rental and earned income from
individual lessees, or affiliated groups of lessees, each representing
more than ten percent of the Company's total rental and earned income
for at least one of the quarters ended June 30:
1996 1995
-------- --------
Castle Hill Holdings V,
L.L.C. and Castle Hill
Holdings VI, L.L.C.
("Castle Hill") $160,536 $ -
Golden Corral Corporation 142,178 -
Foodmaker, Inc. 52,833 369
During the quarter ended June 30, 1996, the Company also earned
$280,549 in interest income from mortgage notes receivable under which
Castle Hill is the borrower.
In addition, the following schedule presents total rental and earned
income from individual restaurant chains, each representing more than
ten percent of the Company's total rental and earned income for at
least one of the quarters ended June 30:
1996 1995
-------- --------
Golden Corral
Family Steakhouse
Restaurants $313,694 $ -
Pizza Hut 160,536 -
Jack in the Box 52,833 369
Although the Company's Properties are geographically diverse and the
Company's lessees operate a variety of restaurant concepts, failure of
any one of these restaurant chains or any lessee or borrower that
contributes more than ten percent of the Company's total income could
significantly impact the results of operations of the Company. However,
management believes that the risk of such a default is reduced due to
the essential or important nature of these Properties for the on-going
operations of the lessees and borrowers.
It is expected that the percentage of total rental and earned income
contributed by these lessees, borrowers and restaurant chains will
decrease as additional Properties are acquired and leased in 1996 and
subsequent years.
B-23
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30,
1996 and 1995
13. Commitments:
The Company has entered into various development agreements with
tenants which provide terms and specifications for the construction of
buildings the tenants have agreed to lease once construction is
completed. The agreements provide a maximum amount of development costs
(including the purchase price of the land and closing costs) to be paid
by the Company. The aggregate maximum development costs the Company has
agreed to pay is approximately $17,499,600, of which approximately
$11,111,000 in land and other costs had been incurred as of June 30,
1996. The buildings currently under construction are expected to be
operational by October 1996. In connection with the purchase of each
Property, the Company, as lessor, entered into a long-term lease
agreement.
14. Subsequent Events:
During the period July 1, 1996 through August 6, 1996, the Company
received subscription proceeds for an additional 1,105,184 shares
($11,051,838) of common stock.
Subsequent to June 30, 1996, the Company declared distributions of
$458,646 and $515,906, respectively, or $.059375 per share of common
stock, payable in September 1996, to stockholders of record on July 1,
1996 and August 1, 1996, respectively.
During the period July 1, 1996 through August 6, 1996, the Company
acquired six Properties (five of which are undeveloped land on which
restaurants are being constructed) for cash at a total cost of
approximately $3,083,000, excluding closing and development costs. In
connection with the purchase of each Property, the Company, as lessor,
entered into a long-term lease agreement. The development costs
(including the purchase of the land and closing costs) to be paid by
the Company relating to the five properties under construction are
estimated to be approximately $4,578,000. The buildings under
construction are expected to be operational by February 1997.
During the period July 1, 1996 through August 6, 1996, the Company
obtained two additional advances totalling approximately $1,093,000
under its $15,000,000 Loan. The proceeds of the advances were used to
fund two Secured Equipment Leases at a cost of approximately
$1,093,000. In connection with the Company's advances under the Loan,
in July 1996, the Company converted a total of approximately $1,686,000
from variable rate advances to fixed rate advances (at a rate of nine
percent per annum) (See Note 8).
B-24
ADDENDUM TO
EXHIBIT C
PRIOR PERFORMANCE TABLES
THE FOLLOWING INFORMATION UPDATES AND REPLACES THE CORRESPONDING INFORMATION IN
EXHIBIT C TO THE ATTACHED PROSPECTUS, DATED APRIL 26, 1996.
<PAGE>
EXHIBIT C
PRIOR PERFORMANCE TABLES
The information in this Exhibit C contains certain relevant summary
information concerning prior public partnerships sponsored by two of the
Company's principals (who also serve as the Chairman of the Board and President
of the Company) and their Affiliates (the "Prior Public Partnerships") which
like the Company, were formed to invest in restaurant properties leased on a
triple-net basis to operators of national and regional fast-food and
family-style restaurant chains.
A more detailed description of the acquisitions by the Prior Public
Partnerships is set forth in Part II of the registration statement filed with
the Securities and Exchange Commission for this Offering and is available from
the Company upon request, without charge. In addition, upon request to the
Company, the Company will provide, without charge, a copy of the most recent
Annual Report on Form 10-K filed with the Securities and Exchange Commission for
CNL Income Fund, Ltd., CNL Income Fund II, Ltd., CNL Income Fund III, Ltd., CNL
Income Fund IV, Ltd., CNL Income Fund V, Ltd., CNL Income Fund VI, Ltd., CNL
Income Fund VII, Ltd., CNL Income Fund VIII, Ltd., CNL Income Fund IX, Ltd., CNL
Income Fund X, Ltd., CNL Income Fund XI, Ltd., CNL Income Fund XII, Ltd., CNL
Income Fund XIII, Ltd., CNL Income Fund XIV, Ltd., CNL Income Fund XV, Ltd., CNL
Income Fund XVI, Ltd., CNL Income Fund XVII, Ltd. and CNL Income Fund XVIII,
Ltd., as well as a copy, for a reasonable fee, of the exhibits filed with such
reports.
The investment objectives of the Prior Public Partnerships (like those
of the Company) generally include preservation and protection of capital, the
potential for increased income and protection against inflation, and potential
for capital appreciation, all through investment in restaurant properties. In
addition, the investment objectives of the Prior Public Partnerships included
making partially tax-sheltered distributions.
STOCKHOLDERS SHOULD NOT CONSTRUE INCLUSION OF THE FOLLOWING TABLES AS
IMPLYING THAT THE COMPANY WILL HAVE RESULTS COMPARABLE TO THOSE REFLECTED IN
SUCH TABLES. DISTRIBUTABLE CASH FLOW, FEDERAL INCOME TAX DEDUCTIONS, OR OTHER
FACTORS COULD BE SUBSTANTIALLY DIFFERENT. STOCKHOLDERS SHOULD NOTE THAT, BY
ACQUIRING SHARES IN THE COMPANY, THEY WILL NOT BE ACQUIRING ANY INTEREST IN ANY
PRIOR PUBLIC PARTNERSHIPS.
Description of Tables
The following Tables are included herein:
Table I - Experience in Raising and Investing Funds
Table II - Compensation to Sponsor
Table III - Operating Results of Prior Programs
Table V - Sales or Disposal of Properties
Unless otherwise indicated in the Tables, all information contained in
the Tables is as of June 30, 1996. The following is a brief description of the
Tables:
Table I - Experience in Raising and Investing Funds
Table I presents information on a percentage basis showing the
experience of two of the principals of the Company and their Affiliates in
raising and investing funds for the Prior Public Partnerships, the offerings of
which closed between December 1986 and June 1996.
C-1
<PAGE>
The Table sets forth information on the offering expenses incurred and
amounts available for investment expressed as a percentage of total dollars
raised. The Table also shows the percentage of property acquisition cost
leveraged, the date the offering commenced, and the time required to raise funds
for investment.
Table II - Compensation to Sponsor
Table II provides information, on a total dollar basis, regarding
amounts and types of compensation paid to the general partners of the Prior
Public Partnerships.
The Table indicates the total offering proceeds and the portion of such
offering proceeds paid or to be paid to two of the principals of the Company and
their Affiliates in connection with the Prior Public Partnerships, the offerings
of which closed between December 1986 and June 1996. The Table also shows the
amounts paid to two of the principals of the Company and their Affiliates from
cash generated from operations and from cash generated from sales or refinancing
by each of the Prior Public Partnerships on a cumulative basis commencing with
inception and ending June 30, 1996.
Table III - Operating Results of Prior Programs
Table III presents a summary of operating results for the period from
inception through June 30, 1996, of the Prior Public Partnerships, the offerings
of which closed between December 1986 and June 1996.
The Table includes a summary of income or loss of the Prior Public
Partnerships, which are presented on the basis of generally accepted accounting
principles ("GAAP"). The Table also shows cash generated from operations, which
represents the cash generated from operations of the properties of the Prior
Public Partnerships, as distinguished from cash generated from other sources
(special items). The section of the Table entitled "Special Items" provides
information relating to cash generated from or used by items which are not
directly related to the operations of the properties of the Prior Public
Partnerships, but rather are related to items of a partnership nature. These
items include proceeds from capital contributions of limited partners and
disbursements made from these sources of funds, such as syndication and
organizational costs, acquisition of the properties and other costs which are
related more to the organization of the partnership and the acquisition of
properties than to the actual operations of the partnerships.
The Table also presents information pertaining to investment income,
returns of capital on a GAAP basis, cash distributions from operations, sales
and refinancing proceeds expressed in total dollar amounts as well as
distributions and tax results on a per $1,000 investment basis.
Table IV - Results of Completed Programs
Table IV is omitted from this Exhibit C because none of the directors
of the Company or their Affiliates has been involved in completed public
programs which made investments similar to those of the Company.
Table V - Sales or Disposal of Properties
Table V provides information regarding the sale or disposal of
properties owned by the Prior Public Partnerships between December 1986 and June
1996.
This Table includes the selling price of the property, the cost of the
property, the date acquired and the date of sale.
C-2
<PAGE>
TABLE I
EXPERIENCE IN RAISING AND INVESTING FUNDS
<TABLE>
<CAPTION>
CNL Income CNL Income CNL Income CNL Income CNL Income CNL Income
Fund, Fund II, Fund III, Fund IV, Fund V, Fund VI,
Ltd. Ltd. Ltd. Ltd. Ltd. Ltd.
----------- ----------- ----------- ----------- ----------- -----------
<S> <C>
Dollar amount offered $15,000,000 $25,000,000 $25,000,000 $30,000,000 $25,000,000 $35,000,000
=========== =========== =========== =========== =========== ===========
Dollar amount raised 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
----------- ----------- ----------- ----------- ----------- -----------
Less offering expenses:
Selling commissions
and discounts (8.5) (8.5) (8.5) (8.5) (8.5) (8.5)
Organizational expenses (2.9) (2.3) (3.0) (3.0) (3.0) (3.0)
Marketing support and
due diligence expense
reimbursement fees
(includes amounts
reallowed to
unaffiliated
entities) -- -- -- -- -- --
----------- ----------- ----------- ---------- ----------- -----------
(11.4) (10.8) (11.5) (11.5) (11.5) (11.5)
----------- ----------- ----------- ----------- ----------- -----------
Reserve for operations -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Percent available for
investment 88.6% 89.2% 88.5% 88.5% 88.5% 88.5%
=========== =========== =========== =========== =========== ===========
Acquisition costs:
Cash down payment 83.6% 84.2% 83.5% 83.5% 83.5% 83.5%
Acquisition fees paid
to affiliates 5.0 5.0 5.0 5.0 5.0 5.0
Loan costs -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Total acquisition costs 88.6% 89.2% 88.5% 88.5% 88.5% 88.5%
=========== =========== =========== =========== =========== ===========
Percent leveraged
(mortgage financing
divided by total
acquisition costs) -- -- -- -- -- --
Date offering began 4/09/86 1/02/87 8/10/87 5/06/88 12/16/88 6/08/89
Length of offering (in
months) 8.5 7.5 8.5 8 6 7.5
Months to invest 90% of
amount available for
investment measured
from date of offering 8.5 11 13 12.5 12 16
</TABLE>
C-3
<PAGE>
TABLE I
EXPERIENCE IN RAISING AND INVESTING FUNDS
(continued)
<TABLE>
<CAPTION>
CNL Income CNL Income CNL Income CNL Income CNL Income
Fund VII, Fund VIII, Fund IX, Fund X, Fund XI,
Ltd. Ltd. Ltd. Ltd. Ltd.
----------- ----------- ----------- ----------- -----------
<S> <C>
Dollar amount offered $30,000,000 $35,000,000 $35,000,000 $40,000,000 $40,000,000
=========== =========== =========== =========== ===========
Dollar amount raised 100.0% 100.0% 100.0% 100.0% 100.0%
----------- ----------- ----------- ----------- -----------
Less offering expenses:
Selling commissions
and discounts (8.5) (8.5) (8.5) (8.5) (8.5)
Organizational expenses (3.0) (3.0) (3.0) (3.0) (3.0)
Marketing support and
due diligence expense
reimbursement fees
(includes amounts
reallowed to
unaffiliated
entities) -- -- (0.5) (0.5) (0.5)
----------- ----------- ----------- ----------- -----------
(11.5) (11.5) (12.0) (12.0) (12.0)
----------- ----------- ----------- ----------- -----------
Reserve for operations -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Percent available for
investment 88.5% 88.5% 88.0% 88.0% 88.0%
=========== =========== =========== =========== ===========
Acquisition costs:
Cash down payment 83.5% 83.5% 83.0% 83.0% 83.0%
Acquisition fees paid
to affiliates 5.0 5.0 5.0 5.0 5.0
Loan costs -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Total acquisition costs 88.5% 88.5% 88.0% 88.0% 88.0%
=========== =========== =========== =========== ===========
Percent leveraged
(mortgage financing
divided by total
acquisition costs) -- -- -- -- --
Date offering began 1/30/90 8/02/90 3/20/91 9/09/91 3/18/92
Length of offering (in
months) 6 7 5.5 6 6
Months to invest 90% of
amount available for
investment measured
from date of offering 10 13.5 12 7 6
</TABLE>
C-4
<PAGE>
TABLE I - EXPERIENCE IN RAISING AND INVESTING FUNDS (continued)
<TABLE>
<CAPTION>
CNL Income CNL Income CNL Income CNL Income CNL Income CNL Income CNL Income
Fund XII, Fund XIII, Fund XIV, Fund XV, Fund XVI, Fund XVII, Fund XVIII,
Ltd. Ltd. Ltd. Ltd. Ltd. Ltd. Ltd.
----------- ----------- ----------- ----------- ----------- ------------ ------------
<S> <C> (Note 1) (Note 1)
Dollar amount offered $45,000,000 $40,000,000 $45,000,000 $40,000,000 $45,000,000
=========== =========== =========== =========== ===========
Dollar amount raised 100.0% 100.0% 100.0% 100.0% 100.0%
----------- ----------- ----------- ----------- -----------
Less offering expenses:
Selling commissions
and discounts (8.5) (8.5) (8.5) (8.5) (8.5)
Organizational expenses (3.0) (3.0) (3.0) (3.0) (3.0)
Marketing support and
due diligence expense
reimbursement fees
(includes amounts
reallowed to
unaffiliated
entities) (0.5) (0.5) (0.5) (0.5) (0.5)
----------- ----------- ----------- ----------- -----------
(12.0) (12.0) (12.0) (12.0) (12.0)
----------- ----------- ----------- ----------- -----------
Reserve for operations -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Percent available for
investment 88.0% 88.0% 88.0% 88.0% 88.0%
=========== =========== =========== =========== ===========
Acquisition costs:
Cash down payment 83.0% 82.5% 82.5% 82.5% 82.5%
Acquisition fees paid
to affiliates 5.0 5.5 5.5 5.5 5.5
Loan costs -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Total acquisition costs 88.0% 88.0% 88.0% 88.0% 88.0%
=========== =========== =========== =========== ===========
Percent leveraged
(mortgage financing
divided by total
acquisition costs) -- -- -- -- --
Date offering began 9/29/92 3/31/93 8/27/93 2/23/94 9/02/94
Length of offering (in
months) 6 5 6 6 9
Months to invest 90% of
amount available for
investment measured
from date of offering 11 10 11 10 11
</TABLE>
Note 1: Pursuant to a Registration Statement on Form S-11 under the Securities
Act of 1933, as amended, effective August 11, 1995, CNL Income Fund
XVII, Ltd. and CNL Income Fund XVIII, Ltd. each registered for sale
$30,000,000 of units of limited partnership interest (the "Units"). The
offering of Units of CNL Income Fund XVII, Ltd. commenced September 2,
1995. Pursuant to the Registration Statement, the offering of Units of
CNL Income Fund XVIII, Ltd. would not commence until the offering of
Units of CNL Income Fund XVII, Ltd. had terminated. As of June 30,
1996, CNL Income Fund XVII, Ltd. was in the offering stage; therefore,
CNL Income Fund XVIII, Ltd. had not commenced its offering of Units.
C-5
<PAGE>
TABLE II
COMPENSATION TO SPONSOR
<TABLE>
<CAPTION>
CNL Income CNL Income CNL Income CNL Income CNL Income CNL Income
Fund, Fund II, Fund III, Fund IV, Fund V, Fund VI,
Ltd. Ltd. Ltd. Ltd. Ltd. Ltd.
----------- ----------- ----------- ----------- ----------- -----------
<S> <C>
Date offering commenced 4/09/86 1/02/87 8/10/87 5/06/88 12/16/88 6/08/89
Dollar amount raised $15,000,000 $25,000,000 $25,000,000 $30,000,000 $25,000,000 $35,000,000
=========== =========== =========== =========== =========== ===========
Amount paid to sponsor from
proceeds of offering:
Selling commissions and
discounts 1,275,000 2,125,000 2,125,000 2,550,000 2,125,000 2,975,000
Real estate commissions - - - - - -
Acquisition fees 750,000 1,250,000 1,250,000 1,500,000 1,250,000 1,750,000
Marketing support and
due diligence expense
reimbursement fees
(includes amounts
reallowed to
unaffiliated entities) - - - - - -
----------- ----------- ----------- ----------- ----------- -----------
Total amount paid to sponsor 2,025,000 3,375,000 3,375,000 4,050,000 3,375,000 4,725,000
=========== =========== =========== =========== =========== ===========
Dollar amount of cash generated
from operations before
deducting payments to
sponsor:
1996 (6 Months) 616,865 1,213,091 1,151,663 1,432,308 1,075,383 1,708,203
1995 1,241,057 2,249,390 2,282,034 2,750,169 2,226,800 3,304,277
1994 1,323,193 2,210,761 2,411,004 2,594,027 2,224,393 3,303,435
1993 1,321,053 2,214,797 2,332,160 2,696,323 2,257,910 3,234,816
1992 1,338,710 2,374,438 2,277,388 2,781,489 2,390,704 3,240,209
1991 1,468,807 2,524,093 2,426,263 2,578,520 2,278,902 3,235,671
1990 1,520,511 2,462,923 2,437,332 2,798,527 2,382,083 2,964,865
1989 1,542,424 2,449,414 2,430,482 2,642,185 1,544,368 585,207
1988 1,527,498 2,331,127 1,779,330 563,592 - -
1987 1,537,453 1,204,453 93,740 - - -
1986 212,986 - - - - -
1985 - - - - - -
1984 - - - - - -
1983 - - - - - -
1982 - - - - - -
1981 - - - - - -
1980 - - - - - -
1979 - - - - - -
1978 - - - - - -
Amount paid to sponsor from
operations (administrative,
accounting and management
fees):
1996 (6 Months) 38,899 48,605 50,300 51,376 49,578 57,215
1995 58,543 81,023 78,597 79,776 83,882 81,847
1994 43,992 54,157 47,633 49,816 47,314 49,761
1993 35,320 44,620 39,619 42,764 42,252 40,130
1992 29,621 30,514 33,651 35,735 36,114 36,852
1991 26,084 28,141 26,912 27,315 30,125 36,956
1990 19,642 20,078 20,790 24,675 25,195 33,330
1989 30,059 18,505 20,419 36,121 23,611 9,827
1988 27,712 19,896 22,904 11,274 - -
1987 15,596 9,141 2,703 - - -
1986 - - - - - -
1985 - - - - - -
1984 - - - - - -
1983 - - - - - -
1982 - - - - - -
1981 - - - - - -
1980 - - - - - -
1979 - - - - - -
1978 - - - - - -
Dollar amount of property
sales and refinancing
before deducting payments
to sponsor:
Cash 2,207,511 1,635,010 - 1,230,650 - 2,328,984
Notes - - - - 1,040,000 -
Amount paid to sponsors
from property sales and
refinancing:
Real estate commissions - - - - - -
Incentive fees - - - - - -
Other (Note 1) 66,750 - - - - -
</TABLE>
C-7
<PAGE>
TABLE II
COMPENSATION TO SPONSOR
(continued)
<TABLE>
<CAPTION>
CNL Income CNL Income CNL Income CNL Income CNL Income CNL Income
Fund VII, Fund VIII, Fund IX, Fund X, Fund XI, Fund XII,
Ltd. Ltd. Ltd. Ltd. Ltd. Ltd.
----------- ----------- ----------- ----------- ----------- -----------
<S> <C>
Date offering commenced 1/30/90 8/02/90 3/20/91 9/09/91 3/18/92 9/29/92
Dollar amount raised $30,000,000 $35,000,000 $35,000,000 $40,000,000 $40,000,000 $45,000,000
=========== =========== =========== =========== =========== ===========
Amount paid to sponsor from
proceeds of offering:
Selling commissions and
discounts 2,550,000 2,975,000 2,975,000 3,400,000 3,400,000 3,825,000
Real estate commissions - - - - - -
Acquisition fees 1,500,000 1,750,000 1,750,000 2,000,000 2,000,000 2,250,000
Marketing support and
due diligence expense
reimbursement fees
(includes amounts
reallowed to
unaffiliated entities) - - 175,000 200,000 200,000 225,000
----------- ----------- ----------- ----------- ----------- -----------
Total amount paid to sponsor 4,050,000 4,725,000 4,900,000 5,600,000 5,600,000 6,300,000
=========== =========== =========== =========== =========== ===========
Dollar amount of cash generated
from operations before
deducting payments to
sponsor:
1996 (6 Months) 1,399,517 1,772,078 1,726,113 1,877,818 1,866,649 1,986,907
1995 2,565,797 3,337,050 3,162,674 3,603,470 3,758,271 3,928,473
1994 2,780,851 3,453,350 3,250,836 3,828,234 3,574,474 3,933,486
1993 2,701,325 3,240,772 3,064,973 3,499,905 3,434,512 3,320,549
1992 2,716,954 3,256,005 3,179,912 3,141,123 1,525,462 63,401
1991 2,803,819 2,880,558 1,291,549 204,240 - -
1990 1,411,939 288,291 - - - -
1989 - - - - - -
1988 - - - - - -
1987 - - - - - -
1986 - - - - - -
1985 - - - - - -
1984 - - - - - -
1983 - - - - - -
1982 - - - - - -
1981 - - - - - -
1980 - - - - - -
1979 - - - - - -
1978 - - - - - -
Amount paid to sponsor from
operations (administrative,
accounting and management
fees):
1996 (6 Months) 53,413 51,087 48,583 55,272 55,339 55,932
1995 81,259 73,365 64,398 76,108 106,086 109,111
1994 46,469 40,461 36,622 42,741 76,533 84,524
1993 40,143 39,011 35,678 38,999 78,926 73,789
1992 33,638 36,802 37,348 39,505 30,237 2,031
1991 36,193 37,626 18,596 2,834 - -
1990 24,391 7,371 - - - -
1989 - - - - - -
1988 - - - - - -
1987 - - - - - -
1986 - - - - - -
1985 - - - - - -
1984 - - - - - -
1983 - - - - - -
1982 - - - - - -
1981 - - - - - -
1980 - - - - - -
1979 - - - - - -
1978 - - - - - -
Dollar amount of property
sales and refinancing
before deducting payments
to sponsor:
Cash 1,569,036 1,532,852 - 1,057,386 - 1,640,000
Notes 1,400,000 460,000 - - - -
Amount paid to sponsors
from property sales and
refinancing:
Real estate commissions - - - - - -
Incentive fees - - - - - -
Other (Note 1) 7,200 13,800 - - - -
</TABLE>
Note 1: During the years ended December 31, 1992 and 1994, CNL Income Fund,
Ltd. incurred $35,250 and $31,500, respectively, in deferred,
subordinated real estate disposition fees as a result of the sale of
two of its properties. In addition, during the year ended December 31,
1995, CNL Income Fund VII, Ltd. and CNL Income Fund VIII, Ltd. incurred
$7,200 and $13,800, respectively, in deferred, subordinated real estate
disposition fees as a result of the sale of one and two of their
properties, respectively. As of June 30, 1996, no such amounts had been
paid due to the subordinated nature of this fee.
Note 2: During the year ended December 31, 1995, CNL Income Fund X, Ltd.
received proceeds of $7,200 for a small parcel of land as a result of
an easement relating to a certain property. During the six months ended
June 30, 1996, CNL Income Fund, Ltd. received proceeds of $20,000 for
the sale of a small, undeveloped portion of the land relating to a
certain property.
C-8
<PAGE>
TABLE II - COMPENSATION TO SPONSOR (continued)
<TABLE>
<CAPTION>
CNL Income CNL Income CNL Income CNL Income CNL Income CNL Income
Fund XIII, Fund XIV, Fund XV, Fund XVI, Fund XVII, Fund XVIII,
Ltd. Ltd. Ltd. Ltd. Ltd. Ltd.
----------- ----------- ----------- ----------- ---------- ----------
<S> <C> (Note 3) (Note 3)
Date offering commenced 3/31/93 8/27/93 2/23/94 9/02/94
Dollar amount raised $40,000,000 $45,000,000 $40,000,000 $45,000,000
=========== =========== =========== ===========
Amount paid to sponsor from
proceeds of offering:
Selling commissions and
discounts 3,400,000 3,825,000 3,400,000 3,825,000
Real estate commissions - - - -
Acquisition fees 2,200,000 2,475,000 2,200,000 2,475,000
Marketing support and
due diligence expense
reimbursement fees
(includes amounts
reallowed to
unaffiliated entities) 200,000 225,000 200,000 225,000
----------- ----------- ----------- -----------
Total amount paid to sponsor 5,800,000 6,525,000 5,800,000 6,525,000
=========== =========== =========== ===========
Dollar amount of cash generated
from operations before
deducting payments to
sponsor:
1996 (6 Months) 1,701,335 1,857,023 1,741,150 1,936,583
1995 3,482,461 3,823,939 3,361,477 2,619,840
1994 3,232,046 2,897,432 1,154,454 212,171
1993 1,148,550 329,957 - -
1992 - - - -
1991 - - - -
1990 - - - -
1989 - - - -
1988 - - - -
1987 - - - -
1986 - - - -
1985 - - - -
1984 - - - -
1983 - - - -
1982 - - - -
1981 - - - -
1980 - - - -
1979 - - - -
1978 - - - -
Amount paid to sponsor from
operations (administrative,
accounting and management
fees):
1996 (6 Months) 53,682 57,121 53,223 74,887
1995 103,083 114,095 122,107 138,445
1994 83,046 84,801 37,620 7,023
1993 27,003 8,220 - -
1992 - - - -
1991 - - - -
1990 - - - -
1989 - - - -
1988 - - - -
1987 - - - -
1986 - - - -
1985 - - - -
1984 - - - -
1983 - - - -
1982 - - - -
1981 - - - -
1980 - - - -
1979 - - - -
1978 - - - -
Dollar amount of property
sales and refinancing
before deducting payments
to sponsor:
Cash 286,411 696,012 811,706 775,000
Notes - - - -
Amount paid to sponsors
from property sales and
refinancing:
Real estate commissions - - - -
Incentive fees - - - -
Other - - - -
</TABLE>
Note 3: Pursuant to a Registration Statement on Form S-11 under the Securities
Act of 1933, as amended, effective August 11, 1995, CNL Income Fund
XVII, Ltd. and CNL Income Fund XVIII, Ltd. each registered for sale
$30,000,000 of units of limited partnership interest (the "Units"). The
offering of Units of CNL Income Fund XVII, Ltd. commenced September 2,
1995. Pursuant to the Registration Statement, the offering of Units of
CNL Income Fund XVIII, Ltd. would not commence until the offering of
Units of CNL Income Fund XVII, Ltd. had terminated. As of June 30,
1996, CNL Income Fund XVII, Ltd. was in the offering stage; therefore,
CNL Income Fund XVIII, Ltd. had not commenced its offering of Units.
As of June 30, 1996, CNL Income Fund XVII, Ltd. had sold 2,113,286
Units, representing $21,132,863 of capital contributed by limited
partners, and 13 properties had been acquired. From commencement of
the offering through June 30, 1996, total selling commissions and
discounts were $1,796,293, due diligence expense reimbursement fees
were $105,665, and acquisition fees were $950,978, for a total amount
paid to sponsor of $2,852,936. CNL Income Fund XVII, Ltd. had cash
generated from operations for the period November 3, 1995 (the date
funds were originally released from escrow) through June 30, 1996, of
$266,033. CNL Income Fund XVII, Ltd. made payments of $47,754 to the
sponsor from operations for this period.
C-9
<PAGE>
TABLE III
Operating Results of Prior Programs
CNL INCOME FUND, LTD.
<TABLE>
<CAPTION>
1986
(Note 1) 1987 1988 1989
----------- ----------- ----------- -----------
<S> <C>
Gross revenues $ 191,554 $ 1,387,859 $ 1,463,585 $ 1,443,329
Equity in earnings of joint ventures 47,610 116,195 113,777 116,381
Profit from sale of properties 0 0 0 0
Interest income 68,373 40,172 15,852 14,788
Less: Operating expenses (20,031) (84,727) (100,630) (96,613)
Interest expense 0 0 0 0
Depreciation and amortization (45,887) (236,622) (248,962) (251,160)
Minority interest in income of
consolidated joint venture 0 (61) (1,406) 0
----------- ----------- ----------- -----------
Net income - GAAP basis 241,619 1,222,816 1,242,216 1,226,725
=========== =========== =========== ===========
Taxable income
- from operations 226,408 1,103,505 1,123,411 1,106,031
=========== =========== =========== ===========
- from gain on sale 0 0 0 0
=========== =========== =========== ===========
Cash generated from operations
(Notes 2 and 7) 212,986 1,521,857 1,499,786 1,512,365
Cash generated from sales (Note 10) 0 0 0 0
Cash generated from refinancing 0 0 0 0
----------- ----------- ----------- -----------
Cash generated from operations, sales
and refinancing 212,986 1,521,857 1,499,786 1,512,365
Less: Cash distributions to investors
(Note 8)
- from operating cash flow (212,986) (1,443,975) (1,499,786) (1,500,000)
- from sale of properties (Note 6) 0 0 0 0
- from cash flow from prior period 0 0 0 0
- from return of capital (Note 4) (82,152) 0 (214) 0
- from other (Notes 5 and 10) 0 0 0 0
----------- ----------- ----------- -----------
Cash generated (deficiency) after cash
distributions (82,152) 77,882 (214) 12,365
Special items (not including sales and
refinancing):
Limited partners' capital
contributions 15,000,000 0 0 0
General partners' capital
contributions 1,000 0 0 0
Proceeds from loan from corporate
general partner (Note 9) 0 0 0 0
Repayment of loan from corporate
general partner (Note 9) 0 0 0 0
Organization costs (51,890) 0 0 0
Syndication costs (1,455,695) (20,056) 0 0
Acquisition of land and buildings (9,909,615) (2,003,668) (8,106) 0
Lease costs 0 0 0 (50,000)
Investment in joint ventures (1,129,974) 0 0 0
Loan to tenant, net of repayments 0 0 0 0
Repayment of advances (advances)
to an affiliate (20,500) 20,500 0 0
Reimbursement of syndication and
acquisition costs paid on behalf
of CNL Income Fund, Ltd. by
related parties (189,401) (145,371) 0 0
Minority interest in joint venture,
net of distributions 0 26,417 (1,755) 0
Acquisition of minority interest in
joint venture 0 0 (26,600) 0
Increase in other assets (26,541) (12,300) 0 0
----------- ----------- ----------- -----------
Cash generated (deficiency) after cash
distributions and special items 2,135,232 (2,056,596) (36,675) (37,635)
=========== =========== =========== ===========
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 36 73 74 73
=========== =========== =========== ===========
- from recapture 0 0 0 0
=========== =========== =========== ===========
Capital gain (loss) 0 0 0 0
=========== =========== =========== ===========
</TABLE>
C-9
<PAGE>
<TABLE>
<CAPTION>
6 Months
1990 1991 1992 1993 1994 1995 1996
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C>
Gross revenues $ 1,414,800 $ 1,401,267 $ 1,328,805 $ 1,292,997 $ 1,233,600 $ 1,165,756 $ 551,767
Equity in earnings of joint ventures 116,452 115,198 110,288 114,028 112,160 112,974 54,903
Profit from sale of properties 0 0 214,488 0 182,384 0 19,000
Interest income 15,208 13,002 13,668 5,302 13,111 11,837 5,177
Less: Operating expenses (81,179) (135,127) (128,135) (147,416) (110,252) (118,268) (63,844)
Interest expense 0 0 0 0 0 0 0
Depreciation and amortization (251,784) (246,212) (233,093) (225,366) (222,427) (210,197) (105,102)
Minority interest in income of
consolidated joint venture 0 0 0 0 0 0 0
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net income - GAAP basis 1,213,497 1,148,128 1,306,021 1,039,545 1,208,576 962,102 461,901
=========== =========== =========== =========== =========== =========== ===========
Taxable income
- from operations 1,085,391 1,031,688 970,214 922,353 996,832 863,755 406,670
=========== =========== =========== =========== =========== =========== ===========
- from gain on sale 0 0 209,586 0 177,224 0 19,000
=========== =========== =========== =========== =========== =========== ===========
Cash generated from operations
(Notes 2 and 7) 1,500,869 1,442,723 1,309,089 1,285,733 1,279,201 1,182,514 577,966
Cash generated from sales (Note 10) 0 0 1,169,021 0 1,018,490 0 20,000
Cash generated from refinancing 0 0 0 0 0 0 0
----------- ----------- ----------- ----------- ----------- ----------- -----------
Cash generated from operations, sales
and refinancing 1,500,869 1,442,723 2,478,110 1,285,733 2,297,691 1,182,514 597,966
Less: Cash distributions to investors
(Note 8)
- from operating cash flow (1,500,000) (1,442,723) (1,309,089) (1,063,216) (1,279,201) (1,182,514) (577,966)
- from sale of properties (Note 6) 0 0 (1,080,850) 0 0 (861,500) 0
- from cash flow from prior period 0 (8,750) 0 0 (138,422) (120,554) (34,476)
- from return of capital (Note 4) 0 0 0 0 0 0 0
- from other (Notes 5 and 10) 0 (48,527) (23,873) 0 0 0 (20,000)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Cash generated (deficiency) after cash
distributions 869 (57,277) 64,298 222,517 880,068 (982,054) (34,476)
Special items (not including sales and
refinancing):
Limited partners' capital
contributions 0 0 0 0 0 0 0
General partners' capital
contributions 0 65,000 7,400 0 120,000 0 0
Proceeds from loan from corporate
general partner (Note 9) 0 0 0 0 0 0 8,100
Repayment of loan from corporate
general partner (Note 9) 0 0 0 0 0 0 (8,100)
Organization costs 0 0 0 0 0 0 0
Syndication costs 0 0 0 0 0 0 0
Acquisition of land and buildings 0 (7,049) (14,523) 0 0 0 0
Lease costs 0 (2,000) 0 0 0 0 0
Investment in joint ventures 0 0 0 0 0 0 0
Loan to tenant, net of repayments 0 0 (25,000) 25,000 0 0 0
Repayment of advances (advances)
to an affiliate 0 0 0 0 0 0 0
Reimbursement of syndication and
acquisition costs paid on behalf
of CNL Income Fund, Ltd. by
related parties 0 0 0 0 0 0 0
Minority interest in joint venture,
net of distributions 0 0 0 0 0 0 0
Acquisition of minority interest in
joint venture 0 0 0 0 0 0 0
Increase in other assets 0 0 (30,000) 0 0 0 0
----------- ----------- ----------- ----------- ----------- ----------- -----------
Cash generated (deficiency) after cash
distributions and special items 869 (1,326) 2,175 247,517 1,000,068 (982,054) (34,476)
=========== =========== =========== =========== =========== =========== ===========
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 72 68 64 61 66 57 27
=========== =========== =========== =========== =========== =========== ===========
- from recapture 0 0 0 0 0 0 0
=========== =========== =========== =========== =========== =========== ===========
Capital gain (loss) 0 0 14 0 12 0 1
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
C-10
<PAGE>
TABLE III - CNL INCOME FUND, LTD. (continued)
<TABLE>
<CAPTION>
1986
(Note 1) 1987 1988 1989
----------- ----------- ----------- -----------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 39 81 82 81
- from capital gain 0 0 0 0
- from return of capital (Note 3) 9 15 18 19
----------- ----------- ----------- -----------
Total distributions on GAAP basis (Note 8) 48 96 100 100
=========== =========== =========== ===========
Source (on cash basis)
- from sales 0 0 0 0
- from refinancing 0 0 0 0
- from operations 35 96 100 100
- from cash flow from prior period 0 0 0 0
- from return of capital (Note 4) 13 0 0 0
- from other (Notes 5 and 10) 0 0 0 0
----------- ----------- ----------- -----------
Total distributions on cash basis (Note 8) 48 96 100 100
=========== =========== =========== ===========
Total cumulative cash distributions per
$1,000 investment from inception 48 144 244 344
Amount (in percentage terms) remaining
invested in program properties at the
end of each year (period) presented
(original total acquisition cost of
properties retained, divided by original
total acquisition cost of all properties
in program) (Note 6) 100% 100% 100% 100%
</TABLE>
C-11
<PAGE>
<TABLE>
<CAPTION>
6 Months
1990 1991 1992 1993 1994 1995 1996
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 80 76 72 69 68 63 29
- from capital gain 0 0 14 0 12 0 1
- from return of capital (Note 3) 20 24 75 2 15 81 12
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total distributions on GAAP basis (Note 8) 100 100 161 71 95 144 42
========== ========== ========== ========== ========== ========== ==========
Source (on cash basis)
- from sales 0 0 72 0 0 57 0
- from refinancing 0 0 0 0 0 0 0
- from operations 100 96 87 71 85 79 39
- from cash flow from prior period 0 1 0 0 10 8 2
- from return of capital (Note 4) 0 0 0 0 0 0 0
- from other (Notes 5 and 10) 0 3 2 0 0 0 1
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total distributions on cash basis (Note 8) 100 100 161 71 95 144 42
========== ========== ========== ========== ========== ========== ==========
Total cumulative cash distributions per
$1,000 investment from inception 444 544 705 776 871 1,015 1,057
Amount (in percentage terms) remaining
invested in program properties at the
end of each year (period) presented
(original total acquisition cost of
properties retained, divided by original
total acquisition cost of all properties
in program) (Note 6) 100% 100% 92% 92% 85% 85% 85%
</TABLE>
Note 1: The registration statement relating to the offering of units by CNL
Income Fund, Ltd. became effective on April 9, 1986. All income and
expenses include the period from April 9, 1986 to December 31, 1986.
Note 2: Cash generated from operations includes cash received from tenants,
plus distributions from joint ventures, less cash paid for expenses,
plus interest received.
Note 3: Cash distributions presented above as a return of capital on a GAAP
basis represent the amount of cash distributions in excess of
accumulated net income on a GAAP basis. Accumulated net income includes
deductions for depreciation and amortization expense and income from
certain non-cash items. This amount is not required to be presented as
a return of capital except for purposes of this table, and CNL Income
Fund, Ltd. has not treated this amount as a return of capital for any
other purpose, except for amounts described in Note 6 below.
Note 4: CNL Income Fund, Ltd. makes its distributions in the current period
rather than in arrears based on estimated operating results. In cases
where distributions exceed cash from operations in the current period,
once finally determined, subsequent distributions are lowered
accordingly in order to avoid any return of capital. This amount is not
required to be presented as a return of capital except for purposes of
this table, and CNL Income Fund, Ltd. has not treated this amount as a
return of capital for any other purpose, except for amounts described
in Note 6 below.
Note 5: The corporate general partner of CNL Income Fund, Ltd. contributed
$65,000, $7,400 and $120,000 during the years ended December 31, 1991,
1992 and 1994, respectively, in connection with the operations of the
partnership.
Note 6: During the year ended December 31, 1992, CNL Income Fund, Ltd. sold one
of its properties. Of the net sales proceeds distributed to the limited
partners, $823,975 was treated as a return of capital for purposes of
calculating the limited partners' preferred return. In addition,
during the year ended December 31, 1994, CNL Income Fund, Ltd. sold a
property and $861,500 of net sales proceeds distributed to limited
partners was treated as a return of capital for purposes of calculating
the limited partners' preferred return. As a result of these returns
of capital, the amount of the limited partners' adjusted capital
contributions (which generally is the limited partners' capital
contributions, less distributions from the sale of a property that are
considered to be a return of capital) was decreased.
Note 7: Cash generated from operations per this table agrees to cash generated
from operations per the statement of cash flows included in the
financial statements of CNL Income Fund, Ltd.
Note 8: As a result of the partnership's change in investor services agents in
1993, distributions are now declared at the end of each quarter and
paid in the following quarter. Since this table generally presents
distributions on a cash basis (rather than amounts declared),
distributions on a cash basis for 1993 only reflect payments for three
quarters. Distributions declared for the quarters ended December 31,
1993, 1994 and 1995, are reflected in the 1994, 1995 and 1996 columns,
respectively, for distributions on a cash basis due to the payment of
such distributions in January 1994, 1995 and 1996, respectively. As a
result of 1994, 1995 and 1996 distributions being presented on a cash
basis, distributions declared and unpaid as of December 31, 1994 and
1995, and June 30, 1996, are not included in the 1994, 1995 and 1996
totals, respectively.
Note 9: CNL Income Fund, Ltd. entered into a promissory note with the corporate
general partner for a loan in the amount of $8,100 in connection with
the operations of CNL Income Fund, Ltd. The loan was uncollateralized,
non-interest bearing and due on demand. As of June 30, 1996, CNL
Income Fund, Ltd. had repaid the loan in full to the corporate general
partner.
Note 10: During the six months ended June 30, 1996, CNL Income Fund, Ltd.
received proceeds of $20,000 for the sale of a small, undeveloped
portion of the land relating to a certain property.
C-12
<PAGE>
TABLE III
Operating Results of Prior Programs
CNL INCOME FUND II, LTD.
<TABLE>
<CAPTION>
1987
(Note 1) 1988 1989 1990
------------ ------------ ------------ -------------
<S> <C>
Gross revenue $ 891,543 $ 2,379,358 $ 2,416,161 $ 2,413,874
Equity in earnings of joint ventures 6,648 39,579 82,531 103,198
Profit from sale of properties 0 0 0 0
Interest income 303,497 55,545 30,522 31,682
Lease termination income 0 0 0 0
Less: Operating expenses (39,295) (120,160) (127,796) (104,043)
Interest expense 0 0 0 0
Depreciation and amortization (170,283) (442,652) (460,460) (452,752)
------------ ------------ ------------ ------------
Net income - GAAP basis 992,110 1,911,670 1,940,958 1,991,959
============ ============ ============ ============
Taxable income
- from operations 1,010,827 1,931,840 1,963,484 2,021,575
============ ============ ============ ============
- from gain (loss) on sale 0 0 0 0
============ ============ ============ ============
Cash generated from operations
(Notes 2 and 6) 1,195,312 2,311,231 2,430,909 2,442,845
Cash generated from sales (Note 4) 0 0 0 0
Cash generated from refinancing 0 0 0 0
------------ ------------ ------------ ------------
Cash generated from operations, sales
and refinancing 1,195,312 2,311,231 2,430,909 2,442,845
Less: Cash distributions to investors
(Note 7)
- from operating cash flow (1,153,877) (2,281,500) (2,376,000) (2,438,500)
- from sale of properties 0 0 0 0
- from cash flow from prior period 0 0 0 0
- from other 0 0 0 0
------------ ------------ ------------ ------------
Cash generated (deficiency) after
cash distributions 41,435 29,731 54,909 4,345
Special items (not including sales and
refinancing):
Limited partners' capital
contributions 25,000,000 0 0 0
General partners' capital
contributions (Note 5) 1,000 0 0 0
Proceeds from loans from corporate
general partner (Note 8) 0 0 0 0
Repayment of loans from corporate
general partner (Note 8) 0 0 0 0
Organization costs (10,000) 0 0 0
Syndication costs (2,445,247) 0 0 0
Acquisition of land and buildings (19,482,309) (2,462,767) (22,330) 0
Lease costs 0 0 (50,000) 0
Investment in joint ventures (307,355) 0 (1,217) (65,000)
Insurance proceeds 0 0 0 65,000
Deposit received from tenant to be
used for renovation 0 0 0 0
Proceeds received from tenant in
connection with termination of
lease 0 0 0 0
Increase in restricted cash 0 0 0 0
Repayment of advance from an
affiliate (20,500) 0 0 0
Reimbursement of syndication and
acquisition costs paid on behalf
of CNL Income Fund II, Ltd. by
related parties (253,510) (1,547) 0 0
Increase in other assets 0 0 0 0
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 2,523,514 (2,434,583) (18,638) 4,345
============ ============ ============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 53 77 78 80
============ ============ ============ ============
- from recapture 0 0 0 0
============ ============ ============ ============
Capital gain (loss) 0 0 0 0
============ ============ ============ ============
C-13
<PAGE>
<CAPTION>
6 Months
1991 1992 1993 1994 1995 1996
------------ ------------ ------------ ------------ ------------ -----------
<S> <C>
Gross revenue $ 2,442,225 $ 2,324,625 $ 2,251,780 $ 2,177,384 $ 2,284,560 $ 1,129,946
Equity in earnings of joint ventures 126,321 109,302 124,098 132,810 153,677 74,341
Profit from sale of properties 0 0 161,025 40,650 0 0
Interest income 26,047 17,748 14,656 13,484 17,517 7,826
Lease termination income 0 0 0 198,482 0 0
Less: Operating expenses (136,678) (174,212) (255,962) (195,568) (160,444) (93,700)
Interest expense 0 0 0 0 0 0
Depreciation and amortization (448,317) (446,317) (445,065) (441,725) (456,793) (210,798)
------------ ------------ ------------ ------------ ------------ ------------
Net income - GAAP basis 2,009,598 1,831,146 1,850,532 1,925,517 1,838,517 907,615
============ ============ ============ ============ ============ ============
Taxable income
- from operations 2,031,552 1,936,526 1,694,054 1,912,389 1,786,291 899,679
============ ============ ============ ============ ============ ============
- from gain (loss) on sale 0 0 108,901 (37,097) 0 0
============ ============ ============ ============ ============ ============
Cash generated from operations
(Notes 2 and 6) 2,495,952 2,343,924 2,170,177 2,156,604 2,168,367 1,164,486
Cash generated from sales (Note 4) 0 0 746,800 888,210 0 0
Cash generated from refinancing 0 0 0 0 0 0
------------ ------------ ------------ ------------ ------------ ------------
Cash generated from operations, sales
and refinancing 2,495,952 2,343,924 2,916,977 3,044,814 2,168,367 1,164,486
Less: Cash distributions to investors
(Note 7)
- from operating cash flow (2,438,500) (2,343,924) (1,782,000) (2,156,604) (2,168,367) (1,164,486)
- from sale of properties 0 0 0 0 0 0
- from cash flow from prior period 0 (94,576) 0 (281,896) (207,633) (23,514)
- from other 0 0 0 0 0
------------ ------------ ------------ ------------ ------------ ------------
Cash generated (deficiency) after
cash distributions 57,452 (94,576) 1,134,977 606,314 (207,633) (23,514)
Special items (not including sales and
refinancing):
Limited partners' capital
contributions 0 0 0 0 0 0
General partners' capital
contributions (Note 5) 0 0 0 161,000 0 0
Proceeds from loans from corporate
general partner (Note 8) 0 0 0 0 0 45,900
Repayment of loans from corporate
general partner (Note 8) 0 0 0 0 0 (45,900)
Organization costs 0 0 0 0 0 0
Syndication costs 0 0 0 0 0 0
Acquisition of land and buildings 0 0 (637,900) (651,540) (4,323) 0
Lease costs 0 0 (1,800) 0 (12,426) (1,930)
Investment in joint ventures 0 0 0 (260,732) (121) 0
Insurance proceeds 0 0 0 0 0 0
Deposit received from tenant to be
used for renovation 0 0 0 0 25,000 0
Proceeds received from tenant in
connection with termination of
lease 0 0 0 198,482 0 0
Increase in restricted cash 0 0 0 0 (25,000) 0
Repayment of advance from an
affiliate 0 0 0 0 0 0
Reimbursement of syndication and
acquisition costs paid on behalf
of CNL Income Fund II, Ltd. by
related parties 0 0 0 0 0 0
Increase in other assets 0 0 0 (1,750) 0 0
------------ ------------ ------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 57,452 (94,576) 495,277 51,774 (224,503) (25,444)
============ ============ ============ ============ ============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 80 77 67 76 71 36
============ ============ ============ ============ ============ ============
- from recapture 0 0 0 0 0 0
============ ============ ============ ============ ============ ============
Capital gain (loss) 0 0 4 (1) 0 0
============ ============ ============ ============ ============ ============
C-14
<PAGE>
TABLE III - CNL INCOME FUND II, LTD. (continued)
<CAPTION>
1987
(Note 1) 1988 1989 1990
------------ ------------ ---------- --------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 52 76 77 79
- from capital gain 0 0 0 0
- from investment income from
prior period 0 0 0 0
- from return of capital (Note 3) 9 15 18 19
------------ ---------- ---------- ----------
Total distributions on GAAP basis
(Note 7) 61 91 95 98
============ ========== ========== ==========
Source (on cash basis)
- from sales 0 0 0 0
- from refinancing 0 0 0 0
- from operations 61 91 95 98
- from cash flow from prior
period 0 0 0 0
- from other 0 0 0 0
------------ ---------- ---------- ----------
Total distributions on cash basis
(Note 7) 61 91 95 98
============ ========== ========== ==========
Total cumulative cash distributions
per $1,000 investment from
inception 61 152 247 345
Amount (in percentage terms)
remaining invested in program
properties at the end of each year
(period) presented (original total
acquisition cost of properties
retained, divided by original total
acquisition cost of all properties
in program) (Note 4) 100% 100% 100% 100%
C-15
<PAGE>
<CAPTION>
6 Months
1991 1992 1993 1994 1995 1996
------------ ------------ ------------ ----------- ----------- ------------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 80 73 65 75 73 36
- from capital gain 0 0 6 2 0 0
- from investment income from
prior period 0 0 0 2 0 0
- from return of capital (Note 3) 18 25 0 19 22 12
------------ ------------ ------------ ------------ ------------ ------------
Total distributions on GAAP basis
(Note 7) 98 98 71 98 95 48
============ ============ ============ ============ ============ ============
Source (on cash basis)
- from sales 0 0 0 0 0 0
- from refinancing 0 0 0 0 0 0 0
- from operations 98 94 71 86 87 47
- from cash flow from prior
period 0 4 0 12 8 1
- from other 0 0 0 0 0 0
------------ ------------ ------------ ------------ ------------ ------------
Total distributions on cash basis
(Note 7) 98 98 71 98 95 48
============ ============ ============ ============ ============ ============
Total cumulative cash distributions
per $1,000 investment from
inception 443 541 612 710 805 853
Amount (in percentage terms)
remaining invested in program
properties at the end of each year
(period) presented (original total
acquisition cost of properties
retained, divided by original total
acquisition cost of all properties
in program) (Note 4) 100% 100% 100% 99% 99% 99%
</TABLE>
Note 1: The registration statement relating to the offering of units by CNL
Income Fund II, Ltd. became effective on January 2, 1987. All income and
expenses include the period from January 2, 1987 to December 31, 1987.
Note 2: Cash generated from operations includes cash received from tenants, plus
distributions from joint ventures, less cash paid for expenses, plus
interest received.
Note 3: Cash distributions presented above as a return of capital on a GAAP
basis represent the amount of cash distributions in excess of
accumulated net income on a GAAP basis. Accumulated net income includes
deductions for depreciation and amortization expense and income from
certain non-cash items. This amount is not required to be presented as a
return of capital except for purposes of this table, and CNL Income Fund
II, Ltd. has not treated this amount as a return of capital for any
other purpose.
Note 4: In July 1993, the partnership sold one of its properties and received
net sales proceeds of $746,800. In addition, in 1994, the partnership
sold two additional properties and received net sales proceeds of
$888,210. The sale of one of the properties in 1994 qualified as a
like-kind exchange transaction in accordance with Section 1031 of the
Internal Revenue Code. As a result, no gain was recognized for tax
purposes on the sale of this property. The partnership reinvested
approximately $1,554,000 of the net sales proceeds in three additional
properties. The remaining sales proceeds were used to pay partnership
expenses and to meet other working capital needs.
Note 5: The corporate general partner of CNL Income Fund II, Ltd. contributed
$161,000 during the year ended December 31, 1994, in connection with the
operations of the partnership.
Note 6: Cash generated from operations per this table agrees to cash generated
from operations per the statement of cash flows included in the
financial statements of CNL Income Fund II, Ltd.
Note 7: As a result of the partnership's change in investor services agents in
1993, distributions are now declared at the end of each quarter and paid
in the following quarter. Since this table generally presents
distributions on a cash basis (rather than amounts declared),
distributions on a cash basis for 1993 only reflect payments for three
quarters. Distributions declared for the quarters ended December 31,
1993, 1994 and 1995, are reflected in the 1994, 1995 and 1996 columns,
respectively, for distributions on a cash basis due to the payment of
such distributions in January 1994, 1995 and 1996, respectively. As a
result of 1994, 1995 and 1996 distributions being presented on a cash
basis, distributions declared and unpaid as of December 31, 1994 and
1995, and June 30, 1996, are not included in the 1994, 1995 and 1996
totals, respectively.
Note 8: In January 1996, CNL Income Fund II, Ltd. entered into a promissory
note with the corporate general partner for a loan in the amount of
$26,300 in connection with the operations of CNL Income Fund II, Ltd.
The loan, which was uncollateralized and bore interest at a rate of
prime plus .25% per annum, and was due on demand. As of June 30, 1996,
CNL Income Fund II, Ltd. had repaid the loan in full along with
approximately $200 in interest, to the corporate general partner. In
addition, in April 1996, CNL Income Fund II, Ltd. entered into a
promissory note with the corporate general partner for a loan in the
amount of $19,600 in connection with the operations of CNL Income Fund
II, Ltd. The loan was uncollateralized, non-interest bearing and due on
demand. As of June 30, 1996, CNL Income Fund II, Ltd. had repaid the
loan in full to the corporate general partner.
C-16
<PAGE>
TABLE III
Operating Results of Prior Programs
CNL INCOME FUND III, LTD.
<TABLE>
<CAPTION>
1987
(Note 1) 1988 1989 1990
------------ ------------ ------------ -----------
<S> <C>
Gross revenue $ 55,316 $ 1,607,223 $ 2,487,626 $ 2,504,506
Equity in earnings (losses) of joint
venture 0 0 60,079 61,636
Profit from sale of properties 0 0 0 0
Provision for loss on land and
building (Note 6) 0 0 0 0
Interest income 41,081 233,970 36,574 30,541
Less: Operating expenses (6,340) (111,115) (126,039) (112,087)
Interest expense 0 0 0 0
Depreciation and amortization (19,877) (294,811) (451,668) (458,189)
Minority interest in income of
consolidated joint venture 0 (20,509) (17,240) (17,290)
------------ ------------ ------------ ------------
Net income - GAAP basis 70,180 1,414,758 1,989,332 2,009,117
============ ============ ============ ============
Taxable income
- from operations 76,166 1,427,351 2,012,200 2,073,719
============ ============ ============ ============
- from gain on sale 0 0 0 0
============ ============ ============ ============
Cash generated from operations
(Notes 2 and 7) 91,037 1,756,426 2,410,063 2,416,542
Cash generated from sales 0 0 0 0
Cash generated from refinancing 0 0 0 0
------------ ------------ ------------ ------------
Cash generated from operations,
sales and refinancing 91,037 1,756,426 2,410,063 2,416,542
Less: Cash distributions to investors
(Note 8)
- from operating cash flow (91,037) (1,672,500) (2,376,000) (2,376,000)
- from sale of properties 0 0 0 0
- from cash flow from prior period 0 0 0 0
- from return of capital (Note 4) (2,103) 0 0 0
------------ ------------ ------------ ------------
Cash generated (deficiency) after
cash distributions (2,103) 83,926 34,063 40,542
Special items (not including sales
and refinancing):
Limited partners' capital
contributions 11,345,875 13,654,125 0 0
General partners' capital
contributions (Note 5) 1,000 0 0 0
Proceeds from loans from corporate
general partner (Note 9) 0 0 0 0
Repayment of loans from corporate
general partner (Note 9) 0 0 0 0
Organization costs (10,000) 0 0 0
Syndication costs (973,197) (1,398,802) (150) 0
Acquisition of land and buildings (7,269,301) (13,799,321) (165,636) 0
Deposit received on sale of land parcel 0 0 0 0
Lease costs 0 0 0 0
Investment in and loans to joint
ventures 0 (650,540) (95,294) 0
Investment of tenant security
deposit 0 (50,000) 0 0
Proceeds from certificate of
deposit 0 0 50,000 0
Decrease (increase) in restricted
cash 0 (29,820) 0 29,820
Reimbursement of syndication and
acquisition costs paid on behalf
of CNL Income Fund III, Ltd. by
related parties (189,613) (393,065) (933) 0
Repayment of advance (advances) to
affiliates (4,129) 4,129 0 0
Collection on loans 0 0 0 0
Distributions to holder of minority
interest 0 (26,348) (20,028) (20,184)
Decrease (increase) in other assets (25,188) (40,869) 11,515 0
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 2,873,344 (2,646,585) (186,463) 50,178
============ ============ ============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 13 61 80 82
============ ============ ============ ============
- from recapture 0 0 0 0
============ ============ ============ ============
Capital gain (loss) 0 0 0 0
============ ============ ============ ============
</TABLE>
C-17
<PAGE>
<TABLE>
<CAPTION>
6 Months
1991 1992 1993 1994 1995 1996
------------ ------------ ------------ ------------ ------------ ------------
<S> <C>
Gross revenue $ 2,473,440 $ 2,379,939 $ 2,458,704 $ 2,496,217 $ 2,339,419 $ 1,156,841
Equity in earnings (losses) of joint
venture (17,482) 31,040 26,521 20,952 22,015 5,042
Profit from sale of properties 0 0 0 0 0 0
Provision for loss on land and
building (Note 6) 0 0 0 0 (207,844) 0
Interest income 30,119 20,416 16,444 11,951 14,006 4,690
Less: Operating expenses (133,947) (256,773) (171,418) (218,737) (233,384) (138,270)
Interest expense 0 0 0 0 0 0
Depreciation and amortization (458,189) (457,439) (449,120) (434,491) (434,492) (215,680)
Minority interest in income of
consolidated joint venture (17,169) (17,242) (24,669) (17,287) (17,205) (8,578)
------------ ------------ ------------ ------------ ------------ ------------
Net income - GAAP basis 1,876,772 1,699,941 1,856,462 1,858,605 1,482,515 804,045
============ ============ ============ ============ ============ ============
Taxable income
- from operations 1,864,647 1,854,785 1,922,069 1,925,870 1,728,573 819,314
============ ============ ============ ============ ============ ============
- from gain on sale 0 0 0 0 0 0
============ ============ ============ ============ ============ ============
Cash generated from operations
(Notes 2 and 7) 2,399,351 2,243,737 2,292,541 2,363,371 2,203,437 1,101,363
Cash generated from sales 0 0 0 0 0 0
Cash generated from refinancing 0 0 0 0 0 0
------------ ------------ ------------ ------------ ------------ ------------
Cash generated from operations,
sales and refinancing 2,399,351 2,243,737 2,292,541 2,363,371 2,203,437 1,101,363
Less: Cash distributions to investors
(Note 8)
- from operating cash flow (2,376,000) (2,243,737) (1,782,000) (2,363,371) (2,203,437) (1,101,363)
- from sale of properties 0 0 0 0 0 0
- from cash flow from prior period 0 (132,263) 0 (12,629) (172,563) (86,637)
- from return of capital (Note 4) 0 0 0 0 0
------------ ------------ ------------ ------------ ------------ ------------
Cash generated (deficiency) after
cash distributions 23,351 (132,263) 510,541 (12,629) (172,563) (86,637)
Special items (not including sales
and refinancing):
Limited partners' capital
contributions 0 0 0 0 0 0
General partners' capital
contributions (Note 5) 0 160,500 0 0 0 0
Proceeds from loans from corporate
general partner (Note 9) 0 0 0 0 0 210,400
Repayment of loans from corporate
general partner (Note 9) 0 0 0 0 0 (210,400)
Organization costs (10,000) 0 0 0 0 0 0
Syndication costs 0 0 0 0 0 0
Acquisition of land and buildings 0 0 0 0 0 0
Deposit received on sale of land parcel 0 0 0 0 0 51,400
Lease costs 0 0 (8, 000) (4,000) 0 0
Investment in and loans to joint
ventures (132,084) (19,728) 0 0 0 0
Investment of tenant security
deposit 0 0 0 0 0 0
Proceeds from certificate of
deposit 0 0 0 0 0 0
Decrease (increase) in restricted
cash 0 0 0 0 0 0
Reimbursement of syndication and
acquisition costs paid on behalf
of CNL Income Fund III, Ltd. by
related parties 0 0 0 0 0 0
Repayment of advance (advances) to
affiliates 0 0 0 0 0 0
Collection on loans 55,000 8,206 27,206 26,173 0 0
Distributions to holder of minority
interest (19,854) (20,031) (27,455) (20,033) (19,997) (9,984)
Decrease (increase) in other assets 0 0 0 0 0 0
------------ ------------ ----------- ------------ ----------- ------------
Cash generated (deficiency) after cash
distributions and special items (73,587) (3,316) 502,292 (10,489) (192,560) (45,221)
============ ============ ============ ============ ============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 74 73 76 76 68 32
============ ============ ============ ============ ============ ============
- from recapture 0 0 0 0 0 0
============ ============ ============ ============ ============ ============
Capital gain (loss) 0 0 0 0 0 0
============ ============ ============ ============ ============ ============
</TABLE>
C-18
<PAGE>
TABLE III - CNL INCOME FUND III, LTD. (continued)
<TABLE>
<CAPTION>
1987
(Note 1) 1988 1989 1990
------------ ------------ ------------ -----------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 12 60 79 80
- from capital gain 0 0 0 0
- from investment income from prior
period 0 0 0 0
- from return of capital (Note 3) 4 12 16 15
------------ ------------ ------------ ------------
Total distributions on GAAP basis
(Note 8) 16 72 95 95
============ ============ ============ ============
Source (on cash basis)
- from sales 0 0 0 0
- from refinancing 0 0 0 0
- from operations 16 72 95 95
- from cash flow from prior
period 0 0 0 0
- from return of capital (Note 4) 0 0 0 0
------------ ------------ ------------ ------------
Total distributions on cash basis
(Note 8) 16 72 95 95
============ ============ ============ ============
Total cumulative cash distributions
per $1,000 investment from
inception 16 88 183 278
Amount (in percentage terms)
remaining invested in program
properties at the end of each
year (period) presented (original
total acquisition cost of properties
retained, divided by original total
acquisition cost of all properties
in program) 100% 100% 100% 100%
</TABLE>
C-19
<PAGE>
<TABLE>
<CAPTION>
6 Months
1991 1992 1993 1994 1995 1996
------------ ------------ ------------ ------------ ------------ ------------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 74 67 71 74 59 32
- from capital gain 0 0 0 0 0 0
- from investment income from prior
period 0 0 0 0 0 0
- from return of capital (Note 3) 21 28 0 21 36 16
------------ ------------ ------------ ------------ ------------ ------------
Total distributions on GAAP basis
(Note 8) 95 95 71 95 95 48
============ ============ ============ ============ ============ ============
Source (on cash basis)
- from sales 0 0 0 0 0 0
- from refinancing 0 0 0 0 0 0 0
- from operations 95 90 71 95 88 44
- from cash flow from prior
period 0 5 0 0 7 4
- from return of capital (Note 4) 0 0 0 0 0
------------ ------------ ------------ ------------ ------------ -------------
Total distributions on cash basis
(Note 8) 95 95 71 95 95 48
============ ============ ============ ============ ============ ============
Total cumulative cash distributions
per $1,000 investment from
inception 373 468 539 634 729 777
Amount (in percentage terms)
remaining invested in program
properties at the end of each
year (period) presented (original
total acquisition cost of properties
retained, divided by original total
acquisition cost of all properties
in program) 100% 100% 100% 100% 100% 100%
</TABLE>
Note 1: The registration statement relating to the offering of units by CNL
Income Fund III, Ltd. became effective on August 10, 1987. All income
and expenses include the period from August 10, 1987 to December 31,
1987.
Note 2: Cash generated from operations includes cash received from tenants,
plus distributions from joint ventures, less cash paid for expenses,
plus interest received.
Note 3: Cash distributions presented above as a return of capital on a GAAP
basis represent the amount of cash distributions in excess of
accumulated net income on a GAAP basis. Accumulated net income includes
deductions for depreciation and amortization expense and income from
certain non-cash items. This amount is not required to be presented as a
return of capital except for purposes of this table, and CNL Income Fund
III, Ltd. has not treated this amount as a return of capital for any
other purpose.
Note 4: CNL Income Fund III, Ltd. makes its distributions in the current
period rather than in arrears based on estimated operating results. In
cases where distributions exceed cash from operations in the current
period, once finally determined, subsequent distributions are lowered
accordingly in order to avoid any return of capital. This amount is not
required to be presented as a return of capital except for purposes of
this table, and CNL Income Fund III, Ltd. has not treated this amount as
a return of capital for any other purpose.
Note 5: The corporate general partner of CNL Income Fund III, Ltd.
contributed $160,000 during the year ended December 31, 1992, in
connection with the operations of the partnership.
Note 6: During the year ended December 31, 1995, CNL Income Fund III, Ltd.
recorded an allowance for loss on land and building of $207,844 for
financial reporting purposes relating to one of its properties. The loss
represented the difference between the property's carrying value and the
estimated net realizable value, based on an anticipated sales price
expected to be received from an unrelated third party.
Note 7: Cash generated from operations per this table agrees to cash
generated from operations per the statement of cash flows included in
the financial statements of CNL Income Fund III, Ltd.
Note 8: As a result of the partnership's change in investor services agents
in 1993, distributions are now declared at the end of each quarter and
paid in the following quarter. Since this table generally presents
distributions on a cash basis (rather than amounts declared),
distributions on a cash basis for 1993 only reflect payments for three
quarters. Distributions declared for the quarters ended December 31,
1993, 1994 and 1995, are reflected in the 1994, 1995 and 1996 columns,
respectively, for distributions on a cash basis due to the payment of
such distributions in January 1994, 1995 and 1996, respectively. As a
result of 1994, 1995 and 1996 distributions being presented on a cash
basis, distributions declared and unpaid as of December 31, 1994 and
1995, and June 30, 1996 are not included in the 1994, 1995 and 1996
totals, respectively.
Note 9: In January 1996, CNL Income Fund III, Ltd. entered into a promissory
note with the corporate general partner for a loan in the amount of
$86,200 in connection with the operations of CNL Income Fund III, Ltd.
The loan, which was uncollateralized and bore interest at a rate of
prime plus .25% per annum, and was due on demand. As of June 30, 1996,
CNL Income Fund III, Ltd. had repaid the loan in full along with
approximately $660 in interest, to the corporate general partner. In
addition, in April 1996, CNL Income Fund III, Ltd. entered into a
promissory note with the corporate general partner for a loan in the
amount of $124,200 in connection with the operations of CNL Income Fund
III, Ltd. The loan was uncollateralized, non-interest bearing and due on
demand. As of June 30, 1996, CNL Income Fund III, Ltd. had repaid the
loan in full to the corporate general partner.
C-20
<PAGE>
TABLE III
Operating Results of Prior Programs
CNL INCOME FUND IV, LTD.
<TABLE>
<CAPTION>
1988
(Note 1) 1989 1990 1991
------------ ------------ ------------ ------------
<S> <C>
Gross revenue $ 236,113 $ 2,540,112 $ 2,705,889 $ 2,607,075
Equity in earnings of joint ventures 8,367 92,589 194,745 207,752
Profit from sale of properties 0 0 0 0
Interest income 318,111 150,156 27,203 22,674
Less: Operating expenses (26,424) (175,108) (175,697) (221,842)
Interest expense 0 0 0 0
Depreciation and amortization (50,019) (427,683) (468,389) (467,451)
------------ ------------ ------------ ------------
Net income - GAAP basis 486,148 2,180,066 2,283,751 2,148,208
============ ============ ============ ============
Taxable income
- from operations 481,448 2,095,089 2,222,457 2,034,837
============ ============ ============ ============
- from gain on sale 0 0 0 0
============ ============ ============ ============
Cash generated from operations
(Notes 2 and 7) 552,318 2,606,064 2,773,852 2,551,205
Cash generated from sales (Note 5) 0 0 0 0
Cash generated from refinancing 0 0 0 0
------------ ------------ ------------ ------------
Cash generated from operations, sales
and refinancing 552,318 2,606,064 2,773,852 2,551,205
Less: Cash distributions to investors
(Note 8)
- from operating cash flow (510,163) (2,606,064) (2,760,000) (2,551,205)
- from sale of properties 0 0 0 0
- from cash flow from prior period 0 (11,736) 0 (44,271)
- from return of capital (Note 4) 0 0 0 (22,520)
- from other (Note 6) 0 0 0 (142,004)
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions 42,155 (11,736) 13,852 (208,795)
Special items (not including sales and
refinancing):
Limited partners' capital
contributions 30,000,000 0 0 0
General partners' capital
contributions 1,000 0 0 142,004
Organization costs (10,000) 0 0 0
Syndication costs (2,720,258) (41,440) 0 0
Lease costs 0 0 0 (5,050)
Acquisition of land and buildings (19,131,848) (3,382,106) (221,182) (2,155)
Investment in direct financing
leases 0 (2,236,216) 0 0
Investment in joint ventures (906,725) (375,408) (168) (15,960)
Proceeds from transfer of joint
venture interest 0 95,201 123,394 0
Decrease (Increase) in restricted cash 0 0 0 0
Reimbursement of syndication and
acquisition costs paid on behalf
of CNL Income Fund IV, Ltd. by
related parties (760,951) (5,264) (269) 0
Repayment of advance (advances)
to an affiliate (14,693) 14,693 0 0
Increase in other assets (373,299) (5,790) 0 0
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 6,125,381 (5,948,066) (84,373) (89,956)
============ ============ ============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 31 69 73 67
============ ============ ============ ============
- from recapture 0 0 0 0
============ ============ ============ ============
Capital gain (loss) 0 0 0 0
============ ============ ============ ============
C-21
<PAGE>
<CAPTION>
6 Months
1992 1993 1994 1995 1996
------------ ------------ ------------ ------------ ------------
<S> <C>
Gross revenue $ 2,708,496 $ 2,678,068 $ 2,591,454 $ 2,608,216 $ 1,285,108
Equity in earnings of joint ventures 198,177 235,457 247,197 245,778 131,471
Profit from sale of properties 0 0 128,592 128,547 0
Interest income 15,370 20,202 27,119 17,578 9,946
Less: Operating expenses (158,464) (209,789) (220,033) (330,843) (141,064)
Interest expense 0 0 0 0 0
Depreciation and amortization (471,737) (460,193) (463,805) (458,937) (223,661)
------------ ------------ ------------ ------------ ------------
Net income - GAAP basis 2,291,842 2,263,745 2,310,524 2,210,339 1,061,800
============ ============ ============ ============ ============
Taxable income
- from operations 2,236,726 2,229,572 2,164,504 2,153,355 1,001,988
============ ============ ============ ============ ============
- from gain on sale 0 0 124,367 0 0
============ ============ ============ ============ ============
Cash generated from operations
(Notes 2 and 7) 2,745,754 2,653,559 2,544,211 2,670,393 1,380,932
Cash generated from sales (Note 5) 0 0 712,000 518,650 0
Cash generated from refinancing 0 0 0 0 0
------------ ------------ ------------ ------------ ------------
Cash generated from operations, sales
and refinancing 2,745,754 2,653,559 3,256,211 3,189,043 1,380,932
Less: Cash distributions to investors
(Note 8)
- from operating cash flow (2,745,754) (2,070,000) (2,544,211) (2,670,393) (1,380,000)
- from sale of properties 0 0 0 0 0
- from cash flow from prior period 0 0 (215,789) (89,607) 0
- from return of capital (Note 4) 0 0 0 0 0
- from other (Note 6) (14,246) 0 0 0 0
------------ ------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions (14,246) 583,559 496,211 429,043 932
Special items (not including sales and
refinancing):
Limited partners' capital
contributions 0 0 0 0 0
General partners' capital
contributions 21,000 77,500 0 0 22,300
Organization costs 0 0 0 0 0
Syndication costs 0 0 0 0 0
Lease costs (2,160) (10,560) (360) (1,800) (669)
Acquisition of land and buildings 0 (34,011) (537,317) (1,628) 0
Investment in direct financing
leases 0 0 0 0 0
Investment in joint ventures 0 0 0 0 (520,000)
Proceeds from transfer of joint
venture interest 0 0 0 0 0
Decrease (Increase) in restricted cash 0 0 0 (518,150) 518,150
Reimbursement of syndication and
acquisition costs paid on behalf
of CNL Income Fund IV, Ltd. by
related parties (3,028) 0 0 (1,175) 0
Repayment of advance (advances)
to an affiliate 0 0 0 0 0
Increase in other assets 0 0 0 0 0
------------ ------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 1,566 616,488 (41,466) (93,710) 20,713
============ ============ ============ ============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 74 74 71 71 33
============ ============ ============ ============ ============
- from recapture 0 0 0 0 0
============ ============ ============ ============ ============
Capital gain (loss) 0 0 4 0 0
============ ============ ============ ============ ============
C-22
<PAGE>
TABLE III - CNL INCOME FUND IV, LTD. (continued)
<CAPTION>
1988
(Note 1) 1989 1990 1991
------------- ------------ ------------ ------------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 32 72 75 71
- from capital gain 0 0 0 0
- from investment income from prior
period 0 0 0 0
- from return of capital (Note 3) 2 15 17 21
------------ ------------ ------------ ------------
Total distributions on GAAP basis (Note 8) 34 87 92 92
============ ============ ============ ============
Source (on cash basis)
- from sales 0 0 0 0
- from refinancing 0 0 0 0
- from operations 34 87 92 85
- from cash flow from prior period 0 0 0 1
- from return of capital (Note 4) 0 0 0 1
- from other (Note 6) 0 0 0 5
------------ ------------ ------------ ------------
Total distributions on cash basis (Note 8) 34 87 92 92
============ ============ ============ ============
Total cumulative cash distributions per
$1,000 investment from inception 34 121 213 305
Amount (in percentage terms) remaining
invested in program properties at the
end of each year (period) presented
(original total acquisition cost of
properties retained, divided by
original total acquisition cost of
all properties in program) (Note 5) 100% 100% 100% 100%
<CAPTION>
6 Months
1992 1993 1994 1995 1996
------------ ----------- ------------ ------------ ------------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 76 69 72 69 35
- from capital gain 0 0 4 4 0
- from investment income from prior
period 0 0 6 0 0
- from return of capital (Note 3) 16 0 10 19 11
------------ ----------- ------------ ------------ ------------
Total distributions on GAAP basis (Note 8) 92 69 92 92 46
============ =========== ============ ============ ============
Source (on cash basis)
- from sales 0 0 0 0 0
- from refinancing 0 0 0 0 0
- from operations 92 69 85 89 46
- from cash flow from prior period 0 0 7 3 0
- from return of capital (Note 4) 0 0 0 0 0
- from other (Note 6) 0 0 0 0 0
------------ ----------- ------------ ------------ ------------
Total distributions on cash basis (Note 8) 92 69 92 92 46
============ =========== ============ ============ ============
Total cumulative cash distributions per
$1,000 investment from inception 397 466 558 650 696
Amount (in percentage terms) remaining
invested in program properties at the
end of each year (period) presented
(original total acquisition cost of
properties retained, divided by
original total acquisition cost of
all properties in program) (Note 5) 100% 100% 100% 98% 100%
</TABLE>
C-23
<PAGE>
Note 1: The registration statement relating to the offering of units by CNL
Income Fund IV, Ltd. became effective on May 6, 1988. All income and
expenses include the period from May 6, 1988 to December 31, 1988.
Note 2: Cash generated from operations includes cash received from tenants,
plus distributions from joint ventures, less cash paid for expenses,
plus interest received.
Note 3: Cash distributions presented above as a return of capital on a GAAP
basis represent the amount of cash distributions in excess of
accumulated net income on a GAAP basis. Accumulated net income includes
deductions for depreciation and amortization expense and income from
certain non-cash items. This amount is not required to be presented as a
return of capital except for purposes of this table, and CNL Income Fund
IV, Ltd. has not treated this amount as a return of capital for any
other purpose.
Note 4: CNL Income Fund IV, Ltd. makes its distributions in the current
period rather than in arrears based on estimated operating results. In
cases where distributions exceed cash from operations in the current
period, once finally determined, subsequent distributions are lowered
accordingly in order to avoid any return of capital. This amount is not
required to be presented as a return of capital except for purposes of
this table, and CNL Income Fund IV, Ltd. has not treated this amount as
a return of capital for any other purpose.
Note 5: During April 1994, the partnership sold one of its properties for
$712,000. Subsequently, the partnership reinvested $539,794 of the net
sales proceeds in two additional properties. The remaining net sales
proceeds were used by the partnership to meet other working capital
needs of the Partnership. In December 1995, CNL Income Fund IV, Ltd.
sold one of its properties for $520,000 and received net sales proceeds
of $518,650. At December 31, 1995, the net sales proceeds were being
held in an interest bearing escrow account pending the release of funds
by the escrow agent to acquire an additional property or return the
funds to the partnership. In January 1996, CNL Income Fund IV, Ltd.
reinvested the net sales proceeds, along with additional funds, in an
additional property as tenants-in-common with affiliates of its general
partners.
Note 6: The corporate general partner of CNL Income Fund IV, Ltd. contributed
$142,004, $21,000, $77,500 and $22,300 during the years ended December
31, 1991, 1992 and 1993, and the six months ended June 30, 1996,
respectively, in connection with the operations of the partnership.
Note 7: Cash generated from operations per this table agrees to cash
generated from operations per the statement of cash flows included in
the financial statements of CNL Income Fund IV, Ltd.
Note 8: As a result of the partnership's change in investor services agents
in 1993, distributions are now declared at the end of each quarter and
paid in the following quarter. Since this table generally presents
distributions on a cash basis (rather than amounts declared),
distributions on a cash basis for 1993 only reflect payments for three
quarters. Distributions declared for the quarters ended December 31,
1993, 1994 and 1995, are reflected in the 1994, 1995 and 1996 columns,
respectively, for distributions on a cash basis due to the payment of
such distributions in January 1994, 1995 and 1996, respectively. As a
result of 1994, 1995 and 1996 distributions being presented on a cash
basis, distributions declared and unpaid as of December 31, 1994 and
1995, and June 30, 1996, are not included in the 1994, 1995 and 1996
totals, respectively.
C-24
<PAGE>
TABLE III
Operating Results of Prior Programs
CNL INCOME FUND V, LTD.
<TABLE>
<CAPTION>
1988
(Note 1) 1989 1990 1991
------------ ------------ ------------ ------------
<S> <C>
Gross revenue $ 0 $ 1,122,067 $ 2,527,538 $ 2,507,285
Equity in earnings of unconsolidated
joint ventures 0 448 36,362 51,823
Profit from sale of properties
(Note 4) 0 0 0 0
Interest income 0 459,899 41,407 22,199
Less: Operating expenses 0 (74,006) (132,991) (201,129)
Interest expense 0 0 0 0
Depreciation and amortization 0 (117,848) (335,444) (343,363)
Minority interest in loss
(income) of consolidated
joint venture 0 (20,558) (43,323) (43,040)
------------ ------------ ------------ ------------
Net income - GAAP basis 0 1,370,002 2,093,549 1,993,775
============ ============ ============ ============
Taxable income
- from operations 0 1,268,799 1,983,848 1,842,653
============ ============ ============ ============
- from gain on sale 0 0 0 0
============ ============ ============ ============
Cash generated from operations
(Notes 2 and 6) 0 1,520,757 2,356,888 2,248,777
Cash generated from sales 0 0 0 0
Cash generated from refinancing 0 0 0 0
------------ ------------ ------------ ------------
Cash generated from operations, sales
and refinancing 0 1,520,757 2,356,888 2,248,777
Less: Cash distributions to investors
(Note 7)
- from operating cash flow 0 (1,370,974) (2,286,701) (2,248,777)
- from sale of properties 0 0 0 0
- from cash flow from prior period 0 0 0 (51,606)
- from other 0 0 0 0
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions 0 149,783 70,187 (51,606)
Special items (not including sales and
refinancing):
Limited partners' capital
contributions 24,010 24,976,000 0 0
General partners' capital
contributions 1,000 0 0 45,000
Withdrawal of original limited
partner 0 (10) 0 0
Organization costs 0 (10,000) 0 0
Syndication costs 0 (2,358,755) 0 0
Lease costs 0 0 0 (21,660)
Acquisition of land and buildings 0 (15,843,161) (2,129,325) (47,605)
Loan to tenant 0 0 0 (28,512)
Collections on mortgage note
receivable (Note 4) 0 0 0 0
Collections on note receivable 0 0 0 9,206
Investment in direct financing leases 0 (4,124,100) (38,042) 0
Investment in joint ventures 0 (21,292) (132,376) 0
Investment of tenant security deposit 0 (15,000) 0 0
Proceeds from certificate of deposit 0 0 15,000 0
Proceeds from sale of portion of land
for right of way purposes 0 0 0 0
Proceeds from sale of joint venture
interest 0 0 365,000 0
Increase in other assets (64) (95,773) 0 0
Reimbursement of syndication and
acquisition costs paid on behalf
of CNL Income Fund V, Ltd. by
related parties 0 (599,934) (4,792) 0
Distributions to holder of minority
interest 0 (23,319) (49,169) (29,086)
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 24,946 2,034,439 (1,903,517) (124,263)
============ ============ ============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 0 61 79 73
============ ============ ============ ============
- from recapture 0 0 0 0
============ ============ ============ ============
Capital gain (loss) 0 0 0 0
============ ============ ============ ============
C-25
<PAGE>
<CAPTION>
6 Months
1992 1993 1994 1995 1996
------------ ------------ ------------ ------------ -----------
<S> <C>
Gross revenue $ 2,405,496 2,347,566 $ 2,292,921 $ 2,200,192 $ 1,043,257
Equity in earnings of unconsolidated
joint ventures 49,839 45,711 47,219 47,018 22,233
Profit from sale of properties
(Note 4) 0 0 0 5,924 450
Interest income 15,127 10,650 7,564 55,785 57,786
Less: Operating expenses (153,618) (281,407) (208,805) (243,187) (143,474)
Interest expense 0 0 0 0 0
Depreciation and amortization (345,847) (345,485) (403,147) (397,735) (190,442)
Minority interest in loss
(income) of consolidated
joint venture 4,434 17,859 7,277 11,823 13,108
------------ ------------ ------------ ------------ -----------
Net income - GAAP basis 1,975,431 1,794,894 1,743,029 1,679,820 802,918
============ ============ ============ ============ ===========
Taxable income
- from operations 1,922,820 1,733,453 1,746,181 1,514,341 787,616
============ ============ ============ ============ ===========
- from gain on sale 0 0 0 5,855 430
============ ============ ============ ============ ===========
Cash generated from operations
(Notes 2 and 6) 2,354,590 2,215,658 2,177,079 2,142,918 1,025,805
Cash generated from sales 0 0 0 0 0
Cash generated from refinancing 0 0 0 0 0
------------ ------------ ------------ ------------ -----------
Cash generated from operations, sales
and refinancing 2,354,590 2,215,658 2,177,079 2,142,918 1,025,805
Less: Cash distributions to investors
(Note 7)
- from operating cash flow (2,300,053) (1,735,129) (2,177,079) (2,142,918) (1,025,805)
- from sale of properties 0 0 0 0 0
- from cash flow from prior period 0 0 (122,921) (157,082) (124,195)
- from other 0 0 0 0 0
------------ ------------ ------------ ------------ -----------
Cash generated (deficiency) after cash
distributions 54,537 480,529 (122,921) (157,082) (124,195)
Special items (not including sales and
refinancing):
Limited partners' capital
contributions 0 0 0 0 0
General partners' capital
contributions 0 0 0 31,500 108,200
Withdrawal of original limited
partner 0 0 0 0 0
Organization costs 0 0 0 0 0
Syndication costs 0 0 0 0 0
Lease costs 0 0 0 0 0
Acquisition of land and buildings 0 0 0 0 0
Loan to tenant 0 0 0 0 0
Collections on mortgage note
receivable (Note 4) 0 0 0 11,409 3,270
Collections on note receivable 19,306 0 0 0 0
Investment in direct financing leases 0 0 0 0 0
Investment in joint ventures 0 0 0 0 0
Investment of tenant security deposit 0 0 0 0 0
Proceeds from certificate of deposit 0 0 0 0 0
Proceeds from sale of portion of land
for right of way purposes 0 0 0 7,625 0
Proceeds from sale of joint venture
interest 0 0 0 0 0
Increase in other assets 0 0 0 0 0
Reimbursement of syndication and
acquisition costs paid on behalf
of CNL Income Fund V, Ltd. by
related parties 0 0 0 0 0
Distributions to holder of minority
interest (26,731) (10,725) 0 0 0
------------ ---------- ------------ ------------- -----------
Cash generated (deficiency) after cash
distributions and special items 47,112 469,804 (122,921) (106,548) (12,725)
============ ========== ============ ============ ===========
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 76 69 69 60 31
============ ========== ============ ============ ============
- from recapture 0 0 0 0 0
============ ========== ============ ============ ============
Capital gain (loss) 0 0 0 0 0
============ ========== ============ ============ ============
C-26
<PAGE>
TABLE III - CNL INCOME FUND V, LTD. (continued)
<CAPTION>
1988
(Note 1) 1989 1990 1991
------------ ------------ ------------ ------------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 0 66 83 79
- from capital gain 0 0 0 0
- from investment income from prior
period 0 0 0 0
- from return of capital (Note 3) 0 0 8 13
------------ ------------ ------------ ------------
Total distributions on GAAP basis
(Note 7) 0 66 91 92
============ ============ ============ ============
Source (on cash basis)
- from sales 0 0 0 0
- from refinancing 0 0 0 0
- from operations 0 66 91 90
- from cash flow from prior
period 0 0 0 2
------------ ------------ ------------ ------------
Total distributions on cash basis
(Note 7) 0 66 91 92
============ ============ ============ ============
Total cumulative cash distributions
per $1,000 investment from inception 0 66 157 249
Amount (in percentage terms) remaining
invested in program properties at the
end of each year (period) presented
(original total acquisition cost of
properties retained, divided by
original total acquisition cost of
all properties in program) (Note 4) N/A 100% 100% 100%
<CAPTION>
6 Months
1992 1993 1994 1995 1996
------------ ------------ ------------ ------------ ------------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 78 69 69 66 32
- from capital gain 0 0 0 0 0
- from investment income from prior
period 0 0 2 0 0
- from return of capital (Note 3) 14 0 21 26 14
------------ ------------ ------------ ------------ ------------
Total distributions on GAAP basis
(Note 7) 92 69 92 92 46
============ ============ ============ ============ ============
Source (on cash basis)
- from sales 0 0 0 0 0
- from refinancing 0 0 0 0 0
- from operations 92 69 87 86 41
- from cash flow from prior
period 0 0 5 6 5
------------ ------------ ------------ ------------ ------------
Total distributions on cash basis
(Note 7) 92 69 92 92 46
============ ============ ============ ============ ============
Total cumulative cash distributions
per $1,000 investment from inception 341 410 502 594 640
Amount (in percentage terms) remaining
invested in program properties at the
end of each year (period) presented
(original total acquisition cost of
properties retained, divided by
original total acquisition cost of
all properties in program) (Note 4) 100% 100% 100% 95% 95%
</TABLE>
C-27
<PAGE>
Note 1: The registration statement relating to the offering of units by CNL
Income Fund V, Ltd. became effective on December 16, 1988. Activities
through February 1, 1989, were devoted to organization of the
partnership and operations had not begun.
Note 2: Cash generated from operations includes cash received from tenants,
plus distributions from joint ventures, less cash paid for expenses,
plus interest received.
Note 3: Cash distributions presented above as a return of capital on a GAAP
basis represent the amount of cash distributions in excess of
accumulated net income on a GAAP basis. Accumulated net income includes
deductions for depreciation and amortization expense and income from
certain non-cash items. This amount is not required to be presented as a
return of capital except for purposes of this table, and CNL Income Fund
V, Ltd. has not treated this amount as a return of capital for any other
purpose.
Note 4: In August 1995, CNL Income Fund V, Ltd. sold one of its properties to
the tenant and in connection therewith accepted a promissory note in the
principal sum of $1,040,000, collateralized by a mortgage on the
property. The note bears interest at a rate of 10.25% per annum and is
being collected in 59 equal monthly installments of $9,319, with a
balloon payment of $1,006,004 due in July 2000. In accordance with
generally accepted accounting principles, the partnership recorded the
sale using the installment method; therefore, the gain on sale of the
property was deferred and is being recognized as income proportionately
as payments under the mortgage note are collected. The partnership
recognized a gain of $1,571 and $450 for financial reporting purposes
for the year ended December 31, 1995 and the six months ended June 30,
1996, respectively, and had a deferred gain of $141,641 and $141,191 at
December 31, 1995 and June 30, 1996, respectively. The general partners
anticipate that payments collected under the mortgage note will be
reinvested in additional properties or used for other partnership
purposes.
Note 5: The corporate general partner of CNL Income Fund V, Ltd. contributed
$45,000, $31,500 and $108,200 during the years ended December 31, 1991
and 1995, and the six months ended June 30, 1996, respectively.
Note 6: Cash generated from operations per this table agrees to cash
generated from operations per the statement of cash flows included in
the financial statements of CNL Income Fund V, Ltd.
Note 7: As a result of the partnership's change in investor services agents
in 1993, distributions are now declared at the end of each quarter and
paid in the following quarter. Since this table generally presents
distributions on a cash basis (rather than amounts declared),
distributions on a cash basis for 1993 only reflect payments for three
quarters. Distributions declared for the quarters ended December 31,
1993, 1994 and 1995, are reflected in the 1994, 1995 and 1996 columns,
respectively, for distributions on a cash basis due to the payment of
such distributions in January 1994, 1995 and 1996, respectively. As a
result of 1994, 1995 and 1996 distributions being presented on a cash
basis, distributions declared and unpaid as of December 31, 1994 and
1995, and June 30, 1996, are not included in the 1994, 1995 and 1996
totals, respectively.
C-28
<PAGE>
TABLE III
Operating Results of Prior Programs
CNL INCOME FUND VI, LTD.
<TABLE>
<CAPTION>
1988
(Note 1) 1989 1990 1991
------------ ------------ ------------ -----------
<S> <C>
Gross revenue $ 0 $ 83,266 $ 2,760,167 $ 3,378,012
Equity in earnings of unconsolidated
joint ventures 0 0 12,246 41,607
Profit (Loss) from sale of properties 0 0 0 0
Interest income 0 527,128 417,935 43,401
Less: Operating expenses 0 (33,611) (144,999) (234,452)
Interest expense 0 0 0 0
Depreciation and amortization 0 (14,823) (405,738) (508,761)
Minority interest in income of
consolidated joint venture 0 0 (13,116) (17,873)
------------ ------------ ------------ ------------
Net income - GAAP basis 0 561,960 2,626,495 2,701,934
============ ============ ============ ============
Taxable income
- from operations 0 559,399 2,490,985 2,495,354
============ ============ ============ ============
- from gain on sale (Note 4) 0 0 0 0
============ ============ ============ ============
Cash generated from operations
(Notes 2 and 5) 0 575,380 2,931,535 3,198,715
Cash generated from sales (Note 4) 0 0 0 0
Cash generated from refinancing 0 0 0 0
------------ ------------ ------------ ------------
Cash generated from operations, sales
and refinancing 0 575,380 2,931,535 3,198,715
Less: Cash distributions to investors
(Note 6)
- from operating cash flow 0 (567,092) (2,876,824) (3,150,375)
- from sale of properties 0 0 0 0
- from cash flow from prior period 0 0 0 0
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions 0 8,288 54,711 48,340
Special items (not including sales and
refinancing):
Limited partners' capital
contributions 10 33,833,625 1,166,375 0
General partners' capital
contributions 1,000 0 0 0
Withdrawal of original limited
partner 0 (10) 0 0
Organization costs 0 (10,000) 0 0
Syndication costs 0 (3,105,276) (136,045) 0
Acquisition of land and buildings 0 (12,005,638) (13,096,593) (601,145)
Investment in direct financing
leases 0 (810,522) (2,836,022) (829)
Investment in joint ventures 0 0 (322,916) (150,378)
Proceeds from transfer of joint
venture interest 0 0 0 21,000
Lease costs 0 0 0 (14,200)
Loan to tenant 0 0 (200,920) 0
Collections on loan to tenant 0 0 0 200,920
Collections on mortgage note
receivable 0 0 0 0
Decrease(increase) in other assets (72) (1,044,052) 0 0
Reimbursement of syndication and
acquisition costs paid on behalf
of CNL Income Fund VI, Ltd. by
related parties 0 (773,705) (92,589) (23,408)
Distributions to holder of minority
interest 0 0 (16,590) (21,959)
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 938 16,092,710 (15,480,589) (541,659)
============ ============ ============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 0 32 71 71
============ ============ ============ ============
- from recapture 0 0 0 0
============ ============ ============ ============
Capital gain (loss) (Note 4) 0 0 0 0
============ ============ ============ ============
C-29
<PAGE>
<CAPTION>
6 Months
1992 1993 1994 1995 1996
------------ ------------ ------------ ------------ ------------
<S> <C>
Gross revenue $ 3,552,597 $ 3,595,729 $ 3,394,257 $ 3,331,584 $ 1,690,053
Equity in earnings of unconsolidated
joint ventures 42,537 44,350 70,499 83,483 46,577
Profit (Loss) from sale of properties 0 0 332,664 95,913 0
Interest income 17,257 15,548 24,933 43,352 18,848
Less: Operating expenses (190,190) (163,373) (196,287) (182,432) (110,303)
Interest expense 0 0 0 0 0
Depreciation and amortization (516,527) (516,717) (510,246) (490,386) (242,262)
Minority interest in income of
consolidated joint venture (19,172) (19,845) (20,792) (20,133) (11,069)
------------ ------------ ------------ ------------ ------------
Net income - GAAP basis 2,886,502 2,955,692 3,095,028 2,861,381 1,391,844
============ ============ ============ ============ ============
Taxable income
- from operations 2,601,278 2,732,663 2,724,815 2,566,953 1,253,001
============ ============ ============ ============ ============
- from gain on sale (Note 4) 0 0 0 92,999 0
============ ============ ============ ============ ============
Cash generated from operations
(Notes 2 and 5) 3,203,357 3,194,686 3,253,674 3,222,430 1,650,988
Cash generated from sales (Note 4) 0 0 1,429,481 899,503 0
Cash generated from refinancing 0 0 0 0 0
------------ ------------ ------------ ------------ ------------
Cash generated from operations, sales
and refinancing 3,203,357 3,194,686 4,683,155 4,121,933 1,650,988
Less: Cash distributions to investors
(Note 6)
- from operating cash flow (3,150,252) (2,382,184) (3,150,000) (3,150,000) (1,575,000)
- from sale of properties 0 0 0 0 0
- from cash flow from prior period 0 0 0 0 0
------------ ------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions 53,105 812,502 1,533,155 971,933 75,988
Special items (not including sales and
refinancing):
Limited partners' capital
contributions 0 0 0 0 0
General partners' capital
contributions 0 0 0 0 0
Withdrawal of original limited
partner 0 0 0 0 0
Organization costs 0 0 0 0 0
Syndication costs 0 0 0 0 0
Acquisition of land and buildings (26,500) 0 (980,904) (25,646) 0
Investment in direct financing
leases 0 0 0 (723,237) 0
Investment in joint ventures (6,171) 0 (455,146) 0 (173,650)
Proceeds from transfer of joint
venture interest 0 0 0 0 0
Lease costs (4,800) (3,600) (1,500) (3,300) (3,300)
Loan to tenant 0 0 0 0 0
Collections on loan to tenant 0 0 0 0 0
Collections on mortgage note
receivable 0 0 0 2,967 3,033
Decrease(increase) in other assets 4,067 0 0 0 0
Reimbursement of syndication and
acquisition costs paid on behalf
of CNL Income Fund VI, Ltd. by
related parties 0 0 0 (1,375) 0
Distributions to holder of minority
interest (23,229) (23,821) (22,077) (26,824) (3,524)
------------- ----------- ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items (3,528) 785,081 73,528 194,518 (101,453)
============= ============ ============ ============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 74 77 77 73 35
============= ============ ============ ============ ============
- from recapture 0 0 0 0 0
============= ============ ============ ============ ============
Capital gain (loss) (Note 4) 0 0 0 3 0
============= ============ ============ ============ ============
C-30
<PAGE>
TABLE III - CNL INCOME FUND VI, LTD. (continued)
<CAPTION>
1988
(Note 1) 1989 1990 1991
------------ ------------ ------------ ------------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 0 32 74 76
- from capital gain 0 0 0 0
- from investment income from prior
period 0 0 0 0
- from return of capital (Note 3) 0 0 8 14
------------ ------------ ------------ ------------
Total distributions on GAAP basis
(Note 6) 0 32 82 90
============ ============ ============ ============
Source (on cash basis)
- from operations 0 32 82 90
- from sale of partnership interests 0 0 0 0
- from cash flow from prior period 0 0 0 0
------------ ------------ ------------ ------------
Total distributions on cash basis (Note 6) 0 32 82 90
============ ============ ============ ============
Total cumulative cash distributions per
$1,000 investment from inception 0 32 114 204
Amount (in percentage terms) remaining
invested in program properties at the
end of each year (period) presented
(original total acquisition cost of
properties retained, divided by original
total acquisition cost of all properties
in program) (Note 4) N/A 100% 100% 100%
<CAPTION>
6 Months
1992 1993 1994 1995 1996
------------ ------------ ------------ ------------ ------------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 82 68 78 78 39
- from capital gain 0 0 10 3 0
- from investment income from prior
period 0 0 2 9 5
- from return of capital (Note 3) 8 0 0 0 1
------------ ------------ ------------ ------------ ------------
Total distributions on GAAP basis
(Note 6) 90 68 90 90 45
============ ============ ============ ============ ============
Source (on cash basis)
- from operations 90 68 90 90 45
- from sale of partnership interests 0 0 0 0 0
- from cash flow from prior period 0 0 0 0 0
------------ ------------ ------------ ------------ ------------
Total distributions on cash basis (Note 6) 90 68 90 90 45
============ ============ ============ ============ ============
Total cumulative cash distributions per
$1,000 investment from inception 294 362 452 542 587
Amount (in percentage terms) remaining
invested in program properties at the
end of each year (period) presented
(original total acquisition cost of
properties retained, divided by original
total acquisition cost of all properties
in program) (Note 4) 100% 100% 100% 100% 100%
</TABLE>
C-31
<PAGE>
Note 1: Pursuant to a registration statement on Form S-11 under the
Securities Act of 1933, as amended, CNL Income Fund VI, Ltd. ("CNL VI")
and CNL Income Fund V, Ltd. each registered for sale $25,000,000 units
of limited partnership interest ("Units"). The offering of Units of CNL
Income Fund V, Ltd. commenced December 16, 1988. Pursuant to the
registration statement, CNL VI's offering of Units could not commence
until the offering of Units of CNL Income Fund V, Ltd. was terminated.
CNL Income Fund V, Ltd. terminated its offering of Units on June 7,
1989, at which time the maximum offering proceeds of $25,000,000 had
been received. Upon the termination of the offering of Units of CNL
Income Fund V, Ltd., CNL VI commenced its offering of Units. Activities
through June 22, 1989, were devoted to organization of the partnership
and operations had not begun.
Note 2: Cash generated from operations includes cash received from tenants,
plus distributions from joint ventures, less cash paid for expenses,
plus interest received.
Note 3: Cash distributions presented above as a return of capital on a GAAP
basis represent the amount of cash distributions in excess of
accumulated net income on a GAAP basis. Accumulated net income includes
deductions for depreciation and amortization expense and income from
certain non-cash items. This amount is not required to be presented as a
return of capital except for purposes of this table, and CNL Income Fund
VI, Ltd. has not treated this amount as a return of capital for any
other purpose.
Note 4: During the year ended December 31, 1994, the partnership sold two of
its properties and received net proceeds of $1,429,481. The sale of
these properties was structured to qualify as like-kind exchange
transactions in accordance with Section 1031 of the Internal Revenue
Code. As a result, no gain or loss was recognized for federal income tax
purposes. Subsequent to the sale of these properties, the partnership
reinvested the sales proceeds in two additional properties. In June
1995, CNL Income Fund VI, Ltd. sold a property and received net sales
proceeds of $899,503. In August 1995, the partnership reinvested
$724,612 in an additional property. In addition, in January 1996, the
partnership reinvested the remaining net sales proceeds in an additional
property as tenants-in-common with affiliates of the general partners.
Note 5: Cash generated from operations per this table agrees to cash
generated from operations per the statement of cash flows included in
the financial statements of CNL Income Fund VI, Ltd.
Note 6: As a result of the partnership's change in investor services agents
in 1993, distributions are now declared at the end of each quarter and
paid in the following quarter. Since this table generally presents
distributions on a cash basis (rather than amounts declared),
distributions on a cash basis for 1993 only reflect payments for three
quarters. Distributions declared for the quarters ended December 31,
1993, 1994 and 1995, are reflected in the 1994, 1995 and 1996 columns,
respectively, for distributions on a cash basis due to the payment of
such distributions in January 1994, 1995 and 1996, respectively. As a
result of 1994, 1995 and 1996 distributions being presented on a cash
basis, distributions declared and unpaid as of December 31, 1994 and
1995, and June 30, 1996, are not included in the 1994, 1995 and 1996
totals, respectively.
C-32
<PAGE>
TABLE III
Operating Results of Prior Programs
CNL INCOME FUND VII, LTD.
<TABLE>
<CAPTION>
1989
(Note 1) 1990 1991 1992
------------ ------------ ------------ ------------
<S> <C>
Gross revenue $ 0 $ 1,107,671 $ 2,922,456 $ 2,827,336
Equity in earnings of unconsolidated
joint ventures 0 21,785 57,994 115,763
Profit (Loss) from sale of properties
(Note 6) 0 0 0 110,344
Interest income 0 352,475 87,982 33,395
Less: Operating expenses 0 (71,687) (151,806) (149,202)
Interest expense 0 0 0 0
Depreciation and amortization 0 (171,276) (369,363) (365,245)
Other (Note 7) 0 0 0 0
Minority interest in income of
consolidated joint venture 0 (8,113) (18,999) (19,338)
------------ ------------ ------------ ------------
Net income - GAAP basis 0 1,230,855 2,528,264 2,553,053
============ ============ ============ ============
Taxable income
- from operations 0 1,187,723 2,395,751 2,286,276
============ ============ ============ ============
- from gain on sale (Notes 4 and 5) 0 0 0 65,924
============ ============ ============ ============
Cash generated from operations
(Notes 2 and 8) 0 1,387,548 2,767,626 2,683,316
Cash generated from sales (Notes 4
and 5) 0 0 0 700,000
Cash generated from refinancing 0 0 0 0
------------ ------------ ------------ ------------
Cash generated from operations, sales
and refinancing 0 1,387,548 2,767,626 3,383,316
Less: Cash distributions to investors
(Note 9)
- from operating cash flow 0 (1,255,979) (2,640,400) (2,683,316)
- from sale of properties 0 0 0 0
- from cash flow from prior period 0 0 0 (16,688)
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions 0 131,569 127,226 683,312
Special items (not including sales and
refinancing):
Limited partners' capital
contributions 0 30,000,000 0 0
General partners' capital
contributions 1,000 0 0 0
Organization costs 0 (10,000) 0 0
Syndication costs 0 (2,695,286) 445 0
Acquisition of land and buildings 0 (18,596,877) (1,219,126) (284,264)
Collections on mortgage notes
receivable (Note 6) 0 0 0 0
Investment in direct financing leases 0 (4,758,884) 0 (338,216)
Investment in joint ventures 0 (365,168) (1,115,881) (53,542)
Return of capital from joint ventures 0 0 0 0
Increase in other assets (76) (244,822) 0 0
Reimbursement of syndication and
acquisition costs paid on behalf
of CNL Income Fund VII, Ltd. by
related parties 0 (853,348) (8,665) (117)
Distributions to holder of minority
interest 0 (8,246) (18,940) (19,221)
Other 0 0 1,522 0
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 924 2,598,938 (2,233,419) (12,048)
============ ============ ============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 0 51 79 75
============ ============ ============ ============
- from recapture 0 0 0 0
============ ============ ============ ============
Capital gain (loss) (Notes 4 and 5) 0 0 0 2
============ ============ ============ ============
</TABLE>
C-33
<PAGE>
<TABLE>
<CAPTION>
6 Months
1993 1994 1995 1996
------------ ------------ ------------ ------------
<S> <C>
Gross revenue $ 2,837,025 $ 2,764,901 $ 2,502,152 $ 1,289,907
Equity in earnings of unconsolidated
joint ventures 115,908 142,974 154,937 77,124
Profit (Loss) from sale of properties
(Note 6) 0 77,379 (5,135) 407
Interest income 19,348 28,254 78,522 82,046
Less: Operating expenses (157,425) (139,845) (225,784) (98,418)
Interest expense 0 0 0 0
Depreciation and amortization (362,070) (351,565) (329,350) (164,088)
Other (Note 7) 0 0 (174,466) 0
Minority interest in income of
consolidated joint venture (18,876) (18,798) (18,728) (9,310)
------------ ------------ ------------ ------------
Net income - GAAP basis 2,433,910 2,503,300 1,982,148 1,177,668
============ ============ ============ ============
Taxable income
- from operations 2,269,497 2,283,272 2,171,377 866,741
============ ============ ============ ============
- from gain on sale (Notes 4 and 5) 0 45,612 (179,648) 309
============ ============ ============ ============
Cash generated from operations
(Notes 2 and 8) 2,661,182 2,734,382 2,484,538 1,346,104
Cash generated from sales (Notes 4
and 5) 0 869,036 0 0
Cash generated from refinancing 0 0 0 0
------------ ------------ ------------ ------------
Cash generated from operations, sales
and refinancing 2,661,182 3,603,418 2,484,538 1,346,104
Less: Cash distributions to investors
(Note 9)
- from operating cash flow (2,046,235) (2,700,002) (2,484,538) (1,346,104)
- from sale of properties 0 0 0 0
- from cash flow from prior period 0 0 (275,464) (3,896)
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions 614,947 903,416 (275,464) (3,896)
Special items (not including sales and
refinancing):
Limited partners' capital
contributions 0 0 0 0
General partners' capital
contributions 0 0 0 0
Organization costs 0 0 0 0
Syndication costs 0 0 0 0
Acquisition of land and buildings (4,678) (397,536) 0 0
Collections on mortgage notes
receivable (Note 6) 0 0 12,725 4,298
Investment in direct financing leases 0 0 0 0
Investment in joint ventures (48) (425,887) 0 0
Return of capital from joint ventures 0 0 0 0
Increase in other assets 0 0 0 0
Reimbursement of syndication and
acquisition costs paid on behalf
of CNL Income Fund VII, Ltd. by
related parties 0 0 0 0
Distributions to holder of minority
interest (19,092) (20,464) (17,240) (9,823)
Other 0 0 0 0
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 591,129 59,529 (279,979) (9,421)
============ ============ ============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 75 75 72 29
============ ============ ============ ============
- from recapture 0 0 0 0
============ ============ ============ ============
Capital gain (loss) (Notes 4 and 5) 0 2 (6) 0
============ ============ ============ ============
</TABLE>
C-34
<PAGE>
TABLE III - CNL INCOME FUND VII, LTD. (continued)
<TABLE>
<CAPTION>
1989 6 Months
(Note 1) 1990 1991 1992 1993 1994 1995 1996
------------ ------ ------ ------ ------ ------ ------ ------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 0 52 83 81 68 80 65 39
- from capital gain 0 0 0 4 0 3 0 0
- from investment income from
prior period 0 0 0 0 0 7 5 0
- from return of capital (Note 3) 0 2 5 5 0 0 22 6
------------ ------ ------ ------ ------ ------ ------ ------
Total distributions on GAAP basis
(Note 9) 0 54 88 90 68 90 92 45
============ ====== ====== ====== ====== ====== ====== ======
Source (on cash basis)
- from sales 0 0 0 0 0 0 0 0
- from refinancing 0 0 0 0 0 0 0 0
- from operations 0 54 88 89 68 90 83 45
- from cash flow from prior period 0 0 0 1 0 0 9 0
------------ ------ ------ ------ ------ ------ ------ ------
Total distributions on cash basis
(Note 9) 0 54 88 90 68 90 92 45
============ ====== ====== ====== ====== ====== ====== ======
Total cumulative cash distributions
per $1,000 investment from inception 0 54 142 232 300 390 482 527
Amount (in percentage terms) remaining
invested in program properties at the
end of each year (period) presented
(original total acquisition cost of
properties retained, divided by original
total acquisition cost of all properties
in program) (Notes 4, 5 and 6) N/A 100% 100% 100% 100% 100% 94% 94%
</TABLE>
Note 1: The registration statement relating to the offering of units by CNL
Income Fund VII, Ltd. became effective on January 30, 1990. Activities
through March 8, 1990, were devoted to organization of the partnership
and operations had not begun.
Note 2: Cash generated from operations includes cash received from tenants,
plus distributions from joint ventures, less cash paid for expenses,
plus interest received.
Note 3: Cash distributions presented above as a return of capital on a GAAP
basis represent the amount of cash distributions in excess of
accumulated net income on a GAAP basis. Accumulated net income includes
deductions for depreciation and amortization expense and income from
certain non-cash items. This amount is not required to be presented as a
return of capital except for purposes of this table, and CNL Income Fund
VII, Ltd. has not treated this amount as a return of capital for any
other purpose.
Note 4: On May 19, 1992, one of the partnership's properties was taken by the
State Department of Transportation as a result of condemnation
proceedings, and the partnership received condemnation proceeds of
$700,000. Since this property was held by the partnership for less than
two years and was involuntarily taken in condemnation proceedings, the
partnership has elected to defer a portion of the gain from the sale for
tax purposes and reinvest a majority of the proceeds in other restaurant
properties.
Note 5: In May 1994, the partnership sold one of its properties and received net
sales proceeds of $869,036. Subsequent to the sale of this property, the
partnership used the net sales proceeds to reinvest in two additional
properties or for other partnership purposes.
Note 6: In August 1995, CNL Income Fund VII, Ltd. sold one of its properties to
the tenant and in connection therewith accepted a promissory note in the
principal sum of $1,160,000, collateralized by a mortgage on the
property. The note bears interest at a rate of 10.25% per annum and is
being collected in 59 equal monthly installments of $10,395, with a
balloon payment of $1,106,657 due in July 2000. In accordance with
generally accepted accounting principles, the partnership recorded the
sale using the installment method; therefore, the gain on sale of the
property was deferred and is being recognized as income proportionately
as payments under the mortgage note are being collected. The partnership
recognized a gain of $1,421 and $407 for financial reporting purposes
for the year ended December 31, 1995 and the six months ended June 30,
1996, respectively, and had a deferred gain of $128,065 and $127,658 at
December 31, 1995 and June 30, 1996, respectively. The general partners
anticipate that payments collected under the mortgage note will be
reinvested in additional properties or used for other partnership
purposes. In addition, in December 1995, CNL Income Fund VII, Ltd. sold
one of its properties to the subtenant of the property and in connection
therewith accepted a promissory note in the principal sum of $240,000,
collateralized by a mortgage on the property. The note bears interest at
a rate of 10% per annum and is being collected in 119 equal installments
of $2,106, with a balloon payment of $218,252 due December 2005.
Proceeds received from payments collected under the mortgage note are
expected to be distributed to the limited partners or used for other
partnership purposes.
Note 7: During the year ended December 31, 1995, the building located on one of
the partnership's properties was demolished. As a result, the
undepreciated cost of the building was charged to income for financial
reporting purposes.
C-35
<PAGE>
Note 8: Cash generated from operations per this table agrees to cash generated
from operations per the statement of cash flows included in the
financial statements of CNL Income Fund VII, Ltd.
Note 9: As a result of the partnership's change in investor services agents in
1993, distributions are now declared at the end of each quarter and paid
in the following quarter. Since this table generally presents
distributions on a cash basis (rather than amounts declared),
distributions on a cash basis for 1993 only reflect payments for three
quarters. Distributions declared for the quarters ended December 31,
1993, 1994 and 1995, are reflected in the 1994, 1995 and 1996 columns,
respectively, for distributions on a cash basis due to the payment of
such distributions in January 1994, 1995 and 1996, respectively. As a
result of 1994, 1995 and 1996 distributions being presented on a cash
basis, distributions declared and unpaid as of December 31, 1994 and
1995, and June 30, 1996, are not included in the 1994, 1995 and 1996
totals, respectively.
C-36
<PAGE>
TABLE III
Operating Results of Prior Programs
CNL INCOME FUND VIII, LTD.
<TABLE>
<CAPTION>
1989
(Note 1) 1990 1991 1992
------------ ------------ ------------ ------------
<S> <C>
Gross revenue $ 0 $ 262,113 $ 2,719,978 $ 3,346,555
Equity in earnings of unconsolidated
joint ventures 0 0 103,195 241,148
Profit (Loss) from sale of properties 0 0 7,047 0
Interest income 0 40,345 321,312 33,477
Less: Operating expenses 0 (18,274) (151,188) (156,144)
Interest expense 0 0 0 0
Depreciation and amortization 0 (42,458) (182,535) (226,377)
Minority interest in income of
consolidated joint venture 0 0 (10,168) (14,362)
------------ ------------ ------------ ------------
Net income - GAAP basis 0 241,726 2,807,641 3,224,297
============ ============ ============ ============
Taxable income
- from operations 0 238,870 2,470,765 2,750,886
============ ============ ============ ============
- from gain (loss) on sale 0 0 6,517 0
============ ============ ============ ============
Cash generated from operations
(Notes 2 and 7) 0 280,920 2,842,932 3,219,203
Cash generated from sales (Notes 4
and 5) 0 0 347,987 0
Cash generated from refinancing 0 0 0 0
------------ ------------ ------------ ------------
Cash generated from operations, sales
and refinancing 0 280,920 3,190,919 3,219,203
Less: Cash distributions to investors
(Note 8)
- from operating cash flow 0 (266,364) (2,573,695) (3,127,143)
- from sale of properties 0 0 0 0
- from cash flow from prior period 0 0 0 0
- from other 0 0 0 0
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 0 14,556 617,224 92,060
Special items (not including sales and
refinancing):
Limited partners' capital
contributions 0 21,343,892 13,656,108 0
General partners' capital
contributions 1,000 0 0 0
Organization costs 0 (10,000) 0 0
Syndication costs 0 (1,880,317) (1,165,045) 0
Acquisition of land and buildings 0 (11,468,731) (3,899,575) (1,119,387)
Collections on mortgage notes
receivable (Note 6) 0 0 0 0
Investment in direct financing
leases 0 (2,053,171) (9,101,514) (1,344)
Investment in joint ventures 0 0 (3,008,634) (13)
Return of capital from joint
ventures 0 0 0 0
Increase in other assets (76) (380,641) 0 0
Reimbursement of syndication and
acquisition costs paid on behalf
of CNL Income Fund VIII, Ltd. by
related parties 0 (1,018,263) (69,490) (3,072)
Distributions to holder of minority
interest 0 0 (9,074) (12,594)
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 924 4,547,325 (2,980,000) (1,044,350)
============ ============ ============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 0 20 73 78
============ ============ ============ ============
- from recapture 0 0 0 0
============ ============ ============ ============
Capital gain (loss) 0 0 0 0
============ ============ ============ ============
C-37
<PAGE>
<CAPTION>
6 Months
1993 1994 1995 1996
------------ ------------ ------------ ------------
<S> <C>
Gross revenue $ 3,418,241 $ 3,406,108 $ 3,368,201 $ 1,625,419
Equity in earnings of unconsolidated
joint ventures 246,027 245,933 244,933 123,702
Profit (Loss) from sale of properties 0 0 59,926 0
Interest income 24,283 32,273 68,145 46,002
Less: Operating expenses (157,387) (142,979) (172,732) (100,950)
Interest expense 0 0 0 0
Depreciation and amortization (209,123) (218,961) (217,576) (104,485)
Minority interest in income of
consolidated joint venture (14,247) (14,107) (14,142) (6,943)
------------ ------------ ------------ ------------
Net income - GAAP basis 3,307,794 3,308,267 3,336,755 1,582,745
============ ============ ============ ============
Taxable income
- from operations 2,718,665 2,890,736 3,096,286 1,410,301
============ ============ ============ ============
- from gain (loss) on sale 0 0 (101,622) 0
============ ============ ============ ============
Cash generated from operations
(Notes 2 and 7) 3,201,761 3,412,889 3,263,685 1,720,991
Cash generated from sales (Notes 4
and 5) 0 0 1,184,865 0
Cash generated from refinancing 0 0 0 0
------------ ------------ ------------ ------------
Cash generated from operations, sales
and refinancing 3,201,761 3,412,889 4,448,550 1,720,991
Less: Cash distributions to investors
(Note 8)
- from operating cash flow (2,384,934) (3,150,000) (3,263,685) (1,720,991)
- from sale of properties 0 0 0 0
- from cash flow from prior period 0 0 (43,817) (29,009)
- from other 0 0 0 0
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 816,827 262,889 1,141,048 (29,009)
Special items (not including sales and
refinancing):
Limited partners' capital
contributions 0 0 0 0
General partners' capital
contributions 0 0 0 0
Organization costs 0 0 0 0
Syndication costs 0 0 0 0
Acquisition of land and buildings 0 0 (397,291) (1,135)
Collections on mortgage notes
receivable (Note 6) 0 0 0 1,247
Investment in direct financing
leases (136,464) 0 (550,911) (1,326)
Investment in joint ventures 0 0 0 (235,611)
Return of capital from joint
ventures 495 0 0 0
Increase in other assets 0 0 0 0
Reimbursement of syndication and
acquisition costs paid on behalf
of CNL Income Fund VIII, Ltd. by
related parties (1,925) 0 0 0
Distributions to holder of minority
interest (12,614) (13,562) (11,526) (6,747)
----------- ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 666,319 249,327 181,320 (272,581)
=========== ============ ============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 77 82 88 40
=========== ============ ============ ============
- from recapture 0 0 0 0
=========== ============ ============ ============
Capital gain (loss) 0 0 (3) 0
=========== ============ ============ ============
</TABLE>
C-38
<PAGE>
TABLE III - CNL INCOME FUND VIII, LTD. (continued)
<TABLE>
<CAPTION>
1989 6 Months
(Note 1) 1990 1991 1992 1993 1994 1995 1996
------------ ------ ------ ------ ------ ------ ------ ------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 0 20 76 89 68 90 93 45
- from capital gain 0 0 0 0 0 0 2 0
- from investment income from prior
period 0 0 0 0 0 0 0 5
- from return of capital (Note 3) 0 2 0 0 0 0 0 0
------------ ------ ------ ------ ------ ------ ------ ------
Total distributions on GAAP basis
(Note 8) 0 22 76 89 68 90 95 50
============ ====== ====== ====== ====== ====== ====== ======
Source (on cash basis)
- from sales 0 0 0 0 0 0 0 0
- from refinancing 0 0 0 0 0 0 0 0
- from operations 0 22 76 89 68 90 93 49
- from cash flow from prior period 0 0 0 0 0 0 2 1
- from other 0 0 0 0 0 0 0 0
------------ ------ ------ ------ ------ ------ ------ ------
Total distributions on cash basis
(Note 8) 0 22 76 89 68 90 95 50
============ ====== ====== ====== ====== ====== ====== ======
Total cumulative cash distributions
per $1,000 investment from inception 0 22 98 187 255 345 440 490
Amount (in percentage terms) remaining
invested in program properties at the
end of each year (period) presented
(original total acquisition cost of
properties retained, divided by original
total acquisition cost of all properties
in program) (Notes 4, 5 and 6) N/A 100% 100% 100% 100% 100% 98% 99%
</TABLE>
Note 1: Pursuant to a registration statement on Form S-11 under the Securities
Act of 1933, as amended, CNL Income Fund VIII, Ltd. ("CNL VIII") and CNL
Income Fund VII, Ltd. each registered for sale $30,000,000 units of
limited partnership interests ("Units"). The offering of Units of CNL
Income Fund VII, Ltd. commenced January 30, 1990. Pursuant to the
registration statement, CNL VIII's offering of Units could not commence
until the offering of Units of CNL Income Fund VII, Ltd. was terminated.
CNL Income Fund VII, Ltd. terminated its offering of Units on August 1,
1990, at which time the maximum offering proceeds of $30,000,000 had
been received. Upon the termination of the offering of Units of CNL
Income Fund VII, Ltd., CNL VIII commenced its offering of Units.
Activities through August 22, 1990, were devoted to organization of the
partnership and operations had not begun.
Note 2: Cash generated from operations includes cash received from tenants, plus
distributions from joint ventures, less cash paid for expenses, plus
interest received.
Note 3: Cash distributions presented as a return of capital on a GAAP basis
represent the amount of cash distributions in excess of accumulated net
income on a GAAP basis. Accumulated net income includes deductions for
depreciation and amortization expense and income from certain non-cash
items. This amount is not required to be presented as a return of
capital except for purposes of this table, and CNL Income Fund VIII,
Ltd. has not treated this amount as a return of capital for any other
purpose.
Note 4: During 1991, two properties ceased operations and were sold to third
parties. The net proceeds from the sales were $347,987. The partnership
used the proceeds to renovate one restaurant property and to make
certain additions or improvements to other restaurant properties.
Note 5: In July 1995, CNL Income Fund VIII, Ltd. sold one of its properties and
received net sales proceeds of $1,184,865. In September 1995, the
partnership reinvested $950,663 of the net sales proceeds in an
additional property. In May 1996, CNL Income Fund VIII, Ltd. reinvested
the remaining net sales proceeds of $235,611 in Middleburg Joint
Venture.
Note 6: In December 1995, CNL Income Fund VIII, Ltd. sold two of its properties
to the subtenant of the properties and in connection therewith accepted
two promissory notes in the principal sums totalling $460,000,
collateralized by mortgages on the properties. The notes bear interest
at a rate of 10% per annum and are being collected in 119 equal
installments totalling $4,037, with balloon payments totalling $418,576
due December 2005. Proceeds received from payments collected under the
mortgage notes are expected to be distributed to the limited partners or
used for other partnership purposes.
Note 7: Cash generated from operations per this table agrees to cash generated
from operations per the statement of cash flows included in the
financial statements of CNL Income Fund VIII, Ltd.
C-39
<PAGE>
Note 8: As a result of the partnership's change in investor services agents in
1993, distributions are now declared at the end of each quarter and paid
in the following quarter. Since this table generally presents
distributions on a cash basis (rather than amounts declared),
distributions on a cash basis for 1993 only reflect payments for three
quarters. Distributions declared for the quarters ended December 31,
1993, 1994 and 1995, are reflected in the 1994, 1995 and 1996 columns,
respectively, for distributions on a cash basis due to the payment of
such distributions in January 1994, 1995 and 1996, respectively. As a
result of 1994, 1995 and 1996 distributions being presented on a cash
basis, distributions declared and unpaid as of December 31, 1994 and
1995, and June 30, 1996, are not included in the 1994, 1995 and 1996
totals, respectively.
C-40
<PAGE>
TABLE III
Operating Results of Prior Programs
CNL INCOME FUND IX, LTD.
<TABLE>
<CAPTION>
1990
(Note 1) 1991 1992 1993
------------ ------------ ------------ ------------
<S> <C>
Gross revenue $ 0 $ 787,718 $ 2,957,084 $ 3,010,717
Equity in earnings of joint ventures 0 52,325 389,625 470,094
Profit from sale of properties 0 0 0 0
Interest income 0 423,913 72,644 23,218
Less: Operating expenses 0 (56,243) (158,885) (167,115)
Interest expense 0 0 0 0
Depreciation and amortization 0 (77,647) (220,070) (220,052)
------------ ------------ ------------ ------------
Net income - GAAP basis 0 1,130,066 3,040,398 3,116,862
============ ============ ============ ============
Taxable income
- from operations 0 1,136,231 2,682,360 2,587,955
============ ============ ============ ============
- from gain on sale 0 0 0 0
============ ============ ============ ============
Cash generated from operations
(Notes 2 and 3) 0 1,272,953 3,142,564 3,029,295
Cash generated from sales 0 0 0 0
Cash generated from refinancing 0 0 0 0
------------ ------------ ------------ ------------
Cash generated from operations, sales
and refinancing 0 1,272,953 3,142,564 3,029,295
Less: Cash distributions to investors
(Note 4)
- from operating cash flow 0 (1,119,489) (2,880,517) (2,383,067)
- from sale of properties 0 0 0 0
- from cash flow from prior period 0 0 0 0
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions 0 153,464 262,047 646,228
Special items (not including sales and
refinancing):
Limited partners' capital
contributions 0 35,000,000 0 0
General partners' capital
contributions 1,000 0 0 0
Organization costs 0 (10,000) 0 0
Syndication costs 0 (3,261,772) 0 0
Acquisition costs paid by the
partnership on behalf of
related parties 0 (12,942) 0 0
Reimbursement of acquisition costs
paid by the partnership on behalf
of related parties 0 0 12,942 0
Acquisition of land and buildings 0 (14,265,241) (1,137,138) 0
Investment in direct financing
leases 0 (8,680,844) (79,493) (30,493)
Investment in joint venture 0 (2,768,296) (3,387,844) 0
Return of capital from joint
ventures 0 0 0 655
Increase in other assets (78) (285,383) 0 0
Reimbursement of syndication and
acquisition costs paid on behalf
of CNL Income Fund IX, Ltd. by
related parties 0 (1,038,645) (13,269) 0
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 922 4,830,341 (4,342,755) 616,390
============ ============ ============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 0 44 76 73
============ ============ ============ ============
- from recapture 0 0 0 0
============ ============ ============ ============
Capital gain (loss) 0 0 0 0
============ ============ ============ ============
C-41
<PAGE>
<CAPTION>
6 Months
1994 1995 1996
------------ ------------ ------------
<S> <C>
Gross revenue $ 2,879,282 $ 2,917,144 $ 1,419,048
Equity in earnings of joint ventures 456,154 453,794 221,647
Profit from sale of properties 0 0 0
Interest income 26,958 57,209 18,918
Less: Operating expenses (125,815) (186,693) (111,930)
Interest expense 0 0 0
Depreciation and amortization (232,996) (253,483) (126,298)
------------ ------------ ------------
Net income - GAAP basis 3,003,583 2,987,971 1,421,385
============ ============ ============
Taxable income
- from operations 2,818,525 2,581,931 1,295,368
============ ============ ============
- from gain on sale 0 0 0
============ ============ ============
Cash generated from operations
(Notes 2 and 3) 3,214,214 3,098,276 1,677,530
Cash generated from sales 0 0 0
Cash generated from refinancing 0 0 0
------------ ------------ ------------
Cash generated from operations, sales
and refinancing 3,214,214 3,098,276 1,677,530
Less: Cash distributions to investors
(Note 4)
- from operating cash flow (3,150,002) (3,098,276) (1,610,001)
- from sale of properties 0 0 0
- from cash flow from prior period 0 (51,728) 0
------------ ------------ ------------
Cash generated (deficiency) after cash
distributions 64,212 (51,728) 67,529
Special items (not including sales and
refinancing):
Limited partners' capital
contributions 0 0 0
General partners' capital
contributions 0 0 0
Organization costs 0 0 0
Syndication costs 0 0 0
Acquisition costs paid by the
partnership on behalf of
related parties 0 0 0
Reimbursement of acquisition costs
paid by the partnership on behalf
of related parties 0 0 0
Acquisition of land and buildings 0 0 0
Investment in direct financing
leases 0 0 0
Investment in joint venture 0 0 0
Return of capital from joint
ventures 0 0 0
Increase in other assets 0 0 0
Reimbursement of syndication and
acquisition costs paid on behalf
of CNL Income Fund IX, Ltd. by
related parties 0 0 0
------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 64,212 (51,728) 67,529
============ ============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 80 73 37
============ ============ ============
- from recapture 0 0 0
============ ============ ============
Capital gain (loss) 0 0 0
============ ============ ============
</TABLE>
C-42
<PAGE>
TABLE III - CNL INCOME FUND IX, LTD. (continued)
<TABLE>
<CAPTION>
1990 6 Months
(Note 1) 1991 1992 1993 1994 1995 1996
------------ ---------- --------- --------- -------- --------- ----------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 0 44 82 68 85 85 40
- from capital gain 0 0 0 0 0 0 0
- from investment income from
prior period 0 0 0 0 5 5 6
------------ ---------- --------- --------- -------- --------- ----------
Total distributions on GAAP basis
(Note 4) 0 44 82 68 90 90 46
============ ========== ========= ========= ======== ========= ==========
Source (on cash basis)
- from sales 0 0 0 0 0 0 0
- from refinancing 0 0 0 0 0 0 0
- from operations 0 44 82 68 90 89 46
- from cash flow from prior period 0 0 0 0 0 1 0
------------ ---------- --------- --------- -------- --------- ----------
Total distributions on cash basis
(Note 4) 0 44 82 68 90 90 46
============ ========== ========= ========= ======== ========= ==========
Total cumulative cash distributions
per $1,000 investment from inception 0 44 126 194 284 374 420
Amount (in percentage terms) remaining
invested in program properties at the
end of each year (period) presented
(original total acquisition cost of
properties retained, divided by original
total acquisition cost of all properties
in program) N/A 100% 100% 100% 100% 100% 100%
</TABLE>
C-43
<PAGE>
Note 1: The registration statement relating to the offering of Units by CNL
Income Fund IX, Ltd. became effective on March 20, 1991. Activities
through April 11, 1991, were devoted to organization of the partnership
and operations had not begun.
Note 2: Cash generated from operations includes cash received from tenants, plus
distributions from joint ventures, less cash paid for expenses, plus
interest received.
Note 3: Cash generated from operations per this table agrees to cash generated
from operations per the statement of cash flows included in the
financial statements of CNL Income Fund IX, Ltd.
Note 4: As a result of the partnership's change in investor services agents in
1993, distributions are now declared at the end of each quarter and paid
in the following quarter. Since this table generally presents
distributions on a cash basis (rather than amounts declared),
distributions on a cash basis for 1993 only reflect payments for three
quarters. Distributions declared for the quarters ended December 31,
1993, 1994 and 1995, are reflected in the 1994, 1995 and 1996 columns,
respectively, for distributions on a cash basis due to the payment of
such distributions in January 1994, 1995 and 1996, respectively. As a
result of 1994, 1995 and 1996 distributions being presented on a cash
basis, distributions declared and unpaid as of December 31, 1994 and
1995, and June 30, 1996, are not included in the 1994, 1995 and 1996
totals, respectively.
C-44
<PAGE>
TABLE III
Operating Results of Prior Programs
CNL INCOME FUND X, LTD.
<TABLE>
<CAPTION>
1990
(Note 1) 1991 1992 1993
------------ ------------ ------------ --------
<S> <C>
Gross revenue $ 0 $ 80,723 $ 2,985,620 $ 3,729,533
Equity in earnings of unconsolidated
joint venture 0 0 184,425 273,564
Profit from sale of properties 0 0 0 0
Interest income 0 77,424 149,051 35,072
Less: Operating expenses 0 (7,078) (147,094) (178,294)
Interest expense 0 0 0 0
Depreciation and amortization 0 (5,603) (261,058) (215,143)
Minority interest in income of
consolidated joint venture 0 0 (4,902) (8,159)
------------ ------------ ------------ ------------
Net income - GAAP basis 0 145,466 2,906,042 3,636,573
============ ============ ============ ============
Taxable income
- from operations 0 187,164 2,652,037 2,936,325
============ ============ ============ ============
- from gain on sale 0 0 0 0
============ ============ ============ ============
Cash generated from operations
(Notes 2 and 5) 0 201,406 3,101,618 3,460,906
Cash generated from sales (Note 4) 0 0 0 0
Cash generated from refinancing 0 0 0 0
------------ ------------ ------------ ------------
Cash generated from operations, sales
and refinancing 0 201,406 3,101,618 3,460,906
Less: Cash distributions to investors
(Note 6)
- from operating cash flow 0 (163,012) (2,760,446) (2,659,655)
- from sale of properties 0 0 0 0
- from cash flow from prior period 0 0 0 0
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions 0 38,394 341,172 801,251
Special items (not including sales and
refinancing):
Limited partners' capital
contributions 0 19,972,663 20,027,337 0
General partners' capital
contributions 1,000 0 0 0
Organization costs 0 (10,000) 0 0
Syndication costs 0 (1,942,339) (1,880,824) 0
Acquisition of land and buildings 0 (7,317,942) (12,095,378) (316)
Investment in direct financing
leases 0 (3,024,796) (8,018,153) (46,364)
Investment in joint ventures 0 0 (3,687,069) 0
Return of capital from joint
ventures 0 0 0 0
Deposit received for sale of land
and building 0 0 0 0
Increase in other assets (78) (482,466) 0 0
Reimbursement of syndication and
acquisition costs paid on behalf
of CNL Income Fund X, Ltd. by
related parties 0 (815,938) (313,196) (544)
Distributions to holder of minority
interest 0 0 (5,729) (5,543)
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 922 6,417,576 (5,631,840) 748,484
============ ============ ============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 0 17 70 73
============ ============ ============ ============
- from recapture 0 0 0 0
============ ============ ============ ============
Capital gain (loss) 0 0 0 0
============ ============ ============ ============
</TABLE>
C-45
<PAGE>
<TABLE>
<CAPTION>
6 Months
1994 1995 1996
------------ ------------ ------------
<S> <C>
Gross revenue $ 3,710,792 $ 3,544,446 $ 1,763,069
Equity in earnings of unconsolidated
joint venture 271,512 267,799 134,133
Profit from sale of properties 0 67,214 0
Interest income 46,456 72,600 30,695
Less: Operating expenses (138,507) (189,230) (116,253)
Interest expense 0 0 0
Depreciation and amortization (208,941) (201,696) (95,126)
Minority interest in income of
consolidated joint venture (8,471) (9,066) (3,986)
------------ ------------ ------------
Net income - GAAP basis 3,672,841 3,552,067 1,712,532
============ ============ ============
Taxable income
- from operations 3,212,304 2,956,800 1,447,328
============ ============ ============
- from gain on sale 0 50,819 0
============ ============ ============
Cash generated from operations
(Notes 2 and 5) 3,785,493 3,527,362 1,822,546
Cash generated from sales (Note 4) 0 1,057,386 0
Cash generated from refinancing 0 0 0
------------ ------------ ------------
Cash generated from operations, sales 3,785,493 4,584,748 1,822,546
and refinancing
Less: Cash distributions to investors
(Note 6)
- from operating cash flow (3,500,017) (3,527,362) (1,822,546)
- from sale of properties 0 0 0
- from cash flow from prior period
0 (172,641) (17,454)
------------ ------------ ------------
Cash generated (deficiency) after cash
distributions 285,476 884,745 (17,454)
Special items (not including sales and
refinancing):
Limited partners' capital
contributions 0 0 0
General partners' capital
contributions 0 0 0
Organization costs 0 0 0
Syndication costs 0 0 0
Acquisition of land and buildings 0 (359,506) (978)
Investment in direct financing
leases 0 (566,097) (1,542)
Investment in joint ventures 0 0 (129,503)
Return of capital from joint
ventures 0 0 0
Deposit received for sale of land
and building 0 69,000 0
Increase in other assets 0 0 0
Reimbursement of syndication and
acquisition costs paid on behalf
of CNL Income Fund X, Ltd. by
related parties 0 0 0
Distributions to holder of minority
interest (7,909) (7,998) (3,677)
---------- ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 277,567 20,144 (153,154)
========== ============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 80 73 36
=========== ============ ============
- from recapture 0 0 0
=========== ============ ============
Capital gain (loss) 0 1 0
=========== ============ ============
</TABLE>
C-46
<PAGE>
TABLE III - CNL INCOME FUND X, LTD. (continued)
<TABLE>
<CAPTION>
1990
(Note 1) 1991 1992 1993
------------ ------------ ------------ --------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 0 13 73 66
- from capital gain 0 0 0 0
- from investment income from
prior period 0 0 0 0
- from return of capital (Note 3) 0 2 0 0
------------ ------------ ------------ ----------
Total distributions on GAAP basis
(Note 6) 0 15 73 66
============ ============ ============ ==========
Source (on cash basis)
- from sales 0 0 0 0
- from refinancing 0 0 0 0
- from operations 0 15 73 66
- from cash flow from prior
period 0 0 0 0
------------ ------------ ------------ ----------
Total distributions on cash basis
(Note 6) 0 15 73 66
============ ============ ============ ==========
Total cumulative cash distributions
per $1,000 investment from inception 0 15 88 154
Amount (in percentage terms) remaining
invested in program properties at the end
of each year (period) presented
(original total acquisition cost of
properties retained, divided by original
total acquisition cost of all properties
in program) (Note 4) N/A 100% 100% 100%
</TABLE>
C-47
<PAGE>
<TABLE>
<CAPTION>
6 Months
1994 1995 1996
--------- --------- ----------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 88 87 42
- from capital gain 0 2 0
- from investment income from
prior period 0 4 4
- from return of capital (Note 3) 0 0 0
------- -------- -------
Total distributions on GAAP basis
(Note 6) 88 93 46
======= ========= =======
Source (on cash basis)
- from sales 0 0 0
- from refinancing 0 0 0
- from operations 88 88 46
- from cash flow from prior
period 0 5 0
------- -------- -------
Total distributions on cash basis
(Note 6) 88 93 46
======= ======== =======
Total cumulative cash distributions
per $1,000 investment from inception 242 335 381
Amount (in percentage terms) remaining
invested in program properties at the end
of each year (period) presented
(original total acquisition cost of
properties retained, divided by original
total acquisition cost of all properties
in program) (Note 4) 100% 99% 100%
</TABLE>
C-48
Note 1: Pursuant to a registration statement on Form S-11 under the
Securities Act of 1933, as amended, CNL Income Fund X, Ltd. ("CNL X")
and CNL Income Fund IX, Ltd. each registered for sale $35,000,000 units
of limited partnership interests ("Units"). The offering of Units of CNL
Income Fund IX, Ltd. commenced March 20, 1991. Pursuant to the
registration statement, CNL X's offering of Units could not commence
until the offering of Units of CNL Income Fund IX, Ltd. was terminated.
CNL Income Fund IX, Ltd. terminated its offering of Units on September
6, 1991, at which time the maximum offering proceeds of $35,000,000 had
been received. Upon the termination of the offering of Units of CNL
Income Fund IX, Ltd., CNL X commenced its offering of Units. Activities
through September 24, 1991, were devoted to organization of the
partnership and operations had not begun.
Note 2: Cash generated from operations includes cash received from tenants,
plus distributions from joint ventures, less cash paid for expenses,
plus interest received.
Note 3: Cash distributions presented above as a return of capital on a GAAP
basis represent the amount of cash distributions in excess of
accumulated net income on a GAAP basis. Accumulated net income includes
deductions for depreciation and amortization expense and income from
certain non-cash items. This amount is not required to be presented as a
return of capital except for purposes of this table, and CNL Income Fund
X, Ltd. has not treated this amount as a return of capital for any other
purpose.
Note 4: In August 1995, CNL Income Fund X, Ltd. sold one of its properties
and received net sales proceeds of $1,050,186. In September 1995, the
partnership reinvested $928,122 in an additional property. In addition,
in January 1996, the partnership reinvested the remaining net sales
proceeds in an additional property as tenants-in-common with affiliates
of the general partners.
Note 5: Cash generated from operations per this table agrees to cash
generated from operations per the statement of cash flows included in
the financial statements of CNL Income Fund X, Ltd.
Note 6: As a result of the partnership's change in investor services agents
in 1993, distributions are now declared at the end of each quarter and
paid in the following quarter. Since this table generally presents
distributions on a cash basis (rather than amounts declared),
distributions on a cash basis for 1993 only reflect payments for three
quarters. Distributions declared for the quarters ended December 31,
1993, 1994 and 1995, are reflected in the 1994, 1995 and 1996 columns,
respectively, for distributions on a cash basis due to the payment of
such distributions in January 1994, 1995 and 1996, respectively. As a
result of 1994, 1995 and 1996 distributions being presented on a cash
basis, distributions declared and unpaid as of December 31, 1994 and
1995, and June 30, 1996 are not included in the 1994, 1995 and 1996
totals, respectively.
<PAGE>
TABLE III
Operating Results of Prior Programs
CNL INCOME FUND XI, LTD.
<TABLE>
<CAPTION>
1991
(Note 1) 1992 1993 1994
------------ ------------ ------------ ------------
<S> <C>
Gross revenue $ 0 $ 1,269,086 $ 3,831,648 $ 3,852,107
Equity in earnings of unconsolidated
joint ventures 0 33,367 121,059 119,370
Profit from sale of properties 0 0 0 0
Interest income 0 150,535 24,258 30,894
Less: Operating expenses 0 (63,390) (206,987) (179,717)
Interest expense 0 0 0 0
Depreciation and amortization 0 (180,631) (469,127) (481,226)
Minority interests in income of
consolidated joint ventures 0 (23,529) (68,399) (68,936)
------------ ------------ ------------ ------------
Net income - GAAP basis 0 1,185,438 3,232,452 3,272,492
============ ============ ============ ============
Taxable income
- from operations 0 1,295,104 2,855,026 2,947,445
============ ============ ============ ============
- from gain on sale 0 0 0 0
============ ============ ============ ============
Cash generated from operations
(Notes 2 and 4) 0 1,495,225 3,355,586 3,497,941
Cash generated from sales 0 0 0 0
Cash generated from refinancing 0 0 0 0
------------ ------------ ------------ ------------
Cash generated from operations, sales
and refinancing 0 1,495,225 3,355,586 3,497,941
Less: Cash distributions to investors
(Note 5)
- from operating cash flow 0 (1,205,030) (2,495,002) (3,400,001)
- from sale of properties 0 0 0 0
- from cash flow from prior period 0 0 0 0
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions 0 290,195 860,584 97,940
Special items (not including sales and
refinancing):
Limited partners' capital
contributions 0 40,000,000 0 0
General partners' capital
contributions 1,000 0 0 0
Minority interests' capital
contributions 0 426,367 0 0
Organization costs 0 (10,000) 0 0
Syndication costs 0 (3,922,875) 0 0
Acquisition of land and buildings 0 (26,428,556) (276,157) 0
Investment in direct financing
leases 0 (6,716,561) (276,206) 0
Investment in joint ventures 0 (1,658,925) (772) 0
Reimbursement of syndication and
acquisition costs paid on behalf
of CNL Income Fund XI, Ltd. by
related parties 0 (1,011,487) (900) 0
Increase in other assets 0 (122,024) 0 0
Distributions to holders of minority
interests 0 (17,467) (51,562) (57,641)
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 1,000 828,667 254,987 40,299
============ ============ ============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 0 45 71 73
============ ============ ============ ============
- from recapture 0 0 0 0
============ ============ ============ ============
Capital gain (loss) 0 0 0 0
============ ============ ============ ============
</TABLE>
C-49
<PAGE>
6 Months
1995 1996
------------ ----------
Gross revenue $ 3,820,990 $ 1,905,317
Equity in earnings of unconsolidated
joint ventures 118,384 56,598
Profit from sale of properties 0 0
Interest income 51,192 24,214
Less: Operating expenses (237,126) (148,842)
Interest expense 0 0
Depreciation and amortization (481,226) (240,613)
Minority interests in income of
consolidated joint ventures (70,038) (34,437)
------------ ------------
Net income - GAAP basis 3,202,176 1,562,237
============ ============
Taxable income
- from operations 2,985,221 1,414,282
============ ============
- from gain on sale 0 0
============ ============
Cash generated from operations
(Notes 2 and 4) 0 0
============ ============
Cash generated from sales 3,652,185 1,811,310
Cash generated from refinancing 0 0
------------ ------------
Cash generated from operations, sales
and refinancing 3,652,185 1,811,310
Less: Cash distributions to investors
(Note 5)
- from operating cash flow (3,500,023) (1,790,012)
- from sale of properties 0 0
- from cash flow from prior period 0 0
------------ ------------
Cash generated (deficiency) after cash
distributions 152,162 21,298
Special items (not including sales and
refinancing):
Limited partners' capital
contributions 0 0
General partners' capital
contributions 0 0
Minority interests' capital
contributions 0 0
Organization costs 0 0
Syndication costs 0 0
Acquisition of land and buildings 0 0
Investment in direct financing
leases 0 0
Investment in joint ventures 0 0
Reimbursement of syndication and
acquisition costs paid on behalf
of CNL Income Fund XI, Ltd. by
related parties 0 0
Increase in other assets 0 0
Distributions to holders of minority
interests (54,227) (27,839)
------------ ------------
Cash generated (deficiency) after cash
distributions and special items 97,935 (6,541)
============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 74 35
============ ============
- from recapture 0 0
============ ============
Capital gain (loss) 0 0
============ ============
C-50
<PAGE>
TABLE III - CNL INCOME FUND XI, LTD. (continued)
<TABLE>
<CAPTION>
1991
(Note 1) 1992 1993 1994
------------ ------------ ------------ ---------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 0 41 62 81
- from capital gain 0 0 0 0
- from investment income from
prior period 0 0 0 4
- from return of capital (Note 3) 0 1 0 0
------------ ------------ ------------ ------------
Total distributions on GAAP basis
(Note 5) 0 42 62 85
============ ============ ============ ============
Source (on cash basis)
- from sales 0 0 0 0
- from refinancing 0 0 0 0
- from operations 0 42 62 85
- from cash flow from prior
period 0 0 0 0
------------ ------------ ------------ ------------
Total distributions on cash basis
(Note 5) 0 42 62 85
============ ============ ============ ============
Total cumulative cash distributions
per $1,000 investment from inception 0 42 104 189
Amount (in percentage terms) remaining
invested in program properties at the
end of each year (period) presented
(original total acquisition cost of
properties retained, divided by original
total acquisition cost of all properties
in program) N/A 100% 100% 100%
</TABLE>
C-51
<PAGE>
6 Months
1995 1996
------------ -----------
Cash distributions to investors
Source (on GAAP basis)
- from investment income 79 39
- from capital gain 0 0
- from investment income from
prior period 9 5
- from return of capital (Note 3) 0 1
------------ ------------
Total distributions on GAAP basis
(Note 5) 88 45
============ ============
Source (on cash basis)
- from sales 0 0
- from refinancing 0 0
- from operations 88 45
- from cash flow from prior
period 0 0
------------ ------------
Total distributions on cash basis
(Note 5) 88 45
============ ============
Total cumulative cash distributions
per $1,000 investment from inception 277 322
Amount (in percentage terms) remaining
invested in program properties at the
end of each year (period) presented
(original total acquisition cost of
properties retained, divided by original
total acquisition cost of all properties
in program) 100% 100%
Note 1: The registration statement relating to the offering of Units by CNL
Income Fund XI, Ltd. became effective on March 12, 1992. Activities
through April 22, 1992, were devoted to organization of the partnership
and operations had not begun.
Note 2: Cash generated from operations includes cash received from tenants,
plus distributions from joint ventures, less cash paid for expenses,
plus interest received.
Note 3: Cash distributions presented above as a return of capital on a GAAP
basis represent the amount of cash distributions in excess of
accumulated net income on a GAAP basis. Accumulated net income includes
deductions for depreciation and amortization expense and income from
certain non-cash items. This amount is not required to be presented as a
return of capital except for purposes of this table, and CNL Income Fund
XI, Ltd. has not treated this amount as a return of capital for any
other purpose.
Note 4: Cash generated from operations per this table agrees to cash
generated from operations per the statement of cash flows included in
the financial statements of CNL Income Fund XI, Ltd.
Note 5: As a result of the partnership's change in investor services agents
in 1993, distributions are now declared at the end of each quarter and
paid in the following quarter. Since this table generally presents
distributions on a cash basis (rather than amounts declared),
distributions on a cash basis for 1993 only reflect payments for three
quarters. Distributions declared for the quarters ended December 31,
1993, 1994 and 1995, are reflected in the 1994, 1995 and 1996 columns,
respectively, for distributions on a cash basis due to the payment of
such distributions in January 1994, 1995 and 1996, respectively. As a
result of 1994, 1995 and 1996 distributions being presented on a cash
basis, distributions declared and unpaid as of December 31, 1994 and
1995, and June 30, 1996 are not included in the 1994, 1995 and 1996
totals, respectively.
C-52
<PAGE>
TABLE III
Operating Results of Prior Programs
CNL INCOME FUND XII, LTD.
<TABLE>
<CAPTION>
1991
(Note 1) 1992 1993 1994
------------ ------------ ------------ --------
<S> <C>
Gross revenue $ 0 $ 25,133 $ 3,374,640 $ 4,397,881
Equity in earnings of joint ventures 0 46 49,604 85,252
Profit (Loss) from sale of properties 0 0 0 0
Interest income (Note 7) 0 45,228 190,082 65,447
Less: Operating expenses 0 (7,211) (193,804) (192,951)
Interest expense 0 0 0 0
Depreciation and amortization 0 (3,997) (286,293) (327,795)
------------ ------------ ------------ ------------
Net income - GAAP basis 0 59,199 3,134,229 4,027,834
============ ============ ============ ============
Taxable income
- from operations 0 58,543 2,749,072 3,301,005
============ ============ ============ ============
- from gain (loss) on sale 0 0 0 0
============ ============ ============ ============
Cash generated from operations
(Notes 2 and 5) 0 61,370 3,246,760 3,848,962
Cash generated from sales (Note 7) 0 0 0 0
Cash generated from refinancing 0 0 0 0
------------ ------------ ------------ ------------
Cash generated from operations, sales
and refinancing 0 61,370 3,246,760 3,848,962
Less: Cash distributions to investors
(Note 6)
- from operating cash flow 0 (61,370) (1,972,769) (3,768,754)
- from sale of properties 0 0 0 0
- from return of capital (Note 4) 0 (60,867) 0 0
- from cash flow from prior period 0 0 0 0
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions 0 (60,867) 1,273,991 80,208
Special items (not including sales and
refinancing):
Limited partners' capital
contributions 0 21,543,270 23,456,730 0
General partners' capital
contributions 1,000 0 0 0
Organization costs 0 (10,000) 0 0
Syndication costs 0 (2,066,937) (2,277,637) 0
Acquisition of land and buildings 0 (7,536,009) (15,472,737) (230)
Investment in direct financing
leases 0 (2,503,050) (11,875,100) (591)
Loan to tenant of joint venture,
net of repayments 0 0 (207,189) 6,400
Investment in joint ventures 0 (372,045) (468,771) (4,400)
Increase in restricted cash 0 0 0 0
Reimbursement of syndication and
acquisition costs paid on behalf
of CNL Income Fund XII, Ltd. by
related parties 0 (704,923) (432,749) 0
Increase in other assets 0 (654,497) 0 0
Other 0 0 0 973
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 1,000 7,634,942 (6,003,462) 82,360
============ ============ ============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 0 5 64 73
============ ============ ============ ============
- from recapture 0 0 0 0
============ ============ ============ ============
Capital gain (loss) 0 0 0 0
============ ============ ============ ============
</TABLE>
C-53
<PAGE>
<TABLE>
<CAPTION>
6 Months
1995 1996
------------ --------
<S> <C>
Gross revenue $ 4,404,792 $2,171,212
Equity in earnings of joint ventures 81,582 55,297
Profit (Loss) from sale of properties 0 (15,355)
Interest income (Note 7) 84,197 49,199
Less: Operating expenses (228,404) (150,511)
Interest expense 0 0
Depreciation and amortization (327,795) (156,420)
------------ ------------
Net income - GAAP basis 4,014,372 1,953,422
============ ============
Taxable income
- from operations 3,262,046 1,591,118
============ ============
- from gain (loss) on sale 0 (66,395)
============ ============
Cash generated from operations
(Notes 2 and 5) 3,819,362 1,930,975
Cash generated from sales (Note 7) 0 1,640,000
Cash generated from refinancing 0 0
------------ ------------
Cash generated from operations, sales
and refinancing 3,819,362 3,570,975
Less: Cash distributions to investors
(Note 6)
- from operating cash flow (3,819,362) (1,930,975)
- from sale of properties 0 0
- from return of capital (Note 4) 0 0
- from cash flow from prior period (5,645) (26,529)
------------ ------------
Cash generated (deficiency) after cash
distributions (5,645) 1,613,471
Special items (not including sales and
refinancing):
Limited partners' capital
contributions 0 0
General partners' capital
contributions 0 0
Organization costs 0 0
Syndication costs 0 0
Acquisition of land and buildings 0 0
Investment in direct financing
leases 0 0
Loan to tenant of joint venture,
net of repayments 7,008 3,774
Investment in joint ventures 0 (1,655,928)
Increase in restricted cash 0 0
Reimbursement of syndication and
acquisition costs paid on behalf
of CNL Income Fund XII, Ltd. by
related parties 0 0
Increase in other assets 0 0
Other 0 0
------------ ------------
Cash generated (deficiency) after cash
distributions and special items 1,363 (38,683)
============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 72 35
============ ============
- from recapture 0 0
============ ============
Capital gain (loss) 0 (1)
============ ============
</TABLE>
C-54
<PAGE>
TABLE III - CNL INCOME FUND XII, LTD. (continued)
<TABLE>
<CAPTION>
1991
(Note 1) 1992 1993 1994
------------ ------------ ------------ --------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 0 5 46 84
- from capital gain 0 0 0 0
- from investment income from
prior period 0 0 0 0
- from return of capital (Note 3) 0 7 0 0
------------ ------------ ------------ ------------
Total distributions on GAAP basis
(Note 6) 0 12 46 84
============ ============ ============ ============
Source (on cash basis)
- from sales 0 0 0 0
- from refinancing 0 0 0 0
- from operations 0 6 46 84
- from return of capital (Note 4) 0 6 0 0
- from cash flow from prior period 0 0 0 0
------------ ------------ ------------ ------------
Total distributions on cash basis
(Note 6) 0 12 46 84
============ ============ ============ ============
Total cumulative cash distributions
per $1,000 investment from inception 0 12 58 142
Amount (in percentage terms) remaining
invested in program properties at the
end of each year (period) presented
(original total acquisition cost of
properties retained, divided by original
total acquisition cost of all properties
in program) N/A 100% 100% 100%
</TABLE>
C-55
<PAGE>
6 Months
1995 1996
------------ --------
Cash distributions to investors
Source (on GAAP basis)
- from investment income 85 44
- from capital gain 0 0
- from investment income from
prior period 0 0
- from return of capital (Note 3) 0 0
------------ ------------
Total distributions on GAAP basis
(Note 6) 85 44
============ ============
Source (on cash basis)
- from sales 0 0
- from refinancing 0 0
- from operations 85 43
- from return of capital (Note 4) 0 0
- from cash flow from prior period 0 1
------------ ------------
Total distributions on cash basis
(Note 6) 85 44
============ ============
Total cumulative cash distributions
per $1,000 investment from inception 227 271
Amount (in percentage terms) remaining
invested in program properties at the
end of each year (period) presented
(original total acquisition cost of
properties retained, divided by original
total acquisition cost of all properties
in program) 100% 100%
Note 1: Pursuant to a registration statement on Form S-11 under the
Securities Act of 1933, as amended, CNL Income Fund XII, Ltd. ("CNL
XII") and CNL Income Fund XI, Ltd. each registered for sale $40,000,000
units of limited partnership interests ("Units"). The offering of Units
of CNL Income Fund XI, Ltd. commenced March 12, 1992. Pursuant to the
registration statement, CNL XII could not commence until the offering of
Units of CNL Income Fund XI, Ltd. was terminated. CNL Income Fund XI,
Ltd. terminated its offering of Units on September 28, 1992, at which
time the maximum offering proceeds of $40,000,000 had been received.
Upon the termination of the offering of Units of CNL Income Fund XI,
Ltd., CNL XII commenced its offering of Units. Activities through
October 8, 1992, were devoted to organization of the partnership and
operations had not begun.
Note 2: Cash generated from operations includes cash received from tenants,
plus distributions from joint ventures, less cash paid for expenses,
plus interest received.
Note 3: Cash distributions presented above as a return of capital on a GAAP
basis represent the amount of cash distributions in excess of
accumulated net income on a GAAP basis. Accumulated net income includes
deductions for depreciation and amortization expense and income from
certain non-cash items. This amount is not required to be presented as a
return of capital except for purposes of this table, and CNL Income Fund
XII, Ltd. has not treated this amount as a return of capital for any
other purpose.
Note 4: CNL Income Fund XII, Ltd. makes its distributions in the current
period rather than in arrears based on estimated operating results. In
cases where distributions exceed cash from operations in the current
period, once finally determined, subsequent distributions are lowered
accordingly in order to avoid any return of capital. This amount is not
required to be presented as a return of capital except for purposes of
this table, and CNL Income Fund XII, Ltd. has not treated this amount as
a return of capital for any other purpose.
Note 5: Cash generated from operations per this table agrees to cash
generated from operations per the statement of cash flows included in
the financial statements of CNL Income Fund XII, Ltd.
Note 6: As a result of the partnership's change in investor services agents
in 1993, distributions are now declared at the end of each quarter and
paid in the following quarter. Since this table generally presents
distributions on a cash basis (rather than amounts declared),
distributions on a cash basis for 1993 only reflect payments for three
quarters. Distributions declared for the quarters ended December 31,
1993, 1994 and 1995, are reflected in the 1994, 1995 and 1996 columns,
respectively, for distributions on a cash basis due to the payment of
such distributions in January 1994, 1995 and 1996, respectively. As a
result of 1994, 1995 and 1996 distributions being presented on a cash
basis, distributions declared and unpaid as of December 31, 1994 and
1995, and June 30, 1996 are not included in the 1994, 1995 and 1996
totals, respectively.
Note 7: In April 1996, CNL Income Fund XII, Ltd. sold one of its properties to
an unrelated third party for $1,640,000. As a result of this
transaction, CNL Income Fund XII, Ltd. recognized a loss of $15,355 for
financial reporting purposes primarily due to acquisition fees and
miscellaneous acquisition expenses CNL Income Fund XII, Ltd. had
allocated to this property. In May 1996, CNL Income Fund XII, Ltd.
reinvested the proceeds from this sale, along with additional funds, for
a total of $1,655,928 in Middleburg Joint Venture.
C-56
<PAGE>
TABLE III
Operating Results of Prior Programs
CNL INCOME FUND XIII, LTD.
<TABLE>
<CAPTION>
1992
(Note 1) 1993 1994 1995
------------ ------------ ------------ --------
<S> <C>
Gross revenue $ 0 $ 966,564 $ 3,558,447 $ 3,806,944
Equity in earnings of joint ventures 0 1,305 43,386 98,520
Profit (Loss) from sale of properties
(Note 4) 0 0 0 (29,560)
Interest income 0 181,568 77,379 51,410
Less: Operating expenses 0 (59,390) (183,311) (214,705)
Interest expense 0 0 0 0
Depreciation and amortization 0 (148,170) (378,269) (393,435)
------------ ------------ ------------ ------------
Net income - GAAP basis 0 941,877 3,117,632 3,319,174
============ ============ ============ ============
Taxable income
- from operations 0 978,535 2,703,252 2,920,859
============ ============ ============ ============
- from gain (loss) on sale 0 0 0 0
============ ============ ============ ============
Cash generated from operations
(Notes 2 and 3) 0 1,121,547 3,149,000 3,379,378
Cash generated from sales (Note 4) 0 0 0 286,411
Cash generated from refinancing 0 0 0 0
------------ ------------ ------------ ------------
Cash generated from operations, sales
and refinancing 0 1,121,547 3,149,000 3,665,789
Less: Cash distributions to investors
(Note 5)
- from operating cash flow 0 (528,364) (2,800,004) (3,350,014)
- from sale of properties 0 0 0 0
- from cash flow from prior period 0 0 0 0
------------ ------------ ------------ ------------
Cash generated (deficiency) after
cash distributions 0 593,183 348,996 315,775
Special items (not including sales
and refinancing):
Limited partners' capital
contributions 0 40,000,000 0 0
General partners' capital
contributions 1,000 0 0 0
Syndication costs 0 (3,932,017) (181) 0
Acquisition of land and buildings 0 (19,691,630) (5,764,308) (336,116)
Investment in direct financing leases 0 (6,760,624) (1,365,075) 0
Investment in joint ventures 0 (314,998) (545,139) (140,052)
Reimbursement of organization,
syndication and acquisition costs
paid on behalf of CNL Income Fund
XIII, Ltd. by related parties 0 (799,980) (25,036) (3,074)
Increase in other assets 0 (454,909) 9,226 0
Other 0 0 0 954
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 1,000 8,639,025 (7,341,517) (162,513)
============ ============ ============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 0 33 67 72
============ ============ ============ ============
- from recapture 0 0 0 0
============ ============ ============ ============
Capital gain (loss) (Note 4) 0 0 0 0
============ ============ ============ ============
</TABLE>
C-57
<PAGE>
6 Months
1996
------------
Gross revenue $ 1,773,791
Equity in earnings of joint ventures 52,525
Profit (Loss) from sale of properties
(Note 4) 0
Interest income 18,430
Less: Operating expenses (173,194)
Interest expense 0
Depreciation and amortization (196,717)
------------
Net income - GAAP basis 1,474,835
============
Taxable income
- from operations 1,427,419
==============
- from gain (loss) on sale 0
=============
Cash generated from operations
(Notes 2 and 3) 1,647,653
Cash generated from sales (Note 4) 0
Cash generated from refinancing 0
Cash generated from operations, sales
and refinancing 1,647,653
Less: Cash distributions to investors
(Note 5)
- from operating cash flow (1,647,653)
- from sale of properties 0
- from cash flow from prior period (52,351)
------------
Cash generated (deficiency) after
cash distributions (52,351)
Special items (not including sales
and refinancing):
Limited partners' capital
contributions 0
General partners' capital
contributions 0
Syndication costs 0
Acquisition of land and buildings 0
Investment in direct financing leases 0
Investment in joint ventures 0
Reimbursement of organization,
syndication and acquisition costs
paid on behalf of CNL Income Fund
XIII, Ltd. by related parties 0
Increase in other assets 0
Other 0
0
------------
Cash generated (deficiency) after cash
distributions and special items (52,351)
============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 35
============
- from recapture 0
============
Capital gain (loss) (Note 4) 0
============
C-58
<PAGE>
TABLE III - CNL INCOME FUND XIII, LTD. (continued)
<TABLE>
<CAPTION>
1992
(Note 1) 1993 1994 1995
------------ ------------ ------------ --------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 0 18 70 82
- from capital gain 0 0 0 0
- from investment income from prior
period 0 0 0 2
------------ ------------ ------------ ------------
Total distributions on GAAP basis (Note 5) 0 18 70 84
============ ============ ============ ============
Source (on cash basis)
- from sales 0 0 0 0
- from refinancing 0 0 0 0
- from operations 0 18 70 84
- from cash flow from prior period 0 0 0 0
------------ ------------ ------------ ------------
Total distributions on cash basis (Note 5) 0 18 70 84
============ ============ ============ ============
Total cumulative cash distributions per
$1,000 investment from inception 0 18 88 172
Amount (in percentage terms) remaining
invested in program properties at the
end of each year (period) presented
(original total acquisition cost of
properties retained, divided by original
total acquisition cost of all properties
in program) N/A 100% 100% 100%
</TABLE>
C-59
<PAGE>
6 Months
1996
---------
Cash distributions to investors
Source (on GAAP basis)
- from investment income 37
- from capital gain 0
- from investment income from prior
period 6
---------
Total distributions on GAAP basis (Note 5) 43
=========
Source (on cash basis)
- from sales 0
- from refinancing 0
- from operations 41
- from cash flow from prior period 2
=========
Total distributions on cash basis (Note 5) 43
=========
Total cumulative cash distributions per
$1,000 investment from inception 215
Amount (in percentage terms) remaining
invested in program properties at the
end of each year (period) presented
(original total acquisition cost of
properties retained, divided by original
total acquisition cost of all properties
in program) 100%
Note 1: The registration statement relating to the offering of Units by CNL
Income Fund XIII, Ltd. became effective on March 17, 1993. Activities
through April 15, 1993, were devoted to organization of the partnership
and operations had not begun.
Note 2: Cash generated from operations includes cash received from tenants,
plus distributions from joint ventures, less cash paid for expenses,
plus interest received.
Note 3: Cash generated from operations per this table agrees to cash
generated from operations per the statement of cash flows included in
the financial statements of CNL Income Fund XIII, Ltd.
Note 4: During 1995, the partnership sold one of its properties to a tenant
for its original purchase price, excluding acquisition fees and
miscellaneous acquisition expenses. The net sales proceeds were used to
acquire an additional property. As a result of this transaction, the
partnership recognized a loss for financial reporting purposes of
$29,560 primarily due to acquisition fees and miscellaneous acquisition
expenses the partnership had allocated to the property and due to the
accrued rental income relating to future scheduled rent increases that
the partnership had recorded and reversed at the time of sale.
Note 5: As a result of the partnership's change in investor services agents
in 1993, distributions are now declared at the end of each quarter and
paid in the following quarter. Since this table generally presents
distributions on a cash basis (rather than amounts declared),
distributions on a cash basis for 1993 only reflect payments for three
quarters. Distributions declared for the quarters ended December 31,
1993, 1994 and 1995, are reflected in the 1994, 1995 and 1996 columns,
respectively, for distributions on a cash basis due to the payment of
such distributions in January 1994, 1995 and 1996, respectively. As a
result of 1994, 1995 and 1996 distributions being presented on a cash
basis, distributions declared and unpaid as of December 31, 1994 and
1995, and June 30, 1996, are not included in the 1994, 1995 and 1996
totals, respectively.
C-60
TABLE III
Operating Results of Prior Programs
CNL INCOME FUND XIV, LTD.
<TABLE>
<CAPTION>
1992
(Note 1) 1993 1994 1995
------------ ------------ ------------ --------
<S> <C>
Gross revenue $ 0 $ 256,234 $ 3,135,716 $ 4,017,266
Equity in earnings of joint ventures 0 1,305 35,480 338,717
Profit (Loss) from sale of properties
(Note 4) 0 0 0 (66,518)
Interest income 0 27,874 200,499 50,724
Less: Operating expenses 0 (14,049) (181,980) (248,840)
Interest expense 0 0 0 0
Depreciation and amortization 0 (28,918) (257,640) (340,112)
------------ ------------ ------------ ------------
Net income - GAAP basis 0 242,446 2,932,075 3,751,237
============ ============ ============ ============
Taxable income
- from operations 0 278,845 2,482,240 3,162,165
============ ============ ============ ============
- from gain on sale 0 0 0 0
============ ============ ============ ============
Cash generated from operations
(Notes 2 and 3) 0 321,737 2,812,631 3,709,844
Cash generated from sales (Note 4) 0 0 0 696,012
Cash generated from refinancing 0 0 0 0
------------ ------------ ------------ ------------
Cash generated from operations, sales
and refinancing 0 321,737 2,812,631 4,405,856
Less: Cash distributions to investors
(Note 5)
- from operating cash flow 0 (9,050) (2,229,952) (3,543,751)
- from sale of properties 0 0 0 0
- from cash flow from prior period 0 0 0 0
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions 0 312,687 582,679 862,105
Special items (not including sales and
refinancing):
Limited partners' capital
contributions 0 28,785,100 16,214,900 0
General partners' capital
contributions 1,000 0 0 0
Syndication costs 0 (2,771,892) (1,618,477) 0
Acquisition of land and buildings 0 (13,758,004) (11,859,237) (964,073)
Investment in direct financing leases 0 (4,187,268) (5,561,748) (75,352)
Investment in joint ventures 0 (315,209) (1,561,988) (1,087,218)
Return of capital from joint venture 0 0 0 0
Reimbursement of organization,
syndication and acquisition costs
paid on behalf of CNL Income Fund
XIV, Ltd. by related parties 0 (706,215) (376,738) (577)
Increase in other assets 0 (444,267) 0 0
Other 0 0 0 5,530
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 1,000 6,914,932 (4,180,609) (1,259,585)
============ ============ ============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 0 16 56 70
============ ============ ============ ============
- from recapture 0 0 0 0
============ ============ ============ ============
Capital gain (loss) (Note 4) 0 0 0 0
============ ============ ============ ============
</TABLE>
C-61
<PAGE>
6 Months
1996
------------
Gross revenue $ 1,987,463
Equity in earnings of joint ventures 177,099
Profit (Loss) from sale of properties
(Note 4) 0
Interest income 21,659
Less: Operating expenses (138,978)
Interest expense 0
Depreciation and amortization (170,044)
------------
Net income - GAAP basis 1,877,199
============
Taxable income
- from operations 1,570,651
============
- from gain on sale 0
============
Cash generated from operations
(Notes 2 and 3) 1,799,902
Cash generated from sales (Note 4) 0
Cash generated from refinancing 0
-----------
Cash generated from operations, sales
and refinancing 1,799,902
Less: Cash distributions to investors
(Note 5)
- from operating cash flow (1,799,902)
- from sale of properties 0
- from cash flow from prior period (56,358)
------------
Cash generated (deficiency) after cash
distributions (56,358)
Special items (not including sales and
refinancing):
Limited partners' capital
contributions 0
General partners' capital
contributions 0
Syndication costs 0
Acquisition of land and buildings 0
Investment in direct financing leases 0
Investment in joint ventures 0
Return of capital from joint venture 0
Reimbursement of organization,
syndication and acquisition costs
paid on behalf of CNL Income Fund
XIV, Ltd. by related parties 0
Increase in other assets 0
Other 0
------------
Cash generated (deficiency) after cash
distributions and special items (56,358)
============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 35
============
- from recapture 0
============
Capital gain (loss) (Note 4) 0
============
C-62
<PAGE>
TABLE III - CNL INCOME FUND XIV, LTD. (continued)
<TABLE>
<CAPTION>
1992
(Note 1) 1993 1994 1995
----------- ------------ ------------ --------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 0 1 51 79
- from capital gain 0 0 0 0
- from return of capital 0 0 0 0
------------ ------------ ------------ ------------
Total distributions on GAAP basis (Note 5) 0 1 51 79
============ ============ ============ ============
Source (on cash basis)
- from sales 0 0 0 0
- from refinancing 0 0 0 0
- from operations 0 1 51 79
- from cash flow from prior period 0 0 0 0
------------ ------------ ------------ ------------
Total distributions on cash basis (Note 5) 0 1 51 79
============ ============ ============ ============
Total cumulative cash distributions
per $1,000 investment from inception 0 1 52 131
Amount (in percentage terms) remaining
invested in program properties at the
end of each year (period) presented
(original total acquisition cost of
properties retained, divided by
original total acquisition cost of all
properties in program) N/A 100% 100% 100%
</TABLE>
C-63
<PAGE>
Months
1996
--------
Cash distributions to investors
Source (on GAAP basis)
- from investment income 41
- from capital gain 0
- from return of capital 0
--------
Total distributions on GAAP basis (Note 5) 41
=========
Source (on cash basis)
- from sales 0
- from refinancing 0
- from operations 40
- from cash flow from prior period 1
--------
Total distributions on cash basis (Note 5) 41
=========
Total cumulative cash distributions
per $1,000 investment from inception 172
Amount (in percentage terms) remaining
invested in program properties at the
end of each year (period) presented
(original total acquisition cost of
properties retained, divided by
original total acquisition cost of all
properties in program) 100%
Note 1: Pursuant to a registration statement on Form S-11 under the
Securities Act of 1933, as amended, CNL Income Fund XIV, Ltd. ("CNL
XIV") and CNL Income Fund XIII, Ltd. each registered for sale
$40,000,000 units of limited partnership interests ("Units"). The
offering of Units of CNL Income Fund XIII, Ltd. commenced March 17,
1993. Pursuant to the registration statement, CNL XIV could not commence
until the offering of Units of CNL Income Fund XIII, Ltd. was
terminated. CNL Income Fund XIII, Ltd. terminated its offering of Units
on August 26, 1993, at which time the maximum offering proceeds of
$40,000,000 had been received. Upon the termination of the offering of
Units of CNL Income Fund XIII, Ltd., CNL XIV commenced its offering of
Units. Activities through September 13, 1993, were devoted to
organization of the partnership and operations had not begun.
Note 2: Cash generated from operations includes cash received from tenants,
plus distributions from joint ventures, less cash paid for expenses,
plus interest received.
Note 3: Cash generated from operations per this table agrees to cash
generated from operations per the statement of cash flows included in
the financial statements of CNL Income Fund XIV, Ltd.
Note 4: During 1995, the partnership sold two of its properties to a tenant
for its original purchase price, excluding acquisition fees and
miscellaneous acquisition expenses. The net sales proceeds were used to
acquire two additional properties. As a result of these transactions,
the partnership recognized a loss for financial reporting purposes of
$66,518 primarily due to acquisition fees and miscellaneous acquisition
expenses the partnership had allocated to the property and due to the
accrued rental income relating to future scheduled rent increases that
the partnership had recorded and reversed at the time of sale.
Note 5: As a result of the partnership's change in investor services agents
in 1993, distributions are now declared at the end of each quarter and
paid in the following quarter. Since this table generally presents
distributions on a cash basis (rather than amounts declared),
distributions on a cash basis for 1993 only reflect payments for three
quarters. Distributions declared for the quarters ended December 31,
1993, 1994 and 1995, are reflected in the 1994, 1995 and 1996 columns,
respectively, for distributions on a cash basis due to the payment of
such distributions in January 1994, 1995 and 1996, respectively. As a
result of 1994, 1995 and 1996 distributions being presented on a cash
basis, distributions declared and unpaid as of December 31, 1994 and
1995, and June 30, 1996 are not included in the 1994, 1995 and 1996
totals, respectively.
C-64
<PAGE>
TABLE III
Operating Results of Prior Programs
CNL INCOME FUND XV, LTD.
<TABLE>
<CAPTION>
1993 6 Months
(Note 1) 1994 1995 1996
------------ ------------ ------------ --------
<S> <C>
Gross revenue $ 0 $ 1,143,586 $ 3,546,320 $ 1,799,609
Equity in earnings of joint venture 0 8,372 280,606 144,539
Profit (Loss) from sale of properties
(Note 4) 0 0 (71,023) 0
Interest income 0 167,734 88,059 21,155
Less: Operating expenses 0 (62,926) (228,319) (138,719)
Interest expense 0 0 0 0
Depreciation and amortization 0 (70,848) (243,175) (124,093)
------------ ------------ ------------ ------------
Net income - GAAP basis 0 1,185,918 3,372,468 1,702,491
============ ============ ============ ============
Taxable income
- from operations 0 1,026,715 2,861,912 1,399,634
============ ============ ============ ============
- from gain on sale 0 0 0 0
============ ============ ============ ============
Cash generated from operations
(Notes 2 and 3) 0 1,116,834 3,239,370 1,687,927
Cash generated from sales (Note 4) 0 0 811,706 0
Cash generated from refinancing 0 0 0 0
------------ ------------ ------------ ------------
Cash generated from operations, sales
and refinancing 0 1,116,834 4,051,076 1,687,927
Less: Cash distributions to investors
(Note 5)
- from operating cash flow 0 (635,944) (2,650,003) (1,600,000)
- from sale of properties 0 0 0 0
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions 0 480,890 1,401,073 87,927
Special items (not including sales and
refinancing):
Limited partners' capital contri-
butions 0 40,000,000 0 0
General partners' capital contri-
butions 1,000 0 0 0
Syndication costs 0 (3,892,003) 0 0
Acquisition of land and buildings 0 (22,152,379) (1,625,601) 0
Investment in direct financing
leases 0 (6,792,806) (2,412,973) 0
Investment in joint venture 0 (1,564,762) (720,552) (145,526)
Reimbursement of organization,
syndication and acquisition costs
paid on behalf of CNL Income Fund
XV, Ltd. by related parties 0 (1,098,197) (23,507) 0
Increase in other assets 0 (187,757) 0 0
Other (38) (6,118) 25,150 0
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 962 4,786,868 (3,356,410) (57,599)
============ ============ ============ ============
TAX AND DISTRIBUTION DATA PER $1,000
INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 0 33 71 35
============ ============ ============ ============
- from recapture 0 0 0 0
============ ============ ============ ============
Capital gain (loss) (Note 4) 0 0 0 0
============ ============ ============ ============
C-65
<PAGE>
TABLE III - CNL INCOME FUND XV, LTD. (continued)
<CAPTION>
1993 6 Months
(Note 1) 1994 1995 1996
------------ ------------ ------------ --------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 0 21 66 40
- from capital gain 0 0 0 0
------------ ------------ ------------ ------------
Total distributions on GAAP basis (Note 5) 0 21 66 40
============ ============ ============ ============
Source (on cash basis)
- from sales 0 0 0 0
- from refinancing 0 0 0 0
- from operations 0 21 66 40
------------ ------------ ------------ ------------
Total distributions on cash basis (Note 5) 0 21 66 40
============ ============ ============ ============
Total cumulative cash distributions per
$1,000 investment from inception 0 21 87 127
Amount (in percentage terms) remaining
invested in program properties at the
end of each year (period) presented
(original total acquisition cost of
properties retained, divided by original
total acquisition cost of all properties
in program) N/A 100% 100% 100%
</TABLE>
Note 1: The registration statement relating to this offering of Units of CNL
Income Fund XV, Ltd. became effective February 23, 1994. Activities
through March 23, 1994, were devoted to organization of the partnership
and operations had not begun.
Note 2: Cash generated from operations includes cash received from tenants,
plus distributions from joint venture, less cash paid for expenses, plus
interest received.
Note 3: Cash generated from operations per this table agrees to cash
generated from operations per the statement of cash flows included in
the financial statements of CNL Income Fund XV, Ltd.
Note 4: During 1995, the partnership sold three of its properties to a tenant
for its original purchase price, excluding acquisition fees and
miscellaneous acquisition expenses. The majority of the net sales
proceeds were used to acquire additional properties. As a result of
these transactions, the partnership recognized a loss for financial
reporting purposes of $71,023 primarily due to acquisition fees and
miscellaneous acquisition expenses the partnership had allocated to the
three properties and due to the accrued rental income relating to future
scheduled rent increases that the partnership had recorded and reversed
at the time of sale.
Note 5: Distributions declared for the quarters ended December 31, 1994 and
1995 are reflected in the 1995 and 1996 columns, respectively, due to
the payment of such distributions in January 1995 and 1996,
respectively. As a result of distributions being presented on a cash
basis, distributions declared and unpaid as of December 31, 1994 and
1995, and June 30, 1996 are not included in the 1994, 1995 and 1996
totals, respectively.
C-66
<PAGE>
TABLE III
Operating Results of Prior Programs
CNL INCOME FUND XVI, LTD.
<TABLE>
<CAPTION>
1993 6 Months
(Note 1) 1994 1995 1996
------------ ------------ ------------ --------
<S> <C>
Gross revenue $ 0 $ 186,257 $ 2,702,504 $ 2,143,589
Profit from sale of properties (Note 5) 0 0 0 124,305
Interest income 0 21,478 321,137 43,562
Less: Operating expenses 0 (10,700) (274,595) (148,823)
Interest expense 0 0 0 0
Depreciation and amortization 0 (9,458) (318,205) (270,831)
------------ ------------ ------------ ------------
Net income - GAAP basis 0 187,577 2,430,841 1,891,802
============ ============ ============ ============
Taxable income
- from operations 0 189,864 2,139,382 1,550,241
============ ============ ============ ============
- from gain on sale (Note 5) 0 0 0 0
============ ============ ============ ============
Cash generated from operations
(Notes 2 and 3) 0 205,148 2,481,395 1,861,696
Cash generated from sales (Note 5) 0 0 0 775,000
Cash generated from refinancing 0 0 0 0
------------ ------------ ------------ ------------
Cash generated from operations, sales
and refinancing 0 205,148 2,481,395 2,636,696
Less: Cash distributions to investors
(Note 4)
- from operating cash flow 0 (2,845) (1,798,921) (1,631,251)
- from sale of properties 0 0 0 0
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions 0 202,303 682,474 1,005,445
Special items (not including sales and
refinancing):
Limited partners' capital contri-
butions 0 20,174,172 24,825,828 0
General partners' capital contri-
butions 1,000 0 0 0
Syndication costs 0 (1,929,465) (2,452,743) 0
Acquisition of land and buildings 0 (13,170,132) (16,012,458) (2,392,562)
Investment in direct financing
leases 0 (975,853) (5,595,236) (382,372)
Increase in restricted cash 0 0 0 (775,000)
Reimbursement of organization,
syndication and acquisition costs
paid on behalf of CNL Income Fund
XVI, Ltd. by related parties 0 (854,154) (405,569) 0
Collection of overpayment of acqui-
sition and syndication costs paid
by related parties on behalf of the
partnership 0 0 0 1,204
Increase in other assets 0 (443,625) (58,720) 0
Other (36) (20,714) 20,714 0
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 964 2,982,532 1,004,290 (2,543,285)
============ ============ ============ ============
TAX AND DISTRIBUTION DATA PER $1,000
INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 0 17 53 34
============ ============ ============ ============
- from recapture 0 0 0 0
============ ============ ============ ============
Capital gain (loss) (Note 5) 0 0 0 0
============ ============ ============ ============
</TABLE>
C-67
<PAGE>
TABLE III - CNL INCOME FUND XVI, LTD. (continued)
<TABLE>
<CAPTION>
1993 6 Months
(Note 1) 1994 1995 1996
------------ ------------ ------------ --------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 0 1 45 33
- from capital gain 0 0 0 3
- from investment income from
prior period 0 0 0 0
------------ ------------ ------------ ------------
Total distributions on GAAP basis (Note 4) 0 1 45 36
============ ============ ============ ============
Source (on cash basis)
- from sales 0 0 0 0
- from refinancing 0 0 0 0
- from operations 0 1 45 36
------------ ------------ ------------ ------------
Total distributions on cash basis (Note 4) 0 1 45 36
============ ============ ============ ============
Total cumulative cash distributions per
$1,000 investment from inception 0 1 46 82
Amount (in percentage terms) remaining
invested in program properties at the
end of each year (period) presented
(original total acquisition cost of
properties retained, divided by original
total acquisition cost of all properties
in program) (Note 5) N/A 100% 100% 98%
</TABLE>
Note 1: Pursuant to a registration statement on Form S-11 under the
Securities Act of 1933, as amended, CNL Income Fund XVI, Ltd. ("CNL
XVI") and CNL Income Fund XV, Ltd. each registered for sale $40,000,000
units of limited partnership interests ("Units"). The offering of Units
of CNL Income Fund XV, Ltd. commenced February 23, 1994. Pursuant to the
registration statement, CNL XVI could not commence until the offering of
Units of CNL Income Fund XV, Ltd. was terminated. CNL Income Fund XV,
Ltd. terminated its offering of Units on September 1, 1994, at which
time the maximum offering proceeds of $40,000,000 had been received.
Upon the termination of the offering of Units of CNL Income Fund XV,
Ltd., CNL XVI commenced its offering of Units. Activities through
September 22, 1994, were devoted to organization of the partnership and
operations had not begun.
Note 2: Cash generated from operations includes cash received from tenants,
less cash paid for expenses, plus interest received.
Note 3: Cash generated from operations per this table agrees to cash
generated from operations per the statement of cash flows included in
the financial statements of CNL Income Fund XVI, Ltd.
Note 4: Distributions declared for the quarters ended December 31, 1994 and
1995 are reflected in the 1995 and 1996 columns, respectively, due to
the payment of such distributions in January 1995 and 1996,
respectively. As a result of distributions being presented on a cash
basis, distributions declared and unpaid as of December 31, 1994 and
1995, and June 30, 1996 are not included in the 1994, 1995 and 1996
totals, respectively.
Note 5: In April 1996, CNL Income Fund XVI, Ltd. sold one of its properties
for $775,000, resulting in a gain for financial reporting purposes of
$124,305. As of June 30, 1996, the net sales proceeds of $775,000, plus
accrued interest of $3,526, were being held in an interest-bearing
escrow account. The general partners believe that the sale of this
property will qualify as a like-kind exchange transaction in accordance
with Section 1031 of the Internal Revenue Code. As a result, no gain or
loss was recognized for federal income tax purposes. The remaining net
sales proceeds are expected to be invested in an additional property or
used for other Partnership purposes.
C-68
<PAGE>
TABLE V
SALES OR DISPOSALS OF PROPERTIES
<TABLE>
<CAPTION>
======================================================================================================================
Selling Price, Net of
Closing Costs and GAAP Adjustments
----------------------------------
Purchase
Cash money Adjustments
received Mortgage mortgage resulting
net of balance taken from Original
Date Date of closing at time back by application mortgage
Property Acquired Sale costs of sale program of GAAP Total financing
======================================================================================================================
<S> <C>
CNL Income Fund, Ltd.:
Burger King -
San Dimas, CA 02/05/87 06/12/92 $1,169,021 0 0 0 $1,169,021 0
Wendy's -
Fairfield, CA 07/01/87 10/03/94 1,018,490 0 0 0 1,018,490 0
CNL Income Fund II, Ltd.:
Golden Corral -
Salisbury, NC 05/29/87 07/21/93 746,800 0 0 0 746,800 0
Pizza Hut -
Graham, TX 08/24/87 07/28/94 261,628 0 0 0 261,628 0
Golden Corral -
Medina, OH 11/18/87 11/30/94 626,582 0 0 0 626,582 0
CNL Income Fund IV, Ltd.:
Taco Bell -
York, PA 03/22/89 04/27/94 712,000 0 0 0 712,000 0
Burger King -
Hastings, MI 08/12/88 12/15/95 518,650 0 0 0 518,650 0
CNL Income Fund V, Ltd.:
Perkins -
Myrtle Beach, SC (2) 02/28/90 08/25/95 0 0 1,040,000 0 1,040,000 0
CNL Income Fund VI, Ltd.:
Hardee's -
Batesville, AR 11/02/89 05/24/94 791,211 0 0 0 791,211 0
Hardee's -
Heber Springs, AR 02/13/90 05/24/94 638,270 0 0 0 638,270 0
Hardee's -
Little Canada, MN 11/28/89 06/29/95 899,503 0 0 0 899,503 0
</TABLE>
==============================================================================
Cost of Properties
Including Closing and
Soft Costs
-------------------------------------
Excess
Total (deficiency)
acquisition of property
cost, capital operating cash
improvements receipts over
closing and cash
Property soft costs (1) Total expenditures
==============================================================================
CNL Income Fund, Ltd.:
Burger King -
San Dimas, CA $955,000 $955,000 $214,021
Wendy's -
Fairfield, CA 861,500 861,500 156,990
CNL Income Fund II, Ltd.:
Golden Corral -
Salisbury, NC 642,800 642,800 104,000
Pizza Hut -
Graham, TX 205,500 205,500 56,128
Golden Corral -
Medina, OH 743,000 743,000 (116,418)
CNL Income Fund IV, Ltd.:
Taco Bell -
York, PA 616,501 616,501 95,499
Burger King -
Hastings, MI 419,936 419,936 98,714
CNL Income Fund V, Ltd.:
Perkins -
Myrtle Beach, SC (2) 986,418 986,418 53,582
CNL Income Fund VI, Ltd.:
Hardee's -
Batesville, AR 605,500 605,500 185,711
Hardee's -
Heber Springs, AR 532,893 532,893 105,377
Hardee's -
Little Canada, MN 821,692 821,692 77,811
C-69
<PAGE>
<TABLE>
<CAPTION>
TABLE V
SALES OR DISPOSALS OF PROPERTIES
======================================================================================================================
Selling Price, Net of
Closing Costs and GAAP Adjustments
----------------------------------
Purchase
Cash money Adjustments
received Mortgage mortgage resulting
net of balance taken from Original
Date Date of closing at time back by application mortgage
Property Acquired Sale costs of sale program of GAAP Total financing
======================================================================================================================
<S> <C>
CNL Income Fund VII, Ltd.:
Taco Bell -
Kearns, UT 06/14/90 05/19/92 700,000 0 0 0 700,000 0
Hardee's -
St. Paul, MN 08/09/90 05/24/94 869,036 0 0 0 869,036 0
Perkins -
Florence, SC (3) 08/28/90 08/25/95 0 0 1,160,000 0 1,160,000 0
Church's Fried Chicken -
Jacksonville, FL (4) 04/30/90 12/01/95 0 0 240,000 0 240,000 0
CNL Income Fund VIII, Ltd.:
Church's Fried Chicken -
Melbourne, FL 09/28/90 02/01/91 172,945 0 0 0 172,945 0
Church's Fried Chicken -
Cocoa, FL 09/28/90 05/14/91 175,042 0 0 0 175,042 0
Denny's -
Ocoee, FL 03/16/91 07/31/95 1,184,865 0 0 0 1,184,865 0
Church's Fried Chicken -
Jacksonville, FL (4) 09/28/90 12/01/95 0 0 240,000 0 240,000 0
Church's Fried Chicken -
Jacksonville, FL (5) 09/28/90 12/01/95 0 0 220,000 0 220,000 0
CNL Income Fund X, Ltd.:
Shoney's -
Denver, CO 03/04/92 08/11/95 1,050,186 0 0 0 1,050,186 0
</TABLE>
==============================================================================
Cost of Properties
Including Closing and
Soft Costs
----------------------
Excess
Total (deficiency)
acquisition of property
cost, capital operating cash
improvements receipts over
closing and cash
Property soft costs (1) Total expenditures
==============================================================================
CNL Income Fund VII, Ltd.:
Taco Bell -
Kearns, UT 560,202 560,202 139,798
Hardee's -
St. Paul, MN 742,333 742,333 126,703
Perkins -
Florence, SC (3) 1,084,905 1,084,905 75,095
Church's Fried Chicken -
Jacksonville, FL (4) 233,728 233,728 6,272
CNL Income Fund VIII, Ltd.
Church's Fried Chicken -
Melbourne, FL 166,022 166,022 6,923
Church's Fried Chicken -
Cocoa, FL 175,694 175,694 (652)
Denny's -
Ocoee, FL 949,199 949,199 235,666
Church's Fried Chicken -
Jacksonville, FL (4) 238,153 238,153 1,847
Church's Fried Chicken -
Jacksonville, FL (5) 215,845 215,845 4,155
CNL Income Fund X, Ltd.:
Shoney's -
Denver, CO 987,679 987,679 62,507
==============================================================================
C-70
<PAGE>
TABLE V
SALES OR DISPOSALS OF PROPERTIES
<TABLE>
<CAPTION>
======================================================================================================================
Selling Price, Net of
Closing Costs and GAAP Adjustments
-----------------------------------
Purchase
Cash money Adjustments
received Mortgage mortgage resulting
net of balance taken from Original
Date Date of closing at time back by application mortgage
Property Acquired Sale costs of sale program of GAAP Total financing
======================================================================================================================
<S> <C>
CNL Income Fund XII, Ltd.:
Golden Corral -
Houston, TX 12/28/92 04/10/96 1,640,000 0 0 0 1,640,000 0
CNL Income Fund XIII, Ltd.:
Checkers -
Houston, TX 03/31/94 04/24/95 286,411 0 0 0 286,411 0
CNL Income Fund XIV, Ltd.:
Checkers -
Knoxville, TN 03/31/94 03/01/95 339,031 0 0 0 339,031 0
Checkers -
Dallas, TX 03/31/94 03/01/95 356,981 0 0 0 356,981 0
CNL Income Fund XV, Ltd.:
Checkers -
Knoxville, TN 05/27/94 03/01/95 263,221 0 0 0 263,221 0
Checkers -
Leavenworth, KS 06/22/94 03/01/95 259,600 0 0 0 259,600 0
Checkers -
Knoxville, TN 07/08/94 03/01/95 288,885 0 0 0 288,885 0
CNL Income Fund XVI, Ltd.:
Long John Silver's -
Appleton, WI 06/24/95 04/24/96 775,000 0 0 0 775,000 0
</TABLE>
==============================================================================
Cost of Properties
Including Closing and
Soft Costs
Excess
Total (deficiency)
acquisition of property
cost, capital operating cash
improvements receipts over
closing and cash
Property soft costs (1) Total expenditures
==============================================================================
CNL Income Fund XII, Ltd.:
Golden Corral -
Houston, TX 1,636,643 1,636,643 3,357
CNL Income Fund XIII, Ltd.
Checkers -
Houston, TX 286,411 286,411 0
CNL Income Fund XIV, Ltd.:
Checkers -
Knoxville, TN 339,031 339,031 0
Checkers -
Dallas, TX 356,981 356,981 0
CNL Income Fund XV, Ltd.:
Checkers -
Knoxville, TN 263,221 263,221 0
Checkers -
Leavenworth, KS 259,600 259,600 0
Checkers -
Knoxville, TN 288,885 288,885 0
CNL Income Fund XVI, Ltd.:
Long John Silver's -
Appleton, WI 613,838 613,838 161,162
(1) Amounts shown do not include pro rata share of original offering costs or
acquisition fees.
(2) Amount shown is face value and does not represent discounted current value.
The mortgage note bears interest at a rate of 10.25% per annum and provides
for a balloon payment of $1,006,004 in July 2000.
(3) Amount shown is face value and does not represent discounted current value.
The mortgage note bears interest at a rate of 10.25% per annum and provides
for a balloon payment of $1,106,657 in July 2000.
(4) Amounts shown are face value and do not represent discounted current value.
Each mortgage note bears interest at a rate of 10.00% per annum and provides
for a balloon payment of $218,252 in December 2005.
(5) Amount shown is face value and does not represent discounted current value.
The mortgage note bears interest at a rate of 10.00% per annum and provides
for a balloon payment of $200,324 in December 2005.
C-71
<PAGE>
ADDENDUM TO
EXHIBIT E
PRO FORMA ESTIMATE OF TAXABLE INCOME
BEFORE DIVIDENDS PAID DEDUCTION
THE PRO FORMA ESTIMATE OF TAXABLE INCOME CONTAINED IN THIS ADDENDUM SHOULD BE
READ IN CONJUNCTION WITH EXHIBIT E TO THE ATTACHED PROSPECTUS, DATED APRIL 26,
1996.
<PAGE>
PRO FORMA ESTIMATE OF TAXABLE INCOME BEFORE DIVIDENDS PAID DEDUCTION OF
CNL AMERICAN PROPERTIES FUND, INC.
GENERATED FROM THE OPERATIONS OF PROPERTIES ACQUIRED FROM APRIL 10, 1996
THROUGH OCTOBER 3, 1996
For a 12-Month Period (Unaudited)
The following schedule represents pro forma unaudited estimates of taxable
income before dividends paid deduction of each Property acquired by the Company
from April 10, 1996 through October 3, 1996, for the 12-month period commencing
on the date of the inception of the respective lease on such Property. The
schedule should be read in light of the accompanying footnotes. For information
regarding the 48 Properties acquired by the Company prior to April 10, 1996, see
Exhibit E to the attached Prospectus dated April 26, 1996.
These estimates do not purport to present actual or expected operations of
the Company for any period in the future. These estimates were prepared on the
basis described in the accompanying notes which should be read in conjunction
herewith. No single lessee or group of affiliated lessees lease Properties or
has borrowed funds from the Company with an aggregate purchase price in excess
of 20% of the expected total net offering proceeds of the Company.
<TABLE>
<CAPTION>
TGI Friday's Wendy's Golden Corral Ten Pizza
Hamden, CT (7) Knoxville, TN (7)(9) Port Richey, FL (7) Hut Properties
-------------- -------------------- ------------------- --------------
<S> <C>
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction:
Base Rent (1) $ 173,714 $ 81,898 $ 196,972 $ 166,320
Interest Income (2) - - - 415,686
---------- ---------- ---------- ----------
Total Revenues 173,714 81,898 196,972 582,006
---------- ---------- ---------- ----------
Asset Management Fees (3) (6,808) (4,746) (10,233) (8,922)
Mortgage Management Fee (4) - - - (23,167)
General and Administrative
Expenses (5) (10,770) (5,078) (12,212) (36,084)
---------- ---------- ---------- ----------
Total Operating Expenses (17,578) (9,824) (22,445) (68,173)
---------- ---------- ---------- ----------
Estimated Cash Available from
Operations 156,136 72,074 174,527 513,833
Depreciation and Amortization
Expense (6) (30,652) (13,081) (30,970) (10,498)
---------- ---------- ---------- ----------
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction of the Company $ 125,484 $ 58,993 $ 143,557 $ 503,335
========== ========== ========== ==========
</TABLE>
See Footnotes
E-1
<PAGE>
<TABLE>
<CAPTION>
Denny's Denny's Wendy's Wendy's
Hillsboro, TX (7)(12) McKinney, TX (12) Camarillo, CA (7)(9) Sevierville, TN(7)(9)
--------------------- ----------------- -------------------- ---------------------
<S> <C>
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction:
Base Rent (1) $ 114,346 $ 104,013 $ 124,655 $ 60,735
Interest Income (2) - - - -
---------- ---------- ---------- ---------
Total Revenues 114,346 104,013 124,655 60,735
---------- ---------- ---------- ----------
Asset Management Fees (3) (6,319) (5,874) (7,224) (2,956)
Mortgage Management Fee (4) - - - -
General and Administrative
Expenses (5) (7,089) (6,449) (7,729) (3,766)
---------- ---------- ---------- ----------
Total Operating Expenses (13,408) (12,323) (14,953) (6,722)
---------- ---------- ---------- ----------
Estimated Cash Available from
Operations 100,938 91,690 109,702 54,013
Depreciation and Amortization
Expense (6) (19,022) (16,066) (17,220) (13,308)
---------- ---------- ---------- ----------
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction of the Company $ 81,916 $ 75,624 $ 92,482 $ 40,705
========== ========== ========== ==========
</TABLE>
See Footnotes
E-2
<PAGE>
<TABLE>
<CAPTION>
Boston Market Boston Market Jack in the Box Boston Market
Ellisville, MO (7)(10) Golden Valley, MN (7)(10) Humble #1, TX (7)(11) Corvallis, OR (7)
<S> <C>
Pro Forma Estimate
of Taxable
Income Before Dividends
Paid Deduction:
Base Rent (1) $ 102,675 $ 112,890 $ 100,061 $ 95,085
Interest Income (2) - - - -
---------- ---------- ---------- ----------
Total Revenues 102,675 112,890 100,061 95,085
---------- ---------- ---------- ----------
Asset Management Fees (3) (5,864) (6,448) (5,603) (5,440)
Mortgage Management Fee (4) - - - -
General and Administrative
Expenses (5) (6,366) (6,999) (6,204) (5,895)
---------- ---------- ---------- ---------
Total Operating Expenses (12,230) (13,447) (11,807) (11,335)
---------- ---------- ---------- ---------
Estimated Cash Available from
Operations 90,445 99,443 88,254 83,750
Depreciation and Amortization
Expense (6) (16,272) (13,561) (15,646) (16,006)
---------- ---------- ---------- ----------
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction of the Company $ 74,173 $ 85,882 $ 72,608 $ 67,744
========== ========== ========== ==========
</TABLE>
See Footnotes
E-3
<PAGE>
<TABLE>
<CAPTION>
Jack in the Box Arby's Boston Market
Houston #1, TX (7)(11) Kendallville, IN (13) Rockwall, TX (7)
---------------------- --------------------- ----------------
<S> <C>
Pro Forma Estimate
of Taxable
Income Before Dividends
Paid Deduction:
Base Rent (1) $ 95,757 $ 75,812 $ 79,356
Interest Income (2) - - -
---------- ----------- ----------
Total Revenues 95,757 75,812 79,356
---------- ----------- ----------
Asset Management Fees (3) (5,362) (4,430) (4,551)
Mortgage Management Fee (4) - - -
General and Administrative
Expenses (5) (5,937) (4,700) (4,920)
---------- ----------- ----------
Total Operating Expenses (11,299) (9,130) (9,471)
---------- ----------- ----------
Estimated Cash Available from
Operations 84,458 66,682 69,885
Depreciation and Amortization
Expense (6) (15,890) (7,794) (10,813)
---------- ----------- ----------
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction of the Company $ 68,568 $ 58,888 $ 59,072
========== =========== ==========
</TABLE>
See Footnotes
E-4
<PAGE>
<TABLE>
<CAPTION>
Boston Market Jack in the Box Applebee's Golden Corral
Upland, CA (7)(14) Houston #2, TX (7)(11) Montclair, CA (7) Brooklyn, OH (8)
<S> <C>
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction:
Base Rent (1) $ 101,479 $ 97,618 $ 176,084 $ 142,823
Interest Income (2) - - - -
---------- ---------- ---------- ---------
Total Revenues 101,479 97,618 176,084 142,823
---------- ---------- ---------- ----------
Asset Management Fees (3) (5,819) (5,467) (9,563) (5,921)
Mortgage Management Fee (4) - - - -
General and Administrative
Expenses (5) (6,292) (6,052) (10,917) (8,855)
---------- ---------- ---------- ----------
Total Operating Expenses (12,111) (11,519) (20,480) (14,776)
---------- ---------- ---------- ----------
Estimated Cash Available from
Operations 89,368 86,099 155,604 128,047
Depreciation and Amortization
Expense (6) (11,115) (15,257) (21,142) (26,658)
---------- ---------- ---------- ----------
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction of the Company $ 78,253 $ 70,842 $ 134,462 $ 101,389
========== ========== ========== ==========
</TABLE>
See Footnotes
E-5
<PAGE>
<TABLE>
<CAPTION> Ryan's Family
Boston Market Boston Market Steak House Arby's
La Quinta, CA (7)(14) Merced, CA (7) Spring Hill, FL (7) Avon, IN (13)
--------------------- ----------------- ------------------- -------------
<S> <C>
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction:
Base Rent (1) $ 98,804 $ 96,704 $ 204,392 $ 81,044
Interest Income (2) - - - -
---------- ---------- ---------- ----------
Total Revenues 98,804 96,704 204,392 81,044
---------- ---------- ---------- ----------
Asset Management Fees (3) (5,660) (5,540) (11,112) (4,738)
Mortgage Management Fee (4) - - - -
General and Administrative
Expenses (5) (6,126) (5,996) (12,672) (5,025)
---------- ---------- ---------- ----------
Total Operating Expenses (11,786) (11,536) (23,784) (9,763)
---------- ---------- ---------- ----------
Estimated Cash Available from
Operations 87,018 85,168 180,608 71,281
Depreciation and Amortization
Expense (6) (12,439) (10,283) (34,952) (12,415)
---------- ---------- ---------- ----------
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction of the Company $ 74,579 $ 74,885 $ 145,656 $ 58,866
========== ========== ========== ==========
</TABLE>
See Footnotes
E-6
<PAGE>
<TABLE>
<CAPTION>
Boston Market Applebee's Burger King
Florissant, MO (7)(10) Salinas, CA (7) Chicago, IL (7) Total
---------------------- --------------- --------------- -------
<S> <C>
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction:
Base Rent (1) $ 131,306 $ 145,549 $ 173,489 $3,133,581
Interest Income (2) - - - 415,686
---------- ---------- ---------- ----------
Total Revenues 131,306 145,549 173,489 3,549,267
---------- ---------- ---------- ----------
Asset Management Fees (3) (7,523) (7,950) (9,463) (169,536)
Mortgage Management Fee (4) - - - (23,167)
General and Administrative
Expenses (5) (8,141) (9,024) (10,756) (220,054)
---------- ---------- ---------- ----------
Total Operating Expenses (15,664) (16,974) (20,219) (412,757)
---------- ---------- ---------- ----------
Estimated Cash Available from
Operations 115,642 128,575 153,270 3,136,510
Depreciation and Amortization
Expense (6) (15,852) (16,617) (19,317) (442,846)
---------- ---------- ---------- ----------
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction of the Company $ 99,790 $ 111,958 $ 133,953 $2,693,664
========== ========== ========== ==========
</TABLE>
FOOTNOTES:
(1) Base rent does not include percentage rents which become due if
specified levels of gross receipts are achieved.
(2) The Company entered into a Master Mortgage Note agreement for
$3,888,000, collateralized by building improvements located on the Ten
Pizza Hut Properties. The Master Mortgage Note bears interest at a rate
of 10.75% per annum and principal and interest will be collected in
equal monthly installments over 20 years beginning in July 1996. Amount
does not include $19,440 of loan commitment fees and $19,440 in loan
origination fees collected by the Company at closing from the borrower.
(3) The Properties will be managed pursuant to an advisory agreement
between the Company and CNL Fund Advisors, Inc. (the "Advisor"),
pursuant to which the Advisor will receive monthly asset management
fees in an amount equal to one-twelfth of .60% of the Company's Real
Estate Asset Value as of the end of the preceding month as defined in
such agreement. See "Management Compensation."
(4) For managing the Mortgage Loans, the Advisor will be entitled to
receive a monthly mortgage management fee of one-twelfth of .60% of the
total principal amount of the Mortgage Loans as of the end of the
preceding month. See "Management Compensation."
(5) Estimated at 6.2% of gross rental income and interest income based on
the previous experience of Affiliates of the Advisor with 17 public
limited partnerships which own properties similar to those owned by the
Company. Amount does not include soliciting dealer servicing fee due to
the fact that such fee will not be incurred until December 31 of the
year following the year in which the offering terminates.
E-7
<PAGE>
(6) The estimated federal tax basis of the depreciable portion (the
building portion) of the Properties has been depreciated on the
straight-line method over 39 years. In connection with the Ten Pizza
Hut Properties, acquisition fees allocated to the Master Mortgage Note
have been amortized on a straight-line basis over the life of the
agreement (20 years).
(7) The Company accepted an assignment of an interest in the ground lease
relating to the Hamden and Sevierville Properties effective April 24,
1996 and June 5, 1996, respectively, in consideration of its funding of
certain preliminary development costs and its agreement to fund
remaining development. The development agreements for the Properties
which are to be constructed provide that construction must be completed
no later than the dates set forth below:
<TABLE>
<CAPTION>
Property Estimated Final Completion Date Property Estimated Final Completion Date
-------- ------------------------------- -------- --------------------------------
<S> <C>
Hamden Property Opened for business August 26, 1996 Rockwall Property January 11, 1997
Knoxville Property Opened for business July 8, 1996 Upland Property Opened for business September 30, 1996
Port Richey Property Opened for business September 30, 1996 Houston #2 Property Opened for business July 14, 1996
Hillsboro Property April 1, 1997 Montclair Property February 19, 1997
Camarillo Property Opened for business July 28, 1996 La Quinta Property March 5, 1997
Sevierville Property Opened for business June 13, 1996 Merced Property March 16, 1997
Ellisville Property Opened for business September 3, 1996 Spring Hill Property February 15, 1997
Golden Valley Property Opened for business September 30, 1996 Florissant Property March 18, 1997
Humble #1 Property Opened for business September 12, 1996 Salinas Property February 6, 1997
Corvallis Property Opened for business October 6, 1996 Chicago Property December 28, 1996
Houston #1 Property Opened for business September 25, 1996
</TABLE>
(8) The Company accepted an assignment of an interest in a ground lease
relating to the Brooklyn Property effective August 23, 1996.
(9) The lessee of the Knoxville, Camarillo, and Sevierville Properties is the
same unaffiliated lessee.
(10) The lessee of the Ellisville, Golden Valley and Florissant Properties is
the same unaffiliated lessee.
(11) The lessee of the Humble #1, Houston #1 and Houston #2 Properties is the
same unaffiliated lessee.
(12) The lessee of the Hillsboro and McKinney Properties is the same
unaffiliated lessee.
(13) The lessee of the Kendallville and Avon Properties is the same
unaffiliated lessee.
(14) The lessee of the Upland and La Quinta Properties is the same
unaffiliated lessee.
E-8
