FILED PURSUANT TO RULE 424B(3)
FILE NO. 33-90998
CNL INCOME FUND XVII, LTD.
AND
CNL INCOME FUND XVIII, LTD.
Supplement No. 4, dated November 27, 1996
to Prospectus, dated August 11, 1995
This Supplement is part of, and should be read in conjunction with, the
Prospectus dated August 11, 1995. 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.
THE OFFERING
SUBSCRIPTION PROCEDURES
The offering of Units of CNL Income Fund XVIII, Ltd. ("CNL XVIII")
commenced on September 20, 1996. As of October 11, 1996, CNL XVIII had received
aggregate subscription proceeds of $1,733,131, which exceeded the minimum
offering amount of $1,500,000, and $1,517,431 of the funds (which excluded all
funds received from New York and Pennsylvania investors) were released from
escrow. As of November 15, 1996, CNL XVIII had received total subscription
proceeds of $4,686,463 from 222 limited partners, and all funds received from
New York and Pennsylvania investors had been released from escrow. Up to
3,500,000 Units ($35,000,000) of CNL XVIII will be offered for sale to the
public.
All subscriptions are for the purchase of Units of CNL XVIII. Offers
are no longer being made nor are the General Partners accepting subscriptions
for Units of CNL XVII. THE ACQUISITION OF UNITS OF ONE PARTNERSHIP WILL NOT
ENTITLE THE INVESTOR TO ANY OWNERSHIP INTEREST IN THE OTHER PARTNERSHIP OR ITS
PROPERTIES.
BUSINESS
PROPERTY ACQUISITIONS
As of November 15, 1996, CNL XVIII had acquired no Properties, and no
commitments have been issued by CNL XVIII to acquire any Properties.
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RISK FACTORS
The purchase of Units involves risks and therefore is suitable only for
persons who understand the possible consequences of an investment in the
Partnership and who are able to bear the risk of loss of their investment. The
acquisition of Units in CNL XVIII will not give the investor any ownership
interest in CNL XVII or its Properties and, consequently, the risks associated
with an investment in CNL XVIII may not apply to an investment in CNL XVII.
Prospective investors should carefully consider the following risks in
conjunction with the information set forth elsewhere in this Prospectus.
INVESTMENT RISKS
Reliance on General Partners for Management of Partnership. All
decisions with respect to the management of the Partnership will be made
exclusively by the General Partners . The Limited Partners will have no right or
power to take part in the management of the Partnership except through the
exercise of their voting rights and will be relying almost entirely on the
General Partners with respect to the management of the Partnership and the
operation of its business. Thus, no prospective investor should purchase any of
the Units offered hereby unless the prospective investor is willing to entrust
all aspects of the management of the Partnership and the operation of its
business to the General Partners. The General Partners may be removed under
certain conditions set forth in the Partnership Agreement but only subject to
payment for their interest in the residual value of Partnership assets and
release from all guarantees and other obligations incurred as General Partners.
See "Summary of Partnership Agreement" for a summary description of these voting
and removal rights. See "Management" and "Prior Performance of the General
Partners and Affiliates" for a summary of the General Partners' experience in
real estate investment and management of limited partnerships formed to acquire
restaurant properties, apartments, and office buildings, as well as in direct
management of apartments and office parks.
Risks of Payment of Management Compensation. The General Partners and
their Affiliates will perform services for the Partnership in connection with
the offer and sale of Units, the selection and acquisition of the Partnership's
Properties, and the operation of the Partnership, and will receive substantial
compensation from the Partnership in consideration of these services. In
connection with the Offering, Affiliates of the General Partners will receive
between 5% and 13.5% of the Gross Proceeds as fees (depending on the portion of
Selling Commissions and the due diligence expense reimbursement fee reallowed to
Soliciting Dealers) and a maximum of 3% of the Gross Proceeds as reimbursement
of Organizational and Offering Expenses and 0.5% in Acquisition Expenses that
they incur on behalf of the Partnership in connection with the Offering. The
Partnership may pay a substantial portion of these initial fees and expenses and
other compensation and expense reimbursements payable to the General Partners
and their Affiliates in consideration of the services which they will render to
the Partnership prior to making distributions to the Limited Partners. Such
payments could reduce the amount of cash available for investment in Properties
and for initial distributions to the Limited Partners. See "Management
Compensation" for a more complete description of expense reimbursements and fees
to be paid to the General Partners and their Affiliates in connection with their
services to the Partnership.
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Possible Lack of Diversification. There can be no assurance that the
Partnership will obtain Capital Contributions equal to the maximum number of its
Units. The potential profitability of the Partnership and its ability to
diversify its investments, both geographically and by type of restaurant
Properties purchased, will be limited by the amount of funds at its disposal.
For example, if Gross Proceeds total $5,000,000, the Partnership will be able to
acquire approximately four Properties and therefore will not achieve maximum
diversification of its investments.
Lack of Market for Units. The Partnership is under no obligation to
repurchase Units from a Limited Partner, and it is not anticipated that there
will be a public market for the Units. It therefore may be difficult to sell
Units quickly. This investment is designed for investors with no need for
liquidity in this investment. See "Suitability Standards and How to
Subscribe--Suitability Standards." The Partnership has established a
Distribution Reinvestment Plan which, on behalf of Participants in the
Distribution Reinvestment Plan, will repurchase Units from Limited Partners who
desire to sell their Units to the extent of available funds and subject to
certain additional limitations. There of course can be no assurance that the
funds available through the Plan will be sufficient to permit the purchase of
all of the Units for which the General Partners receive repurchase requests. See
"Summary of Distribution Reinvestment Plan."
Significant Restrictions on Transferability of Units. Because the
classification of the Partnership as a "publicly traded partnership" would
significantly decrease the value of the Units, the General Partners intend to
exercise fully their right to prohibit transfers of Units under circumstances
that could cause the Partnership to be so classified. An assignee of Units may
be substituted as a Limited Partner only with the consent of the General
Partners, using assignment forms required by the General Partners, which could
affect the resale value of the Units. See "Summary of Partnership
Agreement--Restrictions on Transferability of Units." Accordingly, there can be
no assurance that Limited Partners will be able to liquidate their investments
in the event of an emergency. Therefore, Units should be purchased only for
long-term investment.
Potential Liability of Limited Partners. The Limited Partners'
liability, in general, will be limited to the amount they agree to contribute to
the capital of the Partnership plus their share of any undistributed profits and
assets. If, however, Limited Partners participate in the control of the business
of the Partnership, or permit their names to be used in the conduct of the
Partnership's business, they may become personally liable as general partners
for the Partnership's obligations. The nature of the activities constituting
"control" which are required to impose such liability on a Limited Partner is
not altogether clear. In certain cases, however, the exercise by a Limited
Partner of voting rights granted in the Partnership Agreement could be deemed to
constitute management control. Further, in the event the Partnership is unable
to meet its obligations, the Limited Partners, under applicable law, could be
obligated to (i) return, with interest, any cash wrongfully distributed which
represents a return of their Capital Contributions and (ii) repay, with
interest, any cash distributed to them which represents a return of their
Capital Contributions, pro rata in accordance with their Partnership Interests
as may required to discharge liabilities of the Partnership to creditors who
extended credit or whose claims arose during the period the returned Capital
Contributions were held by the Partnership. See Exhibit A--Form of Amended and
Restated Agreement of Limited Partnership and "Summary of Partnership
Agreement--Liability of the Limited Partners to Third Parties."
Limited Resources of General Partners. The corporate General Partner
has only nominal capitalization. The individual General Partners are general
partners in other partnerships and have certain contingent liabilities or may
incur additional liabilities in connection therewith. Should some of these
liabilities become actual, the net worth of the General Partners could be
impaired. If the net worth of the General Partners decreases significantly, the
General Partners may be unable to perform their obligations under the
Partnership Agreement and may have to devote time and attention to claims
related to such liabilities. See "Business--Financing" for a description of the
limitations on Partnership borrowing and "Management--Net Worth of General
Partners" for a description of the assets that secure the majority of the loans
relating to these contingent liabilities.
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Conflicts of Interest. The Partnership will be subject to conflicts of
interest arising out of its relationship to the General Partners and their
Affiliates with respect to the acquisition, leasing and sale of properties,
joint investment with other public programs sponsored by the General Partners,
allocation by the General Partners and their Affiliates of management time
between the business of the Partnership and some or all of the 17 other CNL
Income Funds and certain programs intended to qualify as real estate investment
trusts, as to each of which the General Partners and their Affiliates have
management responsibilities, and compensation of the General Partners and
Affiliates for the services which they will provide to the Partnership. In
addition to the Partnership, the General Partners and their Affiliates have
organized and currently manage numerous other real estate investment programs
and plan to organize and manage other real estate investment programs in the
future. Some of these programs may have investment objectives similar or
identical to those of the Partnership and may acquire, operate, lease and manage
fast-food, family-style, and casual dining restaurants, including restaurants
suitable for the Partnership. The General Partners have adopted certain conflict
of interest resolution procedures and restrictions related to the allocation of
properties between investment programs, including the Partnership, however, any
such conflict could result in the acquisition by other programs of properties
which are more desirable or valuable to those of the Partnership which could
adversely affect gross revenues of the Partnership. See "Conflicts of Interest--
Prior and Future Programs" and "Conflicts of Interest--Acquisition of
Properties."
Other conflicts of interest between the Partnership and other
affiliated investment programs may arise in the leasing and sale of properties.
The leasing and operation of properties owned by other programs which are
located in the vicinity of Properties owned by the Partnership could adversely
affect the gross revenues of the Partnership. Additionally, in the unlikely
event that the Partnership and an affiliated investment program attempted at the
same time to sell similar properties in the same vicinity, the Partnership and
affiliated program potentially could compete for the same purchaser which
adversely affect the sales price for the Property or the timing of the sale of
the Property. See "Conflicts of Interest--Sale of Properties."
The Partnership may invest in Joint Venture and Co-Tenancy Arrangements
with other public programs sponsored by the General Partners. A conflict of
interest between the Partnership and another public program as co-venturers or
co- tenants could potentially result in an impasse with respect to Joint Venture
and Co-Tenancy Arrangement decisions because neither party will control the
Joint Venture or Co-Tenancy Arrangement. Such an impasse could adversely affect
the revenues to the Partnership derived from the Joint Venture or Co-Tenancy
Arrangement. In order to reduce to the extent possible the potential conflicts
of interest between the Partnership and other public investment programs in
Joint Ventures and Co-Tenancy Arrangements, the General Partners have adopted
certain conditions and requirements which must be met prior to the Partnership
entering into a Joint Venture or Co-Tenancy Arrangement with another program.
See "Conflicts of Interest--Joint Investment with an Affiliated Program."
Conflicts of interest may also arise in connection with the allocation
of management time the General Partners and their Affiliates will devote to the
Partnership and its business and the compensation of the General Partners and
their Affiliates for services which they will provide to the Partnership. The
General Partners and their Affiliates currently are engaged, and in the future
will engage, in the management and operation of other investment programs and
business ventures. The General Partners and their Affiliates will devote only so
much of their time to the business of the Partnership as they, in their
judgment, determine is reasonably necessary. Especially during periods of
intense activity in other programs and ventures, such a conflict could result in
the devotion by the General Partners and their Affiliates of less time and
resources to the Partnership and its business. See "Conflicts of
Interest--Competition for Management Time."
The General Partners and their Affiliates will be engaged to perform
various services for the Partnership and will receive fees and compensation for
such services. None of the agreements for such services are the result of
arm's-length negotiations which creates the potential opportunity for the
payment of compensation in excess of that permitted by the Partnership Agreement
for the services provided and the engagement of less qualified parties to
perform such services. The General Partners believe, however, that the terms of
such arrangements are reasonable and no less favorable than those which could be
obtained from unaffiliated entities. Certain of these conflicts may be
alleviated due to the opportunity for the Limited Partners to vote to terminate
contracts with Affiliates of the General Partners and take other actions to
protect their interests. See "Conflicts of Interest--Compensation of General
Partners and Affiliates" and "Conflicts of Interest--Certain Conflict Resolution
Procedures."
MANAGEMENT COMPENSATION
FEES AND EXPENSES PAID TO THE
GENERAL PARTNERS AND THEIR AFFILIATES
Selling Commissions. The Placement Agent, CNL Securities Corp., is
entitled to receive Selling Commissions amounting to 8.5% of the Limited
Partners' Capital Contributions for services in connection with selling the
Units, a substantial portion of which will be paid as Selling Commissions
to other broker-dealers. As of September 30, 1996, the Partnership had
incurred $51,574 for Selling Commissions due to the Placement Agent, a
substantial portion of which has since been paid as commissions to other
Soliciting Dealers. CNL Securities Corp. also is entitled to receive a due
diligence expense reimbursement fee equal to 0.5% of the Limited Partners'
Capital Contributions. As of September 30, 1996, the Partnership had incurred
$3,034 in due diligence expense reimbursement fees due to the Placement Agent.
A portion of these fees has since been reallowed to other Soliciting Dealers,
and all due diligence expenses will be paid from such fees.
Acquisition Fees. CNL Fund Advisors, Inc. is entitled to receive
Acquisition Fees for services in finding, negotiating and acquiring Properties
equal to 4.5% of the Limited Partners' Capital Contributions. As of September
30, 1996, the Partnership has incurred $27,304 in Acquisition Fees payable to
CNL Fund Advisors, Inc., and are included as part of the cost of land,
construction in progress and other assets.
Management Fees. The Partnership has entered or will enter into a
management agreement pursuant to which CNL Fund Advisors, Inc., will receive
annual management fees of one percent of the sum of gross revenues from
Properties wholly owned by the Partnership and one percent of the Partnership's
allocable share of gross operating revenues from Joint Ventures. As of September
30, 1996, the Partnership had not incurred any management fees.
Administrative and Other Expenses. CNL Fund Advisors, Inc. provides
accounting and administrative services (including accounting and administrative
services in connection with the Offering of Units) to the Partnership on a
day-to-day basis. As of September 30, 1996, the Partnership had incurred
$67,566 in administrative and other expenses, which includes amounts incurred
in connection with the Offering and included with syndication costs.
Real Estate Disposition Fee. CNL Fund Advisors, Inc. is also entitled to
receive a deferred, subordinated real estate disposition fee, payable upon the
sale of one or more Properties based on the lesser of one-half of a Competitive
Real Estate Commission or three percent of the sales price if CNL Fund Advisors,
Inc. provides a substantial amount of services in connection with the sale. The
real estate disposition fee is payable only after the Limited Partners receive
their cumulative Limited Partners' 8% Return, plus their Invested Capital
Contributions. No real estate disposition fees had been incurred by the
Partnership as of September 30, 1996.
CONFLICTS OF INTEREST
ACQUISITION OF PROPERTIES
The General Partners and their Affiliates regularly have opportunities
to acquire restaurant properties of a type suitable for acquisition by the
Partnership as a result of their existing relationships and past experience with
various fast-food, family-style, and casual dining restaurant chains and their
franchisees. See "Business--General." A purchaser who wishes to acquire one or
more of these properties must do so within a relatively short period of time,
occasionally at a time when the Partnership (due to insufficient funds, for
example) may be unable to make the acquisition.
In an effort to address these situations and preserve the acquisition
opportunities for the Partnership (and other entities with which the General
Partners are affiliated), the General Partners or their Affiliates maintain
lines of credit which enable them to acquire these restaurant properties on an
interim basis. Typically, no more than 10 to 15 restaurant properties are
temporarily owned by the General Partners or their Affiliates on this interim
basis at any particular time. These restaurant properties generally will be
purchased from the General Partners or their Affiliates, at their cost, by one
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or more existing or future public or private programs formed by the General
Partners or their Affiliates, potentially including the Partnership.
The General Partners and their Affiliates could experience potential
conflicts due to their ongoing business relationships with operators of
Restaurant Chains. Although unlikely, such conflicts could adversely affect the
negotiation by the General Partners of the purchase price and other terms of the
acquisition of a Property, as well as the terms of the lease of a Property .
The General Partners or their Affiliates also may be subject to
potential conflicts of interest in determining which partnership will acquire a
particular property which could result in the acquisition by other partnerships
of properties appropriate for investment by the Partnership. Such a conflict
could possibly result in the acquisition of properties by other partnerships
which are more desirable or valuable than those of the Partnership which could
adversely affect gross revenues of the Partnership. In an effort to establish
standards for resolving these potential conflicts, the General Partners have
agreed to the guidelines set forth below under "Allocations of Properties
Between CNL XVII and CNL XVIII" and "Certain Conflict Resolution Procedures,"
and in Article 11.4 of the Partnership Agreement. The General Partners have a
fiduciary obligation to act in the best interest of both the Limited Partners
and the investors in other programs with investment objectives that are similar
to those of the Partnership and will use their best efforts to assure that the
Partnership will be treated as favorably as any such other program. See
"Fiduciary Responsibility of the General Partners."
The individual General Partners are directors of Commercial Net Lease
Realty, Inc., a Maryland corporation, and CNL American Properties Fund, Inc., a
separate Maryland corporation, both of which are intended to qualify as real
estate investment trusts for federal income tax purposes (collectively, the
"REITs"). The individual General Partners also are officers of the REITs and
officers and directors of CNL Realty Advisors, Inc. and CNL Fund Advisors, Inc.,
the advisors to Commercial Net Lease Realty, Inc. and CNL American Properties
Fund, Inc., respectively. The REITs, subject to compliance with the provisions
relating to qualification as real estate investment trusts under the Code, have
authority to invest in all types of real property, similar to those to be
acquired by the Partnership, although both have the authority, unlike the
Partnership, to leverage the properties so acquired under certain circumstances
and, in the case of CNL American Properties Fund, Inc., to provide furniture,
fixture and equipment financing. At such time, if any, as either of these
entities wishes to acquire a restaurant property that also would be suitable for
acquisition by the Partnership, a conflict of interest could develop in
determining whether the Partnership or one of the REITs should acquire the
property. Such a conflict could possibly result in the acquisition of properties
by the REITs which are more desirable or valuable than those of the Partnership
which could adversely affect gross revenues of the Partnership. The General
Partners have a fiduciary duty to act in the best interest of the Limited
Partners, and the individual General Partners, as two of the directors of both
REITs, have a fiduciary duty to act in the best interest of the REITs, and each
will use his best efforts to assure that the Partnership will be treated as
favorably as the REITs in determining which entity will acquire a particular
property. See "Fiduciary Responsibility of the General Partners." Despite the
General Partners' best efforts to assure that the Partnership will be treated as
favorably as the REITs, however, it is possible that properties acquired by the
REITs could acquire certain properties of a higher quality than to those
acquired by the Partnership which could result in greater returns for investors
in the REITs.
ALLOCATION OF PROPERTIES BETWEEN CNL XVII AND CNL XVIII
CNL XVII, which offered its units as part of the aggregate offering by
CNL XVII and CNL XVIII (of which this Offering is a part), but prior to the
offer by CNL XVIII of its Units, and CNL XVIII each will acquire its own
separate portfolio of Properties. In selecting Properties for acquisition by
either CNL XVII or CNL XVIII, the General Partners will consider the factors
discussed throughout this Prospectus, with particular emphasis on those
described in the sections entitled "Business--General," "Business--Site
Selection and Acquisition of Properties," "Business--Standards for Investment,"
and "Investment Objectives and Policies."
CNL XVII and CNL XVIII could compete with each other for suitable
Properties to the extent, if any, that both partnerships have funds available
for investment in Properties at a particular time. Such a conflict could
possibly result in the acquisition of properties by CNL XVII which are more
desirable or valuable than those of the Partnership which could adversely affect
gross revenues of the Partnership. Accordingly, the General Partners have
instituted certain procedures (described below), in addition to those procedures
described in "Certain Conflict Resolution Procedures" below for resolution of
potential conflicts between the Partnership and the General Partners or other
Affiliates.
In general, CNL XVIII will acquire Properties following such time as
substantially all of the net offering proceeds available to CNL XVII have been
invested or committed for investment. Thereafter, Properties will be acquired by
CNL XVIII until the net Offering proceeds available to it have been fully
invested or committed for investment. If the General Partners determine that a
Property is not suitable for CNL XVII, however, the General Partners may cause
CNL XVIII to acquire the Property at a time when CNL XVII has uncommitted net
offering proceeds. The General Partners will determine the suitability of a
particular Property for CNL XVII based on such factors as the amount of the
proposed investment, the amount of funds available to CNL XVII, the effect of
the acquisition on the diversification of the investments of CNL XVII and on the
diversification of the lessees of its Properties (which also may affect the need
for CNL XVII to prepare or produce audited financial statements for a Property
or a lessee), and the anticipated cash flow of CNL XVII and CNL XVIII.
In addition to the factors listed above, the General Partners intend to
apply two additional standards if necessary or advisable in order to resolve
potential conflicts relating to allocations of Properties between CNL XVII and
CNL XVIII.
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First, the Partnership generally will not acquire a Property if, as a result,
more than 20% of its Gross Proceeds would be invested in Properties that would
be leased to a single lessee or a group of affiliated lessees. Second, the
General Partners expect that the Partnership's Properties will be located in
various states and regions throughout the United States and, in general, the
Partnership will not acquire a Property if, as a result, more than 30% of its
Gross Proceeds would be invested in Properties located in a single state. The
General Partners have undertaken to supplement this Prospectus during the
Offering period to disclose the acquisition of a Property at such time as the
General Partners believe that a reasonable probability exists that the Property
will be acquired by the Partnership.
As of November 15, 1996, CNL XVII had purchased 22 properties,
including one property as tenants-in-common with an Affiliate of the General
Partners, for an aggregate of approximately $22,500,000. As of November 15,
1996, approximately 85% of the net offering proceeds available to CNL XVII had
been invested or committed for investment in properties.
SALES OF PROPERTIES
A conflict also could arise in connection with the General Partners'
determination as to whether or not to sell a Property, since the interests of
the General Partners and the Limited Partners are likely to differ as a result
of their distinct financial and tax positions and the compensation to which the
General Partners or their Affiliates may be entitled upon the Sale of a
Property. See "Management Compensation" for a description of these compensation
arrangements. This conflict could result in a disposition of a Property at a
time and pursuant to terms which may be less favorable to the Limited Partners.
However, the General Partners have a fiduciary obligation to act in the best
interests of the Limited Partner and will use their best efforts to do so. In
the unlikely event that the Partnership and another program managed by the
General Partners attempted to sell similar properties at the same time, a
conflict could arise since the two programs potentially could compete with each
other for a suitable purchaser. Such a conflict may adversely affect the sales
price for the Property or the timing of the sale of the Property which in turn
could delay or reduce distributions to the Limited Partners. In order to resolve
this potential conflict, the General Partners have agreed not to sell any of the
Partnership's Properties contemporaneously with a property owned by another
program managed by the General Partners if the two properties are part of the
same Restaurant Chain and are within a three-mile radius of each other, unless
the General Partners are able to locate a suitable purchaser for each property.
JOINT INVESTMENT WITH AN AFFILIATED PROGRAM
The Partnership may invest in Joint Ventures and Co-Tenancy
Arrangements with another public program sponsored by the General Partners whose
securities were, are, or will be offered to the public pursuant to a
registration statement filed under the Securities Act of 1933, as amended, to
purchase and hold Properties for investment if all of the following conditions
are met: (i) the two programs have substantially identical investment
objectives, (ii) there are no duplicate management or other fees, (iii)
compensation to the General Partners and their Affiliates is substantially the
same in each program, (iv) each program has a right of first refusal to buy the
Property held in the Joint Venture or Co-Tenancy Arrangement, at the Property's
fair market value as determined by an independent appraisal, if the other
program has the right to sell such Property, and (v) each program's investment
is on substantially the same terms and conditions. There may be a potential risk
of impasse in Joint Venture or Co-Tenancy Arrangement decisions since neither
program will control the Joint Venture or Co-Tenancy Arrangement. Although
either program will have the effective right to buy the Property from the
co-venturer or co-tenant by purchasing the co-venturer's or co-tenant's interest
in the Joint Venture or Co-Tenancy Arrangement, it may not have the resources to
do so at the time of the sale.
COMPETITION FOR MANAGEMENT TIME
The General Partners and their Affiliates currently are engaged, and in
the future will engage, in the management of other business entities and
properties and in other business activities. They will devote only as much of
their time to the business of the Partnership as they, in their judgment,
determine is reasonably required. The General Partners and their Affiliates may
experience conflicts of interest in allocating management time, services, and
functions among the various existing partnerships in which one or more of them
serve as general partners (including the Partnership and 17 other public
partnerships with investment objectives similar to those of the Partnership),
any investor programs (public or private) which the General Partners or their
Affiliates may organize in the future, and any other business ventures in which
the General Partners or their Affiliates are or may become involved. Especially
during periods of intense activity in other programs and ventures, such a
conflict could possibly result in the devotion by the General Partners and their
Affiliates of less time and resources to the Partnership and the operation of
its business.
COMPENSATION OF GENERAL PARTNERS AND AFFILIATES
The General Partners and their Affiliates will be engaged to perform
various services for the Partnership and will receive fees and compensation for
such services. None of the agreements for such services are the result of arm's-
length negotiations which creates the potential opportunity for the payment of
compensation in excess of that permitted by the Partnership Agreement for the
services provided and the engagement of less qualified parties to perform such
services. The General Partners believe, however, that the terms of such
arrangements are reasonable and no less favorable than those which could be
obtained from unaffiliated entities. The timing and nature of these fees and
compensation could create a conflict between the interests of the General
Partners and those of the Limited Partners in connection with the engagement
of CNL Fund Advisors, Inc. as manager of the Partnership's Properties or the
proposed disposition of one or more Properties. See "Management Compensation."
Certain of these conflicts may be alleviated in part due to the opportunity for
the Limited Partners to vote to terminate contracts with Affiliates of the
General Partners and take other actions to protect their interests. See
"Conflicts of Interest--Certain Conflict Resolution Procedures."
SELECTED FINANCIAL DATA
The following table sets forth certain financial information for CNL
XVIII, 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. Revenues, net income, cash
distributions declared, net income per Unit, cash distributions per Unit and
weighted average number of limited partner Units outstanding have not been
presented because as of September 30, 1996, operations had not commenced.
September 30, 1996
(Unaudited) December 31, 1995
Total Assets $542,133 $256,890
Partners' capital 1,000 1,000
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION OF THE PARTNERSHIP
GENERAL
The Partnership is a Florida limited partnership that was organized on
February 10, 1995, to acquire Properties for cash, either directly or through
Joint Venture arrangements, to be leased primarily to operators of selected
Restaurant Chains. The leases
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will be "triple-net leases", with the lessee generally responsible for all
repairs and maintenance, property taxes, insurance and utilities. Since leases
will be entered into on a "triple-net" basis, the Partnership does not expect,
although it has the right, to maintain a reserve for operating expenses. The
Partnership's Properties will not be readily marketable and their value may be
affected by general market conditions. Nevertheless, the General Partners
believe that Partnership capital and revenues will be sufficient to fund the
Partnership's anticipated investments, proposed operations, and cash
distributions to the Limited Partners.
On October 11, 1996, the Partnership received the minimum Offering
proceeds of $1,500,000 , and such amounts were released from escrow with the
proceeds being deposited initially in the Partnership's general accounts.
Thereafter, the Partnership intends to commence its acquisition of suitable
Properties. Pending investment in suitable Properties, Partnership funds will be
invested in short-term, highly liquid U.S. Government securities or in other
short-term, highly liquid investments with appropriate safety of principal. The
General Partners anticipate that after the Partnership has invested funds in
Properties, Partnership revenues sufficient to pay operating expenses and
provide cash distributions to the Limited Partners will be derived from the
lease payments paid to the Partnership by the restaurant lessees. As of the date
of this Prospectus, the Partnership has not acquired any Properties and
consequently, has no operating history.
LIQUIDITY AND CAPITAL RESOURCES
The Partnership's sources of liquidity are (i) capital contributions
from General and Limited Partners, (ii) interest earned on short-term
investments prior to the purchase of Properties and distributions of net cash
flow to partners, and (iii) rental payments under leases once Properties are
acquired.
The Offering commenced on September 20, 1996. As of September 30, 1996,
the Partnership had received subscriptions for 60,676 Units, representing
$606,756 in subscription proceeds from Limited Partners which were being held in
escrow until the Partnership received aggregate subscription proceeds of at
least $1,500,000 from the Offering. As of October 11, 1996, the Partnership had
received aggregate subscriptions for 173,313 Units, representing $1,733,131 in
aggregate subscription proceeds from Limited Partners and $1,517,431 of the
funds were released from escrow (which excluded all funds received from New York
and Pennsylvania investors). As of November 15, 1996, the Partnership had sold
468,646 Units, representing $4,686,463 of capital contributed by Limited
Partners and all funds received from New York and Pennsylvania investors had
been released from escrow. Based on the General Partners' experience with 17
prior CNL Income Fund offerings (each of which sold the entire amount of units
offered for purchase), the Partnership anticipates significant additional sales
of Units prior to the termination of the Offering. The General Partners have
elected to extend the Offering to a date not later than August 11, 1997.
At September 30, 1996, and December 31, 1995, the Partnership's total
assets were $542,133 and $256,890, respectively. The increase in total assets
reflects Organizational and Offering Expenses incurred and recorded as deferred
syndication costs and Acquisition Fees recorded as other assets during the nine
months ended September 30, 1996.
The Partnership and any Joint Venture in which the Partnership may
become a partner or co-venturer will acquire the Properties without borrowing.
Properties 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
Partnership operating expenses. For these reasons, no short-term or long-term
liquidity problems currently are anticipated by the General Partners.
The Partnership'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 Partnership's operating
expenses. During the operational stage, the General Partners believe 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 or the percentage rent at specified times during the terms of the leases,
it is anticipated that Partnership rental income will increase over time.
Accordingly the General Partners believe that any anticipated decrease in the
Partnership's liquidity in 1996, due to its investment of available net Offering
proceeds in Properties, will not have an adverse effect on the Partnership's
operations in 1996.
During the nine months ended September 30, 1996, Affiliates of the
General Partners incurred on behalf of the Partnership $186,976 for certain
Organizational and Offering Expenses. As of September 30, 1996, the Partnership
owed $478,020 to Affiliates for such amounts , for accounting and administrative
services and for Acquisition Fees. In addition, the Partnership accrued $54,608
due to an Affiliate as of September 30, 1996, for commissions and due diligence
expense reimbursement fees. As of October 31, 1996, the Partnership had
reimbursed the Affiliates all such amounts. The General Partners have agreed to
pay all Organizational and Offering Expenses in excess of three percent of the
gross Offering proceeds.
The Partnership will utilize its net proceeds from its Offering to
purchase Properties. The Partnership expects to acquire Properties entirely for
cash. See "Investment Objectives and Policies." As of November 15, 1996, the
Partnership had not entered into any arrangements creating a reasonable
probability that a Property would be acquired by the Partnership. The number of
Properties to be acquired will depend upon the amount of net Offering proceeds
(Gross Proceeds less fees and expenses of the Offering) available to the
Partnership.
The General Partners expect that the cash to be generated from
operations of all Properties, once they are acquired, will be adequate to pay
operating expenses and provide distributions to partners. Distributions to the
Limited Partners of the Partnership are expected to commence in the fourth
quarter of 1996 and will be paid quarterly thereafter.
Due to anticipated low operating expenses, rental income expected to be
obtained from Properties after they are acquired and the fact that the
Partnership will not enter into a commitment to purchase a Property until
sufficient cash is available for such
39
<PAGE>
purchase, the General Partners do not believe that working capital reserves will
be necessary at this time. The General Partners have the right to cause the
Partnership to maintain reserves if, in their discretion, they determine such
reserves are required to meet the Partnership's working capital needs.
The General Partners are not aware of any material trends, favorable or
unfavorable, in either capital resources or the outlook for long-term cash
generation, nor do they expect any material changes in the availability and
relative cost of such capital resources, other than as referred to in this
Prospectus.
RESULTS OF OPERATIONS
No significant operations had commenced as of September 30, 1996,
because the Partnership was in its development stage.
As of October 11, 1996, the Partnership had received aggregate
subscription proceeds in excess of the minimum Offering amount of $1,500,000 and
funds were released from escrow, as described above in "Liquidity and Capital
Resources". As of November 15, 1996, the Partnership had sold 468,646 Units,
representing $4,686,463 of capital contributed by Limited Partners, and as of
that date, had acquired no Properties and no commitments had been issued by the
Partnership to acquire any Properties.
The General Partners are not aware of any known trends or
uncertainties, other than national economic conditions, which have had or which
may reasonably be expected to have a material impact, favorable or unfavorable,
on revenues or income from the acquisition and operations of real properties,
other than those referred to in this Prospectus. Once Properties are acquired by
the Partnership, the General Partners expect that the cash to be generated from
operations of all Properties will be adequate to pay operating expenses and
provide distributions to Partners.
There currently are no material changes being considered in the
objectives and policies of the Partnership as set forth in this Prospectus.
INVESTMENT OBJECTIVES AND POLICIES
CERTAIN INVESTMENT LIMITATIONS
The Partnership will not: (i) issue Units in exchange for property or
otherwise than pursuant to the terms of this Offering; (ii) issue senior
securities; (iii) make loans to the General Partners or their Affiliates; (iv)
underwrite the securities of other issuers; (v) invest in the securities of
other issuers, including junior trust deeds or other similar obligations
(provided, however, that the Partnership may invest Partnership funds
temporarily in short-term, highly liquid investments, with appropriate safety of
principal, may accept purchase money mortgages secured by a first mortgage on a
Property in connection with the Sale of a Property , and may enter into Joint
Ventures to acquire Properties to be leased primarily to operators of selected
Restaurant Chains); (vi) operate in such a manner as to be classified as an
"investment company" for purposes of the Investment Company Act of 1940; (vii)
redeem or repurchase Units (except that the Partnership may implement the
Distribution Reinvestment Plan); (viii) invest in real estate mortgages; (ix)
purchase or own equipment unless the General Partners determine that it is in
the best interests of the Partnership in order to preserve the asset values of
the Properties; (x) engage in the purchase and sale (or turnover) of investments
(provided, however, that the Partnership may invest Partnership funds in
Properties and, temporarily, in short-term, highly liquid investments, with
appropriate safety of principal, may accept purchase money mortgages secured by
a first mortgage on a Property in connection with the Sale of a Property, and
may enter into Joint Ventures to acquire Properties to be leased primarily to
operators of selected Restaurant Chains); (xi) offer securities in exchange for
property; or (xiii) purchase or lease any Property from, or sell or lease any
Property to, the General Partners or their Affiliates, except for a purchase of
Property which such persons have temporarily purchased to facilitate acquisition
of such Property as described in "Business--Site Selection and Acquisition of
Properties--Interim Acquisitions."
BORROWING POLICIES
The Partnership and any general partnership or Joint Venture in which
the Partnership becomes a partner or joint venturer will acquire Properties
without borrowing. The General Partners do not anticipate that the Partnership
will borrow for any reason and do not intend to cause the Partnership to do so.
Subject to certain restrictions on borrowing, however, the Partnership may
borrow funds but will not encumber any of the Properties in connection with any
such borrowing. The Partnership will not borrow for the purpose of returning
capital to the Limited Partners or under arrangements that would make the
Limited Partners liable to creditors of the Partnership. The General Partners
have represented that they will limit the Partnership's outstanding indebtedness
to 3% of the aggregate adjusted tax basis of its Properties and that they will
use their reasonable efforts to structure any borrowing so that it will not
constitute "acquisition indebtedness" (as discussed in "Federal Income Tax
Considerations--Qualified Plan Investors").
SUMMARY OF PARTNERSHIP AGREEMENT
MANAGEMENT OF THE PARTNERSHIP
The management, operation, and control of the Partnership and all of
its business and affairs will rest exclusively with the General Partners. The
vote of a majority of the General Partners will control. Limited Partners
holding a majority of the outstanding Units may remove one or more of the
General Partners, provided that written notice of the removal of a General
Partner, setting forth the reasons for such removal and the date upon which the
removal is to become effective, shall be served upon such General Partner,
either by certified or registered mail, return receipt requested, or by personal
service. Any removal of the last remaining General Partner shall be effective
only on the earlier of (i) such date as a substituted General Partner shall have
been admitted to the Partnership in accordance with the terms of the Partnership
Agreement or (ii) a date 90 days after the date on which Limited Partners
holding the required majority in interest shall have voted for such removal of
the General Partner. Upon the effective date of the removal of a General
Partner, he or it shall cease to be a General Partner, and any loans made by
such General Partner or his or its Affiliates to the Partnership in accordance
with the provisions of the Partnership Agreement shall be repaid as
expeditiously as possible. Additionally, if the business of the Partnership is
to be continued following the removal of a General Partner, then (i) the
Partnership shall purchase the General Partner's Partnership Interest at a price
determined in accordance with the terms of Article 15.5 of the Partnership
Agreement, and (ii) if no substituted General Partner is elected in the place of
any removed General Partner, those persons or entities who are General Partners
following such removal shall use their best efforts to release such removed
General Partner (and his or its Affiliates, if applicable) from personal
liability on any existing or future Partnership borrowing, if any.
RESTRICTIONS ON TRANSFERABILITY OF UNITS
Subject to the conditions on transfer in Article Fourteen of the
Partnership Agreement, Limited Partners shall have the right to transfer their
Units. The investment in Units is designed, however, as a long-term investment
for persons who have no need for liquidity in this investment. For example, the
General Partners have retained the right to prohibit transfers of Units,
including transfers of economic interests, if the General Partners determine
that such transfers could increase the likelihood that the Partnership would be
treated as a "publicly traded partnership." Because the characterization of the
Partnership as a "publicly traded partnership" would significantly decrease the
value of the Units, the General Partners intend to exercise fully their right to
prohibit transfers of Units under these circumstances. See "Federal Income Tax
Considerations--Publicly Traded Partnerships" and Article Fourteen of the
Partnership Agreement. In the case of any permitted transfer of an economic
interest, the substitution of the transferee as a Limited Partner in the
Partnership will be subject to the prior written consent of the General
Partners. The assignment must be documented with original signatures on forms
supplied by the General Partners. Other conditions on transfers Units by Limited
Partners are as follows: (i) a duly executed and acknowledged counterpart of the
instrument making the transfer, signed by both the transferor and the
transferee, with such instrument evidencing the written acceptance by the
transferee of all of the terms and provisions of the Partnership Agreement and
containing a representation by the transferor that such transfer was made in
accordance with all applicable laws and regulations shall have been filed with
the Partnership; (ii) the transferor and the transferee shall have executed such
documents and performed such acts as the General Partners may request in
connection with the transfer; (iii) no transfer will be permitted if, based upon
information provided by the Partnership, counsel for the Partnership or the
General Partners is of the view that there is a substantial risk that such
transfer would result in the Partnership being considered to have terminated
within the meaning of Section 708 of the Code; (iv) Units shall not be
transferred to a minor or an incompetent except by will or intestate succession;
(v) no transfer will be recognized for any purpose whatsoever if, after such
transfer, the transferor or the transferee will hold an interest representing a
Capital Contribution of less than $2,500 ($1,000, or such greater amounts as may
be required by applicable state law, in the case of transfers by an individual
retirement account, Keogh or pension plan), unless such transfer represents the
transfer of the entire Partnership Interest of the transferor; (vi) transfers to
a foreign persons for purposes of U.S. federal income taxation may be prohibited
by the General Partners; and (vii) purported transfers of Units, or any
beneficial interest therein, will be void if, as a result of such transfer, the
Partnership would violate the safe harbors of section 7704 of the Code and the
regulations issued thereunder.
THE OFFERING
GENERAL
On September 19, 1996, the offering of units of limited partnership
interest in CNL XVII terminated upon the receipt of subscriptions for an
aggregate of 3,000,000 units ($30,000,000). An aggregate of 1618 subscribers
were admitted as limited partners to CNL XVII in accordance with the terms of
the partnership agreement of CNL XVIII. The Offering of Units in CNL XVIII
commenced on September 20, 1996. As of September 30, 1996, CNL XVIII had
received subscriptions for 60,676 Units, representing $606,756 in subscription
proceeds from unaffiliated Limited Partners which were being held in escrow
until CNL XVIII received aggregate subscription proceeds of at least $1,500,000
from the Offering. As of October 11, 1996, CNL XVIII had received aggregate
subscriptions for 173,313 Units, representing $1,733,131 in aggregate
subscription proceeds from Limited Partners and $1,517,431 of the funds were
released from escrow (which excluded all funds received from New York and
Pennsylvania investors). As of November 15, 1996, the Partnership had sold
468,646 Units, representing $4,686,463 of capital contributed by Limited
Partners and all funds received from New York and Pennsylvania investors had
been released from escrow.
A maximum of 3,500,000 Units are being offered at a purchase price of
$10.00 each. A minimum purchase of 250 Units (or a minimum purchase of 100 Units
in the case of most IRAs and Keogh and pension plans) is required. Nebraska
investors, however, as well as any investor who wishes to receive monthly
distributions, must make a minimum investment of 500 Units ($5,000). IRAs and
Keogh and pension plans must make a minimum investment of at least 100 Units
(except for Iowa tax-exempt investors who must make a minimum investment of 300
Units, or $3,000, and Minnesota IRAs, which must make a minimum purchase of 200
Units, or $2,000). Investors making the required minimum investment may make
additional purchases in increments of one Unit. Maine investors, however, may
not purchase additional Units in amounts less than the applicable minimum
investment except at the time of the initial subscription or with respect to
Units purchased pursuant to the Distribution Reinvestment Plan. See "Suitability
Standards and How to Subscribe--How to Subscribe." The General Partners or their
Affiliates may purchase up to 15,000 Units ($150,000) of the Partnership for
their own accounts for investment purposes and not with a view towards
distribution, on the same terms and conditions as other investors, and will
purchase a minimum of 5,000 Units ($50,000) of the Partnership.
The General Partners have elected to extend the Offering to a date not
later than August 11, 1997.
PLAN OF DISTRIBUTION
The Units will be offered to the public on a "best efforts" basis
(which means that no one is guaranteeing that any minimum amount will be sold)
through the Soliciting Dealers, who will be members of the National Association
of Securities Dealers, Inc. (the "NASD") and CNL Securities Corp., which will
act as Managing Dealer. Both of the individual General Partners are Affiliates
and licensed principals of the Managing Dealer, and the corporate General
Partner is an Affiliate of the Managing Dealer. The Soliciting
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Dealers will use their best efforts during the Offering period to find eligible
persons who desire to subscribe for the purchase of Units from the Partnership.
The maximum Offering is 3,500,000 Units ($35,000,000).
Prior to a subscriber's admission to the Partnership as a Limited
Partner, funds paid by such subscriber will be deposited in an interest-bearing
escrow account with SouthTrust Asset Management Company of Florida, N.A. The
Partnership, within 30 days after the date a subscriber is admitted to the
Partnership as a Limited Partner, will pay to such subscriber the interest
(generally calculated on a daily basis) actually earned on such subscriber's
funds. Interest will be payable only to those subscribers whose funds have been
held in escrow by such bank for at least 20 days. Limited Partners otherwise
will not be entitled to interest earned on Partnership funds or to receive
interest on their Capital Contributions. See "Escrow Arrangements" below.
In order to provide for the orderly closing of the Offering , the
Managing Dealer may institute a system pursuant to which it will accept
reservations to purchase Units provided all subscription materials with respect
to the purchase of such Units are received by the Managing Dealer within five to
ten business days after making the reservation.
Subject to the provisions for reduced Selling Commissions described
below, the Partnership will pay the Managing Dealer an aggregate of 8.5% of the
Gross Proceeds to the Partnership as Selling Commissions. The Managing Dealer
may reallow fees of up to 8% to the Soliciting Dealers with respect to Units
sold by them. In addition, the Partnership will pay the Managing Dealer, as an
expense allowance, a due diligence expense reimbursement fee equal to 0.5% of
Gross Proceeds. The Managing Dealer, in its sole discretion, may reallow to any
Soliciting Dealer all or any portion of this fee based on such factors as the
number of Units sold by such Soliciting Dealer, the assistance, if any, of such
Soliciting Dealer in marketing the Offering, and bona fide due diligence
expenses incurred. Limited Partners who elect to participate in the Distribution
Reinvestment Plan will be charged Selling Commissions on Units purchased for
their accounts on the same basis as investors who do not purchase Units pursuant
to the Distribution Reinvestment Plan until the Offering has terminated. After
the Offering has terminated, no Selling Commissions will be paid for Units
purchased pursuant to the Distribution Reinvestment Plan.
Although it is not the intent of the Partnership, the Partnership, the
General Partners, or their Affiliates may provide incentive items for registered
representatives of the Managing Dealer and the Soliciting Dealers, which in no
event shall exceed an aggregate of $100 per annum per participating salesperson.
In the event other incentives are provided to registered representatives of the
Managing Dealer or the Soliciting Dealers, they will be paid only in cash, and
such payments will be made only to the Managing Dealer or the Soliciting Dealers
rather than to their registered representatives. Any such sales incentive
program must first have been submitted for review by the NASD, and must comply
with Section 5(f) of Appendix F to Section 34 of its Rules of Fair Practice.
Costs incurred in connection with such sales incentive programs, if any, will be
considered underwriting compensation.
A registered principal or representative of the Managing Dealer or a
Soliciting Dealer, may purchase Units net of 8% commissions, at a per Unit
purchase price of $9.20. In addition, Soliciting Dealers, in their sole
discretion, may elect not to accept any Selling Commissions offered by the
Partnership for Units that they sell. In that event, such Units shall be sold to
the investor net of all Selling Commissions, at a per Unit purchase price of
$9.20. In connection with purchases of certain minimum numbers of Units, the
amount of Selling Commissions otherwise payable to the Managing Dealer or a
Soliciting Dealer, shall be reduced in accordance with the following schedule:
<TABLE>
<CAPTION>
Dollar Amount
of Units Purchase Price Reallowed Commissions on Sales Per Unit
Purchased Per Unit Percent Dollar Amount
<S> <C>
$10-- $249,990 $10.00 8.0% $0.80
$250,000-- $499,990 $9.80 6.0% $0.60
$500,000-- $999,990 $9.60 4.0% $0.40
$1,000,000-- $1,499,990 $9.50 3.0% $0.30
$1,500,000 or more $9.40 2.0% $0.20
</TABLE>
For example, if an investor purchases 100,000 Units, the investor could
pay as little as $950,000 rather than $1,000,000 for the Units, in which event
the Selling Commissions on the sale of such Units would be $35,000 ($0.35 per
Unit). The net proceeds to the Partnership will not be affected by such
discounts.
Any such reduction in Selling Commissions will be credited to the
"purchaser," as defined below, by reducing the total purchase price otherwise
payable by the "purchaser." The net proceeds to the Partnership will not be
affected by the volume discount.
Subscriptions for Units of CNL XVIII may be combined for the purpose of
determining the volume discounts in the case of subscriptions made by any
"purchaser," provided all such Units are purchased through the same Soliciting
Dealer or through the Managing Dealer. The volume discount will be prorated
among the separate subscribers considered to be a single "purchaser." Units
purchased pursuant to the Distribution Reinvestment Plan on behalf of a
Participant in the Distribution Reinvestment Plan will not be combined with
other subscriptions for Units by the investor in determining the volume discount
to which such investor may be entitled. See "Summary of Distribution
Reinvestment Plan." Further, subscriptions for Units will not be combined for
purposes of the volume discount in the case of subscriptions by any "purchaser"
who subscribes for additional Units subsequent to the purchaser's initial
purchase of Units.
Any request to combine more than one subscription must be made in
writing in a form satisfactory to the General Partners and must set forth the
basis for such request. Any such request will be subject to verification by the
Managing Dealer that all of such
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subscriptions were made by a single "purchaser." If a "purchaser" does not
reduce the per Unit purchase price, the excess purchase price over the
discounted purchase price will be returned to the actual separate subscribers
for Units.
For purposes of such volume discounts, "purchaser" includes (i) an
individual, his or her spouse, and their children under the age of 21, who
purchase the Units for his or her or their own accounts, and all pension or
trust funds established by each such individual; (ii) a corporation,
partnership, association, joint-stock company, trust fund, or any organized
group of persons, whether incorporated or not (provided that the entities
described in this clause (ii) must have been in existence for at least six
months before purchasing the Units and must have formed such group for a purpose
other than to purchase the Units at a discount); (iii) an employee's trust,
pension, profit-sharing, or other employee benefit plan qualified under section
401 of the Code; and (iv) all pension, trust, or other funds maintained by a
given bank. In addition, the General Partners, in their sole discretion, may
aggregate and combine separate subscriptions for Units received during the
Offering period from (i) the Managing Dealer or the same Soliciting Dealer, (ii)
investors whose accounts are managed by a single investment adviser registered
under the Investment Advisers Act of 1940, (iii) investors over whose accounts a
designated bank, insurance company, trust company, or other entity exercises
discretionary investment responsibility, or (iv) a single corporation,
partnership, trust association, or other organized group of persons, whether
incorporated or not, and whether such subscriptions are by or for the benefit of
such corporation, partnership, trust association, or group . Except as provided
in this paragraph, subscriptions will not be cumulated, combined, or aggregated.
Any reduction in commissions will reduce the effective purchase price
per Unit to the investor involved but will not alter the net proceeds payable to
the Partnership as a result of such sale.
All investors will be deemed to have contributed the same amount per
Unit to the Partnership whether or not the investor receives a volume discount.
Accordingly, for purposes of Partnership allocations, as well as distributions
of Net Cash Flow and Net Sales Proceeds, investors qualifying for volume
discounts will receive higher returns on their investments in the Partnership as
compared to investors who do not qualify for such discounts.
In connection with the sale of Units, certain registered principals or
representatives of the Managing Dealer may perform wholesaling functions for
which they will receive compensation payable by the Managing Dealer in an
aggregate amount not in excess of one percent of Gross Proceeds. In addition,
the General Partners and their Affiliates, including the Managing Dealer and its
registered principals or representatives, may incur due diligence fees and other
expenses, including expenses related to sales seminars and wholesaling
activities, a portion of which may be paid by the Partnership. Any such expenses
paid by the Partnership are estimated not to exceed $34,300 in the event
3,500,000 Units ($35,000,000) are sold. In no event, however, will the total
underwriting compensation payable to the Managing Dealer, Soliciting Dealer, or
persons performing wholesaling functions, whether characterized as Selling
Commissions, expense reimbursements, sales incentives, or otherwise, exceed 10%
of Gross Proceeds, plus a maximum of 0.5% for reimbursement of bona fide due
diligence expenses.
The Managing Dealer and the Soliciting Dealers severally will indemnify
the Partnership, the General Partners, and their Affiliates, officers and
directors against certain liabilities, including liabilities under the
Securities Act of 1933, as amended.
SUBSCRIPTION PROCEDURES
In order to purchase Units, the subscriber must complete and execute
the Subscription Agreement. Any subscription for Units must be accompanied by
cash or a check payable to "SouthTrust Asset Management Company of Florida,
N.A., Escrow Agent" (or to the Partnership after subscription funds are released
from escrow), in the amount of $10.00 per Unit. See "Escrow Arrangements" below.
Certain Soliciting Dealers who have "net capital," as defined in the applicable
federal securities regulations, of $250,000 or more may instruct their customers
to make their checks for Units subscribed for payable directly to the Soliciting
Dealer. In such case, the Soliciting Dealer will issue a check made payable to
the order of the Partnership for the aggregate amount of the subscription
proceeds.
Each subscription will be accepted or rejected by the General Partners
within 30 days after its receipt. If a subscription is rejected, the funds will
be returned to the subscriber within ten business days after the date of such
rejection, without interest and without deduction. A form of the Subscription
Agreement is set forth as Exhibit E to this Prospectus. A subscription may not
be revoked or withdrawn by the subscriber. The subscription price of each Unit
is payable in full upon execution of the Subscription Agreement.
By executing the Subscription Agreement, the subscribers agree to all
of the terms of the Partnership Agreement, including the grant to the General
Partners of a power of attorney under certain circumstances. The General
Partners and each Soliciting Dealer who sells Units on behalf of the Partnership
have the responsibility to make every reasonable effort to determine that the
purchase of Units is suitable and appropriate for an investor. In making this
determination, the Soliciting Dealers will rely on relevant information provided
by the investor, including information as to the investor's age, investment
objectives, investment experience, income, net worth, financial situation, other
investments, and any other pertinent information. Each investor should be aware
that determining suitability is the responsibility of the Soliciting Dealer.
Certain Soliciting Dealers may permit investors to subscribe for Units
by telephonic order to the Soliciting Dealer. There are no additional fees
associated with telephonic orders. Representatives of Soliciting Dealers who
accept telephonic orders may execute the Subscription Agreement on behalf of
those investors who place such orders. Investors, however, who are residents of
Florida, Iowa, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri,
Nebraska, New Mexico, North Carolina, Oregon, South Dakota, Tennessee, or
Washington, must complete and sign the Subscription Agreement in order to
subscribe for Units and, therefore, may not subscribe for Units by telephone.
Representatives of Soliciting Dealers who accept telephonic orders will execute
the Subscription Agreement on behalf of investors who place such orders. All
investors who telephonically subscribe for Units will receive, with confirmation
of their subscription, a second copy of the Prospectus.
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Residents of California, Oklahoma, and Texas who telephonically
subscribe for Units will have the right to rescind such subscriptions within ten
days from receipt of the confirmation. Such investors who do not rescind their
subscriptions within such ten-day period shall be deemed to have assented to all
of the terms and conditions of the Subscription Agreement and the Partnership
Agreement, including, but not limited to, the power of attorney therein.
Investors who have questions or who wish to place orders for Units by
telephone or to participate in the Distribution Reinvestment Plan should contact
their Soliciting Dealer. Certain Soliciting Dealers do not permit telephonic
subscriptions or participation in the Distribution Reinvestment Plan. See
"Summary of Distribution Reinvestment Plan." The form of Subscription Agreement
for certain Soliciting Dealers who do not permit telephonic subscriptions or
participation in the Distribution Reinvestment Plan differs slightly from the
form attached hereto as Exhibit E, primarily in that it will eliminate one or
both of these options.
Investors who wish to establish an IRA for the purpose of investing
solely in Units may do so by so indicating on the Subscription Agreement,
appointing Franklin Bank, N.A., an unaffiliated bank, to act as their IRS
custodian. The custodian will not have the authority to vote any of the Units
held in any IRA except in accordance with written instructions from the
beneficiary of the IRA, although it will hold the Units on behalf of that
beneficiary and make distributions and, at the direction and in the discretion
of the beneficiary, investments in Units or in other securities issued by
Affiliates of the General Partners. The custodian will not have the authority at
any time to make investments through any such IRA on behalf of the beneficiary
if the investment do not constitute Units or other securities issued by
Affiliates of the General Partners. The investors will not be required to pay
any initial or annual fees in connection with any such IRA. The fees for
establishing and maintaining all such IRAs will be paid by the General Partners
initially and annually up to an aggregate amount of $5,000, and by the
Partnership above such amount. In determining whether to use the IRA option made
available by the Partnership and the General Partners, investors should consider
the impact of the withholding rules under Section 3405 and, more importantly,
the limitation on tax-free rollovers under Section 408(d)(3)(E) that limits an
individual from making a tax-free rollover of any amounts received from any IRA
or group of IRAs more than once during a one-year period, and whether direct
transfers ameliorate the impact of such rules and limitations.
Investors should not purchase Units unless such investors believe that
they are in a financial position appropriate to enable them to realize to a
significant extent the benefits described in the Prospectus, have adequate means
for providing for their current needs and personal contingencies, have
sufficient net worth and income to sustain the risks inherent in the investment,
including limited liquidity of the investment, and believe the investment is
otherwise suitable. In addition, each investor should be aware that none of the
Partnership, the General Partners, or any Affiliates, agents, or representatives
of the Partnership or the General Partners are authorized to make any
representations or warranties on behalf of the Partnership other than those
contained in the Prospectus or specified by the investors in the Subscription
Agreement.
Subscribers will be admitted as Limited Partners not later than the
last day of the calendar month following acceptance of their subscriptions.
ESCROW ARRANGEMENTS
Subscription proceeds will be received in trust and deposited in a
separate account with SouthTrust Asset Management Company of Florida, N.A., 135
W. Central Blvd., Suite 1200, Orlando, Florida 32801 (the "Bank").
The Escrow Agreement between the General Partners and the Bank provides
that escrowed funds will be invested by the Bank in an interest-bearing account
with the power of investment in short-term, highly liquid U.S. Government
securities or in other short-term, highly liquid investments with appropriate
safety of principal. Such subscription funds will be released periodically (at
least once per month) upon admission of Limited Partners to the Partnership.
The interest, if any, earned on subscription proceeds prior to their
release from escrow, within 30 days after the date a subscriber is admitted to
the Partnership as a Limited Partner, will be distributed to such subscriber.
Interest will be payable only to those subscribers whose funds have been held in
escrow by the Bank for at least 20 days. Limited Partners will not otherwise be
entitled to interest earned on Partnership funds or to receive interest on their
Capital Contributions.
SUPPLEMENTAL SALES MATERIAL
In addition to this Prospectus, the Partnership may use certain sales
materials in connection with this Offering, although only when accompanied or
preceded by the delivery of this Prospectus. No sales material may be used
unless it has first been approved in writing by the General Partners. As of the
date of this Prospectus, it is anticipated that the following sales material
will be authorized for use by the Partnership in connection with this Offering:
(i) a brochure entitled CNL Income Fund XVII, Ltd. and CNL Income Fund XVIII,
Ltd.; (ii) a brochure describing CNL Group, Inc. and its affiliated entities;
(iii) a fact sheet describing the general features of the Partnership; (iv) a
cover letter transmitting the Prospectus; (v) a summary description of the
Offering; (vi) a slide
69
<PAGE>
and computer presentation; (vii) broker updates; (viii) an audio cassette
presentation; (ix) a video presentation; (x) a script for telephonic marketing;
(xi) seminar advertisements and invitations; and (xii) certain third-party
articles. Units are being offered only through this Prospectus. All such
materials will be used only by registered broker-dealers who are members of the
National Association of Securities Dealers, Inc. The Partnership also may
respond to specific questions from Soliciting Dealers and prospective investors.
Additional materials relating to the Offering may be made available to
Soliciting Dealers for their internal use.
ADDITIONAL INFORMATION
The Partnership has filed with the Securities and Exchange Commission
(the "Commission"), Washington, D.C., a Registration Statement on Form S-11, as
amended, with respect to the Units offered hereby. This Prospectus, which is
part of the Registration Statement, does not contain all of the information set
forth in the Registration Statement and the exhibits and schedules thereto. For
further information with respect to the Partnership and the Units offered
hereby, reference is made to the Registration Statement and the exhibits and
schedules filed as a part thereof. Statements contained herein concerning the
provisions of any document are not necessarily complete and in each instance
reference is made to the copy of such document filed as an exhibit or schedule
to the Registration Statement, each such statement being qualified in all
respects by reference to such exhibit or schedule.
The Registration Statement, together with its exhibits and schedules,
may be inspected, without charge, at the Commission's principal office at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and also at the following
regional offices of the Commission: Room 1400, 75 Park Place, New York, New York
10007, and Suite 1400, Northwestern Atrium Center, 500 West Madison Street,
Chicago, Illinois 60661-2511. Copies of such material may also be obtained from
the Commission upon payment of prescribed fees.
The Commission maintains a Web site that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission, which includes the Partnership. The address
of such site is http://www.sec.gov.
EXHIBIT B
FINANCIAL STATEMENTS OF
CNL INCOME FUND XVIII, LTD.
AND
CNL REALTY CORPORATION
<PAGE>
INDEX TO UPDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
CNL INCOME FUND XVIII, LTD.
(A Florida Limited Partnership)
Unaudited Condensed Financial Statements:
Condensed Balance Sheets as of September 30, 1996 and December 31, 1995 B-1
Condensed Statements of Partners' Capital for the nine months ended September 30, 1996
and the period February 10, 1995 (date of inception) through December 31, 1995 B-2
Notes to Condensed Financial Statements for the nine months ended
September 30, 1996 and the period February 10, 1995 (date of inception)
through September 30, 1995 B-3
Audited Financial Statements:
Report of Independent Accountants B-6
Balance Sheet as of December 31, 1995 B-7
Statement of Partners' Capital for the period February 10, 1995 (date of
inception) through December 31, 1995 B-8
Notes to Financial Statements for the period February 10, 1995 (date of
inception) through December 31, 1995 B-9
CNL REALTY CORPORATION
Financial Statements:
Report of Independent Accountants B-15
Balance Sheets as of September 30, 1996 (unaudited) and December 31, 1995 B-16
Notes to Balance Sheets as of September 30, 1996 and December 31, 1995 B-17
</TABLE>
<PAGE>
CNL INCOME FUND XVIII, LTD.
(A Development Stage Florida Limited Partnership)
CONDENSED BALANCE SHEETS
September 30, December 31,
ASSETS 1996 1995
------------- ------------
Cash $ 730 $ 980
Prepaid expenses 20 20
Organization costs 10,000 10,000
Deferred syndication costs 504,079 245,890
Other assets 27,304 -
-------- -------
$542,133 $256,890
======== ========
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 8,505 $ 22,130
Due to related parties 532,628 233,760
-------- --------
Total liabilities 541,133 255,890
Partners' capital 1,000 1,000
-------- --------
$542,133 $256,890
======== ========
See accompanying notes to condensed financial statements.
B-1
<PAGE>
CNL INCOME FUND XVIII, LTD.
(A Development Stage Florida Limited Partnership)
CONDENSED STATEMENTS OF PARTNERS' CAPITAL
Nine Months Ended September 30, 1996 and the
Period February 10, 1995 (Date of Inception)
through December 31, 1995
<TABLE>
<CAPTION>
Number of
Units of
Limited
Partnership
Interest Limited General
Issued Partners Partners Total
----------- -------- -------- -----
<S> <C>
Balance,
February 10, 1995
(Date of Inception) - $ - $ - $ -
Cash contributions
on February 22,
1995, for general
partners' interest - - 1,000 1,000
------- -------- ------ -------
Balance,
December 31, 1995 - - 1,000 1,000
Subscriptions received
for limited partner-
ship units through
public offering 60,676 606,756 - 606,756
Subscriptions held
in escrow at
September 30, 1996 (60,676) (606,756) - (606,756)
------- -------- ------ ---------
Balance, September 30, 1996 - $ - $1,000 $ 1,000
================================================================
</TABLE>
See accompanying notes to condensed financial statements.
B-2
<PAGE>
CNL INCOME FUND XVIII, LTD.
(A Development Stage Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters Ended September 30, 1996 and 1995
and Nine Months Ended September 30, 1996, and the
Period February 10, 1995 (Date of Inception)
through September 30, 1995
1. Significant Accounting Policies:
Basis of Presentation - The accompanying unaudited condensed financial
statements have been prepared in accordance with the instructions to
Form 10-Q and do not include all of the information and note
disclosures required by generally accepted accounting principles. The
financial statements reflect all adjustments, consisting of normal
recurring adjustments, which are, in the opinion of management,
necessary to a fair statement of the results for the interim periods
presented. Amounts as of December 31, 1995, included in the financial
statements, have been derived from audited financial statements as of
that date.
These unaudited financial statements should be read in conjunction with
the financial statements and notes thereto included in Form 10-K of CNL
Income Fund XVIII, Ltd. (the "Partnership") for the year ended December
31, 1995.
Under the terms of a registration statement filed with the Securities
and Exchange Commission, the Partnership is authorized to sell a
maximum of 3,500,000 units ($35,000,000) of limited partnership
interest. Subscriptions for 60,676 units ($606,756) of limited
partnership interest had been received and were being held in escrow as
of September 30, 1996.
As of September 30, 1996, the Partnership was a development stage
enterprise and operations had not begun.
2. Deferred Syndication Costs:
At September 30, 1996 and December 31, 1995, syndication costs
consisting of commissions, due diligence expense reimbursement fees,
legal fees, printing and other expenses which were incurred in
connection with the offering totalled $504,079 and $245,890,
respectively. These syndication costs have been treated as deferred
costs and, once the Partnership receives the minimum offering proceeds
and funds are released from escrow, will be charged to the limited
partners' capital accounts to reflect the net capital proceeds of the
offering. All organizational and offering expenses, as defined in the
Partnership's prospectus, which exceed three percent of the total gross
proceeds received from the sale of units of the Partnership will be
paid by the general partners and will not be the responsibility of the
Partnership.
B-3
<PAGE>
CNL INCOME FUND XVIII, LTD.
(A Development Stage Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS -
CONTINUED Quarters Ended September 30, 1996 and 1995
and Nine Months Ended September 30, 1996, and the
Period February 10, 1995 (Date of Inception)
through September 30, 1995
3. Related Party Transactions:
CNL Securities Corp. is entitled to receive commissions amounting to
8.5% of limited partners' contributions for services in connection with
selling limited partnership interests, a substantial portion of which
will be paid as commissions to other broker-dealers. As of September
30, 1996, $51,574 of such fees had been incurred.
In addition, CNL Securities Corp. is entitled to receive a due
diligence expense reimbursement fee equal to 0.5% of limited partners'
contributions, a portion of which may be reallowed to other
broker-dealers. As of September 30, 1996, $3,034 of such fees had been
incurred.
CNL Fund Advisors, Inc. is entitled to receive acquisition fees for
services in finding, negotiating and acquiring properties on behalf of
the Partnership equal to 4.5% of the limited partners' contributions.
As of September 30, 1996, $27,304 of such fees had been incurred. This
amount is included in other assets at September 30, 1996.
During the quarter and nine months ended September 30, 1996, CNL Fund
Advisors, Inc. and its affiliates provided accounting and
administrative services to the Partnership, primarily in connection
with the registration of the offering, totalling $23,375 and $29,980,
respectively, which are included in deferred syndication costs.
The amounts due to related parties consisted of the following at:
September 30, December 31,
1996 1995
Due to CNL Securities Corp.:
Commissions $ 51,574 $ -
Due diligence expense
reimbursement fee 3,034 -
-------- --------
54,608 -
-------- --------
Due to CNL Fund Advisors, Inc.:
Expenditures incurred for
organizational and offering
expenses on behalf of the
Partnership 383,150 233,760
Accounting and administrative
services 67,566 -
Acquisition fees 27,304 -
-------- --------
478,020 233,760
- --------------------------------------------------------- --------
$532,628 $233,760
======== ========
B-4
<PAGE>
CNL INCOME FUND XVIII, LTD.
(A Development Stage Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS -
CONTINUED Quarters Ended September 30, 1996 and 1995
and Nine Months Ended September 30, 1996, and the
Period February 10, 1995 (Date of Inception)
through September 30, 1995
3. Related Party Transactions - Continued:
In the event the minimum offering proceeds are not received by the
Partnership, the Partnership will have no obligation to repay such
amounts.
4. Subsequent Event:
As of October 11, 1996, the Partnership had received aggregate
subscription proceeds of $1,733,131, which exceeded the minimum
offering amount of $1,500,000, and $1,517,431 of the funds (which
excluded all funds received from New York and Pennsylvania investors)
were released from escrow. As of October 31, 1996, the Partnership had
sold 368,665 units, representing $3,686,653 of capital contributed by
limited partners and all funds received from New York and Pennsylvania
investors had been released from escrow.
B-5
<PAGE>
Report of Independent Accountants
To the Partners
CNL Income Fund XVIII, Ltd.
We have audited the accompanying balance sheet of CNL Income Fund XVIII, Ltd. (a
development stage Florida limited partnership) as of December 31, 1995, and the
related statement of partners' capital for the period February 10, 1995 (date of
inception) through December 31, 1995. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of CNL Income Fund XVIII, Ltd. as
of December 31, 1995, and the changes in partners' capital for the period
February 10, 1995 (date of inception) through December 31, 1995 in conformity
with generally accepted accounting principles.
/s/COOPERS & LYBRAND L.L.P.
Orlando, Florida
February 13, 1996
B-6
CNL INCOME FUND XVIII, LTD.
(A Development Stage Florida Limited Partnership)
BALANCE SHEET
December 31, 1995
ASSETS
Cash $ 980
Prepaid expenses 20
Organization costs 10,000
Deferred syndication costs 245,890
---------
$ 256,890
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 22,130
Due to related parties 233,760
---------
Total liabilities 255,890
Partners' capital 1,000
$ 256,890
See accompanying notes to financial statements
B-7
<PAGE>
CNL INCOME FUND XVIII, LTD.
(A Development Stage Florida Limited Partnership)
STATEMENT OF PARTNERS' CAPITAL
February 10, 1995 (Date of Inception)
through December 31, 1995
General Limited
Partners Partners Total
Balance, February 10, 1995
(date of inception) $ - $ - $ -
Cash contributions 1,000 - 1,000
------ ------- ------
Balance, December 31, 1995 $1,000 $ - $1,000
====== ======= ======
See accompanying notes to financial statements
B-8
<PAGE>
CNL INCOME FUND XVIII, LTD.
(A Development Stage Florida Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
February 10, 1995 (Date of Inception)
through December 31, 1995
1. Significant Accounting Policies:
Organization and Nature of Business - CNL Income Fund XVIII, Ltd. (the
"Partnership") is a Florida limited partnership that was organized for
the purpose of acquiring both newly constructed and existing restaurant
properties, as well as properties upon which restaurants are to be
constructed, to be leased primarily to operators of national and
regional fast-food, family-style and casual dining restaurant chains.
As of December 31, 1995, the Partnership was a development stage
enterprise and operations had not begun.
The general partners of the Partnership are CNL Realty
Corporation (the "Corporate General Partner"), James M.
Seneff, Jr. and Robert A. Bourne. Mr. Seneff and Mr. Bourne
are also 50 percent shareholders of the Corporate General
Partner. The general partners have responsibility for
managing the day-to-day operations of the Partnership.
Organization Costs - Organization costs will be amortized over five
years using the straight-line method once operations commence.
Income Taxes - Under Section 701 of the Internal Revenue Code, all
income, expenses and tax credit items flow through to the partners for
tax purposes. Therefore, no provision for federal income taxes is
provided in the accompanying financial statements. The Partnership will
be subject to certain state taxes on its income and property.
New Accounting Standard - In March 1995, the Financial Accounting
Standards Board issued 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, which is effective
for fiscal years beginning after December 15, 1995, 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. The Partnership will adopt this standard in 1996. The
general partners believe adoption of this standard currently would not
have had a material effect on the Partnership's financial position.
B-9
<PAGE>
CNL INCOME FUND XVIII, LTD.
(A Development Stage Florida Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
February 10, 1995 (Date of Inception)
through December 31, 1995
2. Public Offering:
The Partnership, together with an affiliated newly-formed partnership,
CNL Income Fund XVII, Ltd. ("CNL XVII"), has filed a currently
effective registration statement on Form S- 11 with the Securities and
Exchange Commission. Under the terms of the registration statement, the
Partnership is authorized to sell a maximum of 3,500,000 units
($35,000,000) of limited partnership interest. The units will be
offered to the public on a "best efforts" basis (which means that no
one is guaranteeing that any minimum amount will be sold) through CNL
Securities Corp., the managing dealer, and other broker-dealers. The
offering will terminate not later than August 11, 1996, unless the
general partners elect to extend the offering to a date not later than
August 11, 1997, in states that permit such an extension.
The Partnership has and will continue to incur certain expenses of its
offering of units, including filing fees, legal, accounting, printing
and escrow fees, which will be deducted from the gross proceeds of the
offering. Preliminary costs incurred prior to raising capital have been
and will continue to be advanced by an affiliate of the general
partners. If the offering is not successful, the Partnership will not
be required to repay these amounts. Expenses of the offering of units
are expected to amount to 12 percent (assuming the minimum number of
units is sold; the total offering expenses are expected to decrease to
11.5% if the maximum number of units is sold of the gross offering
proceeds available to the Partnership). Of these amounts, the managing
dealer (an affiliate of the general partners) is to be paid 8.5% of the
gross offering proceeds in the form of selling commissions and 0.5% of
the gross offering proceeds as a due diligence expense reimbursement
fee. Other broker-dealers may be engaged as soliciting dealers to sell
units and may be reallowed selling commissions of up to eight percent
with respect to units which they sell. In addition, all or a portion of
the due diligence expense reimbursement fee may be reallowed to
soliciting dealers for reimbursement for bona fide expenses incurred in
connection with due diligence activities. The general partners have
agreed to pay all organizational and offering expenses, as defined in
the Partnership's prospectus, which exceed three percent of the gross
offering proceeds received from the sale of units of the Partnership.
B-10
<PAGE>
CNL INCOME FUND XVIII, LTD.
(A Development Stage Florida Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
February 10, 1995 (Date of Inception)
through December 31, 1995
2. Public Offering - Continued:
The first $30,000,000 of subscription funds received (3,000,000 units)
will be for units of CNL XVII, although the general partners have the
right to terminate the offering of units of CNL XVII at any time after
subscriptions aggregating at least 150,000 units ($1,500,000) have been
received and the funds have been released from escrow. As of December
31, 1995, CNL XVII had sold 569,692 units, representing $5,696,921 of
capital contributed by limited partners. After the termination of the
offering of units of CNL XVII, the next up to $30,000,000 of
subscription funds will be for units of the Partnership. The managing
dealer has the option to increase the offering of units of the
Partnership by up to $5,000,000 (500,000 units).
3. Deferred Syndication Costs:
As of December 31, 1995, syndication costs consisting of legal fees,
printing and other expenses which were incurred in connection with the
offering totalled $245,890. These syndication costs have been treated
as deferred costs and, once the Partnership's offering commences, will
be charged to the limited partners' capital accounts to reflect the net
capital proceeds of the offering. All organizational and offering
expenses, as defined in the Partnership's prospectus, which exceed
three percent of the total gross proceeds received from the sale of
units of the Partnership will be paid by the general partners and will
not be the responsibility of the Partnership.
4. Allocations and Distributions:
Generally, distributions of net cash flow, as defined in the limited
partnership agreement of the Partnership, will be made 95 percent to
the limited partners and five percent to the general partners;
provided, however, that for any particular year the five percent of net
cash flow to be distributed to the general partners will be
subordinated to receipt by the limited partners in that year of an
eight percent noncumulative, noncompounded return on their aggregate
invested capital contributions (the "Limited Partners' 8% Return").
B-11
<PAGE>
CNL INCOME FUND XVIII, LTD.
(A Development Stage Florida Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
February 10, 1995 (Date of Inception)
through December 31, 1995
4. Allocations and Distributions - Continued:
Generally, net income (determined without regard to any depreciation
and amortization deductions and gains and losses from the sale of
properties) will be allocated between the limited partners and the
general partners first, in an amount not to exceed the net cash flow
distributed to the partners attributable to such year in the same
proportions as such net cash flow is distributed; and thereafter, 99
percent to the limited partners and one percent to the general
partners. All deductions for depreciation and amortization will be
allocated 99 percent to the limited partners and one percent to the
general partners.
Net sales proceeds from the sale of a property generally will be
distributed first to the limited partners in an amount sufficient to
provide them with the return of their invested capital contributions,
plus their cumulative Limited Partners' 8% Return. The general partners
will then receive a return of their capital contributions and, to the
extent previously subordinated and unpaid, a five percent interest in
all net cash flow distributions. Any remaining net sales proceeds will
be distributed 95 percent to the limited partners and five percent to
the General Partners.
Any gain from the sale of a property will be, in general, allocated in
the same manner as net sales proceeds are distributable. Any loss will
be allocated first, on a pro rata basis to the partners with positive
balances in their capital accounts; and thereafter, 95 percent to the
limited partners and five percent to the general partners.
Notwithstanding the above allocations, at least one percent of each
material item of income and loss, including any gain or loss from the
sale of a property, will be allocated to the general partners.
5. Related Party Transactions:
One of the individual general partners, James M. Seneff, Jr.,
is one of the principal shareholders of CNL Group, Inc., the
parent company of CNL Securities Corp. and CNL Fund Advisors,
Inc. The other individual general partner, Robert A. Bourne,
is the president of CNL Securities Corp. and CNL Fund
Advisors, Inc.
B-12
<PAGE>
CNL INCOME FUND XVIII, LTD.
(A Development Stage Florida Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
February 10, 1995 (Date of Inception)
through December 31, 1995
5. Related Party Transactions - Continued:
CNL Securities Corp. is entitled to receive syndication fees amounting
to 8.5% of limited partners' contributions for services in connection
with selling limited partnership interests, a substantial portion of
which will be paid as commissions to other broker-dealers. As of
December 31, 1995, no such fees had been incurred.
In addition, CNL Securities Corp. is entitled to receive a due
diligence expense reimbursement fee equal to 0.5% of limited partners'
contributions, a portion of which may be reallowed to other
broker-dealers. As of December 31, 1995, no such fees had been
incurred.
CNL Fund Advisors, Inc. will be entitled to receive acquisition fees
for services in finding, negotiating and acquiring properties on behalf
of the Partnership equal to 4.5% of the limited partners'
contributions. As of December 31, 1995, no such fees had been incurred.
The Partnership and CNL Fund Advisors, Inc. will enter into a
management agreement pursuant to which CNL Fund Advisors, Inc. will
receive annual management fees of one percent of the sum of gross
revenues from properties wholly owned by the Partnership and the
Partnership's allocable share of gross revenues from joint ventures.
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
CNL Fund Advisors, Inc. 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 CNL Fund Advisors, Inc. shall
determine. As of December 31, 1995, no management fees had been
incurred.
CNL Fund Advisors, Inc. also will be entitled to receive a deferred,
subordinated real estate disposition fee, payable upon the sale of one
or more properties based on the lesser of one-half of a competitive
real estate commission or three percent of the sales price if CNL Fund
Advisors, Inc. provides a substantial amount of services in connection
with the sale. The real estate disposition fee is payable only after
the limited partners receive their cumulative Limited Partners' 8%
B-13
<PAGE>
CNL INCOME FUND XVIII, LTD.
(A Development Stage Florida Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
February 10, 1995 (Date of Inception)
through December 31, 1995
5. Related Party Transactions - Continued:
Return and their invested capital contributions. No deferred,
subordinated real estate disposition fees have been incurred to date.
During the period February 10, 1995 (date of inception) through
December 31, 1995, CNL Fund Advisors, Inc. and its affiliates provided
accounting and administrative services to the Partnership, primarily in
connection with the registration of the offering, totalling $37,586,
which are included in deferred syndication costs at December 31, 1995.
The amount due to related parties at December 31, 1995, of $233,760
represents amounts due to CNL Fund Advisors, Inc. and its affiliates
for organizational and offering expenses incurred on behalf of the
Partnership and for accounting and administrative services. In the
event the minimum offering proceeds are not received by the
Partnership, the Partnership will have no obligation to repay such
amounts.
B-14
<PAGE>
Report of Independent Public Accountants
To the Stockholders
CNL Realty Corporation
We have audited the accompanying balance sheet of CNL Realty
Corporation as of December 31, 1995. This financial statement is the
responsibility of the Company's management. Our responsibility is to express an
opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the balance sheet is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the balance sheet. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall balance sheet presentation. We
believe that our audit of the balance sheet provides a reasonable basis for our
opinion.
In our opinion, the balance sheet referred to above presents fairly, in
all material respects, the financial position of CNL Realty Corporation as of
December 31, 1995, in conformity with generally accepted accounting principles.
/s/COOPERS & LYBRAND L.L.P.
Orlando, Florida
February 15, 1996
B-15
<PAGE>
CNL REALTY CORPORATION
BALANCE SHEETS
September 30,
1996 December 31,
ASSETS (Unaudited) 1995
Cash $ 213 $ 49
Investment in CNL Income
Fund Partnerships 1,233,369 1,018,346
---------- ----------
$1,233,582 $1,018,395
========== ==========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Loans payable to stockholders $ 70,030 991,524
Loan payable to CNL Group, Inc. 1,171,248 -
Other payables to related parties 2,422 3,522
---------- ----------
Total liabilities 1,243,700 995,046
---------- ----------
Commitments and contingencies
(Note 5)
Stockholders' equity:
Common stock, $1 par value,
7,500 shares authorized,
1,000 shares issued and
outstanding 1,000 1,000
Retained earnings (Accumulated
deficit) (11,118) 22,349
---------- ----------
(10,118) 23,349
---------- ----------
$1,233,582 $1,018,395
========== ==========
See accompanying notes to balance sheets.
B-16
<PAGE>
CNL REALTY CORPORATION
NOTES TO BALANCE SHEETS
September 30, 1996 and December 31, 1995
(Information with respect to September 30, 1996 is unaudited)
1. Organization and Significant Accounting Policy:
Organization - CNL Realty Corporation (the "Company") was incorporated
on November 26, 1985, under the laws of the State of Florida. The
Company is a general partner in 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. (collectively, the "CNL Income Fund
Partnerships"), all of which were formed to acquire existing restaurant
properties, as well as properties upon which restaurants will be
constructed, to be leased primarily to operators of national and
regional fast-food, family-style and casual dining restaurant chains.
The other general partners in the CNL Income Fund Partnerships are
James M. Seneff, Jr. and Robert A. Bourne.
Use of Estimates - The Company's management has made a number of
estimates and assumptions relating to the reporting of assets and
liabilities and the disclosure of contingent assets and liabilities to
prepare these financial statements in conformity with generally
accepted accounting principles. Actual results could differ from those
estimates.
2. Investment in CNL Income Fund Partnerships:
The Company accounts for its general partner interests in the CNL
Income Fund Partnerships under the equity method. The terms of the
limited partnership agreements of each of the CNL Income Fund
Partnerships are similar. Each agreement provides that allocations and
distributions among the general partners will be in such amounts as the
general partners agree among themselves. The general partners have
agreed that ten percent of their one percent interest in the CNL Income
Fund Partnerships will be allocated to CNL Realty Corporation.
B-17
<PAGE>
CNL REALTY CORPORATION
NOTES TO BALANCE SHEETS - CONTINUED
September 30, 1996 and December 31, 1995
(Information with respect to September 30, 1996 is unaudited)
2. Investment in CNL Income Fund Partnerships - Continued:
The following table presents combined, summarized financial information
relating to the CNL Income Fund Partnerships at:
September 30,
1996 December 31,
(Unaudited) 1995
------------ ------------
Total assets $508,709,317 $486,778,595
Total liabilities 19,253,590 16,318,645
Limited partners'
equity 486,220,565 467,736,550
General partners'
equity:
CNL Realty
Corporation 1,233,369 1,018,346
Other 2,001,793 1,705,054
The Company had made total capital contributions of $1,012,905 and
$830,905 to the CNL Income Fund Partnerships as of September 30, 1996
and December 31, 1995, respectively.
In January 1996, the Company entered into two promissory notes which
provide for loans to certain of the CNL Income Fund Partnerships in the
aggregate amount of $112,500 in connection with the operations of the
CNL Income Fund Partnerships. The loans were uncollateralized, bore
interest at a rate of prime plus 0.25% per annum and were due on
demand. The outstanding balance of these loans, including interest of
approximately $860, was repaid to the Company as of September 30, 1996.
In addition, in April and July 1996, the Company entered into several
promissory notes which provide for loans to certain of the CNL Income
Fund Partnerships in the aggregate amounts of $151,900 and $254,000,
respectively, in connection with the operations of the CNL Income Fund
Partnerships. These loans were uncollateralized, non-interest bearing
and due on demand. These loans were repaid to the Company as of
September 30, 1996.
3. Income Taxes:
Effective January 1988, the Company made an election to be governed by
Subchapter S of the Internal Revenue Code. Taxable income is reported
by the stockholders on their individual income tax returns.
B-18
<PAGE>
CNL REALTY CORPORATION
NOTES TO BALANCE SHEETS - CONTINUED
September 30, 1996 and December 31, 1995
(Information with respect to September 30, 1996 is unaudited)
4. Related Parties:
The Company and its stockholders have entered into two promissory notes
which provide for loans to the Company in the aggregate amount of
$1,500,000. The notes are uncol- lateralized and bear interest at rates
in accordance with the applicable federal rate prescribed by the
Internal Revenue Service. At September 30, 1996 and December 31, 1995,
the blended applicable federal rate was 5.77% and 6.58%, respectively.
Principal and interest are payable on demand or December 31, 1996,
whichever comes first.
The following presents the outstanding balances under these notes,
including accrued interest, at:
September 30,
1996 December 31,
(Unaudited) 1995
----------- -----------
James M. Seneff, Jr $ 35,015 $495,762
Robert A. Bourne 35,015 495,762
-------- --------
$ 70,030 $991,524
======== ========
In April 1996, the Company entered into a promissory note with CNL
Group, Inc., an affiliate of the Company, which provides for loans to
the Company in the aggregate amount of up to $500,000. In September
1996, the promissory note was amended to provide for loans to the
Company in the aggregate amount of up to $1,500,000. The note is
uncollateralized and bears interest at a rate of prime plus one percent
per annum. Principal and interest are payable on demand or December 31,
1997, whichever comes first. The loan payable to CNL Group, Inc. of
$1,171,248 includes accrued interest of $10,349 at September 30, 1996.
Affiliates of the stockholders provide accounting and administrative
services to the Company on a day-to-day basis. Other payables to
related parties at September 30, 1996 and December 31, 1995 of $2,422
and $3,522, respectively, represent amounts for such services and for
operating expenses that affiliates have paid on behalf of the Company.
B-19
<PAGE>
CNL REALTY CORPORATION
NOTES TO BALANCE SHEETS - CONTINUED
September 30, 1996 and December 31, 1995
(Information with respect to September 30, 1996 is unaudited)
5. Commitments and Contingencies:
As one of the general partners in the CNL Income Fund Partnerships, the
Company will share in the liability for organizational and offering
expenses which exceed three percent of the gross offering proceeds.
Further, the general partners have agreed to contribute up to one
percent of the gross offering proceeds for partnership property
maintenance and repairs to the extent that the CNL Income Fund
Partnerships have insufficient funds for such purposes.
6. Subsequent Events:
In October 1996, the Company received additional advances under the
loan from CNL Group, Inc. totalling $430,000 in connection with the
promissory note described in Note 4. As of November 14, 1996, the
Company had repaid $239,000 of such amounts advanced.
In connection therewith, in October 1996, the Company entered into
three promissory notes which provide for loans to certain of the CNL
Income Fund Partnerships in the aggregate amount of $430,000 in
connection with the operations of the CNL Income Fund Partnerships. The
loans are uncollateralized, non-interest bearing and are due on demand.
As of November 14, 1996, $271,000 of these amounts had been repaid to
the Company.
In addition, in November 1996, the Company repaid the stockholders
$32,000 of amounts advanced under the promissory notes described in
Note 4.
7. Basis of Presentation of Unaudited Financial Statements:
In the opinion of management of the Company, the unaudited balance
sheet contains all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the Company's financial position
as of September 30, 1996.
B-20
<PAGE>
EXHIBIT C
PRIOR PERFORMANCE TABLES
<PAGE>
EXHIBIT C
PRIOR PERFORMANCE TABLES
The information in this Exhibit C contains certain relevant summary
information concerning prior public partnerships sponsored by the individual
General Partners and their Affiliates which have investment objectives similar
to the Partnership (the "Prior Public Partnerships").
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 General Partners upon request, without charge. In addition, upon request to
the General Partners, the General Partners 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, which are
substantially the same as those of the Partnership, generally include
preservation and protection of partnership capital, the potential for increased
income and protection against inflation, potential for capital appreciation, and
partially tax-sheltered cash distributions, all through investment in restaurant
properties.
INVESTORS SHOULD NOT CONSTRUE INCLUSION OF THE FOLLOWING TABLES AS
IMPLYING THAT THE PARTNERSHIP WILL HAVE RESULTS COMPARABLE TO THOSE REFLECTED IN
SUCH TABLES. DISTRIBUTABLE CASH FLOW, FEDERAL INCOME TAX DEDUCTIONS, OR OTHER
FACTORS COULD BE SUBSTANTIALLY DIFFERENT. INVESTORS SHOULD NOTE THAT, BY
ACQUIRING UNITS IN THE PARTNERSHIP, 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 the individual General Partners and their Affiliates in raising
and investing funds for the Prior Public Partnerships, the offerings of which
closed between October 1991 and September 1996.
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 the General Partners and their
Affiliates in connection with the Prior Public Partnerships, the offerings of
which closed between October 1991 and September 1996. The Table also shows the
amounts paid to the General Partners 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.
C-1
<PAGE>
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 October 1991 and September 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 General
Partners or their Affiliates has been involved in completed public programs
which had investment objectives similar to those of the Partnership.
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 October 1991 and June
1996.
The 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
Fund X, Fund XI, Fund XII, Fund XIII, Fund XIV,
Ltd. Ltd. Ltd. Ltd. Ltd.
----------- ----------- ----------- ----------- -----------
<S> <C>
Dollar amount offered $40,000,000 $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% 83.0% 83.0% 82.5% 82.5%
Acquisition fees paid
to affiliates 5.0 5.0 5.0 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 9/09/91 3/18/92 9/29/92 3/31/93 8/27/93
Length of offering (in
months) 6 6 6 5 6
Months to invest 90% of
amount available for
investment measured
from date of offering 7 6 11 10 11
</TABLE>
C-3
<PAGE>
TABLE I
EXPERIENCE IN RAISING AND INVESTING FUNDS
(continued)
<TABLE>
<CAPTION>
CNL Income CNL Income CNL Income CNL Income
Fund XV, Fund XVI, Fund XVII, Fund XVIII,
Ltd. Ltd. Ltd. Ltd.
----------- ----------- ---------- -----------
(Note 1) (Note 1)
<S> <C>
Dollar amount offered $40,000,000 $45,000,000
=========== ===========
Dollar amount raised 100.0% 100.0%
----------- -----------
Less offering expenses:
Selling commissions
and discounts (8.5) (8.5)
Organizational expenses (3.0) (3.0)
Marketing support and
due diligence expense
reimbursement fees
(includes amounts
reallowed to
unaffiliated
entities) (0.5) (0.5)
----------- -----------
(12.0) (12.0)
----------- -----------
Reserve for operations -- --
----------- ----------
Percent available for
investment 88.0% 88.0%
=========== ===========
Acquisition costs:
Cash down payment 82.5% 82.5%
Acquisition fees paid
to affiliates 5.5 5.5
Loan costs -- --
----------- ----------
Total acquisition costs 88.0% 88.0%
=========== ===========
Percent leveraged
(mortgage financing
divided by total
acquisition costs) -- --
Date offering began 2/23/94 9/02/94
Length of offering (in
months) 6 9
Months to invest 90% of
amount available for
investment measured
from date of offering 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. could not commence until the offering of
Units of CNL Income Fund XVII, Ltd. had terminated. CNL Income Fund
XVII, Ltd. terminated its offering of Units on September 19, 1996, at
which time subscriptions for an aggregate 3,000,000 Units ($30,000,000)
had been received. Upon the termination of the offering of Units of
CNL Income Fund XVII, Ltd., CNL Income Fund XVIII, Ltd. commenced its
offering to the public of 3,500,000 Units ($35,000,000).
C-4
<PAGE>
TABLE II
COMPENSATION TO SPONSOR
<TABLE>
<CAPTION>
CNL Income CNL Income CNL Income CNL Income CNL Income
Fund X, Fund XI, Fund XII, Fund XIII, Fund XIV,
Ltd. Ltd. Ltd. Ltd. Ltd.
----------- ----------- ----------- ----------- -----------
<S> <C>
Date offering commenced 9/09/91 3/18/92 9/29/92 3/31/93 8/27/93
Dollar amount raised $40,000,000 $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 3,400,000 3,825,000 3,400,000 3,825,000
Real estate commissions - - - - -
Acquisition fees 2,000,000 2,000,000 2,250,000 2,200,000 2,475,000
Marketing support and
due diligence expense
reimbursement fees
(includes amounts
reallowed to
unaffiliated entities) 200,000 200,000 225,000 200,000 225,000
----------- ----------- ----------- ----------- -----------
Total amount paid to sponsor 5,600,000 5,600,000 6,300,000 5,800,000 6,525,000
=========== =========== =========== =========== ===========
Dollar amount of cash generated
from operations before
deducting payments to
sponsor:
1996 (6 Months) 1,877,818 1,866,649 1,986,907 1,701,335 1,857,023
1995 3,603,470 3,758,271 3,928,473 3,482,461 3,823,939
1994 3,828,234 3,574,474 3,933,486 3,232,046 2,897,432
1993 3,499,905 3,434,512 3,320,549 1,148,550 329,957
1992 3,141,123 1,525,462 63,401 - -
1991 204,240 - - - -
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) 55,272 55,339 55,932 53,682 57,121
1995 76,108 106,086 109,111 103,083 114,095
1994 42,741 76,533 84,524 83,046 84,801
1993 38,999 78,926 73,789 27,003 8,220
1992 39,505 30,237 2,031 - -
1991 2,834 - - - -
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 1,057,386 - 1,640,000 286,411 696,012
Notes - - - - -
Amount paid to sponsors
from property sales and
refinancing:
Real estate commissions - - - - -
Incentive fees - - - - -
Other - - - - -
</TABLE>
C-5
<PAGE>
TABLE II
COMPENSATION TO SPONSOR
(continued)
<TABLE>
<CAPTION>
CNL Income CNL Income CNL Income CNL CNL Income
Fund XV, Fund XVI, Fund XVII, Fund XVIII,
Ltd. Ltd. Ltd. Ltd.
----------- ---------- -------------- -----------
(Note 2) (Note 2)
<S> <C>
Date offering commenced 2/23/94 9/02/94
Dollar amount raised $40,000,000 $45,000,000
=========== ===========
Amount paid to sponsor from
proceeds of offering:
Selling commissions and
discounts 3,400,000 3,825,000
Real estate commissions - -
Acquisition fees 2,200,000 2,475,000
Marketing support and
due diligence expense
reimbursement fees
(includes amounts
reallowed to
unaffiliated entities) 200,000 225,000
----------- ----------
Total amount paid to sponsor 5,800,000 6,525,000
=========== ==========
Dollar amount of cash generated
from operations before
deducting payments to
sponsor:
1996 (6 Months) 1,741,150 1,936,583
1995 3,361,477 2,619,840
1994 1,154,454 212,171
1993 - -
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) 53,223 74,887
1995 122,107 138,445
1994 37,620 7,023
1993 - -
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 811,706 775,000
Notes - -
Amount paid to sponsors
from property sales and
refinancing:
Real estate commissions - -
Incentive fees - -
Other - -
</TABLE>
Note 1: 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.
Note 2: 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. could 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. CNL Income Fund XVII, Ltd. terminated its
offering of Units on September 19, 1996, at which time subscriptions
for an aggregate 3,000,000 Units ($30,000,000) had been received. Upon
the termination of the offering of Units of CNL Income Fund XVII, Ltd.,
CNL Income Fund XVIII, Ltd. commenced its offering to the public of
3,500,000 Units ($35,000,000).
C-6
<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-7
<PAGE>
TABLE III
Operating Results of Prior Programs CNL
INCOME FUND X, LTD.
(continued)
<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
and refinancing 3,785,493 4,584,748 1,822,546
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-8
<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 cash distributions as a
percentage of original $1,000
investment (Notes 7 and 8) 0.00% 5.75% 7.38% 8.75%
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-9
<PAGE>
TABLE III - CNL INCOME FUND X, LTD. (continued)
<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 cash distributions as a
percentage of original $1,000
investment (Notes 7 and 8) 9.06% 9.03% 9.00%
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>
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.
Note 7: On December 31, 1994 and December 31, 1995, CNL Income Fund X, Ltd.
declared a special distribution of cumulative excess operating reserves
equal to .25% and .10%, respectively, of the total invested capital.
Accordingly, the total yield for 1994 and 1995 was 9.06% and 9.03%,
respectively.
Note 8: Total cash distributions as a percentage of original $1,000 investment
are calculated based on actual distributions declared for the period.
(See Note 6 above)
Note 9: Certain data for columns representing less than 12 months have been
annualized.
C-10
<PAGE>
TABLE III
Operating Results of Prior Programs CNL
INCOME FUND XI, LTD.
<TABLE>
<CAPTION>
1991
(Note 1) 1992 1993
------------ ------------ ------------
<S> <C>
Gross revenue $ 0 $ 1,269,086 $ 3,831,648
Equity in earnings of unconsolidated
joint ventures 0 33,367 121,059
Profit from sale of properties 0 0 0
Interest income 0 150,535 24,258
Less: Operating expenses 0 (63,390) (206,987)
Interest expense 0 0 0
Depreciation and amortization 0 (180,631) (469,127)
Minority interests in income of
consolidated joint ventures 0 (23,529) (68,399)
------------ ------------ ------------
Net income - GAAP basis 0 1,185,438 3,232,452
============ ============ ============
Taxable income
- from operations 0 1,295,104 2,855,026
============ ============ ============
- from gain on sale 0 0 0
============ ============ ============
Cash generated from operations
(Notes 2 and 4) 0 1,495,225 3,355,586
Cash generated from sales 0 0 0
Cash generated from refinancing 0 0 0
------------ ------------ ------------
Cash generated from operations, sales
and refinancing 0 1,495,225 3,355,586
Less: Cash distributions to investors
(Note 5)
- from operating cash flow 0 (1,205,030) (2,495,002)
- from sale of properties 0 0 0
- from cash flow from prior period 0 0 0
------------ ------------ ------------
Cash generated (deficiency) after cash
distributions 0 290,195 860,584
Special items (not including sales and
refinancing):
Limited partners' capital
contributions 0 40,000,000 0
General partners' capital
contributions 1,000 0 0
Minority interests' capital
contributions 0 426,367 0
Organization costs 0 (10,000) 0
Syndication costs 0 (3,922,875) 0
Acquisition of land and buildings 0 (26,428,556) (276,157)
Investment in direct financing
leases 0 (6,716,561) (276,206)
Investment in joint ventures 0 (1,658,925) (772)
Reimbursement of syndication and
acquisition costs paid on behalf
of CNL Income Fund XI, Ltd. by
related parties 0 (1,011,487) (900)
Increase in other assets 0 (122,024) 0
Distributions to holders of minority
interests 0 (17,467) (51,562)
------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 1,000 828,667 254,987
============ ============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 0 45 71
============ ============ ============
- from recapture 0 0 0
============ ============ ============
Capital gain (loss) 0 0 0
============ ============ ============
</TABLE>
C-11
<PAGE>
TABLE III
Operating Results of Prior Programs CNL
INCOME FUND XI, LTD.
(continued)
<TABLE>
<CAPTION>
6 Months
1994 1995 1996
------------ ------------ ------------
<S> <C>
Gross revenue $ 3,852,107 $ 3,820,990 $ 1,905,317
Equity in earnings of unconsolidated
joint ventures 119,370 118,384 56,598
Profit from sale of properties 0 0 0
Interest income 30,894 51,192 24,214
Less: Operating expenses (179,717) (237,126) (148,842)
Interest expense 0 0 0
Depreciation and amortization (481,226) (481,226) (240,613)
Minority interests in income of
consolidated joint ventures (68,936) (70,038) (34,437)
------------ ---------- -----------
Net income - GAAP basis 3,272,492 3,202,176 1,562,237
============ ========== ===========
Taxable income
- from operations 2,947,445 2,985,221 1,414,282
============ ========== ==========
- from gain on sale 0 0 0
============ ========== ==========
Cash generated from operations
(Notes 2 and 4) 3,497,941 3,652,185 1,811,310
Cash generated from sales 0 0 0
Cash generated from refinancing 0 0 0
------------ ---------- ----------
Cash generated from operations, sales
and refinancing 3,497,941 3,652,185 1,811,310
Less: Cash distributions to investors
(Note 5)
- from operating cash flow (3,400,001) (3,500,023) (1,790,012)
- from sale of properties 0 0 0
- from cash flow from prior period 0 0 0
------------ ---------- ----------
Cash generated (deficiency) after cash
distributions 97,940 152,162 21,298
Special items (not including sales and
refinancing):
Limited partners' capital
contributions 0 0 0
General partners' capital
contributions 0 0 0
Minority interests' capital
contributions 0 0 0
Organization costs 0 0 0
Syndication costs 0 0 0
Acquisition of land and buildings 0 0 0
Investment in direct financing
leases 0 0 0
Investment in joint ventures 0 0 0
Reimbursement of syndication and
acquisition costs paid on behalf
of CNL Income Fund XI, Ltd. by
related parties 0 0 0
Increase in other assets 0 0 0
Distributions to holders of minority
interests (57,641) (54,227) (27,839)
------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 40,299 97,935 (6,541)
============ ============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 73 74 35
============ ============ ============
- from recapture 0 0 0
============ ============ ============
Capital gain (loss) 0 0 0
============ ============ ============
</TABLE>
C-12
<PAGE>
TABLE III - CNL INCOME FUND XI, LTD. (continued)
<TABLE>
<CAPTION>
1991 6 Months
(Note 1) 1992 1993 1994 1995 1996
------------ ----------- ------------ ------------ ------------ ----------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 0 41 62 81 79 39
- from capital gain 0 0 0 0 0 0
- from investment income from
prior period 0 0 0 4 9 5
- from return of capital (Note 3) 0 1 0 0 0 1
------------ ----------- ------------ ------------ ------------ ----------
Total distributions on GAAP basis
(Note 5) 0 42 62 85 88 45
============ =========== ============ ============ ============ ==========
Source (on cash basis)
- from sales 0 0 0 0 0 0
- from refinancing 0 0 0 0 0 0
- from operations 0 42 62 85 88 45
- from cash flow from prior
period 0 0 0 0 0 0
------------ ----------- ------------ ------------ ------------ ----------
Total distributions on cash basis
(Note 5) 0 42 62 85 88 45
============ =========== ============ ============ ============ ==========
Total cash distributions as a
percentage of original $1,000
investment (Notes 6 and 7) 0.00% 6.17% 8.31% 8.56% 8.78% 8.75%
Total cumulative cash distributions
per $1,000 investment from inception 0 42 104 189 277 322
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) N/A 100% 100% 100% 100% 100%
</TABLE>
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.
Note 6: On December 31, 1995, CNL Income Fund XI, Ltd. declared a special
distribution of cumulative excess operating reserves equal to .10% of
the total invested capital. Accordingly, the total yield for 1995 was
8.78%.
Note 7: Total cash distributions as a percentage of original $1,000 investment
are calculated based on actual distributions declared for the period.
(See Note 5 above)
Note 8: Certain data for columns representing less than 12 months have been
annualized.
C-13
<PAGE>
C-14
<PAGE>
TABLE III
Operating Results of Prior Programs CNL
INCOME FUND XII, LTD.
<TABLE>
<CAPTION>
1991 6 Months
(Note 1) 1992 1993 1994 1995 1996
------------ ------------ ------------ ------------ ------------ ------------
<S> <C>
Gross revenue $ 0 $ 25,133 $ 3,374,640 $ 4,397,881 $ 4,404,792 $ 2,171,212
Equity in earnings of joint ventures 0 46 49,604 85,252 81,582 55,297
Profit (Loss) from sale of properties 0 0 0 0 0 (15,355)
Interest income (Note 7) 0 45,228 190,082 65,447 84,197 49,199
Less: Operating expenses 0 (7,211) (193,804) (192,951) (228,404) (150,511)
Interest expense 0 0 0 0 0 0
Depreciation and amortization 0 (3,997) (286,293) (327,795) (327,795) (156,420)
------------ ------------ ------------ ------------ ---------- ----------
Net income - GAAP basis 0 59,199 3,134,229 4,027,834 4,014,372 1,953,422
============ ============ ============ ============ ========== ==========
Taxable income
- from operations 0 58,543 2,749,072 3,301,005 3,262,046 1,591,118
============ ============ ============ ============ ========== ==========
- from gain (loss) on sale 0 0 0 0 0 (66,395)
============ ============ ============ ============ ========== ==========
Cash generated from operations
(Notes 2 and 5) 0 61,370 3,246,760 3,848,962 3,819,362 1,930,975
Cash generated from sales (Note 7) 0 0 0 0 0 1,640,000
Cash generated from refinancing 0 0 0 0 0 0
------------ ------------ ------------ ------------ ---------- ----------
Cash generated from operations, sales
and refinancing 0 61,370 3,246,760 3,848,962 3,819,362 3,570,975
Less: Cash distributions to investors
(Note 6)
- from operating cash flow 0 (61,370) (1,972,769) (3,768,754) (3,819,362) (1,930,975)
- from sale of properties 0 0 0 0 0 0
- from return of capital (Note 4) 0 (60,867) 0 0 0 0
- from cash flow from prior period 0 0 0 0 (5,645) (26,529)
------------ ------------ ------------ ------------ ---------- ----------
Cash generated (deficiency) after cash
distributions 0 (60,867) 1,273,991 80,208 (5,645) 1,613,471
Special items (not including sales and
refinancing):
Limited partners' capital
contributions 0 21,543,270 23,456,730 0 0 0
General partners' capital
contributions 1,000 0 0 0 0 0
Organization costs 0 (10,000) 0 0 0 0
Syndication costs 0 (2,066,937) (2,277,637) 0 0 0
Acquisition of land and buildings 0 (7,536,009) (15,472,737) (230) 0 0
Investment in direct financing
leases 0 (2,503,050) (11,875,100) (591) 0 0
Loan to tenant of joint venture,
net of repayments 0 0 (207,189) 6,400 7,008 3,774
Investment in joint ventures 0 (372,045) (468,771) (4,400) 0 (1,655,928)
Increase in restricted cash 0 0 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 0 0
Increase in other assets 0 (654,497) 0 0 0 0
Other 0 0 0 973 0 0
------------ ------------ ------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 1,000 7,634,942 (6,003,462) 82,360 1,363 (38,683)
============ ============ ============ ============ ============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 0 5 64 73 72 35
============ ============ ============ ============ ============ ============
- from recapture 0 0 0 0 0 0
============ ============ ============ ============ ============ ============
Capital gain (loss) 0 0 0 0 0 (1)
============ ============ ============ ============ ============ ============
</TABLE>
C-15
<PAGE>
C-16
<PAGE>
TABLE III - CNL INCOME FUND XII, LTD. (continued)
<TABLE>
<CAPTION>
1991 6 Months
(Note 1) 1992 1993 1994 1995 1996
----------- ------------ ------------ ------------ ------------ ----------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 0 5 46 84 85 44
- 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) 0 7 0 0 0 0
----------- ------------ ------------ ------------ ------------ ----------
Total distributions on GAAP basis
(Note 6) 0 12 46 84 85 44
=========== ============ ============ ============ ============ ==========
Source (on cash basis)
- from sales 0 0 0 0 0 0
- from refinancing 0 0 0 0 0 0
- from operations 0 6 46 84 85 43
- from return of capital (Note 4) 0 6 0 0 0 0
- from cash flow from prior period 0 0 0 0 0 1
----------- ------------ ------------ ------------ ------------ ----------
Total distributions on cash basis
(Note 6) 0 12 46 84 85 44
=========== ============ ============ ============ ============ ==========
Total cash distributions as a
percentage of original $1,000
investment (Notes 8 and 9) 0.00% 5.00% 6.75% 8.50% 8.53% 8.50%
Total cumulative cash distributions
per $1,000 investment from inception 0 12 58 142 227 271
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) N/A 100% 100% 100% 100% 100%
</TABLE>
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.
C-17
<PAGE>
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.
Note 8: On December 31, 1995, CNL Income Fund XII, Ltd. declared a special
distribution of cumulative excess operating reserves equal to .10% of
the total invested capital. Accordingly, the total yield for 1995 was
8.53%.
Note 9: Total cash distributions as a percentage of original $1,000 investment
are calculated based on actual distributions declared for the period.
(See Note 6 above)
Note 10: Certain data for columns representing less than 12 months have been
annualized.
C-18
<PAGE>
TABLE III
Operating Results of Prior Programs CNL
INCOME FUND XIII, LTD.
<TABLE>
<CAPTION>
1992 6 Months
(Note 1) 1993 1994 1995 1996
------------ ------------ ------------ ------------ ------------
<S> <C>
Gross revenue $ 0 $ 966,564 $ 3,558,447 $ 3,806,944 $ 1,773,791
Equity in earnings of joint ventures 0 1,305 43,386 98,520 52,525
Profit (Loss) from sale of properties
(Note 4) 0 0 0 (29,560) 0
Interest income 0 181,568 77,379 51,410 18,430
Less: Operating expenses 0 (59,390) (183,311) (214,705) (173,194)
Interest expense 0 0 0 0 0
Depreciation and amortization 0 (148,170) (378,269) (393,435) (196,717)
------------ ------------ ------------ ------------ ------------
Net income - GAAP basis 0 941,877 3,117,632 3,319,174 1,474,835
============ ============ ============ ============ ============
Taxable income
- from operations 0 978,535 2,703,252 2,920,859 1,427,419
============ ============ ============ ============ ============
- from gain (loss) on sale 0 0 0 0 0
============ ============ ============ ============ ============
Cash generated from operations
(Notes 2 and 3) 0 1,121,547 3,149,000 3,379,378 1,647,653
Cash generated from sales (Note 4) 0 0 0 286,411 0
Cash generated from refinancing 0 0 0 0 0
------------ ------------ ------------ ------------ ------------
Cash generated from operations, sales
and refinancing 0 1,121,547 3,149,000 3,665,789 1,647,653
Less: Cash distributions to investors
(Note 5)
- from operating cash flow 0 (528,364) (2,800,004) (3,350,014) (1,647,653)
- from sale of properties 0 0 0 0 0
- from cash flow from prior period 0 0 0 0 (52,351)
------------ ------------ ------------ ------------ ------------
Cash generated (deficiency) after
cash distributions 0 593,183 348,996 315,775 (52,351)
Special items (not including sales
and refinancing):
Limited partners' capital
contributions 0 40,000,000 0 0 0
General partners' capital
contributions 1,000 0 0 0 0
Syndication costs 0 (3,932,017) (181) 0 0
Acquisition of land and buildings 0 (19,691,630) (5,764,308) (336,116) 0
Investment in direct financing leases 0 (6,760,624) (1,365,075) 0 0
Investment in joint ventures 0 (314,998) (545,139) (140,052) 0
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) 0
Increase in other assets 0 (454,909) 9,226 0 0
Other 0 0 0 954 0
------------ ------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 1,000 8,639,025 (7,341,517) (162,513) (52,351)
============ ============ ============ ============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 0 33 67 72 35
============ ============ ============ ============ ============
- from recapture 0 0 0 0 0
============ ============ ============ ============ ============
Capital gain (loss) (Note 4) 0 0 0 0 0
============ ============ ============ ============ ============
</TABLE>
C-19
<PAGE>
C-20
<PAGE>
TABLE III - CNL INCOME FUND XIII, LTD. (continued)
<TABLE>
<CAPTION>
1992 6 Months
(Note 1) 1993 1994 1995 1996
------------ ------------ ------------ -------- -----------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 0 18 70 82 37
- from capital gain 0 0 0 0 0
- from investment income from prior
period 0 0 0 2 6
------------ ------------ ------------ ------------ -----------
Total distributions on GAAP basis (Note 5) 0 18 70 84 43
============ ============ ============ ============ ===========
Source (on cash basis)
- from sales 0 0 0 0 0
- from refinancing 0 0 0 0 0
- from operations 0 18 70 84 41
- from cash flow from prior period 0 0 0 0 2
------------ ------------ ------------ ------------ -----------
Total distributions on cash basis (Note 5) 0 18 70 84 43
============ ============ ============ ============ ===========
Total cash distributions as a percentage
of original $1,000 investment (Note 6) 0.00% 5.33% 7.56% 8.44% 8.50%
Total cumulative cash distributions per
$1,000 investment from inception 0 18 88 172 215
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) N/A 100% 100% 100% 100%
</TABLE>
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.
Note 6: Total cash distributions as a percentage of original $1,000 investment
are calculated based on actual distributions declared for the period.
(See Note 5 above)
Note 7: Certain data for columns representing less than 12 months have been
annualized.
C-21
<PAGE>
C-22
<PAGE>
TABLE III
Operating Results of Prior Programs CNL
INCOME FUND XIV, LTD.
<TABLE>
<CAPTION>
1992 6 Months
(Note 1) 1993 1994 1995 1996
------------ ------------ ------------ ------------ ------------
<S> <C>
Gross revenue $ 0 $ 256,234 $ 3,135,716 $ 4,017,266 $ 1,987,463
Equity in earnings of joint ventures 0 1,305 35,480 338,717 177,099
Profit (Loss) from sale of properties
(Note 4) 0 0 0 (66,518) 0
Interest income 0 27,874 200,499 50,724 21,659
Less: Operating expenses 0 (14,049) (181,980) (248,840) (138,978)
Interest expense 0 0 0 0 0
Depreciation and amortization 0 (28,918) (257,640) (340,112) (170,044)
------------ ------------ ------------ ------------ ------------
Net income - GAAP basis 0 242,446 2,932,075 3,751,237 1,877,199
============ ============ ============ ============ ============
Taxable income
- from operations 0 278,845 2,482,240 3,162,165 1,570,651
============ ============ ============ ============ ============
- from gain on sale 0 0 0 0 0
============ ============ ============ ============ ============
Cash generated from operations
(Notes 2 and 3) 0 321,737 2,812,631 3,709,844 1,799,902
Cash generated from sales (Note 4) 0 0 0 696,012 0
Cash generated from refinancing 0 0 0 0 0
------------ ------------ ------------ ------------ ------------
Cash generated from operations, sales 1,799,902
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) (1,799,902)
- from sale of properties 0 0 0 0 0
- from cash flow from prior period 0 0 0 0 (56,358)
------------ ------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions 0 312,687 582,679 862,105 (56,358)
Special items (not including sales and
refinancing):
Limited partners' capital
contributions 0 28,785,100 16,214,900 0 0
General partners' capital
contributions 1,000 0 0 0 0
Syndication costs 0 (2,771,892) (1,618,477) 0 0
Acquisition of land and buildings 0 (13,758,004) (11,859,237) (964,073) 0
Investment in direct financing leases 0 (4,187,268) (5,561,748) (75,352) 0
Investment in joint ventures 0 (315,209) (1,561,988) (1,087,218) 0
Return of capital from joint venture 0 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) 0
Increase in other assets 0 (444,267) 0 0 0
Other 0 0 0 5,530 0
------------ ------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 1,000 6,914,932 (4,180,609) (1,259,585) (56,358)
============ ============ ============ ============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 0 16 56 70 35
============ ============ ============ ============ ============
- from recapture 0 0 0 0 0
============ ============ ============ ============ ============
Capital gain (loss) (Note 4) 0 0 0 0 0
============ ============ ============ ============ ============
</TABLE>
C-23
<PAGE>
C-24
<PAGE>
TABLE III - CNL INCOME FUND XIV, LTD. (continued)
<TABLE>
<CAPTION>
1992 6 Months
(Note 1) 1993 1994 1995 1996
------------ ------------ ------------ ------------ ---------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 0 1 51 79 41
- from capital gain 0 0 0 0 0
- from return of capital 0 0 0 0 0
------------ ------------ ------------ ------------ ---------
Total distributions on GAAP basis (Note 5) 0 1 51 79 41
============ ============ ============ ============ =========
Source (on cash basis)
- from sales 0 0 0 0 0
- from refinancing 0 0 0 0 0
- from operations 0 1 51 79 40
- from cash flow from prior period 0 0 0 0 1
------------ ------------ ------------ ------------ ---------
Total distributions on cash basis (Note 5) 0 1 51 79 41
============ ============ ============ ============ =========
Total cash distributions as a percentage
of original $1,000 investment (Note 6) 0.00% 4.50% 6.50% 8.06% 8.25%
Total cumulative cash distributions
per $1,000 investment from inception 0 1 52 131 172
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% 100%
</TABLE>
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.
Note 6: Total cash distributions as a percentage of original $1,000 investment
are calculated based on actual distributions declared for the period.
(See Note 5 above)
Note 7: Certain data for columns representing less than 12 months have been
annualized.
C-25
<PAGE>
C-26
<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 contra-
bunions 0 40,000,000 0 0
General partners' capital contra-
bunions 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
============ ============ ============ ============
</TABLE>
C-27
<PAGE>
TABLE III - CNL INCOME FUND XV, 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 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 cash distributions as a percentage
of original $1,000 investment (Note 6) 0.00% 5.00% 7.25% 8.00%
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%
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.
Note 6: Total cash distributions as a percentage of original $1,000 investment
are calculated based on actual distributions declared for the period.
(See Note 5 above)
Note 7: Certain data for columns representing less than 12 months have been
annualized.
C-28
<PAGE>
TABLE III
Operating Results of Prior Programs CNL
INCOME FUND XVI, LTD.
</TABLE>
<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 contra-
bunions 0 20,174,172 24,825,828 0
General partners' capital contra-
bunions 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 acquit-
cyton 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-29
<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 cash distributions as a percentage
of original $1,000 investment (Note 6) 0.00% 4.50% 6.00% 8.00%
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.
Note 6: Total cash distributions as a percentage of original $1,000 investment
are calculated based on actual distributions declared for the period.
(See Note 5 above)
Note 7: Certain data for columns representing less than 12 months have been
annualized.
C-30
<PAGE>
TABLE III
Operating Results of Prior Programs CNL
INCOME FUND XVII, LTD.
1995 6 Months
(Note 1) 1996
------------ ------------
Gross revenue $ 0 $ 264,636
Profit from sale of properties 0 0
Interest income 12,153 102,696
Less: Operating expenses (3,493) (68,597)
Interest expense 0 0
Depreciation and amortization (309) (32,931)
------------ ------------
Net income - GAAP basis 8,351 265,804
============ ============
Taxable income
- from operations 12,153 254,708
============ ============
- from gain on sale 0 0
============ ============
Cash generated from operations
(Notes 2 and 3) 9,012 257,021
Cash generated from sales 0 0
Cash generated from refinancing 0 0
------------ ------------
Cash generated from operations, sales
and refinancing 9,012 257,021
Less: Cash distributions to investors
(Note 4)
- from operating cash flow (1,199) (142,120)
- from sale of properties 0 0
------------ ------------
Cash generated (deficiency) after cash
distributions 7,813 114,901
Special items (not including sales and
refinancing):
Limited partners' capital contra-
bunions 5,696,921 15,435,942
General partners' capital contra-
bunions 1,000 0
Syndication costs (604,348) (1,544,293)
Acquisition of land and buildings (332,928) (10,087,458)
Investment in direct financing
leases 0 (1,258,674)
Increase in restricted cash 0 0
Reimbursement of organization,
syndication and acquisition costs
paid on behalf of CNL Income Fund
XVII, Ltd. by related parties (347,907) (339,105)
Increase in other assets (221,282) (65,775)
Other (410) 0
------------ ------------
Cash generated (deficiency) after cash
distributions and special items 4,198,859 2,255,538
============ ============
TAX AND DISTRIBUTION DATA PER $1,000
INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 36 194
============ ============
- from recapture 0 0
============ ============
Capital gain (loss) 0 0
============ ============
C-31
<PAGE>
TABLE III - CNL INCOME FUND XVII, LTD. (continued)
1995 6 Months
(Note 1) 1996
------------ ------------
Cash distributions to investors
Source (on GAAP basis)
- from investment income 4 108
- from capital gain 0 0
- from investment income from
prior period 0 0
------------ ------------
Total distributions on GAAP basis (Note 4) 0
============
Source (on cash basis)
- from sales 0 0
- from refinancing 0 0
- from operations 4 108
------------ ------------
Total distributions on cash basis (Note 4) 4 108
============ ============
Total cash distributions as a percentage
of original $1,000 investment (Note 5) 0.00% 5.17%
Total cumulative cash distributions per
$1,000 investment from inception 4 112
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%
Note 1: Pursuant to a registration statement on Form S-11 under the Securities
Act of 1933, as amended, CNL Income Fund XVII, Ltd. ("CNL XVII") and
CNL Income Fund XVIII, Ltd. each registered for sale $30,000,000 units
of limited partnership interests ("Units"). The offering of Units of
CNL Income Fund XVII, Ltd. commenced September 2, 1995. Pursuant to
the registration statement, CNL XVIII could not commence until the
offering of Units of CNL Income Fund XVII, Ltd. was terminated. CNL
Income Fund XVII, Ltd. terminated its offering of Units on September
19, 1996, at which time subscriptions for the maximum offering proceeds
of $30,000,000 had been received. Upon the termination of the offering
of Units of CNL Income Fund XVII, Ltd., CNL XVIII commenced its
offering of Units. Activities through September 30, 1996, 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 XVII, Ltd.
Note 4: Distributions declared for the quarter ended December 31, 1995 are
reflected in the 1996 column due to the payment of such distributions
in January 1996. As a result of distributions being presented on a cash
basis, distributions declared and unpaid as of June 30, 1996 are not
included in the 1996 totals.
Note 5: Total cash distributions as a percentage of original $1,000 investment
are calculated based on actual distributions declared for the period.
(See Note 4 above)
Note 6: Certain data for columns representing less than 12 months have been
annualized.
C-32
<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
Date Date of closing at time back by application
Property Acquired Sale costs of sale program of GAAP Total
=========================================================================================================
<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
Wendy's -
Fairfield, CA 07/01/87 10/03/94 1,018,490 0 0 0 1,018,490
CNL Income Fund II, Ltd.:
Golden Corral -
Salisbury, NC 05/29/87 07/21/93 746,800 0 0 0 746,800
Pizza Hut -
Graham, TX 08/24/87 07/28/94 261,628 0 0 0 261,628
Golden Corral -
Medina, OH 11/18/87 11/30/94 626,582 0 0 0 626,582
CNL Income Fund IV, Ltd.:
Taco Bell -
York, PA 03/22/89 04/27/94 712,000 0 0 0 712,000
Burger King -
Hastings, MI 08/12/88 12/15/95 518,650 0 0 0 518,650
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
CNL Income Fund VI, Ltd.:
Hardee's -
Batesville, AR 11/02/89 05/24/94 791,211 0 0 0 791,211
Hardee's -
Heber Springs, AR 02/13/90 05/24/94 638,270 0 0 0 638,270
Hardee's -
Little Canada, MN 11/28/89 06/29/95 899,503 0 0 0 899,503
</TABLE>
TABLE V
SALES OR DISPOSALS OF PROPERTIES
(continued)
<TABLE>
<CAPTION>
===================================================================================
Cost of Properties
Including Closing and
Soft Costs
--------------------------------
Excess
Total (deficiency)
acquisition of property
cost, capital operating cash
Original improvements receipts over
mortgage closing and cash
Property financing soft costs (1) Total expenditures
===================================================================================
<S> <C>
CNL Income Fund, Ltd.:
Burger King -
San Dimas, CA 0 $955,000 $955,000 $214,021
Wendy's -
Fairfield, CA 0 861,500 861,500 156,990
CNL Income Fund II, Ltd.:
Golden Corral -
Salisbury, NC 0 642,800 642,800 104,000
Pizza Hut -
Graham, TX 0 205,500 205,500 56,128
Golden Corral -
Medina, OH 0 743,000 743,000 (116,418)
CNL Income Fund IV, Ltd.:
Taco Bell -
York, PA 0 616,501 616,501 95,499
Burger King -
Hastings, MI 0 419,936 419,936 98,714
CNL Income Fund V, Ltd.:
Perkins -
Myrtle Beach, SC (2) 0 986,418 986,418 53,582
CNL Income Fund VI, Ltd.:
Hardee's -
Batesville, AR 0 605,500 605,500 185,711
Hardee's -
Heber Springs, AR 0 532,893 532,893 105,377
Hardee's -
Little Canada, MN 0 821,692 821,692 77,811
</TABLE>
C-33
<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
Date Date of closing at time back by application
Property Acquired Sale costs of sale program of GAAP Total
==========================================================================================================
<S> <C>
CNL Income Fund VII, Ltd.:
Taco Bell -
Kearns, UT 06/14/90 05/19/92 700,000 0 0 0 700,000
Hardee's -
St. Paul, MN 08/09/90 05/24/94 869,036 0 0 0 869,036
Perkins -
Florence, SC (3) 08/28/90 08/25/95 0 0 1,160,000 0 1,160,000
Church's Fried Chicken -
Jacksonville, FL (4) 04/30/90 12/01/95 0 0 240,000 0 240,000
CNL Income Fund VIII, Ltd.:
Denny's -
Ocoee, FL 03/16/91 07/31/95 1,184,865 0 0 0 1,184,865
Church's Fried Chicken -
Jacksonville, FL (4) 09/28/90 12/01/95 0 0 240,000 0 240,000
Church's Fried Chicken -
Jacksonville, FL (5) 09/28/90 12/01/95 0 0 220,000 0 220,000
CNL Income Fund X, Ltd.:
Shoney's -
Denver, CO 03/04/92 08/11/95 1,050,186 0 0 0 1,050,186
CNL Income Fund XII, Ltd.:
Golden Corral -
Houston, TX 12/28/92 04/10/96 1,640,000 0 0 0 1,640,000
CNL Income Fund XIII, Ltd.:
Checkers -
Houston, TX 03/31/94 04/24/95 286,411 0 0 0 286,411
</TABLE>
TABLE V
SALES OR DISPOSALS OF PROPERTIES
(continued)
<TABLE>
<CAPTION>
=================================================================================
Cost of Properties
Including Closing and
Soft Costs
--------------------------------
Excess
Total (deficiency)
acquisition of property
cost, capital operating cash
Original improvements receipts over
mortgage closing and cash
Property financing soft costs (1) Total expenditures
=================================================================================
<S> <C>
CNL Income Fund VII, Ltd.:
Taco Bell -
Kearns, UT 0 560,202 560,202 139,798
Hardee's -
St. Paul, MN 0 742,333 742,333 126,703
Perkins -
Florence, SC (3) 0 1,084,905 1,084,905 75,095
Church's Fried Chicken -
Jacksonville, FL (4) 0 233,728 233,728 6,272
CNL Income Fund VIII, Ltd.:
Denny's -
Ocoee, FL 0 949,199 949,199 235,666
Church's Fried Chicken -
Jacksonville, FL (4) 0 238,153 238,153 1,847
Church's Fried Chicken -
Jacksonville, FL (5) 0 215,845 215,845 4,155
CNL Income Fund X, Ltd.:
Shoney's -
Denver, CO 0 987,679 987,679 62,507
CNL Income Fund XII, Ltd.:
Golden Corral -
Houston, TX 0 1,636,643 1,636,643 3,357
CNL Income Fund XIII, Ltd.:
Checkers -
Houston, TX 0 286,411 286,411 0
</TABLE>
C-34
<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
Date Date of closing at time back by application
Property Acquired Sale costs of sale program of GAAP Total
===========================================================================================================
<S> <C>
CNL Income Fund XIV, Ltd.:
Checkers -
Knoxville, TN 03/31/94 03/01/95 339,031 0 0 0 339,031
Checkers -
Dallas, TX 03/31/94 03/01/95 356,981 0 0 0 356,981
CNL Income Fund XV, Ltd.:
Checkers -
Knoxville, TN 05/27/94 03/01/95 263,221 0 0 0 263,221
Checkers -
Leavenworth, KS 06/22/94 03/01/95 259,600 0 0 0 259,600
Checkers -
Knoxville, TN 07/08/94 03/01/95 288,885 0 0 0 288,885
CNL Income Fund XVI, Ltd.:
Long John Silver's -
Appleton, WI 06/24/95 04/24/96 775,000 0 0 0 775,000
</TABLE>
TABLE V
SALES OR DISPOSALS OF PROPERTIES
(continued)
<TABLE>
<CAPTION>
====================================================================================
Cost of Properties
Including Closing and
Soft Costs
--------------------------------
Excess
Total (deficiency)
acquisition of property
cost, capital operating cash
Original improvements receipts over
mortgage closing and cash
Property financing soft costs (1) Total expenditures
====================================================================================
<S> <C>
CNL Income Fund XIV, Ltd.:
Checkers -
Knoxville, TN 0 339,031 339,031 0
Checkers -
Dallas, TX 0 356,981 356,981 0
CNL Income Fund XV, Ltd.:
Checkers -
Knoxville, TN 0 263,221 263,221 0
Checkers -
Leavenworth, KS 0 259,600 259,600 0
Checkers -
Knoxville, TN 0 288,885 288,885 0
CNL Income Fund XVI, Ltd.:
Long John Silver's -
Appleton, WI 0 613,838 613,838 161,162
</TABLE>
(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-35
