FILED PURSUANT TO RULE 424(B)(3)
FILE NO. 33-90998-01
33-90998
CNL INCOME FUND XVII, LTD.
AND
CNL INCOME FUND XVIII, LTD.
Supplement No. 2, dated November 6, 1997
to Prospectus, dated May 9, 1997
This Supplement is part of, and should be read in conjunction with, the
Prospectus dated May 9, 1997. 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.
All subscriptions referred to in this Supplement are for the purchase
of Units of CNL Income Fund XVIII, Ltd. ("CNL XVIII"). Offers are no longer
being made nor are the General Partners accepting subscriptions for CNL Income
Fund XVII, Ltd. ("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.
Information as to the number and types of Properties acquired by CNL
XVIII is presented as of October 22, 1997, and all references to Property
acquisitions should be read in that context. Proposed properties for which CNL
XVIII receives initial commitments, as well as property acquisitions that occur
after October 22, 1997, will be reported in a subsequent Supplement.
THE OFFERING
GENERAL
The General Partners have elected to extend this Offering until August
11, 1998.
SUBSCRIPTION PROCEDURES
As of October 22, 1997, CNL XVIII had received total subscription
proceeds of $29,805,669 (2,980,567 Units) from 1,388 Limited Partners. Net
offering proceeds to CNL XVIII after deduction of Selling Commissions, due
diligence expense reimbursement fees and offering expenses totalled
approximately $26,073,000. As of October 22, 1997, CNL XVIII had invested or
committed for investment approximately $25,400,000 of such proceeds in 21
Properties and to pay Acquisition Fees and miscellaneous Acquisition Expenses,
leaving approximately $694,000 in offering proceeds available for investment in
Properties. As of October 22, 1997, CNL XVIII had incurred $1,341,255 in
Acquisition Fees to an Affiliate of the General Partners.
BUSINESS
GENERAL
The Partnership invests in the fast-food, family-style, and casual
dining segments of the restaurant industry, the most rapidly growing segments in
recent years. According to the National Restaurant Association, 51% of adults
eat at a quick-service restaurant and 42% of adults patronize a
moderately-priced family restaurant at least once each week. In addition, the
National Restaurant Association indicates that Americans spend approximately 43
cents of every food dollar on dining away from home. Surveys published in
<PAGE>
Restaurant Business indicate that families with children choose quick-service
restaurants four out of every five times they dine out. Additionally, according
to The Wall Street Journal (May 11, 1992) the average American spends $19,791 on
fast-food in a lifetime. Further, according to Nation's Restaurant News, the 100
largest restaurant chains posted an average of 4.59% growth in their systemwide
sales figures for 1996. Casual-theme dining concepts are the chains showing the
strongest growth. In 1996, the family-style segment experienced sales growth of
3.61% over 1995 figures, and, the casual dining segment experienced systemwide
sales growth in 1996 of 12.37%, compared to 12.99% in 1995. The General Partners
believe that the Partnership will have the opportunity to participate in this
growth through the ownership of Properties leased to operators of the Restaurant
Chains.
The fast-food, family-style, and casual dining segments of the
restaurant industry have demonstrated their ability to adapt to changes in
consumer preferences, such as health and dietary issues, decreases in the
disposable income of consumers, and environmental awareness, through various
innovative techniques, including special value pricing and promotions, increased
advertising, menu changes featuring low-calorie, low- cholesterol menu items,
and new packaging and energy conservation techniques.
The table set forth below provides information with respect to certain
Restaurant Chains in which Affiliates of the General Partners (consisting of a
listed public REIT, an unlisted public REIT, 18 public partnerships, including
CNL XVIII, and 8 private partnerships) have invested, as of June 30, 1997:
<TABLE>
<CAPTION>
Approximate Aggregate
Restaurant Chain Dollars Invested Percentage of Number of
Programs by Affiliates Dollars Invested Prior
- ---------------- ---------------- ---------------- -------------
<S> <C>
Golden Corral $143,663,000 16.7% 26
Burger King 105,659,000 12.3% 25
Denny's 91,365,000 10.6% 20
Jack in the Box 90,060,000 10.5% 15
Hardee's 58,599,000 6.8% 13
Boston Market 46,259,000 5.4% 8
Shoney's 35,663,000 4.2% 13
Long John Silver's 32,029,000 3.7% 6
Wendy's 30,011,000 3.5% 16
TGI Friday's 28,184,000 3.3% 9
Darryl's 22,296,000 2.6% 4
Checkers 21,263,000 2.5% 7
Perkins 16,311,000 1.9% 9
Pizza Hut 15,578,000 1.8% 8
KFC 13,642,000 1.6% 10
Popeyes 10,589,000 1.2% 9
Taco Bell 6,915,000 0.8% 7
Black-eyed Pea 6,432,000 0.8% 4
Arby's 5,573,000 0.7% 5
Houlihan's 4,741,000 0.6% 1
</TABLE>
PROPERTY ACQUISITIONS
Between May 1, 1997 and October 22, 1997, CNL XVIII acquired eight
Properties consisting of land and building. The Properties are a Boston Market
Property (in Timonium, Maryland), a Jack in the Box Property (in Houston,
Texas), two Golden Corral Properties (one in each of Elizabethtown, Kentucky,
and Destin, Florida), two IHOP Properties (one in each of Santa Rosa,
California, and Bridgeview, Illinois) , an Arby's Property (in Lexington, North
Carolina) and a Ground Round Property (in Rochester, New York). For information
regarding the 13 Properties acquired by CNL XVIII prior to May 1, 1997, see the
Prospectus dated May 9, 1997.
<PAGE>
In connection with the purchase of each of these eight Properties, CNL
XVIII, as lessor, entered into a long-term lease agreement with an unaffiliated
lessee. The general terms of the lease agreements are described in the section
of the Prospectus entitled "Business - Description of Leases." For the
Properties that are to be constructed, CNL XVIII has entered into development
and indemnification and put agreements with the lessee. The general terms of
these agreements are described in the section of the Prospectus entitled
"Business - Site Selection and Acquisition of Properties - Construction and
Renovation."
The Property in Minnetonka, Minnesota, was originally acquired with the
intent to construct a Boson Market restaurant. The tenant has subsequently
decided not to develop on this location. CNL XVIII and the tenant are currently
in discussions regarding the disposition of the Property or development into a
different restaurant concept. If sold, any proceeds received from the sale of
the Property will be used by CNL XVIII to acquire an additional Property.
The following table sets forth the location of the eight Properties
consisting of land and building acquired by CNL XVIII from May 1, 1997 through
October 22, 1997, a description of the competition, and a summary of the
principal terms of the acquisition and lease of each Property.
PROPERTY ACQUISITIONS
From May 1, 1997 through October 22, 1997
<TABLE>
<CAPTION>
Lease Expira-
Property Location and Purchase Date tion and Minimum Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- ---------------------- --------- --------- --------------- --------------- --------------- -----------
<S> <C>
BOSTON MARKET $749,978 05/08/97 05/2012; five 10.38% of CNL for each lease at any time
(the "Timonium Property") (excluding five-year XVIII's total year after after the
Restaurant to be renovated development year renewal cost topurchase the the fifth lease fifth lease
costs) (3) options property; increases year, (i) 4% of year
The Timonium Property is by 10% after the annual
located on the northeast corner fifth lease year and gross sales
of the intersection of York after every five minus(ii)
Road and Belfast Road, in years thereafter the minimum
Timonium, Baltimore County, during the annual rent
Maryland, in an area of mixed lease term for such lease
retail, commercial, and year
residential development. Other
fast-food and family-style
restaurants located in
proximity to the Timonium
Property include a McDonald's,
a Burger King, a KFC, and
several local restaurants.
JACK IN THE BOX $1,290,000 05/09/97 05/2015; four $132,225 (6); for each lease at any time
(the "Houston #2 Property") (3)(6) five-year increases by 8% year (i) 5% of after the
Restaurant to be constructed renewal after the fifth annual gross seventh lease
options lease year and sales minus (ii) year
The Houston #2 Property is after every the minimum annual
located on the north side of five years rent for such
Louetta Road, west of State thereafter lease year (5)
Highway 249, in Houston, Harris during the
County, Texas, in an area of lease term
mixed retail, commercial, and
residential development. Other
fast-food and family-style
restaurants located in
proximity to the Houston #2
Property include a McDonald's
and a Subway Sandwich Shop.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Property Location Purchase Date tion and Minimum Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- ----------------- --------- --------- --------------- --------------- --------------- -----------
<S> <C>
GOLDEN CORRAL (7) $446,180 05/21/97 05/2012; four 10.75% of Total for each lease during the
(the "Elizabethtown Property") (excluding five-year Cost (4) year, 5% of the first
Restaurant to be constructed closing renewal amount by which through
and options annual gross seventh
The Elizabethtown Property is development sales exceed lease
located on the east side of costs) (3) $2,697,649 (5) years and
North Dixie Avenue, in the tenth
Elizabethtown, Hardin County, through
Kentucky, in an area of mixed fifteenth
retail, commercial, and lease
residential development. Other years only
fast-food and family-style
restaurants located in
proximity to the Elizabethtown
Property include a Steak N
Shake, a Dairy Queen, an
Arby's, a Bob Evans, a Captain
D's, a Fazoli's, a Hardee's, a
McDonald's, a Taco Bell, and a
Lee's Famous Recipe Country
Chicken.
IHOP (8) $1,286,364 05/21/97 05/2017; $130,244; for each lease during the
(the "Santa Rosa Property") three five- increases by year, (i) 4% of eleventh
Existing restaurant year renewal 10% after the annual gross lease year
options fifth lease sales minus and at the
The Santa Rosa Property is year and after (ii) the end of the
located on the northwest every five minimum annual initial
quadrant of Fulton Road and years rent for such lease term
Guerneville Road, in Santa thereafter lease year
Rosa, Sonoma County, during the
California, in an area of mixed lease term
retail, commercial, and
residential development. Other
fast-food and family-style
restaurants located in
proximity to the Santa Rosa
Property include a Taco Bell, a
McDonald's, and several local
restaurants.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Property Location and Purchase Date tion and Minimum Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- --------- --------- --------------- --------------- --------------- -----------
<S> <C>
ARBY'S $632,418 07/15/97 07/2017; two $63,242; for each lease during the
(the "Lexington Property") five-year increases by year, (i) 4% of seventh
Existing restaurant renewal 4.14% after the annual gross and tenth
options third lease sales minus lease
The Lexington Property is year and after (ii) the years only
located on the northeast corner every three minimum annual
of North Main Street and East years rent for such
Fourth Street, in Lexington, thereafter lease year
Davidson County, North during the
Carolina, in an area of mixed lease term
retail, commercial, and
residential development. Other
fast-food and family-style
restaurants located in
proximity to the Lexington
Property include a local
restaurant.
IHOP (8) $1,423,008 07/16/97 07/2017; $144,080; for each lease during the
(the "Bridgeview Property") three five- increases by year, (i) 4% of eleventh
Existing restaurant year renewal 10% after the annual gross lease year
options fifth lease sales minus and at the
The Bridgeview Property is year and after (ii) the end of the
located at the northeast every five minimum annual initial
quadrant of the intersection of years rent for such lease term
West 79th Street and Harlem thereafter lease year
Avenue, in Bridgeview, Cook during the
County, Illinois, in an area of lease term
mixed retail, commercial, and
residential development. Other
fast-food and family-style
restaurants located in
proximity to the Bridgeview
Property include a Pizza Hut, a
McDonald's, a White Castle, and
a Burger King.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Lease Expira-
Property Location and Purchase Date tion and Minimum Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- --------- --------- --------------- --------------- --------------- -----------
<S> <C>
GOLDEN CORRAL (7) $546,572 09/17/97 03/2013; four 10.75% of Total for each lease during the
(the "Destin Property") (excluding five-year Cost (4) year, 5% of the first
Restaurant to be constructed development renewal amount by which through
costs) (3) options annual gross seventh
The Destin Property is located sales exceed lease
on the northeast quadrant of $2,798,367 (5) years and
Highway 98 and Beach Drive, in the tenth
Destin, Okaloosa County, through
Florida, in an area of mixed fifteenth
retail, commercial, and lease
residential development. Other years only
fast-food and family-style
restaurants located in
proximity to the Destin
Property include a Burger King,
a McDonald's, and a local
restaurant.
GROUND ROUND $1,045,455 10/20/97 10/2017; five $107,159 (9) at any
(the "Rochester Property") five-year time after
Existing restaurant renewal the
options seventh
The Rochester Property is lease year
located on the south side of
Buffalo Road, west of Pixley
Road, southeast of Interstate
490, in Rochester, Monroe
County, New York, in an area of
mixed retail, commercial, and
residential development. Other
fast-food and family-style
restaurants located in
proximity to the Rochester
Property include a Perkins, a
Denny's, a Burger King, a
Wendy's, and several local
restaurants.
</TABLE>
<PAGE>
- ------------------------
FOOTNOTES:
(1) The estimated federal income tax basis of the depreciable portion (the
building portion) of each of the Properties acquired, and for
construction Properties, once the buildings are constructed, is set
forth below:
Property Federal Tax Basis
-------- -----------------
Timonium Property $ 454,000
Houston #2 Property 622,000
Elizabethtown Property 1,077,000
Santa Rosa Property 854,000
Lexington Property 456,000
Bridgeview Property 1,144,000
Destin Property 1,029,000
Rochester Property 579,000
(2) Minimum annual rent for each of the Properties became payable on the
effective date of the lease, except as indicated below. For the
Timonium Property, minimum annual rent will become due and payable on
the date the tenant receives from the landlord its final funding of the
construction costs. For the Elizabethtown and Destin Properties,
minimum annual rent will become due and payable on the earlier of (i)
180 days after execution of the lease, (ii) the date the certificate of
occupancy for the restaurant is issued, or (iii) the date the
restaurant opens for business to the public. During the period
commencing with the effective date of the lease to the date minimum
annual rent becomes payable for the Timonium , Elizabethtown and Destin
Properties, as described above, interim rent equal to a specified rate
per annum (ranging from 10% to 10.38%) of the amount funded by CNL
XVIII in connection with the purchase and construction of the
Properties shall accrue and be payable in a single lump sum at the time
of final funding of the construction costs.
(3) The development agreements for the Properties which are to be
constructed or renovated provide that construction or renovation must
be completed no later than the dates set forth below. The maximum cost
to CNL XVIII (including the purchase price of the land (if applicable),
development costs (if applicable), and closing and acquisition costs)
is not expected to, but may, exceed the amounts set forth below:
<TABLE>
<CAPTION>
Property Estimated Maximum Cost Estimated Final Completion Date
-------------------------------------------------------------------------------------------
<S> <C>
Timonium Property $1,140,100 Opened for business July 13, 1997
Houston #2 Property 1,290,000 Opened for business September 24, 1997
Elizabethtown Property 1,572,176 Opened for business October 21, 1997
Destin Property 1,628,391 March 16, 1998
</TABLE>
(4) The "Total Cost" is equal to the sum of (i) the purchase price of the
Property, (ii) closing costs, and (iii) actual development costs
incurred under the development agreement.
(5) Percentage rent shall be calculated on a calendar year basis (January 1
to December 31).
<PAGE>
(6) CNL XVIII paid for all construction costs in advance at closing;
therefore, minimum annual rent was determined on the date acquired and
is not expected to change.
(7) The lessee of the Elizabethtown and Destin Properties is the same
unaffiliated lessee.
(8) The lessee of the Santa Rosa and Bridgeview Properties is the same
unaffiliated lessee.
(9) For each lease year, percentage rent shall be calculated upon the
amount by which gross sales exceed base sales ($1,785,985) as follows;
6% for an increase of 0% to 33.33% above base sales, 5.5% for an
increase of 33.34% to 66.7% above base sales, and 5% for an increase of
66.8% to 100% above base sales. For increases in gross sales in excess
of 100%, percentage rent shall decrease by .5% for every additional
33.33% increase above base sales.
<PAGE>
MANAGEMENT COMPENSATION
FEES AND EXPENSES PAID TO THE
GENERAL PARTNERS AND THEIR AFFILIATES
Selling Commissions and Due Diligence Expense Reimbursement Fee. The
Managing Dealer, 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 October 22,
1997, the Partnership had incurred $2,533,482 for Selling Commissions due to the
Managing Dealer, a substantial portion of which was reallowed to other
broker-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 October 22, 1997, the Partnership had incurred $149,028 in
due diligence expense reimbursement fees due to the Managing Dealer. The
majority of these fees has since been reallowed to other broker-dealers for
payment of bona fide due diligence expenses.
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 October 22,
1997, the Partnership had incurred $1,341,255 in Acquisition Fees payable to
CNL Fund Advisors, Inc.
Management Fees. The Partnership has entered 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. During the six months
ended June 30, 1997, the Partnership had incurred $3,313 in management fees.
Administrative and Other Expenses. CNL Fund Advisors, Inc. and its
Affiliates provide 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. During the six months ended June 30, 1997,
the Partnership incurred $255,949 in administrative and other expenses, which
includes $212,279 incurred in connection with the Offering and is 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 June 30, 1997.
Reimbursement of Out-of-Pocket Expenses. CNL Fund Advisors, Inc. and
its Affiliates are entitled to receive reimbursement, at cost, for expenses
incurred for Organizational and Offering Expenses, Acquisition Expenses and
operating expenses. During the six months ended June 30, 1997, the Advisor and
its Affiliates incurred $210,866, $108,841, and $23,105 on behalf of the
Partnership for Organizational and Offering Expenses, Acquisition Expenses, and
operating expenses, respectively.
<PAGE>
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 the Prospectus and this Prospectus
Supplement.
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1997 June 30, 1996 For the Period February 10,
Year Ended 1995 (date of inception)
December 31, through December 31,
(Unaudited) (Unaudited) 1996 1995
--------------------- -------------- ------------ ---------------------------
<S> <C>
Revenues $ 342,840 $ - $ 31,614 $ -
Net income 236,202 - 26,910 -
Cash distributions declared (2) 421,046 - 57,846 -
Net income per Unit 0.15 - 0.05 -
Cash distributions declared per Unit (2) 0.26 - 0.11 -
Weighted average number of
Limited Partner Units outstanding (3) 1,617,280 - 503,436 -
June 30, June 30,
1997 1996 December 31, December 31,
(Unaudited) (Unaudited) 1996 1995
---------- ----------- ------------ -----------
Total assets $21,127,285 $355,125 $7,240,324 $256,890
Total partners' capital 18,940,133 1,000 6,996,213 1,000
</TABLE>
(1) Operations did not commence until October 12, 1996, the date following
when CNL XVIII received the minimum offering proceeds of $1,500,000,
and such proceeds were released from escrow.
(2) Approximately 44% and 53% of cash distributions ($0.11 and $0.06 per
Unit, respectively) for the six months ended June 30, 1997 and the year
ended December 31, 1996, respectively, represent a return of capital in
accordance with generally accepted accounting principles ("GAAP"). Cash
distributions treated as a return of capital on a GAAP basis represent
the amount of cash distributions in excess of accumulated net income on
a GAAP basis. CNL XVIII has not treated such amount as a return of
capital for purposes of calculating the Limited Partners' Invested
Capital Contributions and the Limited Partners' 8% Return, as described
in the Form of Amended and Restated Agreement of Limited Partnership
included as Exhibit A to the Prospectus.
(3) Represents the weighted average number of Units outstanding during the
period CNL XVIII was operational.
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 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 Part- nership's anticipated investments, proposed
operations, and cash distributions to the Limited Partners.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
On September 20, 1996, the Partnership commenced an Offering to the
public of up to 3,500,000 Units of limited partnership interest pursuant to a
registration statement on Form S-11 under the Securities Act of 1933, as
amended, effective August 11, 1995. As of June 30, 1997, the Partnership had
sold 2,219,221 Units, representing $22,192,212 of capital contributed by the
Limited Partners. 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 until August 11, 1998.
As of June 30, 1997, net proceeds to the Partnership from its offering
of Units, after deduction of Organizational and Offering Expenses, totalled
$19,144,913 and had been invested or committed for investment in 17 Properties
(seven of which were under construction at June 30, 1997), and to pay
Acquisition Fees and certain Acquisition Expenses . As of June 30, 1997, the
Partnership had incurred $998,650 in Acquisition Fees to an Affiliate of the
General Partners.
As of June 30, 1997, the Partnership had entered into seven development
agreements with tenants which provide terms and specifications for the
construction of buildings. The agreements provide a maximum amount of
development costs (including the purchase price of the land and closing costs)
to be paid by the Partnership. The aggregate maximum development costs the
Partnership has agreed to pay is approximately $7,536,200, of which
approximately $5,774,700 in land and other costs had been incurred as of June
30, 1997. The buildings under construction are expected to be operational by
November 1997. In connection with the acquisition of each of these Properties,
the Partnership entered into a long-term, triple- net lease.
During the period July 1, 1997 through October 22, 1997, the
Partnership acquired four additional Properties for cash, at a total cost of
approximately $3,647,500. In connection with the one Property under construction
, the Partnership has agreed to pay development costs (including the purchase
price of the land and closing costs) of approximately $1,628,400, of which
approximately $546,600 in land and other costs had been paid by the Partnership
as of October 22, 1997. The building under construction is expected to be
operational by March 1998. The lease agreements for the existing Properties and
the Property to be constructed are substantially the same as the leases relating
to the Partnership's other Properties.
As of October 22, 1997, the Partnership had sold a total of 2,980,567
Units, for an aggregate of $29,805,669 in gross Offering proceeds. Net offering
proceeds to CNL XVIII after deduction of Selling Commissions, due diligence
expense reimbursement fees and offering expenses totalled approximately
$26,073,000. As of October 22, 1997, the Partnership had invested or committed
for investment approximately $25,400,000 in 21 Properties and to pay Acquisition
Fees and certain Acquisition Expenses. As of October 22, 1997, the Partnership
had incurred $1,341,255 in Acquisition Fees to an Affiliate of the General
Partners.
The Partnership presently is negotiating to acquire additional
properties, but as of October 22, 1997, had not acquired any such properties.
The Partnership will use the remaining net Offering proceeds, together with
proceeds from the sale of Units subsequent to October 22, 1997, to acquire
additional Properties, to pay Acquisition Fees and certain Acquisition Expenses
and to pay expenses relating to the sale of Units. 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.
None of the Properties owned or to be acquired by the Partnership is or
may be encumbered. 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.
Until Properties are acquired by the Partnership, all Partnership
proceeds are held in short-term, highly liquid investments which the General
Partners believe to have appropriate safety of principal. This investment
strategy provides high liquidity in order to facilitate the Partnership's use of
<PAGE>
these funds to acquire Properties at such time as Properties suitable for
acquisition are located. At June 30, 1997, the Partnership had $2,564,807
invested in such short-term investments, as compared to $5,371,325 at December
31, 1996. The decrease in the amount invested in short-term investments is
primarily attributable to the acquisition of additional Properties, as described
above, during the six months ended June 30, 1997. The funds remaining at June
30, 1997, after the payment of accrued acquisition and construction costs and
other liabilities, will be used to purchase and develop additional Properties,
to pay Limited Partner distributions and to meet the Partnership's working
capital and other needs.
During the six months ended June 30, 1997 and 1996, Affiliates of the
General Partners incurred on behalf of the Partnership $210,866 and $309,340,
respectively, for certain Organizational and Offering Expenses. In addition,
during the six months ended June 30, 1997, Affiliates of the General Partners
incurred on behalf of the Partnership $108,841 for certain Acquisition Expenses
and $23,105 for certain operating expenses. As of June 30, 1997, the Partnership
owed $74,235 to related parties for such amounts, fees and other reimbursements.
As of July 31, 1997, the Partnership had reimbursed the Affiliates all such
amounts. Amounts payable to other parties, including distributions payable,
increased to $1,864,992 at June 30, 1997, from $160,222 at December 31, 1996, as
a result of an increase in distributions payable to Limited Partners and costs
incurred with respect to the Properties under construction and unpaid at June
30, 1997.
During the six months ended June 30, 1997, the Partnership generated
cash from operations (which includes cash received from tenants, interest and
other income received, less cash paid for expenses) of $463,751. Based on cash
from operations, the Partnership declared distributions to the Limited Partners
of $421,046 for the six months ended June 30, 1997 ($266,570 for the quarter
ended June 30, 1997). This represents distributions of $0.26 per weighted
average Limited Partner Unit for the six months ended June 30, 1997 ($0.14 per
weighted average Limited Partner Unit for the quarter ended June 30, 1997) . No
distributions were made to the General Partners for the quarter and six months
ended June 30, 1997. No amounts distributed or to be distributed to the Limited
Partners for the six months ended June 30, 1997, are required to be or have been
treated by the Partnership as a return of capital for purposes of calculating
the Limited Partners' return on their adjusted capital contributions. The
Partnership intends to continue to make distributions of cash available for
distribution to the Limited Partners on a quarterly basis.
The Partnership's investment strategy of acquiring Properties for cash
and leasing them under triple-net leases to operators who meet specified
financial standards is expected to minimize the Partnership's operating
expenses. Partnership net income is expected to increase throughout 1997, as
rental income increases, due to the acquisition of additional Properties and due
to the fact that the Properties that were under construction at June 30, 1997,
will be operational. Accordingly, the General Partners believe that any
anticipated decrease in the Partnership's liquidity in 1997, due to its
investment of available net Offering proceeds in Properties and the payment of
additional costs relating to the Properties under construction at June 30, 1997,
will not have an adverse effect on the Partnership's operations.
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 purchase a Property until sufficient cash is available for
such purchase, the General Partners do not believe that working capital reserves
are necessary at this time. In addition, due to the fact that the leases of the
Partnership's Properties are on a triple-net basis, it is not anticipated that a
permanent reserve for maintenance and repairs is necessary at this time. To the
extent, however, that the Partnership has insufficient funds for such purposes,
the General Partners will contribute to the Partnership an aggregate amount of
up to one percent of the offering proceeds for repairs and maintenance. The
General Partners have the right to cause the Partnership to maintain reserves
if, in their discretion, they determine such reserves are necessary to meet the
Partnership's working capital needs.
The General Partners have the right, but not the obligation, to make
additional capital contributions if they deem it appropriate in connection with
the operations of the Partnership.
RESULTS OF OPERATIONS
No significant operations commenced until the Partnership received and
released from escrow the minimum Offering proceeds of $1,500,000 on October 11,
1996.
<PAGE>
As of June 30, 1997, the Partnership had purchased 17 Properties and
entered into lease agreements relating to each of these Properties. The leases
of the Properties provide for minimum base annual rental payments (payable in
monthly installments) ranging from approximately $65,700 to $189,700. Most of
the leases provide for percentage rent based on sales in excess of a specified
amount. In addition, some of the leases provide that, commencing in specified
lease years (generally the sixth lease year), the annual base rent required
under the terms of the lease will increase.
During the quarter and six months ended June 30, 1997, the Partnership
earned $220,191 and $273,534, respectively, in rental income from operating
leases and earned income from direct financing leases from ten Properties which
were operational at June 30, 1997. Because the Partnership did not commence
significant operations until it received the minimum Offering proceeds on
October 11, 1996, and has not yet acquired all of its Properties, Partnership
revenues for the quarter and six months ended June 30, 1997, represent only a
portion of revenues which the Partnership is expected to earn during a full
quarter and six months in which the Partnership's Properties are operational.
During the six months ended June 30, 1997, four lessees of the
Partnership , (i) Platinum Rotisserie, L.L.C. , (ii) Carrols Corporation, (iii)
Tiffany, L.L.C., and (iv) Golden Corral Corporation, each contributed more than
ten percent of the Partnership's total rental income. As of June 30, 1997,
Platinum Rotisserie, L.L.C. , Carrols Corporation, and Tiffany, L.L.C. were each
lessees under leases relating to one restaurant and Golden Corral Corporation
was the lessee under leases relating to two restaurants. During the six months
ended June 30, 1997, three Restaurant Chains, Golden Corral Family Steakhouse
Restaurants, Burger King, and Boston Market, each accounted for more than ten
percent of the Partnership's total rental income. Because the Partnership did
not commence operations until October 1996, and its first Property was not
purchased until December 1996, the foregoing information regarding the lessees
and Restaurant Chains which contributed a significant amount of the
Partnership's total rental income during the six months ended June 30, 1997, may
or may not be representative of the lessees which will account for more than ten
percent of the Partnership's rental income during the remainder of 1997 and
subsequent years. Because the Partnership has not completed its acquisition of
Properties as yet, it is not possible to determine which lessees or Restaurant
Chains will contribute more than ten percent of the Partnership's rental income
during the remainder of 1997 and subsequent years. In the event that certain
lessees or Restaurant Chains contribute more than ten percent of the
Partnership's rental income in the current and future years, any failure of such
lessees or Restaurant Chains could materially affect the Partnership's income.
During the quarter and six months ended June 30, 1997, the Partnership
also earned $26,435 and $69,306, respectively, in interest income from
investments in money market accounts or other short-term, highly liquid
investments. As net Offering proceeds are invested in additional Properties and
the Properties under construction become operational, the percentage of total
income representing interest income is expected to decrease.
Operating expenses, including depreciation and amortization, were
$72,601 and $106,638 for the quarter and six months ended June 30, 1997,
respectively. The dollar amount of operating expenses is expected to increase
and the amount of general operating and administrative expenses as a percentage
of total revenues is expected to decrease, as the Partnership acquires
additional Properties and the Properties under construction become operational.
MANAGEMENT
Robert A. Bourne, age 50, is President and Treasurer of CNL Group,
Inc., President, a director and a registered principal of CNL Securities Corp.
(the Managing Dealer of the Offering) and President and a director of CNL
Investment Company. Mr. Bourne currently holds the position of Vice Chairman of
the Board, director and Treasurer of CNL Fund Advisors, Inc. Mr. Bourne served
as President of CNL Fund Advisors, Inc. from the date of its inception through
June 30, 1997. Mr. Bourne is Chief Investment Officer, Vice Chairman of the
Board, a director and Treasurer of CNL Institutional Advisors, Inc., a
registered investment advisor. Mr. Bourne served as President of CNL
Institutional Advisors, Inc. from the date of its inception through June 30,
1997. Mr. Bourne also has served as a director since 1992, as President from
<PAGE>
July 1992 to February 1996, and since February 1996, as Vice Chairman of the
Board , Secretary and Treasurer of Commercial Net Lease Realty, Inc. In
addition, Mr. Bourne has served as a director since its inception in 1991, as
President from 1991 to February 1996, as Secretary from February 1996 to July
1996, and since February 1996, as Treasurer and Vice Chairman of the Board of
CNL Realty Advisors, Inc. In addition, Mr. Bourne has served as President and a
director of CNL American Properties Fund, Inc. since 1994, and has served as
President and a director of CNL American Realty Fund, Inc. since 1996 and of CNL
Real Estate Advisors, Inc since January 1997. Upon graduation from Florida State
University in 1970, where he received a B.A. in Accounting, with honors, Mr.
Bourne worked as a certified public accountant and, from September 1971 through
December 1978, was employed by Coopers & Lybrand, Certified Public Accountants,
where he held the position of tax manager beginning in 1975. From January 1979
until June 1982, Mr. Bourne was a partner in the accounting firm of Cross &
Bourne and from July 1982 through January 1987, he was a partner in the
accounting firm of Bourne & Rose, P.A., Certified Public Accountants. Mr.
Bourne, who joined CNL Securities Corp. in 1979, has participated as a general
partner or joint venturer in over 100 real estate ventures involved in the
financing, acquisition, construction and rental of office buildings, apartment
complexes, restaurants, hotels and other real estate. Included in these real
estate ventures are approximately 64 privately offered real estate limited
partnerships in which Mr. Bourne, directly or through an affiliated entity,
serves or has served as a general partner. Also included are the CNL Income Fund
Partnerships, public real estate limited partnerships with investment objectives
similar to those of the Partnership, in which Mr. Bourne serves as a general
partner. See "Conflicts of Interest."
CNL GROUP, INC.
The following person serves as an operating officer of CNL Group, Inc.
or its affiliates or subsidiaries in the discretion of the Boards of Directors
of those companies, but, except as specifically indicated, does not serve as a
member of the Boards of Directors of those entities. The Boards of Directors
have the responsibility for creating and implementing the policies of CNL Group,
Inc. and its affiliated companies. For information regarding other operating
officers, see the section of the Prospectus entitled "Management."
Curtis B. McWilliams. Mr. McWilliams joined CNL Group, Inc. in April
1997 and currently serves as President of CNL Fund Advisors, Inc. In addition,
Mr. McWilliams serves as Executive Vice President of CNL Group, Inc. and as
President of CNL Institutional Advisors, Inc. and certain other subsidiaries of
CNL Group, Inc. From January 1991 to August 1996, Mr. McWilliams was a managing
director in the corporate banking group of Merrill Lynch's investment banking
division. During this time, he was a senior relationship manager with Merrill
Lynch and as such was responsible for a number of the firm's relationships with
companies such as AT&T, AT&T Capital, AMR Corporation, J.C. Penney and the
Robert M. Bass Group. In addition, from February 1990 to February 1993, he
served as co-head of one of the Industrial Banking Groups within Merrill Lynch's
investment banking division and had administrative responsibility for 25 bankers
overseeing 150 client relationships, including the firm's transportation group.
In addition, from September 1996 to March 1997, Mr. McWilliams served as
Chairman of Private Advisory Services, Merrill Lynch's high net worth brokerage
business. Mr. McWilliams received a B.S.E. in Chemical Engineering from
Princeton University in 1977 and a Masters of Business Administration with a
concentration in finance from the University of Chicago in 1983.
NET WORTH OF GENERAL PARTNERS
Messrs. Seneff and Bourne, the individual General Partners, have
represented that at April 23, 1996, along with their wives, they had an
aggregate net worth in excess of $14,000,000, and that their aggregate net worth
at April 30, 1997 was in excess of $14,000,000. However, a substantial portion
of their assets is represented by interests in real estate and closely held
companies which are essentially illiquid. At April 23, 1996 and April 30, 1997,
Messrs. Seneff and Bourne also had contingent liabilities in the aggregate
amount of approximately $9,700,000 and $6,700,000, respectively, as a result of
all guarantees of loans to limited partnerships in which they serve as general
partners. Should some of these contingent liabilities become actual, or should
some of the assets prove to be uncollectible, their net worth may be
significantly reduced. Messrs. Seneff and Bourne have additional contingent
liabilities as a result of their practice of maintaining lines of credit that
enable Affiliates to invest in restaurant properties or restaurant facilities on
an interim basis prior to the time that an affiliated partnership has sufficient
funds to purchase the restaurant properties or restaurant facilities. At April
23, 1996 and April 30, 1997, these lines of credit aggregated approximately
$5,900,000 and $1,800,000, respectively. In addition, Messrs. Seneff and Bourne
have certain contingent liabilities as a result of guarantees of loans to
various general partnerships in which they are partners and corporations of
which they are stockholders. At April 23, 1996 and April 30, 1997, these
guarantees totalled approximately $31,500,000 and $42,700,000, respectively. All
of the loans guaranteed by Messrs. Seneff and Bourne, as well as the lines of
credit, are secured by real property or other collateral which, in the event of
a default under any such loan or line of credit, would be subject to foreclosure
and sale, with the proceeds of such sale applied against the outstanding balance
of the loan or line of credit. Messrs. Seneff and Bourne believe that such
properties or collateral are of sufficient value to cover the outstanding
balance of such loans and lines of credit. In addition, it is highly unlikely
that all such loans would be in default at any one time, since they represent
loans made to a number of different partnerships. Messrs. Seneff and Bourne also
have contingent liabilities of approximately $1,400,000 attributable to capital
notes payable to certain corporations that serve as general partners of certain
affiliated partnerships on demand in the event that these corporations require
additional funds. As of the date of this Prospectus, Messrs. Seneff and Bourne
have not been required to advance any amounts pursuant to such notes and, based
on operations of the related partnerships, do not expect to be required to do so
in the foreseeable future. In addition, Messrs. Seneff and Bourne have
guaranteed the obligations of two master tenants (CNL Management Group, Inc. and
CNL Group, Inc., affiliates of the General Partners) under master leases, of
<PAGE>
which the aggregate contingent master lease obligations as of April 30, 1997,
was $3,100,000. Messrs. Seneff and Bourne also have contingent liabilities as a
result of their agreement to fund reserves under certain limited circumstances
for the CNL Income Fund Partnerships. Messrs. Seneff and Bourne do not
anticipate that they will be required to fund such reserves due to the structure
of those public limited partnerships. See "Conflicts of Interest" and "Risk
Factors--Investment Risks--Limited Resources of General Partners." The corporate
General Partner has a nominal net worth.
PRIOR PERFORMANCE OF THE GENERAL PARTNERS AND AFFILIATES
The information presented in this section represents the historical
experience of certain real estate programs organized by the General Partners.
INVESTORS IN THE PARTNERSHIP SHOULD NOT ASSUME THAT THEY WILL EXPERIENCE
RETURNS, IF ANY, COMPARABLE TO THOSE EXPERIENCED BY INVESTORS IN SUCH PRIOR REAL
ESTATE PROGRAMS. INVESTORS WHO PURCHASE INTERESTS IN THE PARTNERSHIP WILL NOT
THEREBY ACQUIRE ANY OWNERSHIP INTEREST IN ANY PROGRAMS TO WHICH THE FOLLOWING
INFORMATION RELATES.
The General Partners of the Partnership are Robert A. Bourne, James M.
Seneff, Jr., and CNL Realty Corporation. Messrs. Bourne and Seneff, individually
or with others, have served as general partners of 86 and 86 real estate limited
partnerships, respectively, including the 17 prior CNL Income Fund Partnerships
and as officers and directors of a real estate investment trust, CNL American
Properties Fund, Inc., listed in the table below. None of these entities has
been audited by the IRS. Of course, there is no guarantee that the Partnership
will not be audited. Based on an analysis of the operating results of the prior
programs, the General Partners believe that each of such programs has met or is
meeting its principal investment objectives in a timely manner.
CNL Realty Corporation, which was organized as a Florida corporation in
November 1985 and whose sole stockholders are Messrs. Bourne and Seneff,
currently serves as the corporate general partner with Messrs. Bourne and Seneff
as individual general partners of 17 prior CNL Income Fund Partnerships, all of
which were organized to invest in fast-food and family-style restaurant
properties and have investment objectives similar to those of the Partnership.
In addition, Messrs. Bourne and Seneff currently serve as directors and officers
of CNL American Properties Fund, Inc. an unlisted public REIT, which was
organized to invest in fast-food, family-style and casual dining restaurant
properties, mortgage loans and secured equipment leases and has investment
objectives similar to those of the Partnership. As of June 30, 1997, these 17
partnerships and CNL American Properties Fund, Inc. had raised a total of
$803,840,447 from a total of 58,560 investors, and had invested in 848
fast-food, family-style or casual dining restaurant properties.
<TABLE>
<CAPTION>
Date 90% of Net
Proceeds Fully
Maximum Invested or
Name of Offering Number of Committed for
Entity Amount (1) Date Closed Units Sold Investment (2)
- --------- ---------- ----------- ---------- --------------
<S> <C>
CNL Income $15,000,000 December 31, 1986 30,000 December 1986
Fund, Ltd. (30,000 units)
CNL Income $25,000,000 August 21, 1987 50,000 November 1987
Fund II, Ltd. (50,000 units)
CNL Income $25,000,000 April 29, 1988 50,000 June 1988
Fund III, Ltd. (50,000 units)
CNL Income $30,000,000 December 6, 1988 60,000 February 1989
Fund IV, Ltd. (60,000 units)
CNL Income $25,000,000 June 7, 1989 50,000 December 1989
Fund V, Ltd. (50,000 units)
</TABLE>
<PAGE>
<TABLE>
<S> <C>
CNL Income $35,000,000 January 19, 1990 70,000 May 1990
Fund VI, Ltd. (70,000 units)
CNL Income $30,000,000 August 1, 1990 30,000,000 January 1991
Fund VII, Ltd. (30,000,000 units)
CNL Income $35,000,000 March 7, 1991 35,000,000 September 1991
Fund VIII, Ltd. (35,000,000 units)
CNL Income $35,000,000 September 6, 1991 3,500,000 November 1991
Fund IX, Ltd. (3,500,000 units)
CNL Income $40,000,000 March 18, 1992 4,000,000 June 1992
Fund X, Ltd. (4,000,000 units)
CNL Income $40,000,000 September 28, 1992 4,000,000 September 1992
Fund XI, Ltd. (4,000,000 units)
CNL Income $45,000,000 March 15, 1993 4,500,000 August 1993
Fund XII, Ltd. (4,500,000 units)
CNL Income $40,000,000 August 26, 1993 4,000,000 January 1994
Fund XIII, Ltd. (4,000,000 units)
CNL Income $45,000,000 February 22, 1994 4,500,000 July 1994
Fund XIV, Ltd. (4,500,000 units)
CNL Income $40,000,000 September 1, 1994 4,000,000 December 1994
Fund XV, Ltd. (4,000,000 units)
CNL Income $45,000,000 June 12, 1995 4,500,000 August 1995
Fund XVI, Ltd. (4,500,000 units)
CNL Income $30,000,000 September 19, 1996 3,000,000 December 1996
Fund XVII, Ltd. (3,000,000 units)
CNL American $425,000,000 (3) (3) (3)
Properties Fund, (42,500,000 shares)
Inc.
</TABLE>
<PAGE>
- ------------------------------------
(1) The amount stated includes the exercise by the general partners of each
Partnership of their option to increase by $5,000,000 the maximum size
of the offering of CNL Income Fund, Ltd., CNL Income Fund II, Ltd., CNL
Income Fund III, Ltd., CNL Income Fund IV, Ltd., CNL Income Fund VI,
Ltd., CNL Income Fund VIII, Ltd., CNL Income Fund X, Ltd., CNL Income
Fund XII, Ltd., CNL Income Fund XIV, Ltd., and CNL Income Fund XVI,
Ltd.
(2) For a description of the property acquisitions by these programs, see
the table set forth on the following page.
(3) In April 1995, CNL American Properties Fund, Inc. commenced an offering
of a maximum of 15,000,000 shares of common stock ($150,000,000),
excluding 1,500,000 shares ($15,000,000) available to investors
participating in the reinvestment plan. On February 6, 1997, the
initial offering closed upon receipt of subscriptions totalling
$150,591,765 (15,059,177 shares), including $591,765 (59,177 shares)
through the reinvestment plan. Following the completion of the initial
offering on February 6, 1997, CNL American Properties Fund, Inc.
commenced a subsequent offering (the "Subsequent Offering") of up to
27,500,000 shares ($275,000,000) of common stock. As of June 30, 1997,
CNL American Properties Fund, Inc. had received subscriptions totalling
$73,251,412 (7,325,141 shares), including $643,293 (64,329 shares)
through the reinvestment plan from the Subsequent Offering. As of such
date, CNL American Properties Fund, Inc. had purchased 174 properties.
As of June 30, 1997, Mr. Seneff and Mr. Bourne, directly or through
affiliated entities, also had served as joint general partners of 67 nonpublic
real estate limited partnerships. The offerings of 65 of these 67 nonpublic
limited partnerships had terminated as of June 30, 1997. These 65 partnerships
raised a total of $166,969,266 from approximately 4,180 investors, and
purchased, directly or through participation in a joint venture or limited
partnership, interests in a total of 203 projects as of June 30, 1997. These 203
projects consist of 19 apartment projects (comprising 11% of the total amount
raised by all 65 partnerships), 13 office buildings (comprising 5% of the total
amount raised by all 65 partnerships), 157 fast-food, family-style, or casual
dining restaurant property and business investments (comprising 68% of the total
amount raised by all 65 partnerships), one condominium development (comprising
.5% of the total amount raised by all 65 partnerships), four hotels/motels
(comprising 5% of the total amount raised by all 65 partnerships), seven
commercial/retail properties (comprising 10% of the total amount raised by all
65 partnerships), and two tracts of undeveloped land (comprising .5% of the
total amount raised by all 65 partnerships). The offering of the two remaining
nonpublic limited partnerships (offerings aggregating $16,750,000) had raised
$9,700,000 from 201 investors (approximately 57.9% of the total offering amount)
as of June 30, 1997.
Mr. Bourne also has served, without Mr. Seneff, as a general partner of
one additional nonpublic real estate limited partnership program which raised a
total of $600,000 from 13 investors and purchased, through participation in a
limited partnership, one apartment building located in Georgia with a purchase
price of $1,712,000.
Mr. Seneff also has served, without Mr. Bourne, as a general partner of
two additional nonpublic real estate limited partnerships which raised a total
of $240,000 from 12 investors and purchased two office buildings with an
aggregate purchase price of $928,390. Both of the office buildings are located
in Florida.
Of the 85 real estate limited partnerships whose offerings had closed
as of June 30, 1997 (including 17 CNL Income Fund limited partnerships) in which
Mr. Seneff and/or Mr. Bourne serve or have served as general partners in the
past, 35 invested in restaurant properties leased on a "triple-net" basis,
including six which also invested in franchised restaurant businesses
(accounting for approximately 93% of the total amount raised by all 85 real
estate limited partnerships).
The following table sets forth summary information, as of June 30, 1997
regarding property acquisitions by the 17 limited partnerships that, either
individually or through a joint venture or partnership arrangement, acquired
properties (or intend to acquire properties) and that have investment objectives
similar to those of the Partnership and by a real estate investment trust, CNL
American Properties Fund, Inc.
<TABLE>
<CAPTION>
Name of Type of Method of Type of
Entity Property Location Financing Program
----- -------- -------- --------- -------
<S> <C>
CNL Income 20 fast-food or AL, AZ, CA, FL, All cash Public
Fund, Ltd. family-style GA, LA, MD, OK,
restaurants TX, VA
</TABLE>
<PAGE>
<TABLE>
<S> <C>
CNL Income 44 fast-food or AL, AZ, CO, FL, All cash Public
Fund II, Ltd. family-style GA, IL, IN, LA, MI,
restaurants MN, MO, NC, NM,
OH, TX, WY
CNL Income 33 fast-food or AZ, CA, FL, GA, All cash Public
Fund III, Ltd. family-style IA, IL, IN, KS, KY,
restaurants MD, MI, MN, MO,
NC, NE, OK, TX
CNL Income 45 fast-food or AL, DC, FL, GA, All cash Public
Fund IV, Ltd. family-style IL, IN, KS, MA,
restaurants MD, MI, MS, NC,
OH, PA, TN, TX,
VA
CNL Income 30 fast-food or FL, GA, IL, IN, MI, All cash Public
Fund V, Ltd. family-style NH, NY, OH, SC,
restaurants TN, TX, UT, WA
CNL Income 48 fast-food or AR, AZ, FL, GA, All cash Public
Fund VI, Ltd. family-style IN, MA, MI, MN,
restaurants NC, NE, NM, NY,
OH, OK, PA, TN,
TX, VA, WY
CNL Income 47 fast-food or AZ, CO, FL, GA, All cash Public
Fund VII, Ltd. family-style IN, LA, MI, MN,
restaurants OH, SC, TN, TX,
UT, WA
CNL Income 42 fast-food or AZ, FL, IN, LA, All cash Public
Fund VIII, Ltd. family-style MI, MN, NC, NY,
restaurants OH, TN, TX, VA
CNL Income 42 fast-food or AL, FL, GA, IL, IN, All cash Public
Fund IX, Ltd. family-style LA, MI, MN, MS,
restaurants NC, NH, NY, OH,
SC, TN, TX
CNL Income 49 fast-food or AL, CA, CO, FL, All cash Public
Fund X, Ltd. family-style ID, IL, LA, MI,
restaurants MO, MT, NC, NH,
NM, NY, OH, PA,
SC, TN, TX
CNL Income 40 fast-food or AL, AZ, CA, CO, All cash Public
Fund XI, Ltd. family-style CT, FL, KS, LA,
restaurants MA, MI, MS, NC,
NH, NM, OH, OK,
PA, SC, TX, VA,
WA
CNL Income 49 fast-food or AL, AZ, CA, FL, All cash Public
Fund XII, Ltd. family-style GA, LA, MO, MS,
restaurants NC, NM, OH, SC,
TN, TX, WA
CNL Income 49 fast-food or AL, AR, AZ, CA, All cash Public
Fund XIII, Ltd. family-style CO, FL, GA, IN,
restaurants KS, LA, MD, NC,
OH, PA, SC, TN,
TX, VA
</TABLE>
<PAGE>
<TABLE>
<S> <C>
CNL Income 62 fast-food or AL, AZ, CO, FL, All cash Public
Fund XIV, Ltd. family-style GA, KS, LA, MN,
restaurants MO, MS, NC, NJ,
NV, OH, SC, TN,
TX, VA
CNL Income 54 fast-food or AL, CA, FL, GA, All cash Public
Fund XV, Ltd. family-style KS, KY, MN, MO,
restaurants MS, NC, NJ, NM,
OH, OK, PA, SC,
TN, TX, VA
CNL Income 44 fast-food or AZ, CA, CO, DC, All cash Public
Fund XVI, Ltd. family-style FL, GA, ID, IN, KS,
restaurants MN, MO, NC, NM,
NV, OH, TN, TX,
UT, WI
CNL Income 27 fast-food, family- CA, FL, GA, IL, IN, All cash Public
Fund XVII, Ltd. style, or casual MI, NC, NV, OH,
dining restaurants SC, TN, TX
CNL American 174 fast-food, AL, AZ, CA, CO, All cash Public
Properties Fund, Inc. family-style, or DE, FL, GA, IA, ID,
casual dining IL, IN, KY, MD,
restaurants MI, MN, MO, NC,
NE, NM, NV, OH,
OK, OR, PA, TN,
TX, UT, VA, WA,
WV
</TABLE>
<PAGE>
- --------------------------
A more detailed description of the acquisitions by the prior public
programs sponsored by the individual General Partners is set forth in prior
performance Table VI, included as Exhibit 99 to Part II of the registration
statement filed with the Securities and Exchange Commission for this Offering. A
copy of Table VI is available to investors from the General Partners upon
request, free of 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., CNL Income Fund XVIII, Ltd.,
and CNL American Properties Fund, Inc., as well as a copy, for a reasonable fee,
of the exhibits filed with such reports.
In order to provide potential purchasers of Units with information to
enable them to evaluate the prior experience of the General Partners as general
partners of public real estate limited partnerships, including those set forth
in the foregoing table, certain financial and other information concerning those
limited partnerships with similar investment objectives in which the General
Partners are general partners is provided in the Prior Performance Tables
included as Exhibit C. Information about the previous public partnerships, the
offerings of which became fully subscribed between July 1992 and June 1997, is
included therein. Potential investors are encouraged to examine the Prior
Performance Tables attached as Exhibit C (in Table III), which include
information as to the operating results of these prior public partnerships, for
more detailed information concerning the experience of the individual General
Partners.
ALLOCATIONS AND DISTRIBUTIONS
DISTRIBUTIONS OF NET CASH FLOW
The Partnership declared distributions of Net Cash Flow to the Limited
Partners in the amount of $421,046 and $57,846 for the six months ended June 30,
1997 and December 31, 1996, respectively, and distributions of Net Cash Flow are
expected to be paid quarterly hereafter. For the six months ended June 30, 1997
and the year ended December 31, 1996, approximately 44% and 53%, respectively,
of the cumulative cash distributions to the Limited Partners constituted cash
distributions that exceeded accumulated net income on a GAAP basis. Accumulated
net income includes deductions for depreciation and amortization expense and
income from certain non-cash items. CNL XVIII did not treat such amounts, which
represent a return of capital on a GAAP basis, as a return of capital for
purposes of calculating the Limited Partners Invested Capital Contributions.
There can be no assurance, however, as to the amount of any future
distributions. At the time distributions are paid, each Limited Partner will
receive a distribution of available Net Cash Flow for the calendar quarter and
each Limited Partner who has elected to receive distributions monthly will
receive one-third of such amount. The remaining two-thirds of such amount will
be held in an interest-bearing monthly distribution account segregated from
other Partnership funds, and will be paid, without interest, in approximately
equal installments in each of the next two months to those Limited Partners who
have elected to receive distributions monthly.
FEDERAL INCOME TAX CONSIDERATIONS
PARTNERSHIP STATUS
Treasury regulations effective January 1, 1997, provide that certain
eligible entities, including domestic limited partnerships such as the
Partnership, automatically will be treated as a partnership rather than a
corporation for federal income tax purposes if it has two or more associates and
an objective to carry on business for a joint profit, provided the entity or an
authorized partner does not affirmatively elect to treat the entity as a
corporation.
Based upon the organization and operation of the Partnership in
accordance with the Revised Uniform Limited Partnership Act as adopted by the
State of Florida, the terms of the Partnership Agreement, and the
representations by the General Partner that neither the Partnership nor any of
its Partners will affirmatively elect or authorize any other person or entity to
affirmatively elect to treat the Partnership as a corporation for federal income
tax purposes, it is the opinion of Counsel that it is more likely than not that
the Partnership will be treated as a partnership as defined in sections
7701(a)(2) and 761(a) of the Code and not as an association taxable as a
corporation.
<PAGE>
ADDENDUM TO
EXHIBIT B
FINANCIAL INFORMATION
THE UPDATED PRO FORMA FINANCIAL STATEMENTS AND THE UPDATED, UNAUDITED FINANCIAL
STATEMENTS OF CNL INCOME FUND XVIII, LTD. AND CNL REALTY CORPORATION CONTAINED
IN THIS ADDENDUM SHOULD BE READ IN CONJUNCTION WITH EXHIBIT B TO THE ATTACHED
PROSPECTUS, DATED MAY 9, 1997.
<PAGE>
INDEX TO UPDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
CNL INCOME FUND XVIII, LTD.
(A Florida Limited Partnership)
<S> <C>
Pro Forma Financial Information (unaudited):
Pro Forma Balance Sheet as of June 30, 1997 B-2
Pro Forma Statement of Income for the six months ended June 30, 1997 B-3
Pro Forma Statement of Income for the year ended December 31, 1996 B-4
Notes to Pro Forma Financial Statements for the six months ended June 30, 1997 and
the year ended December 31, 1996 B-5
Updated Condensed Financial Statements (unaudited):
Condensed Balance Sheets as of June 30, 1997 and December 31, 1996 B-6
Condensed Statements of Income for the six months ended June 30, 1997 and
1996 B-7
Condensed Statements of Partners' Capital for the six months ended
June 30, 1997 and
the year ended December 31, 1996 B-8
Condensed Statements of Cash Flows for the six months ended June 30, 1997 and 1996 B-9
Notes to Condensed Financial Statements for the six months ended June 30, 1997 and 1996 B-11
CNL REALTY CORPORATION
Updated Financial Statements (unaudited):
Balance Sheets as of June 30, 1997 and December 31, 1996 B-19
Notes to Balance Sheets as of June 30, 1997 and December 31, 1996 B-20
</TABLE>
<PAGE>
PRO FORMA FINANCIAL INFORMATION
The following Pro Forma Balance Sheet of CNL Income Fund XVIII, Ltd.
("CNL XVIII") gives effect to (i) property acquisition transactions from
inception through June 30, 1997, including the receipt of $22,192,212 in gross
offering proceeds from the sale of 2,219,221 units of limited partnership
interest (the "Units") pursuant to a registration statement on Form S-11 under
the Securities Act of 1933, as amended, effective August 11, 1995, and the
application of such funds to acquire 17 properties, seven of which were under
construction at June 30, 1997, and to pay organizational and offering expenses,
acquisition fees, and miscellaneous acquisition expenses, (ii) the receipt of
$7,613,457 in gross offering proceeds from the sale of 761,346 additional Units
during the period July 1, 1997 through October 22, 1997, and (iii) the
application of such funds and $1,313,470 of cash and cash equivalents at June
30, 1997, to purchase four additional properties during the period July 1, 1997
through October 22, 1997 (one of which is under construction and consists of
land and building and three properties which consist of land and building), to
pay additional construction costs for the seven properties under construction at
June 30, 1997, and to pay offering expenses, acquisition fees, and miscellaneous
acquisition expenses, all as reflected in the pro forma adjustments described in
the related notes. The Pro Forma Balance Sheet as of June 30, 1997, includes the
transactions described in (i) above, from its historical balance sheet, adjusted
to give effect to the transactions in (ii) and (iii) above, as if they had
occurred on June 30, 1997.
The Pro Forma Statements of Income for the six months ended June 30,
1997 and the year ended December 31, 1996, include the historical operating
results of the properties described in (i) above from the dates of their
acquisitions. No pro forma adjustments have been made to the Pro Forma
Statements of Income for the properties owned by CNL XVIII as of October 22,
1997, due to the fact that these properties did not have a previous rental
history.
This pro forma financial information is presented for informational
purposes only and does not purport to be indicative of CNL XVIII's financial
results or condition if the various events and transactions reflected therein
had occurred on the dates, or been in effect during the periods, indicated. This
pro forma financial information should not be viewed as predictive of CNL
XVIII's financial results or conditions in the future.
B-1
<PAGE>
CNL INCOME FUND XVIII, LTD.
(A Florida Limited Partnership)
UNAUDITED PRO FORMA BALANCE SHEET
JUNE 30, 1997
<TABLE>
<CAPTION>
Pro Forma
ASSETS Historical Adjustments Pro Forma
---------- ----------- ---------
<S> <C>
Land and buildings on operating
leases, less accumulated
depreciation $15,592,297 $ 3,580,133 (a) $19,172,430
Net investment in direct
financing leases (b) 2,781,218 2,991,146 (a) 5,772,364
Cash and cash equivalents 2,564,807 (1,313,470)(a) 1,251,337
Receivables 42,542 42,542
Prepaid expenses 1,991 1,991
Organization costs, less
accumulated amortization 8,589 8,589
Accrued rental income 25,771 25,771
Other assets 110,070 4,654 (a) 114,724
----------- ----------- -----------
$21,127,285 $ 5,262,463 $26,389,748
=========== =========== ===========
LIABILITIES AND
PARTNERS' CAPITAL
Accounts payable $ 186,371 $ (185,000)(a) $ 1,371
Accrued construction costs
payable 1,412,051 (1,412,051)(a) -
Distributions payable 266,570 266,570
Due to related parties 74,235 (68,732)(a) 5,503
Rents paid in advance 247,925 247,925
----------- ----------- -----------
Total liabilities 2,187,152 (1,665,783) 521,369
Partners' capital 18,940,133 6,928,246 (a) 25,868,379
----------- ----------- -----------
$21,127,285 $ 5,262,463 $26,389,748
=========== =========== ===========
</TABLE>
See accompanying notes to unaudited pro forma financial statements.
B-2
<PAGE>
CNL INCOME FUND XVIII, LTD.
(A Florida Limited Partnership)
UNAUDITED PRO FORMA STATEMENT OF INCOME
SIX MONTHS ENDED JUNE 30, 1997
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
---------- ----------- ---------
<S> <C>
Revenues:
Rental income from operating
leases $ 210,798 $ - $ 210,798
Earned income from direct
financing leases 62,736 - 62,736
Interest and other income 69,306 - 69,306
--------- --------- ---------
342,840 - 342,840
--------- --------- ---------
Expenses:
General operating and
administrative 55,106 - 55,106
Professional services 12,404 - 12,404
Management fees to related party 4,525 - 4,525
State and other taxes 424 - 424
Depreciation and amortization 34,179 - 34,179
--------- --------- ---------
106,638 - 106,638
--------- --------- ---------
Net Income $ 236,202 $ - $ 236,202
========= ========= =========
Net Income Per Limited Partner
Unit $ 0.15 $ 0.15
========= =========
Weighted Average Number of Units
Outstanding 1,617,280 1,617,280
========= =========
</TABLE>
See accompanying notes to unaudited pro forma financial statements.
B-3
<PAGE>
CNL INCOME FUND XVIII, LTD.
(A Florida Limited Partnership)
UNAUDITED PRO FORMA STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
---------- ----------- ---------
<S> <C>
Revenues:
Rental income from operating lease $ 1,373 $ - $ 1,373
Interest income 30,241 - 30,241
------- ------- -------
31,614 - 31,614
------- ------- -------
Expenses:
General operating and administrative 3,980 - 3,980
Management fee to related party 12 - 12
Depreciation and amortization 712 - 712
------- ------- -------
4,704 - 4,704
------- ------- -------
Net Income $26,910 $ - $26,910
======= ======= =======
Net Income Per Limited Partner
Unit $ 0.05 $ 0.05
======= =======
Weighted Average Number of Units
Outstanding 503,436 503,436
======= =======
</TABLE>
See accompanying notes to unaudited pro forma financial statements.
B-4
<PAGE>
CNL INCOME FUND XVIII, LTD.
(A Florida Limited Partnership)
NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND THE
YEAR ENDED DECEMBER 31, 1996
Pro Forma Balance Sheet:
(a) Represents gross proceeds of $7,613,457 from the sale of 761,346 Units
during the period July 1, 1997 through October 22, 1997, and $1,313,470 of
cash and cash equivalents at June 30, 1997, used (i) to acquire four
properties for $4,603,541, (ii) to fund estimated construction costs of
$3,041,837 ($1,412,051 of which was accrued as construction costs payable
at June 30, 1997) relating to the seven properties under construction at
June 30, 1997, (iii) to pay acquisition fees and other costs of $356,847
($14,241 of which was accrued as due to related parties at June 30, 1997,
$337,952 of which was allocated to properties and $4,654 of which was
classified as other assets and will be allocated to future properties), and
(iv) to pay selling commissions and offering expenses (syndication costs)
of $924,702 ($54,491 of which was accrued as due to related parties and
$185,000 of which was accrued as accounts payable at June 30, 1997), which
have been netted against partners' capital.
The pro forma adjustments to land and buildings on operating leases as a
result of the above transactions were as follows:
<TABLE>
<CAPTION>
Estimated purchase
price (including
construction and Acquisition
closing costs) and fees
additional con- allocated
struction costs to property Total
------------------ ----------- ---------
<S> <C>
Arby's in Lexington, NC 631,418 34,233 665,651
IHOP in Bridgeview, IL 1,418,777 76,922 1,495,699
Golden Corral in Destin, FL 1,508,391 81,780 1,590,171
Ground Round in Rochester, NY 1,044,955 56,654 1,101,609
Seven properties under construction at
June 30, 1997 1,629,786 88,363 1,718,149
----------- --------- -----------
$ 6,233,327 $ 337,952 $ 6,571,279
=========== ========= ===========
Adjustment classified as follows:
Land and buildings on operating leases $ 3,580,133
Net investment in direct financing leases 2,991,146
-----------
$ 6,571,279
===========
</TABLE>
(b) In accordance with generally accepted accounting principles, leases in
which the present value of future minimum lease payments equals or exceeds
90 percent of the value of the related properties are treated as direct
financing leases rather than as land and buildings. The categorization of
the leases has no effect on rental revenues received.
B-5
<PAGE>
CNL INCOME FUND XVIII, LTD.
(A Development Stage Florida Limited Partnership)
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
ASSETS 1997 1996
----------- ------------
<S> <C>
Land and buildings on operating
leases, less accumulated
depreciation $15,592,297 $ 1,530,768
Net investment in direct financing
lease 2,781,218 -
Cash and cash equivalents 2,564,807 5,371,325
Receivables 42,542 3,711
Prepaid expenses 1,991 -
Organization costs, less accumulated
amortization of $1,411 and $411 8,589 9,589
Accrued rental income 25,771 -
Other assets 110,070 324,931
----------- -----------
$21,127,285 $ 7,240,324
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 186,371 $ 104,514
Accrued construction costs payable 1,412,051 -
Distributions payable 266,570 55,708
Due to related parties 74,235 83,889
Rents paid in advance 247,925 -
----------- -----------
Total liabilities 2,187,152 244,111
Commitments (Note 8)
Partners' capital 18,940,133 6,996,213
----------- -----------
$21,127,285 $ 7,240,324
=========== ===========
</TABLE>
See accompanying notes to condensed financial statements.
B-6
<PAGE>
CNL INCOME FUND XVIII, LTD.
(A Development Stage Florida Limited Partnership)
CONDENSED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
--------- --------- --------- --------
<S> <C>
Revenues:
Rental income from
operating leases $ 158,568 $ - $210,798 $ -
Earned income from
direct financing
leases 61,623 - 62,736 -
Interest and other
income 26,435 - 69,306 -
--------- --------- --------- --------
246,626 - 342,840 -
--------- --------- --------- --------
Expenses:
General operating
and administrative 38,421 - 55,106 -
Professional services 6,508 - 12,404 -
Management fees to
related party 3,313 - 4,525 -
State and other taxes 8 - 424 -
Depreciation and
amortization 24,351 - 34,179 -
--------- --------- --------- --------
72,601 - 106,638 -
--------- --------- --------- --------
Net Income $ 174,025 $ - $ 236,202 $ -
========= ========= ========= ========
Allocation of Net
Income:
General partners $ (244) $ - $ (342) $ -
Limited partners 174,269 - 236,544 -
--------- --------- --------- --------
$ 174,025 $ - $ 236,202 $ -
========= ========= ========= ========
Net Income Per Limited
Partner Unit $ 0.09 $ - $ 0.15 $ -
========= ========= ========= ========
Weighted Average Number
of Limited Partner
Units Outstanding 1,944,020 - 1,617,280 -
========= ========= ========= ========
</TABLE>
See accompanying notes to condensed financial statements.
B-7
<PAGE>
CNL INCOME FUND XVIII, LTD.
(A Development Stage Florida Limited Partnership)
CONDENSED STATEMENTS OF PARTNERS' CAPITAL
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, December 31,
1997 1996
---------------- ------------
<S> <C>
General partners:
Beginning balance $ 993 $ 1,000
Contributions - -
Net income (342) (7)
------------ ------------
651 993
------------ ------------
Limited partners:
Beginning balance 6,995,220 -
Contributions 13,770,397 8,421,815
Syndication costs (1,641,633) (1,395,666)
Net income 236,544 26,917
Distributions ($0.26 and $0.11
per weighted average limited
partner unit, respectively) (421,046) (57,846)
------------ ------------
18,939,482 6,995,220
------------ ------------
Total partners' capital $ 18,940,133 $ 6,996,213
============ ============
See accompanying notes to condensed financial statements.
B-8
<PAGE>
CNL INCOME FUND XVIII, LTD.
(A Development Stage Florida Limited Partnership)
CONDENSED STATEMENTS OF CASH FLOWS
Six Months Ended
June 30,
1997 1996
----------- ----------
Increase (Decrease) in Cash and Cash
Equivalents:
Net Cash Provided by Operating
Activities $ 463,751 $ -
----------- ----------
Cash Flows From Investing
Activities:
Additions to land and
buildings on operating
leases (12,412,836) -
Investment in direct
financing leases (2,750,670) -
Increase in other assets -
Other 80 -
----------- ----------
Net cash used in
investing activities (15,163,426) -
----------- ----------
Cash Flows From Financing
Activities:
Reimbursement of acquisition
and syndication costs paid
by related parties on behalf
of the Partnership (365,218) -
Contributions from limited
partners 13,878,397 -
Distributions to limited
partners (210,184) -
Payment of syndication costs (1,409,838) -
Other - (250)
----------- -----------
Net cash provided by
(used in) financing
activities 11,893,157 (250)
----------- -----------
Net Decrease in Cash and
Cash Equivalents (2,806,518) (250)
Cash and Cash Equivalents at
Beginning of Period 5,371,325 980
----------- -----------
Cash and Cash Equivalents at End of
Period $ 2,564,807 $ 730
=========== ===========
See accompanying notes to condensed financial statements.
B-9
<PAGE>
CNL INCOME FUND XVIII, LTD.
(A Development Stage Florida Limited Partnership)
CONDENSED STATEMENTS OF CASH FLOWS - CONTINUED
Six Months Ended
June 30,
1997 1996
----------- --------
Supplemental Schedule of Non-Cash
Investing and Financing Activities:
Related parties paid certain acqui-
sition and syndication costs on
behalf of the Partnership as
follows:
Acquisition costs $ 108,841 $ -
Syndication costs 210,866 309,340
----------- -----------
$ 319,707 $ 309,340
=========== ===========
Distributions declared and unpaid
at end of period $ 266,570 $ -
=========== ==========
See accompanying notes to condensed financial statements.
B-10
<PAGE>
CNL INCOME FUND XVIII, LTD.
(A Development Stage Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Six Months Ended June 30, 1997 and 1996
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. Operating results for the quarter and six months ended June
30, 1997, may not be indicative of the results that may be expected for
the year ended December 31, 1997. Amounts as of December 31, 1996,
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, 1996.
The Partnership was a development stage enterprise from February 10,
1995 through October 11, 1996. Since operations had not begun,
activities through October 11, 1996, were devoted to the organization
of the Partnership.
Real Estate and Lease Accounting - The Partnership records the
acquisition of land and buildings at cost, including acquisition and
closing costs. Land and buildings are leased to unrelated third parties
on a triple-net basis, whereby the tenant is generally responsible for
all operating expenses relating to the property, including property
taxes, insurance, maintenance and repairs. The leases are accounted for
using either the direct financing or the operating methods. Such
methods are described below:
Direct financing method - The leases accounted for using the
direct financing method are recorded at their net investment
(which at the inception of the lease generally represents the
cost of the asset) (see Note 4). Unearned income is deferred
and amortized to income over the lease terms so as to produce
a constant periodic rate of return on the Partnership's net
investment in the leases.
Operating method - Land and building leases accounted for
using the operating method are recorded at cost, revenue is
recognized as rentals
B-11
<PAGE>
CNL INCOME FUND XVIII, LTD.
(A Development Stage Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30, 1997 and 1996
1. Significant Accounting Policies - Continued:
are earned and depreciation is charged to operations as
incurred. Buildings are depreciated on the straight-line
method over their estimated useful lives of 30 years. When
scheduled rentals (including rental payments, if any, required
during the construction of a property) vary during the lease
term, income is recognized on a straight-line basis so as to
produce a constant periodic rent over the lease term
commencing on the date the property is placed in service.
Rents Paid in Advance - Rents paid in advance by lessees for future
periods are deferred upon receipt and are recognized as revenues during
the period in which the rental income is earned. Rents paid in advance
include "interim rent" payments required to be paid under the terms of
certain leases for construction properties, equal to a pre-determined
rate times the amount funded by the Partnership during the period
commencing with the effective date of the lease to the date minimum
annual rent becomes payable. Once minimum annual rent becomes payable,
the "interim rent" payments are amortized and recorded as income either
(i) over the lease term so as to produce a constant periodic rate of
return for leases accounted for using the direct financing method, or
(ii) over the lease term using the straight-line method for leases
accounted for using the operating method, whichever is applicable.
2. Leases:
The Partnership leases its land and buildings to operators of national
and regional fast-food and family-style restaurants. The leases are
accounted for under the provisions of Statement of Financial Accounting
Standards No. 13, "Accounting for Leases." 14 of the leases are
classified as operating leases and three of the leases has been
classified as direct financing leases. For the leases classified as
direct financing leases, the building portions of the leases are
accounted for as direct financing leases while the land portion of one
of these leases is accounted for as an operating lease. The leases have
initial terms of 15 to 20 years and provide for minimum and contingent
rentals. In addition, the tenant pays all property taxes and
assessments, fully maintains the interior and exterior of the building
and carries insurance coverage for public liability, property damage,
fire and extended coverage. The lease options generally allow the
tenants to renew the leases for four
B-12
<PAGE>
CNL INCOME FUND XVIII, LTD.
(A Development Stage Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30, 1997 and 1996
2. Leases - Continued:
successive five-year periods subject to the same terms and conditions
as the initial lease. Most leases also allow the tenant to purchase the
property at fair market value after a specified portion of the lease
has elapsed.
3. Land and Buildings on Operating Leases:
Land and building on operating leases consisted of the following at:
June 30, December 31,
1997 1996
----------- ------------
Land $ 8,401,294 $ 852,578
Buildings 4,581,399 659,134
----------- ------------
12,982,693 1,511,712
Less accumulated
depreciation (33,480) (301)
----------- ------------
1,511,411
Construction in progress 2,643,084 19,357
----------- ------------
$15,592,297 $ 1,530,768
=========== ============
Some of the leases provide for scheduled rent increases throughout the
lease term and/or rental payments during the construction of a property
prior to the date it is placed in service. Such amounts are recognized
on a straight-line basis over the terms of the leases. For the quarter
and six months ended June 30, 1997, the Partnership recognized $19,121
and $25,625, respectively, of such rental income.
The following is a schedule of the future minimum lease payments to be
received on the noncancellable operating leases for the properties that
were operational as of June 30, 1997:
1997 $ 391,395
1998 918,090
1999 927,191
2000 928,018
2001 928,018
Thereafter 13,192,940
-----------
$17,285,652
===========
B-13
<PAGE>
CNL INCOME FUND XVIII, LTD.
(A Development Stage Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30, 1997 and 1996
3. Land and Buildings on Operating Leases - Continued:
Since lease renewal periods are exercisable at the option of the
tenant, the above table only presents future minimum lease payments due
during the initial lease terms. In addition, this table does not
include any amounts for future contingent rentals which may be received
on the leases based on a percentage of tenant's gross sales. The
amounts also do not include minimum lease payments that will become due
when the properties under development are completed (see Note 8).
4. Net Investment in Direct Financing Lease:
The following lists the components of the net investment in direct
financing lease at:
June 30, December 31,
1997 1996
----------- ------------
Minimum lease payments
receivable $ 6,807,456 $ -
Estimated residual
value 696,533 -
Less unearned income (4,722,771) -
----------- -----------
Net investment in direct
financing lease $ 2,781,218 $ -
=========== ===========
The following is a schedule of future minimum lease payments to be
received on the direct financing lease at June 30, 1997:
1997 $ 159,198
1998 318,396
1999 318,396
2000 318,396
2001 318,396
Thereafter 5,374,674
----------
$6,807,456
==========
The above table does not include future minimum lease payments for
renewal periods or for contingent rental payments that may become due
in future periods (see Note 3).
B-14
<PAGE>
CNL INCOME FUND XVIII, LTD.
(A Development Stage Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30, 1997 and 1996
5. Syndication Costs:
Syndication costs consisting of legal fees, commissions, the due
diligence expense reimbursement fee, printing and other expenses
incurred in connection with the offering totalled $1,641,633 and
$1,395,666 for the six months ended June 30, 1997 and the year ended
December 31, 1996, respectively. These offering expenses were 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 or reimbursed by the general partners and will
not be the responsibility of the Partnership.
6. Related Party Transactions:
During the six months ended June 30, 1997, the Partnership incurred
$1,170,484 in syndication costs due to CNL Securities Corp. for
services in connection with selling units of limited partnership
interest. A substantial portion of these amounts ($1,030,457) was or
will be re-allowed to other broker-dealers.
In addition, during the six months ended June 30, 1997, the Partnership
incurred $68,852 in due diligence expense reimbursement fees due to CNL
Securities Corp. These fees equal 0.5% of the limited partner
contributions of $13,770,397 received during the six months ended June
30, 1997. The majority of these fees was re-allowed to other
broker-dealers and from which all bona fide due diligence expenses were
paid.
Additionally, during the six months ended June 30, 1997, the
Partnership incurred $619,668 in acquisition fees due to CNL Fund
Advisors, Inc. for services in finding, negotiating and acquiring
properties on behalf of the Partnership. These fees represent 4.5% of
the limited partner capital contributions received during the six
months ended June 30, 1997, and are included in land and buildings on
operating leases, net investment in direct financing lease and other
assets.
B-15
<PAGE>
CNL INCOME FUND XVIII, LTD.
(A Development Stage Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30, 1997 and 1996
6. Related Party Transactions - Continued:
In addition, during the six months ended June 30, 1997, the Partnership
incurred management fees of $3,313 due to CNL Fund Advisors, Inc.
During the six months ended June 30, 1997 and 1996, certain affiliates
of the general partners provided accounting and administrative services
to the Partnership (including accounting and administrative services in
connection with the offering of units) on a day-to-day basis. The
expenses incurred for these services were classified as follows for the
six months ended June 30:
1997 1996
------------ ------------
Syndication costs $ 212,279 $ 6,605
General operating and
administrative
expenses 43,670 -
------------ ------------
$ 255,949 $ 6,605
============ ============
The amounts due to related parties consisted of the following at:
June 30, December 31,
1997 1996
-------- ------------
Due to CNL Securities Corp.:
Commissions $ 23,970 $ 44,186
Due diligence expense
reimbursement fee 1,410 2,599
-------- --------
25,380 46,785
-------- --------
Due to CNL Fund Advisors,
Inc.:
Expenditures incurred on
on behalf of the
Partnership 2,654 2,788
Acquisition fees 12,690 23,392
Accounting and admini-
strative services 31,553 10,912
Management fees 1,958 12
-------- --------
48,855 37,104
-------- --------
$ 74,235 $ 83,889
======== ========
B-16
<PAGE>
CNL INCOME FUND XVIII, LTD.
(A Development Stage Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30, 1997 and 1996
7. Concentration of Credit Risk:
The following schedule presents total rental and earned income from
individual lessees and the respective restaurant chains, each
representing more than ten percent of the Partnership's total rental
and earned income for the six months ended June 30:
1997 1996
------- ------
Platinum Rotisserie, L.L.C. $62,632 $ -
Golden Corral Corporation 55,828 -
Tiffany, L.L.C. 50,947 -
Carrols Corporation 50,156 -
It is expected that the percentage of total rental and earned income
contributed by these lessees and restaurant chains will decrease as
additional properties are acquired and leased during the remainder of
1997 and in subsequent years.
In addition, the following schedule presents total rental and earned
income from individual restaurant chains, each representing more than
ten percent of the Partnership's total rental and earned income for at
least one of the six months ended June 30:
1997 1996
---------- --------
Golden Corral Family
Steakhouse Restaurant $ 106,775 -
Boston Market 62,632 -
Burger King 50,156 -
8. Commitments:
The Partnership has entered into seven development agreements with
tenants which provide terms and specifications for the construction of
buildings that the tenants have agreed to lease once construction is
completed. The agreements provide a maximum amount of development costs
(including the purchase price of the land and closing costs) to be paid
by the Partnership. The aggregate maximum development costs the
Partnership has agreed to pay is approximately $7,536,200, of which
approximately $5,774,700 in land and other costs had been incurred as
of June 30, 1997. The buildings under construction are expected to be
operational by November 1997. The lease agreements for these properties
are substantially the same as the leases relating to the Partnership's
other properties as described in Note 2.
B-17
<PAGE>
CNL INCOME FUND XVIII, LTD.
(A Development Stage Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30, 1997 and 1996
9. Subsequent Event:
During the period July 1, 1997 through July 31, 1997, the Partnership
received capital contributions for an additional 167,822 units
($1,678,215) of limited partnership interest.
In addition, during the period July 1, 1997 through July 31, 1997, the
Partnership acquired two additional properties for cash, at a total
cost of approximately $2,055,400. The lease agreements for the two
properties are substantially the same as the leases relating to the
Partnership's other properties, as described in Note 2.
B-18
<PAGE>
CNL REALTY CORPORATION
BALANCE SHEETS
June 30,
1997 December 31,
ASSETS (Unaudited) 1996
------ ----------- ------------
Cash $ 124 $ 188
Investment in CNL Income
Fund Partnerships 1,404,466 1,244,812
---------- ----------
$1,404,590 $1,245,000
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Loan payable to related parties $1,481,759 $1,275,456
Other payables to related parties 5,955 1,201
---------- ----------
Total liabilities 1,487,714 1,276,657
---------- ----------
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
Accumulated deficit (84,124) (32,657)
---------- ----------
Total stockholders' equity (83,124) (31,657)
---------- ----------
$1,404,590 $1,245,000
========== ==========
See accompanying notes to balance sheet.
B-19
<PAGE>
CNL REALTY CORPORATION
NOTES TO BALANCE SHEETS
June 30, 1997 and December 31, 1996
(Information with respect to June 30, 1997 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-20
<PAGE>
CNL REALTY CORPORATION
NOTES TO BALANCE SHEETS - CONTINUED
June 30, 1997 and December 31, 1996
(Information with respect to June 30, 1997 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:
June 30,
1997 December 31,
(Unaudited) 1996
------------ ------------
Total assets $525,759,704 $514,640,258
Total liabilities 19,216,372 18,782,159
Limited partners'
equity 502,838,749 492,508,044
General partners'
equity:
CNL Realty
Corporation 1,404,466 1,244,812
Other 2,300,117 2,105,243
The Company had made total capital contributions of $1,150,905 and
$1,012,905 to the CNL Income Fund Partnerships as of June 30, 1997 and
December 31, 1996, respectively.
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.
4. Related Parties:
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 loans to the Company
in the aggregate amount of up to $1,500,000. Effective March 1, 1997,
the promissory note was assigned to CNL Fund Advisors, Inc., an
affiliate of the Company. In April 1997, the promissory note was
amended to provide loans to the Company in the aggregate amount of up
to $2,000,000. 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 related parties of $1,481,759 and $1,275,456 at June 30,
1997 and December 31, 1996, respectively, includes accrued interest of
$4,614 and $4,817, respectively.
B-21
<PAGE>
CNL REALTY CORPORATION
NOTES TO BALANCE SHEETS - CONTINUED
June 30, 1997 and December 31, 1996
(Information with respect to June 30, 1997 is unaudited)
4. Related Parties - Continued:
Affiliates of the stockholders provide accounting and administrative
services to the Company on a day-to-day basis. Other payables to
related parties at June 30, 1997 and December 31, 1996 of $5,955 and
$1,201, respectively, represent amounts for such services and for
operating expenses that affiliates have paid on behalf of the Company.
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 July 1997, the Company received additional advances under the loan
from CNL Fund Advisors, Inc. totalling $437,000 in connection with the
promissory note described in Note 4.
In connection therewith, in July 1997, the Company made additional
capital contributions of $87,000 to one of the CNL Income Fund
Partnerships and entered into a promissory note which provides for a
loan to one of the CNL Income Fund Partnerships in the amount of
$350,000 in connection with the operations of the CNL Income Fund
Partnerships. The loan is uncollateralized, non-interest bearing and is
due on demand. In August 1997, $175,000 of this amount had been repaid
to the Company.
In August 1997, the Company entered into a promissory note with CNL
First Corp. II, an affiliate of the Company, which provides for loans
to the Company in the aggregate amount of up to $320,000. 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. In conjunction therewith, the Company
received an advance of $320,000 under this loan and used the proceeds
to repay CNL Fund Advisors, Inc. $320,000 of
B-22
<PAGE>
CNL REALTY CORPORATION
NOTES TO BALANCE SHEETS - CONTINUED
June 30, 1997 and December 31, 1996
(Information with respect to June 30, 1997 is unaudited)
6. Subsequent Events - Continued:
the amounts advanced to the Company in July 1997. In addition, as of
August 20, 1997, the Company had repaid an additional $175,000 to CNL
Fund Advisors, Inc. of the amounts advanced under the promissory note
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 June 30, 1997.
B-23
<PAGE>
ADDENDUM TO
EXHIBIT C
PRIOR PERFORMANCE TABLES
THE FOLLOWING INFORMATION UPDATES AND REPLACES THE CORRESPONDING INFORMATION
IN EXHIBIT C TO THE ATTACHED PROSPECTUS DATED MAY 9, 1997.
<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, 1997. 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
became fully subscribed between July 1992 and June 1997.
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.
C-1
<PAGE>
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 became fully subscribed between July 1992 and June 1997. 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, 1997.
Table III - Operating Results of Prior Programs
Table III presents a summary of operating results for the period from
inception through June 30, 1997, of the Prior Public Partnerships, the offerings
of which became fully subscribed between July 1992 and June 1997.
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 July 1992 and June 30,
1997.
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>
<TABLE>
<CAPTION>
CNL Income CNL Income CNL Income CNL Income
Fund XI, Fund XII, Fund XIII, Fund XIV,
Ltd. Ltd. Ltd. Ltd.
---------- ---------- ---------- ----------
<S> <C>
Dollar amount offered $40,000,000 $45,000,000 $40,000,000 $45,000,000
=========== =========== =========== ===========
Dollar amount raised 100.0% 100.0% 100.0% 100.0%
----------- ----------- ----------- -----------
Less offering expenses:
Selling commissions
and discounts (8.5) (8.5) (8.5) (8.5)
Organizational expenses (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)
----------- ----------- ----------- -----------
(12.0) (12.0) (12.0) (12.0)
----------- ----------- ----------- -----------
Reserve for operations -- -- -- --
----------- ----------- ----------- ----------
Percent available for
investment 88.0% 88.0% 88.0% 88.0%
=========== =========== =========== ===========
Acquisition costs:
Cash down payment 83.0% 83.0% 82.5% 82.5%
Acquisition fees paid
to affiliates 5.0 5.0 5.5 5.5
Loan costs -- -- -- --
----------- ----------- ----------- ----------
Total acquisition costs 88.0% 88.0% 88.0% 88.0%
=========== =========== =========== ===========
Percent leveraged
(mortgage financing
divided by total
acquisition costs) -- -- -- --
Date offering began 3/18/92 9/29/92 3/31/93 8/27/93
Length of offering (in
months) 6 6 5 6
Months to invest 90% of
amount available for
investment measured
from date of offering 6 11 10 11
</TABLE>
Note 1: Pursuant to a Registration Statement on Form S-11 under the Securities
Act of 1933, as amended, effective August 11, 1995, CNL Income Fund
XVII, Ltd. and CNL Income Fund XVIII, Ltd. each registered for sale
$30,000,000 of units of limited partnership interest (the "Units"). The
offering of Units of CNL Income Fund XVII, Ltd. commenced September 2,
1995. Pursuant to the Registration Statement, the offering of Units of
CNL Income Fund XVIII, Ltd. 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-3
<PAGE>
CNL Income CNL Income CNL Income CNL Income
Fund XV, Fund XVI, Fund XVII, Fund XVIII,
Ltd. Ltd. Ltd. Ltd.
---------- ---------- ---------- -----------
(Note 1)
$40,000,000 $45,000,000 $30,000,000
=========== =========== ===========
100.0% 100.0% 100.0%
----------- ----------- -----------
(8.5) (8.5) (8.5)
(3.0) (3.0) (3.0)
(0.5) (0.5) (0.5)
----------- ----------- -----------
(12.0) (12.0) (12.0)
----------- ----------- -----------
-- -- --
----------- ----------- ----------
88.0% 88.0% 88.0%
=========== =========== ===========
82.5% 82.5% 83.5%
5.5 5.5 4.5
-- -- --
----------- ----------- ----------
88.0% 88.0% 88.0%
=========== =========== ===========
-- -- --
2/23/94 9/02/94 9/02/95
6 9 12
10 11 15
C-4
<PAGE>
TABLE II
COMPENSATION TO SPONSOR
<TABLE>
<CAPTION>
CNL Income CNL Income CNL Income CNL Income
Fund XI, Fund XII, Fund XIII, Fund XIV,
Ltd. Ltd. Ltd. Ltd.
---------- ---------- ---------- ----------
<S> <C>
Date offering commenced 3/18/92 9/29/92 3/31/93 8/27/93
Dollar amount raised $40,000,000 $45,000,000 $40,000,000 $45,000,000
=========== =========== =========== ===========
Amount paid to sponsor from
proceeds of offering:
Selling commissions and
discounts 3,400,000 3,825,000 3,400,000 3,825,000
Real estate commissions - - - -
Acquisition fees 2,000,000 2,250,000 2,200,000 2,475,000
Marketing support and
due diligence expense
reimbursement fees
(includes amounts
reallowed to
unaffiliated entities) 200,000 225,000 200,000 225,000
----------- ----------- ----------- -----------
Total amount paid to sponsor 5,600,000 6,300,000 5,800,000 6,525,000
=========== =========== =========== ===========
Dollar amount of cash generated
from operations before
deducting payments to
sponsor:
1997 (6 months) 1,841,174 1,981,123 1,708,175 1,856,053
1996 3,734,852 4,089,655 3,494,528 3,841,163
1995 3,758,271 3,928,473 3,482,461 3,823,939
1994 3,574,474 3,933,486 3,232,046 2,897,432
1993 3,434,512 3,320,549 1,148,550 329,957
1992 1,525,462 63,401 - -
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):
1997 (6 months) 48,260 49,885 48,767 48,170
1996 133,138 137,966 126,947 134,867
1995 106,086 109,111 103,083 114,095
1994 76,533 84,524 83,046 84,801
1993 78,926 73,789 27,003 8,220
1992 30,237 2,031 - -
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 1,044,750 1,640,000 836,411 3,196,603
Notes - - - -
Amount paid to sponsors
from property sales and
refinancing:
Real estate commissions - - - -
Incentive fees - - - -
Other - - - -
</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
C-5
<PAGE>
CNL Income CNL Income CNL Income CNL Income
Fund XV, Fund XVI, Fund XVII, Fund XVIII,
Ltd. Ltd. Ltd. Ltd.
---------- ---------- ---------- ----------
(Note 1)
2/23/94 9/02/94 9/02/95
$40,000,000 $45,000,000 $30,000,000
=========== =========== ===========
3,400,000 3,825,000 2,550,000
- - -
2,200,000 2,475,000 1,350,000
200,000 225,000 150,000
----------- ----------- -----------
5,800,000 6,525,000 4,050,000
=========== =========== ===========
1,716,242 1,938,911 1,232,910
3,557,073 3,911,609 1,340,159
3,361,477 2,619,840 11,671
1,154,454 212,171 -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
42,619 50,756 53,768
122,391 157,883 107,211
122,107 138,445 2,659
37,620 7,023 -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
3,312,297 1,385,384 -
- - -
- - -
- - -
- - -
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). As of June 30, 1997, CNL Income Fund
XVIII, Ltd. had sold 2,219,221 Units, representing $22,192,212 of
capital contributed by limited partners, and 17 properties had been
acquired. From commencement of the offering through June 30, 1997,
total selling commissions and discounts were $1,886,338, due diligence
expense reimbursement fees were $110,961, and acquisition fees were
$998,650, for a total amount paid to sponsor of $2,995,949. CNL Income
Fund XVIII, Ltd. had cash generated from operations for the period
October 11, 1996 (the date funds were originally released from escrow)
through June 30, 1997, of $490,897. CNL Income Fund XVIII, Ltd. made
payments of $33,405 to the sponsor from operations for this period.
C-6
<PAGE>
TABLE III
Operating Results of Prior Programs CNL
INCOME FUND XI, LTD.
<TABLE>
<CAPTION>
1991
(Note 1) 1992 1993 1994
------------ ------------ ------------ ------------
<S> <C>
Gross revenue $ 0 $ 1,269,086 $ 3,831,648 $ 3,852,107
Equity in earnings of unconsolidated
joint ventures 0 33,367 121,059 119,370
Profit from sale of properties (Note 5) 0 0 0 0
Interest income 0 150,535 24,258 30,894
Less: Operating expenses 0 (63,390) (206,987) (179,717)
Interest expense 0 0 0 0
Depreciation and amortization 0 (180,631) (469,127) (481,226)
Minority interests in income of
consolidated joint ventures 0 (23,529) (68,399) (68,936)
------------ ------------ ------------ ------------
Net income - GAAP basis 0 1,185,438 3,232,452 3,272,492
============ ============ ============ ============
Taxable income
- from operations 0 1,295,104 2,855,026 2,947,445
============ ============ ============ ============
- from gain on sale 0 0 0 0
============ ============ ============ ============
Cash generated from operations
(Notes 2 and 4) 0 1,495,225 3,355,586 3,497,941
Cash generated from sales (Note 5) 0 0 0 0
Cash generated from refinancing 0 0 0 0
------------ ------------ ------------ ------------
Cash generated from operations, sales
and refinancing 0 1,495,225 3,355,586 3,497,941
Less: Cash distributions to investors
(Note 6)
- from operating cash flow 0 (1,205,030) (2,495,002) (3,400,001)
- from sale of properties 0 0 0 0
- from cash flow from prior period 0 0 0 0
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions 0 290,195 860,584 97,940
Special items (not including sales and
refinancing):
Limited partners' capital
contributions 0 40,000,000 0 0
General partners' capital
contributions 1,000 0 0 0
Minority interests' capital
contributions 0 426,367 0 0
Organization costs 0 (10,000) 0 0
Syndication costs 0 (3,922,875) 0 0
Acquisition of land and buildings 0 (26,428,556) (276,157) 0
Investment in direct financing
leases 0 (6,716,561) (276,206) 0
Increase in restricted cash 0 0 0 0
Decrease in restricted cash 0 0 0 0
Investment in joint ventures 0 (1,658,925) (772) 0
Reimbursement of syndication and
acquisition costs paid on behalf
of CNL Income Fund XI, Ltd. by
related parties 0 (1,011,487) (900) 0
Increase in other assets 0 (122,024) 0 0
Distributions to holders of minority
interests 0 (17,467) (51,562) (57,641)
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 1,000 828,667 254,987 40,299
============ ============ ============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 0 45 71 73
============ ============ ============ ============
- from recapture 0 0 0 0
============ ============ ============ ============
Capital gain (loss) 0 0 0 0
============ ============ ============ ============
</TABLE>
C-7
<PAGE>
6 months
1995 1996 1997
------------ ------------ --------
$ 3,820,990 $ 3,877,311 $ 1,847,371
118,384 118,211 105,163
0 213,685 0
51,192 51,381 21,104
(237,126) (247,569) (136,290)
0 0 0
(481,226) (478,198) (229,919)
(70,038) (70,116) (34,598)
------------ ------------ ------------
3,202,176 3,464,705 1,572,831
============ ============ ============
2,985,221 2,965,514 1,447,710
============ ============ ============
0 0 0
============ ============ ============
3,652,185 3,601,714 1,792,914
0 1,044,750 0
0 0 0
------------ ------------ ------------
3,652,185 4,646,464 1,792,914
(3,500,023) (3,540,024) (1,790,012)
0 0 0
0 0 0
------------ ------------ ------------
152,162 1,106,440 2,902
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 (1,044,750) 0
0 0 1,044,750
0 0 (1,044,750)
0 0 0
0 0 0
(54,227) (58,718) (29,095)
------------ ------------ ------------
97,935 2,972 (26,193)
============ ============ ============
74 73 36
============ ============ ============
0 0 0
============ ============ ============
0 0 0
============ ============ ============
C-8
<PAGE>
TABLE III - CNL INCOME FUND XI, LTD. (continued)
<TABLE>
<CAPTION>
1991
(Note 1) 1992 1993 1994
------------ ------------ ------------ --------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 0 41 62 81
- from capital gain 0 0 0 0
- from investment income from
prior period 0 0 0 4
- from return of capital (Note 3) 0 1 0 0
------------ ------------ ------------ ------------
Total distributions on GAAP basis
(Note 6) 0 42 62 85
============ ============ ============ ============
Source (on cash basis)
- from sales 0 0 0 0
- from refinancing 0 0 0 0
- from operations 0 42 62 85
- from cash flow from prior
period 0 0 0 0
------------ ------------ ------------ ------------
Total distributions on cash basis
(Note 6) 0 42 62 85
============ ============ ============ ============
Total cash distributions as a
percentage of original $1,000
investment (Notes 7 and 8) 0.00% 6.17% 8.31% 8.56%
Total cumulative cash distributions
per $1,000 investment from inception 0 42 104 189
Amount (in percentage terms) remaining
invested in program properties at the
end of each year (period) presented
(original total acquisition cost of
properties retained, divided by original
total acquisition cost of all properties
in program) (Note 5) N/A 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: In November 1996, CNL Income Fund XI, Ltd. sold one if its properties
and received net sales proceeds of $1,044,750, resulting in a gain of
$213,685 for financial reporting purposes. In January 1997, the
partnership reinvested the net sales proceeds in an additional property
as tenants-in-common with an affiliate of the general partners.
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, 1995 and 1996, are reflected in the 1994, 1995, 1996 and
1997 columns, respectively, for distributions on a cash basis due to
the payment of such distributions in January 1994, 1995, 1996 and 1997,
respectively. As a result of 1994, 1995, 1996 and 1997 distributions
being presented on a cash basis, distributions declared and unpaid as
of December 31, 1994, 1995 and 1996, and June 30, 1997 are not included
in the 1994, 1995, 1996 and 1997 totals, respectively.
Note 7: On December 31, 1995 and 1996, CNL Income Fund XI, Ltd. declared a
special distribution of cumulative excess operating reserves equal to
.10% for each year of the total invested capital. Accordingly, the
total yield for each of 1995 and 1996 was 8.85%.
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-9
<PAGE>
6 months
1995 1996 1997
------------ ------------ --------
79 81 39
0 5 0
9 3 2
0 0 4
------------ ------------ ------------
88 89 45
============ ============ ============
0 0 0
0 0 0
88 89 45
0 0 0
------------ ------------ ------------
88 89 45
============ ============ ============
8.85% 8.85% 8.75%
277 366 411
100% 97% 100%
C-10
<PAGE>
TABLE III
Operating Results of Prior Programs CNL
INCOME FUND XII, LTD.
<TABLE>
<CAPTION>
1991
(Note 1) 1992 1993 1994
------------ ------------ ------------ ------------
<S> <C>
Gross revenue $ 0 $ 25,133 $ 3,374,640 $ 4,397,881
Equity in earnings of joint ventures 0 46 49,604 85,252
Profit (Loss) from sale of properties
(Note 7) 0 0 0 0
Interest income 0 45,228 190,082 65,447
Less: Operating expenses 0 (7,211) (193,804) (192,951)
Interest expense 0 0 0 0
Depreciation and amortization 0 (3,997) (286,293) (327,795)
------------ ------------ ------------ ------------
Net income - GAAP basis 0 59,199 3,134,229 4,027,834
============ ============ ============ ============
Taxable income
- from operations 0 58,543 2,749,072 3,301,005
============ ============ ============ ============
- from gain (loss) on sale 0 0 0 0
============ ============ ============ ============
Cash generated from operations
(Notes 2 and 5) 0 61,370 3,246,760 3,848,962
Cash generated from sales (Note 7) 0 0 0 0
Cash generated from refinancing 0 0 0 0
------------ ------------ ------------ ------------
Cash generated from operations, sales
and refinancing 0 61,370 3,246,760 3,848,962
Less: Cash distributions to investors
(Note 6)
- from operating cash flow 0 (61,370) (1,972,769) (3,768,754)
- from sale of properties 0 0 0 0
- from return of capital (Note 4) 0 (60,867) 0 0
- from cash flow from prior period 0 0 0 0
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions 0 (60,867) 1,273,991 80,208
Special items (not including sales and
refinancing):
Limited partners' capital
contributions 0 21,543,270 23,456,730 0
General partners' capital
contributions 1,000 0 0 0
Organization costs 0 (10,000) 0 0
Syndication costs 0 (2,066,937) (2,277,637) 0
Acquisition of land and buildings 0 (7,536,009) (15,472,737) (230)
Investment in direct financing
leases 0 (2,503,050) (11,875,100) (591)
Loan to tenant of joint venture,
net of repayments 0 0 (207,189) 6,400
Investment in joint ventures 0 (372,045) (468,771) (4,400)
Increase in restricted cash 0 0 0 0
Payment of lease costs 0 0 0 0
Reimbursement of syndication and
acquisition costs paid on behalf
of CNL Income Fund XII, Ltd. by
related parties 0 (704,923) (432,749) 0
Increase in other assets 0 (654,497) 0 0
Other 0 0 0 973
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 1,000 7,634,942 (6,003,462) 82,360
============ ============ ============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 0 5 64 73
============ ============ ============ ============
- from recapture 0 0 0 0
============ ============ ============ ============
Capital gain (loss) 0 0 0 0
============ ============ ============ ============
</TABLE>
C-11
<PAGE>
6 months
1995 1996 1997
------------ ------------ -----------
$ 4,404,792 $ 4,264,273 $ 2,058,864
81,582 200,499 141,356
0 (15,355) 0
84,197 88,286 37,968
(228,404) (279,341) (132,808)
0 0 0
(327,795) (315,319) (159,551)
------------ ------------ ------------
4,014,372 3,943,043 1,945,829
============ ============ ============
3,262,046 3,275,495 1,617,525
============ ============ ============
0 (41,506) 0
============ ============ ============
3,819,362 3,951,689 1,931,238
0 1,640,000 0
0 0 0
------------ ------------ ------------
3,819,362 5,591,689 1,931,238
(3,819,362) (3,870,008) (1,912,504)
0 0 0
0 0 0
(5,645) 0 0
------------ ------------ ------------
(5,645) 1,721,681 18,734
0 0 0
0 0 0
0 0 0
0 0 0
0 0 (55,000)
0 0 0
- ------------- ------------ -------------
7,008 7,741 4,171
0 (1,645,024) 0
0 0 0
0 0 (24,052)
0 0 0
0 0 0
0 0 0
------------ ------------ ------------
1,363 84,398 (56,147)
============ ============ ============
72 72 36
============ ============ ============
0 0 0
============ ============ ============
0 (1) 0
============ ============ ============
C-12
<PAGE>
TABLE III - CNL INCOME FUND XII, LTD. (continued)
<TABLE>
<CAPTION>
1991
(Note 1) 1992 1993 1994
------------ ------------ ------------ --------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 0 5 46 84
- from capital gain 0 0 0 0
- from investment income from
prior period 0 0 0 0
- from return of capital (Note 3) 0 7 0 0
------------ ------------ ------------ ------------
Total distributions on GAAP basis
(Note 6) 0 12 46 84
============ ============ ============ ============
Source (on cash basis)
- from sales 0 0 0 0
- from refinancing 0 0 0 0
- from operations 0 6 46 84
- from return of capital (Note 4) 0 6 0 0
- from cash flow from prior period 0 0 0 0
------------ ------------ ------------ ------------
Total distributions on cash basis
(Note 6) 0 12 46 84
============ ============ ============ ============
Total cash distributions as a
percentage of original $1,000
investment (Notes 8 and 9) 0.00% 5.00% 6.75% 8.50%
Total cumulative cash distributions
per $1,000 investment from inception 0 12 58 142
Amount (in percentage terms) remaining
invested in program properties at the
end of each year (period) presented
(original total acquisition cost of
properties retained, divided by original
total acquisition cost of all properties
in program) (Note 7) N/A 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, 1995 and 1996, are reflected in the 1994, 1995, 1996 and
1997 columns, respectively, for distributions on a cash basis due to
the payment of such distributions in January 1994, 1995, 1996 and 1997,
respectively. As a result of 1994, 1995, 1996 and 1997 distributions
being presented on a cash basis, distributions declared and unpaid as
of December 31, 1994, 1995 and 1996, and June 30, 1997 are not included
in the 1994, 1995, 1996 and 1997 totals, respectively.
C-13
<PAGE>
6 months
1995 1996 1997
------------ ------------ ----------
85 86 43
0 0 0
0 0 0
0 0 0
------------ ------------ ------------
85 86 43
============ ============ ============
0 0 0
0 0 0
85 86 43
0 0 0
0 0 0
------------ ------------ ------------
85 86 43
============ ============ ============
8.60% 8.50% 8.50%
227 313 356
100% 100% 100%
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 $1,645,024 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
8.60%.
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-14
<PAGE>
TABLE III
Operating Results of Prior Programs CNL
INCOME FUND XIII, LTD.
<TABLE>
<CAPTION>
1992
(Note 1) 1993 1994 1995
------------ ------------ ------------ ------------
<S> <C>
Gross revenue $ 0 $ 966,564 $ 3,558,447 $ 3,806,944
Equity in earnings of joint ventures 0 1,305 43,386 98,520
Profit (Loss) from sale of properties
(Notes 4 and 5) 0 0 0 (29,560)
Provision for loss on land and net
investment in direct financing leases
(Note 8) 0 0 0 0
Interest income 0 181,568 77,379 51,410
Less: Operating expenses 0 (59,390) (183,311) (214,705)
Interest expense 0 0 0 0
Depreciation and amortization 0 (148,170) (378,269) (393,435)
------------ ------------ ------------ ------------
Net income - GAAP basis 0 941,877 3,117,632 3,319,174
============ ============ ============ ============
Taxable income
- from operations 0 978,535 2,703,252 2,920,859
============ ============ ============ ============
- from gain (loss) on sale 0 0 0 0
============ ============ ============ ============
Cash generated from operations
(Notes 2 and 3) 0 1,121,547 3,149,000 3,379,378
Cash generated from sales (Notes 4 and 5) 0 0 0 286,411
Cash generated from refinancing 0 0 0 0
------------ ------------ ------------ ------------
Cash generated from operations, sales
and refinancing 0 1,121,547 3,149,000 3,665,789
Less: Cash distributions to investors
(Note 6)
- from operating cash flow 0 (528,364) (2,800,004) (3,350,014)
- from sale of properties 0 0 0 0
- from cash flow from prior period 0 0 0 0
------------ ------------ ------------ ------------
Cash generated (deficiency) after
cash distributions 0 593,183 348,996 315,775
Special items (not including sales
and refinancing):
Limited partners' capital
contributions 0 40,000,000 0 0
General partners' capital
contributions 1,000 0 0 0
Syndication costs 0 (3,932,017) (181) 0
Acquisition of land and buildings 0 (19,691,630) (5,764,308) (336,116)
Investment in direct financing leases 0 (6,760,624) (1,365,075) 0
Investment in joint ventures 0 (314,998) (545,139) (140,052)
Increase in restricted cash 0 0 0 0
Decrease in restricted cash 0 0 0 0
Loan to tenant 0 0 0 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)
Increase in other assets 0 (454,909) 9,226 0
Other 0 0 0 954
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 1,000 8,639,025 (7,341,517) (162,513)
============ ============ ============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 0 33 67 72
============ ============ ============ ============
- from recapture 0 0 0 0
============ ============ ============ ============
Capital gain (loss) (Notes 4 and 5) 0 0 0 0
============ ============ ============ ============
</TABLE>
C-15
<PAGE>
6 months
1996 1997
------------ ------------
$ 3,685,280 $ 1,796,451
60,654 70,503
82,855 0
0 (41,202)
49,820 18,246
(253,360) (128,593)
0 0
(393,434) (197,265)
3,231,815 1,518,140
2,972,159 1,387,838
0 0
3,367,581 1,659,408
550,000 0
0 0
------------ ------------
3,917,581 1,659,408
(3,367,581) (1,659,408)
0 0
(32,427) (40,596)
517,573 (40,596)
0 0
0 0
0 0
0 0
0 0
0 (550,000)
(550,000) 0
0 550,000
0 (190,997)
0 0
0 0
0 0
------------ ------------
(32,427) (231,593)
74 34
============ ============
0 0
============ ============
0 0
============ ============
C-16
<PAGE>
TABLE III - CNL INCOME FUND XIII, LTD. (continued)
<TABLE>
<CAPTION>
1992
(Note 1) 1993 1994 1995
------------ ------------ ------------ ------------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 0 18 70 82
- from capital gain 0 0 0 0
- from investment income from prior
period 0 0 0 2
------------ ------------ ------------ ------------
Total distributions on GAAP basis (Note 6) 0 18 70 84
============ ============ ============ ============
Source (on cash basis)
- from sales 0 0 0 0
- from refinancing 0 0 0 0
- from operations 0 18 70 84
- from cash flow from prior period 0 0 0 0
------------ ------------ ------------ ------------
Total distributions on cash basis (Note 6) 0 18 70 84
============ ============ ============ ============
Total cash distributions as a percentage
of original $1,000 investment (Note 7) 0.00% 5.33% 7.56% 8.44%
Total cumulative cash distributions per
$1,000 investment from inception 0 18 88 172
Amount (in percentage terms) remaining
invested in program properties at the
end of each year (period) presented
(original total acquisition cost of
properties retained, divided by original
total acquisition cost of all properties
in program) (Notes 4 and 5) N/A 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: In November 1996, CNL Income Fund XIII, Ltd. sold one of its properties
and received net sales proceeds of $550,000, resulting in a gain of
$82,855 for financial reporting purposes. In January 1997, the
partnership reinvested the net sales proceeds in an additional property
as tenants-in-common with an affiliate of the general partners.
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, 1995 and 1996, are reflected in the 1994, 1995, 1996 and
1997 columns, respectively, for distributions on a cash basis due to
the payment of such distributions in January 1994, 1995, 1996 and 1997,
respectively. As a result of 1994, 1995, 1996 and 1997 distributions
being presented on a cash basis, distributions declared and unpaid as
of December 31, 1994, 1995 and 1996, and June 30, 1997, are not
included in the 1994, 1995, 1996 and 1997 totals, respectively.
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 6 above)
Note 8: During the six months ended June 30, 1997, the partnership recorded an
allowance for loss on land and net investment in the direct financing
lease of $41,202, for financial reporting purposes, relating to one of
its properties. The loss represents the difference between the
property's land carrying value and the carrying value of the net
investment in the direct financing lease, as compared to the estimated
net realizable value, based on the anticipated sales price of this
property from a third party.
Note 9: Certain data for columns representing less than 12 months have been
annualized.
C-17
<PAGE>
6 months
1996 1997
------------ -----------
78 38
2 0
5 5
------------ ------------
85 43
============ ============
0 0
0 0
84 42
1 1
------------ ------------
85 43
============ ============
8.50% 8.50%
257 300
99% 100%
C-18
<PAGE>
TABLE III
Operating Results of Prior Programs CNL
INCOME FUND XIV, LTD.
<TABLE>
<CAPTION>
1992
(Note 1) 1993 1994 1995
------------ ------------ ------------ ------------
<S> <C>
Gross revenue $ 0 $ 256,234 $ 3,135,716 $ 4,017,266
Equity in earnings of joint ventures 0 1,305 35,480 338,717
Profit (Loss) from sale of properties
(Note 4) 0 0 0 (66,518)
Interest income 0 27,874 200,499 50,724
Less: Operating expenses 0 (14,049) (181,980) (248,840)
Interest expense 0 0 0 0
Depreciation and amortization 0 (28,918) (257,640) (340,112)
------------ ------------ ------------ ------------
Net income - GAAP basis 0 242,446 2,932,075 3,751,237
============ ============ ============ ============
Taxable income
- from operations 0 278,845 2,482,240 3,162,165
============ ============ ============ ============
- from gain on sale 0 0 0 0
============ ============ ============ ============
Cash generated from operations
(Notes 2 and 3) 0 321,737 2,812,631 3,709,844
Cash generated from sales (Note 4) 0 0 0 696,012
Cash generated from refinancing 0 0 0 0
------------ ------------ ------------ ------------
Cash generated from operations, sales
and refinancing 0 321,737 2,812,631 4,405,856
Less: Cash distributions to investors
(Note 5)
- from operating cash flow 0 (9,050) (2,229,952) (3,543,751)
- from sale of properties 0 0 0 0
- from cash flow from prior period 0 0 0 0
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions 0 312,687 582,679 862,105
Special items (not including sales and
refinancing):
Limited partners' capital
contributions 0 28,785,100 16,214,900 0
General partners' capital
contributions 1,000 0 0 0
Syndication costs 0 (2,771,892) (1,618,477) 0
Acquisition of land and buildings 0 (13,758,004) (11,859,237) (964,073)
Investment in direct financing leases 0 (4,187,268) (5,561,748) (75,352)
Investment in joint ventures 0 (315,209) (1,561,988) (1,087,218)
Return of capital from joint venture 0 0 0 0
Reimbursement of organization,
syndication and acquisition costs
paid on behalf of CNL Income Fund
XIV, Ltd. by related parties 0 (706,215) (376,738) (577)
Increase in other assets 0 (444,267) 0 0
Other 0 0 0 5,530
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 1,000 6,914,932 (4,180,609) (1,259,585)
============ ============ ============ ============
TAX AND DISTRIBUTION DATA PER
$1,000 INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 0 16 56 70
============ ============ ============ ============
- from recapture 0 0 0 0
============ ============ ============ ============
Capital gain (loss) (Note 4) 0 0 0 0
============ ============ ============ ============
</TABLE>
C-19
<PAGE>
6 months
1996 1997
------------ -----------
$ 3,999,813 $ 1,964,870
459,137 152,823
0 0
44,089 23,015
(246,621) (148,962)
0 0
(340,089) (170,055)
- ------------ --------------
3,916,329 1,821,691
3,236,329 1,594,605
0 47,256
3,706,296 1,807,883
0 0
0 0
- ------------- -------------
3,706,296 1,807,883
(3,706,296) (1,807,883)
0 0
(6,226) (48,377)
- ------------ --------------
(6,226) (48,377)
0 0
0 0
0 0
0 0
0 0
(7,500) 0
0 51,950
0 0
0 0
0 0
------------ ---------------
(13,726) 3,573
============ ============
71 35
============ ============
0 0
============ ============
0 1
============ ============
C-20
<PAGE>
TABLE III - CNL INCOME FUND XIV, LTD. (continued)
<TABLE>
<CAPTION>
1992
(Note 1) 1993 1994 1995
------------ ------------ ------------ ------------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 0 1 51 79
- from capital gain 0 0 0 0
- from return of capital 0 0 0 0
- from investment income from prior
period 0 0 0 0
------------ ------------ ------------ ------------
Total distributions on GAAP basis (Note 5) 0 1 51 79
============ ============ ============ ============
Source (on cash basis)
- from sales 0 0 0 0
- from refinancing 0 0 0 0
- from operations 0 1 51 79
- from cash flow from prior period 0 0 0 0
------------ ------------ ------------ ------------
Total distributions on cash basis (Note 5) 0 1 51 79
============ ============ ============ ============
Total cash distributions as a percentage
of original $1,000 investment (Note 6) 0.00% 4.50% 6.50% 8.06%
Total cumulative cash distributions
per $1,000 investment from inception 0 1 52 131
Amount (in percentage terms) remaining
invested in program properties at the
end of each year (period) presented
(original total acquisition cost of
properties retained, divided by original
total acquisition cost of all properties
in program) N/A 100% 100% 100%
</TABLE>
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, 1995 and 1996, are reflected in the 1994, 1995, 1996 and
1997 columns, respectively, for distributions on a cash basis due to
the payment of such distributions in January 1994, 1995, 1996 and 1997,
respectively. As a result of 1994, 1995, 1996 and 1997 distributions
being presented on a cash basis, distributions declared and unpaid as
of December 31, 1994, 1995 and 1996, and June 30, 1997 are not included
in the 1994, 1995, 1996 and 1997 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>
6 months
1996 1997
------------ -----------
83 40
0 0
0 0
0 1
------------ ------------
83 41
============ ============
0 0
0 0
83 40
0 1
------------ ------------
83 41
============ ============
8.25% 8.25%
214 255
100% 100%
C-22
<PAGE>
TABLE III
Operating Results of Prior Programs CNL
INCOME FUND XV, LTD.
<TABLE>
<CAPTION>
1993
(Note 1) 1994 1995 1996
------------ ------------ ------------ ------------
<S> <C>
Gross revenue $ 0 $ 1,143,586 $ 3,546,320 $ 3,632,699
Equity in earnings of joint ventures 0 8,372 280,606 392,862
Profit (Loss) from sale of properties
(Note 4) 0 0 (71,023) 0
Interest income 0 167,734 88,059 43,049
Less: Operating expenses 0 (62,926) (228,319) (235,319)
Interest expense 0 0 0 0
Depreciation and amortization 0 (70,848) (243,175) (248,232)
------------ ------------ ------------ ------------
Net income - GAAP basis 0 1,185,918 3,372,468 3,585,059
============ ============ ============ ============
Taxable income
- from operations 0 1,026,715 2,861,912 2,954,318
============ ============ ============ ============
- from gain on sale 0 0 0 0
============ ============ ============ ============
Cash generated from operations
(Notes 2 and 3) 0 1,116,834 3,239,370 3,434,682
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 3,434,682
Less: Cash distributions to investors
(Note 5)
- from operating cash flow 0 (635,944) (2,650,003) (3,200,000)
- from sale of properties 0 0 0 0
------------ ------------ ------------ ------------
- from cash flow from prior period
Cash generated (deficiency) after cash
distributions 0 480,890 1,401,073 234,682
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) (129,939)
Return of capital from joint venture 0 0 0 0
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) 104,743
============ ============ ============ ============
TAX AND DISTRIBUTION DATA PER $1,000
INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 0 33 71 73
============ ============ ============ ============
- from recapture 0 0 0 0
============ ============ ============ ============
Capital gain (loss) (Note 4) 0 0 0 0
============ ============ ============ ============
</TABLE>
C-23
<PAGE>
6 months
1997
----------
$ 1,799,379
117,311
0
24,263
(123,377)
0
(124,149)
-----------
1,693,427
1,430,120
47,256
1,673,623
0
0
-----------
1,673,623
(1,673,623)
0
(6,377)
-----------
(6,377)
0
0
0
0
0
0
51,950
0
0
0
-----------
45,573
35
0
1
C-24
<PAGE>
TABLE III - CNL INCOME FUND XV, LTD. (continued)
<TABLE>
<CAPTION>
1993
(Note 1) 1994 1995 1996
------------ -------------- ------------ ------------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 0 21 66 80
- from capital gain 0 0 0 0
------------ ------------ ------------ ------------
Total distributions on GAAP basis (Note 5) 0 21 66 80
============ ============ ============ ============
Source (on cash basis)
- from sales 0 0 0 0
- from refinancing 0 0 0 0
- from operations 0 21 66 80
------------ ------------ ------------ ------------
Total distributions on cash basis (Note 5) 0 21 66 80
============ ============ ============ ============
Total cash distributions as a percentage
of original $1,000 investment (Notes 6
and 7). 0 5.00% 7.25% 8.20%
Total cumulative cash distributions per
$1,000 investment from inception 0 21 87 167
Amount (in percentage terms) remaining
invested in program properties at the
end of each year (period) presented
(original total acquisition cost of
properties retained, divided by original
total acquisition cost of all properties
in program) N/A 100% 100% 100%
</TABLE>
Note 1: The registration statement relating to this offering of Units of CNL
Income Fund XV, Ltd. became effective February 23, 1994. Activities
through March 23, 1994, were devoted to organization of the partnership
and operations had not begun.
Note 2: Cash generated from operations includes cash received from tenants,
plus distributions from joint venture, less cash paid for expenses,
plus interest received.
Note 3: Cash generated from operations per this table agrees to cash generated
from operations per the statement of cash flows included in the
financial statements of CNL Income Fund XV, Ltd.
Note 4: During 1995, the partnership sold three of its properties to a tenant
for its original purchase price, excluding acquisition fees and
miscellaneous acquisition expenses. The majority of the net sales
proceeds were used to acquire additional properties. As a result of
these transactions, the partnership recognized a loss for financial
reporting purposes of $71,023 primarily due to acquisition fees and
miscellaneous acquisition expenses the partnership had allocated to the
three properties and due to the accrued rental income relating to
future scheduled rent increases that the partnership had recorded and
reversed at the time of sale.
Note 5: Distributions declared for the quarters ended December 31, 1994, 1995
and 1996 are reflected in the 1995, 1996 and 1997 columns,
respectively, due to the payment of such distributions in January 1995,
1996 and 1997, respectively. As a result of distributions being
presented on a cash basis, distributions declared and unpaid as of
December 31, 1994, 1995 and 1996, and June 30, 1997 are not included in
the 1994, 1995, 1996 and 1997 totals, respectively.
Note 6: On December 31, 1996, CNL Income Fund XV, Ltd. declared a special
distribution of cumulative excess operating reserves equal to .20% of
the total invested capital. Accordingly, the total yield for 1996 was
8.20%
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-25
<PAGE>
6 months
1997
----------
42
0
----------
42
0
0
42
----------
42
==========
8.00%
209
100%
C-26
<PAGE>
TABLE III
Operating Results of Prior Programs CNL
INCOME FUND XVI, LTD.
<TABLE>
<CAPTION>
1993
(Note 1) 1994 1995 1996
------------ ------------ ------------ -------------
<S> <C>
Gross revenue $ 0 $ 186,257 $ 2,702,504 $ 4,343,390
Equity in earnings from joint venture 0 0 0 19,668
Profit from sale of properties (Notes 4
and 5) 0 0 0 124,305
Interest income 0 21,478 321,137 75,160
Less: Operating expenses 0 (10,700) (274,595) (261,878)
Interest expense 0 0 0 0
Depreciation and amortization 0 (9,458) (318,205) (552,447)
------------ ------------ ------------ ------------
Net income - GAAP basis 0 187,577 2,430,841 3,748,198
============ ============ ============ ============
Taxable income
- from operations 0 189,864 2,139,382 3,239,830
============ ============ ============ ============
- from gain on sale (Notes 4 and 5) 0 0 0 0
============ ============ ============ ============
Cash generated from operations
(Notes 2 and 3) 0 205,148 2,481,395 3,753,726
Cash generated from sales (Notes 4 and 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 4,528,726
Less: Cash distributions to investors
(Note 4)
- from operating cash flow 0 (2,845) (1,798,921) (3,431,251)
- from sale of properties 0 0 0 0
------------ ------------ ------------ ------------
Cash generated (deficiency) after cash
distributions 0 202,303 682,474 1,097,475
Special items (not including sales and
refinancing):
Limited partners' capital contri-
butions 0 20,174,172 24,825,828 0
General partners' capital contri-
butions 1,000 0 0 0
Syndication costs 0 (1,929,465) (2,452,743) 0
Acquisition of land and buildings 0 (13,170,132) (16,012,458) (2,355,627)
Investment in direct financing
leases 0 (975,853) (5,595,236) (405,937)
Investment in joint venture 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) (2,494)
Collection of overpayment of acqui-
sition and syndication costs paid
by related parties on behalf of the
partnership 0 0 0 0
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 (2,441,583)
============ ============ ============ ============
TAX AND DISTRIBUTION DATA PER $1,000
INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 0 17 53 71
============ ============ ============ ============
- from recapture 0 0 0 0
============ ============ ============ ============
Capital gain (loss) (Notes 4 and 5) 0 0 0 0
============ ============ ============ ============
</TABLE>
C-27
<PAGE>
6 months
1997
--------
$ 2,145,424
36,620
41,148
34,155
(134,647)
0
(282,050)
------------
1,840,650
=============
1,598,010
============
41,148
============
1,888,155
610,384
0
-----------
2,498,539
(1,800,000)
0
-----------
698,539
0
0
0
0
(29,257)
0
0
0
0
0
-----------
669,282
-----------
35
=====
0
=====
1
=====
C-28
<PAGE>
TABLE III - CNL INCOME FUND XVI, LTD. (continued)
<TABLE>
<CAPTION>
1993
(Note 1) 1994 1995 1996
------------ ------------ ------------ ------------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 0 1 45 76
- from capital gain 0 0 0 0
- from investment income from
prior period 0 0 0 0
------------ ------------ ------------ ------------
Total distributions on GAAP basis (Note 6) 0 1 45 76
============ ============ ============ ============
Source (on cash basis)
- from sales 0 0 0 0
- from refinancing 0 0 0 0
- from operations 0 1 45 76
------------ ------------ ------------ ------------
Total distributions on cash basis (Note 6) 0 1 45 76
============ ============ ============ ============
Total cash distributions as a percentage
of original $1,000 investment (Note 7) 0.00% 4.50% 6.00% 7.88%
Total cumulative cash distributions per
$1,000 investment from inception 0 1 46 122
Amount (in percentage terms) remaining
invested in program properties at the end
of each year (period) presented
(original total acquisition cost of
properties retained, divided by original
total acquisition cost of all properties
in program) (Notes 4 and 5) N/A 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 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: In April 1996, CNL Income Fund XVI, Ltd. sold one of its properties and
received net sales proceeds of $775,000, resulting in a gain of
$124,305 for financial reporting purposes. In October 1996, the
partnership reinvested the net sales proceeds in an additional property
as tenants-in-common with an affiliate of the general partners.
Note 5: In March 1997, CNL Income Fund XVI, Ltd. sold one of its properties and
received net sales proceeds of $610,384, resulting in a gain of $41,148
for financial reporting purposes.
Note 6: Distributions declared for the quarters ended December 31, 1994, 1995
and 1996 are reflected in the 1995, 1996 and 1997 columns,
respectively, due to the payment of such distributions in January 1995,
1996 and 1997, respectively. As a result of distributions being
presented on a cash basis, distributions declared and unpaid as of
December 31, 1994, 1995 and 1996, and June 30, 1997 are not included in
the 1994, 1995, 1996 and 1997 totals, respectively.
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 6 above)
Note 8: Certain data for columns representing less than 12 months have been
annualized.
C-29
<PAGE>
6 months
1997
--------
39
1
0
--------
40
=======
0
0
40
--------
40
========
8.00%
162
99%
C-30
<PAGE>
TABLE III
Operating Results of Prior Programs CNL
INCOME FUND XVII, LTD.
<TABLE>
<CAPTION>
1995 6 months
(Note 1) 1996 1997
------------ ------------ --------
<S> <C>
Gross revenue $ 0 $ 1,195,263 $ 1,237,898
Equity in earnings of unconsolidated
joint ventures 0 4,834 45,358
Interest income 12,153 244,406 48,537
Less: Operating expenses (3,493) (169,536) (103,397)
Interest expense 0 0 0
Depreciation and amortization (309) (179,208) (188,038)
Minority interest in income of
consolidated joint venture 0 (10,432)
------------ ------------ ------------
Net income - GAAP basis 8,351 1,095,759 1,029,926
============ ============ ============
Taxable income
- from operations 12,153 1,114,964 1,138,900
============ ============ ============
- from gain on sale 0 0 0
============ ============ ============
Cash generated from operations
(Notes 2 and 3) 9,012 1,232,948 1,179,142
Cash generated from sales 0 0 0
Cash generated from refinancing 0 0 0
------------ ------------ ------------
Cash generated from operations, sales
and refinancing 9,012 1,232,948 1,179,142
Less: Cash distributions to investors
(Note 4)
- from operating cash flow (1,199) (703,681) (1,015,084)
- from sale of properties 0 0 0
------------ ------------ ------------
Cash generated (deficiency) after cash
distributions 7,813 529,267 164,058
Special items (not including sales and
refinancing):
Limited partners' capital contri-
butions 5,696,921 24,303,079 0
General partners' capital contri-
butions 1,000 0 0
Contributions from minority interest 0 140,676 278,170
Syndication costs (604,348) (2,407,317) 0
Acquisition of land and buildings (332,928) (19,735,346) (1,978,419)
Investment in direct financing
leases 0 (1,784,925) (1,009,775)
Investment in joint ventures 0 (201,501) (934,196)
Increase in restricted cash 0 0 0
Reimbursement of organization,
syndication and acquisition costs
paid on behalf of CNL Income Fund
XVII, Ltd. by related parties (347,907) (326,483) (26,068)
Increase in other assets (221,282) 0 0
Distributions to holder of minority
interest 0 0 (16,943)
Other (410) 410 0
------------ ------------ ------------
Cash generated (deficiency) after cash
distributions and special items 4,198,859 517,860 (3,523,173)
============ ============ ============
TAX AND DISTRIBUTION DATA PER $1,000
INVESTED
Federal income tax results:
Ordinary income (loss)
- from operations 36 37 38
============ ============ ============
- from recapture 0 0 0
============ ============ ============
Capital gain (loss) 0 0 0
============ ============ ============
</TABLE>
C-31
<PAGE>
TABLE III - CNL INCOME FUND XVII, LTD. (continued)
<TABLE>
<CAPTION>
1995 6 months
(Note 1) 1996 1997
------------ ------------ --------
<S> <C>
Cash distributions to investors
Source (on GAAP basis)
- from investment income 4 23 34
- from capital gain 0 0 0
- from investment income from
prior period 0 0 0
------------ ------------ ------------
Total distributions on GAAP basis (Note 4) 0 23 34
============ ============ ============
Source (on cash basis)
- from sales 0 0 0
- from refinancing 0 0 0
- from operations 4 23 34
------------ ------------ ------------
Total distributions on cash basis (Note 4) 4 23 34
============ ============ ============
Total cash distributions as a percentage
of original $1,000 investment (Note 5) 5.00% 5.50% 7.25%
Total cumulative cash distributions per
$1,000 investment from inception 4 27 61
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 98% 100%
</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. ("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 October 11,
1996, 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 XVII, Ltd.
Note 4: Distributions declared for the quarters ended December 31, 1995 and
1996 are reflected in the 1996 and 1997 columns, respectively, due to
the payment of such distributions in January 1996 and 1997,
respectively. As a result of distributions being presented on a cash
basis, distributions declared and unpaid as of December 31, 1996 and
June 30, 1997 are not included in the 1996 and 1997 totals,
respectively.
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>
====================================================================================================================================
Cost of Properties
Including Closing and Selling Price, Net of
Soft Costs Closing Costs and GAAP Adjustments
-------------------------- ----------------------------------
Purchase Total
Cash money Adjustments acquisition
received Mortgage mortgage resulting cost, capital
net of balance taken from Original improvements
Date Date of closing at time back by application mortgage closing and
Property Acquired Sale costs of sale program of GAAP Total financing soft costs (1)
====================================================================================================================================
<S> <C>
CNL Income Fund, Ltd.:
Burger King -
San Dimas, CA 02/05/87 06/12/92 $1,169,021 0 0 0 $1,169,021 0 $955,000
Wendy's -
Fairfield, CA 07/01/87 10/03/94 1,018,490 0 0 0 1,018,490 0 861,500
CNL Income Fund II, Ltd.:
Golden Corral -
Salisbury, NC 05/29/87 07/21/93 746,800 0 0 0 746,800 0 642,800
Pizza Hut -
Graham, TX 08/24/87 07/28/94 261,628 0 0 0 261,628 0 205,500
Golden Corral -
Medina, OH 11/18/87 11/30/94 626,582 0 0 0 626,582 0 743,000
Denny's -
Show Low, AZ (8) 05/22/87 01/31/97 620,800 0 0 0 620,800 0 484,185
KFC -
Eagan, MN 06/01/87 06/02/97 623,882 0 42,000 0 665,882 0 601,100
CNL Income Fund III, Ltd.:
Wendy's -
Chicago, IL 06/02/88 01/10/97 496,418 0 0 0 496,418 0 591,362
Perkins -
Bradenton, FL 06/30/88 03/14/97 1,310,001 0 0 0 1,310,001 0 1,080,500
Pizza Hut -
Kissimmee, FL 02/23/88 04/08/97 673,159 0 0 0 673,159 0 474,755
Burger King -
Roswell, GA 06/08/88 06/20/97 257,981 0 685,000 0 942,981 0 775,226
CNL Income Fund IV, Ltd.:
</TABLE>
Selling Price, Net of
Closing Costs and GAAP Adjustments
----------------------------------
Excess
(deficiency)
of property
operating cash
receipts over
cash
Property Total expenditures
=================================================================
CNL Income Fund, Ltd.:
Burger King -
San Dimas, CA $955,000 $214,021
Wendy's -
Fairfield, CA 861,500 156,990
CNL Income Fund II, Ltd.:
Golden Corral -
Salisbury, NC 642,800 104,000
Pizza Hut -
Graham, TX 205,500 56,128
Golden Corral -
Medina, OH 743,000 (116,418)
Denny's -
Show Low, AZ (8) 484,185 136,615
KFC -
Eagan, MN 601,100 64,782
CNL Income Fund III, Ltd.:
Wendy's -
Chicago, IL 591,362 (94,944)
Perkins -
Bradenton, FL 1,080,500 229,501
Pizza Hut -
Kissimmee, FL 474,755 198,404
Burger King -
Roswell, GA 775,226 167,755
CNL Income Fund IV, Ltd.:
<PAGE>
<TABLE>
<S> <C>
Taco Bell -
York, PA 03/22/89 04/27/94 712,000 0 0 0 712,000 0 616,501 616,501 95,499
Burger King -
Hastings, MI 08/12/88 12/15/95 518,650 0 0 0 518,650 0 419,936 419,936 98,714
Wendy's -
Tampa, FL 12/30/88 09/20/96 1,049,550 0 0 0 1,049,550 0 828,350 828,350 221,200
CNL Income Fund V, Ltd.:
Perkins -
Myrtle Beach, SC (2) 02/28/90 08/25/95 0 0 1,040,000 0 1,040,000 0 986,418 986,418 53,582
Ponderosa -
St. Cloud, FL (6) 06/01/89 10/24/96 73,713 0 1,057,299 0 1,131,012 0 996,769 996,769 134,243
Franklin National Bank -
Franklin, TN 06/26/89 01/07/97 960,741 0 0 0 960,741 0 1,138,164 1,138,164 (177,423)
</TABLE>
Taco Bell - 616,501 95,499
York, PA
Burger King - 419,936 98,714
Hastings, MI
Wendy's - 828,350 221,200
Tampa, FL
CNL Income Fund V, Ltd.:
Perkins - 986,418 53,582
Myrtle Beach, SC (2)
Ponderosa - 996,769 134,243
St. Cloud, FL (6)
Franklin National Bank - 1,138,164 (177,423)
Franklin, TN
C-33
<PAGE>
TABLE V
SALES OR DISPOSALS OF PROPERTIES
<TABLE>
<CAPTION>
====================================================================================================================================
Cost of Properties
Including Closing and
Soft Cost Selling Price, Net of
------------------------- Closing Costs and GAAP Adjustments
------------------------------------
Purchase Total
Cash money Adjustments acquisition
received Mortgage mortgage resulting cost, capital
net of balance taken from Original improvements
Date Date of closing at time back by application mortgage closing and
Property Acquired Sale costs of sale program of GAAP Total financing soft costs (1)
====================================================================================================================================
<S> <C>
Shoney's -
Smyrna, TN 03/22/89 05/13/97 636,788 0 0 0 636,788 0 554,200
CNL Income Fund VI, Ltd.:
Hardee's -
Batesville, AR 11/02/89 05/24/94 791,211 0 0 0 791,211 0 605,500
Hardee's -
Heber Springs, AR 02/13/90 05/24/94 638,270 0 0 0 638,270 0 532,893
Hardee's -
Little Canada, MN 11/28/89 06/29/95 899,503 0 0 0 899,503 0 821,692
Jack in the Box -
Dallas, TX 06/28/94 12/09/96 982,980 0 0 0 982,980 0 964,437
Denny's -
Show Low, AZ (8) 05/22/87 01/31/97 349,200 0 0 0 349,200 0 272,354
CNL Income Fund VII, Ltd.:
Taco Bell -
Kearns, UT 06/14/90 05/19/92 700,000 0 0 0 700,000 0 560,202
Hardee's -
St. Paul, MN 08/09/90 05/24/94 869,036 0 0 0 869,036 0 742,333
Perkins -
Florence, SC (3) 08/28/90 08/25/95 0 0 1,160,000 0 1,160,000 0 1,084,905
Church's Fried Chicken -
Jacksonville, FL (4) 04/30/90 12/01/95 0 0 240,000 0 240,000 0 233,728
Shoney's -
Colorado Springs, CO 07/03/90 07/24/96 1,044,909 0 0 0 1,044,909 0 893,739
Hardee's -
Hartland, MI 07/10/90 10/23/96 617,035 0 0 0 617,035 0 841,642
</TABLE>
Selling Price, Net of
Closing Costs and GAAP Adjustments
------------------------------------------------------
Excess
(deficiency)
of property
operating cash
receipts over
cash
Property Total expenditures
===================================================
Shoney's -
Smyrna, TN
554,200 82,588
CNL Income Fund VI, Ltd.:
Hardee's -
Batesville, AR
Hardee's - 605,500 185,711
Heber Springs, AR
Hardee's - 532,893 105,377
Little Canada, MN
Jack in the Box - 821,692 77,811
Dallas, TX
Denny's - 964,437 18,543
Show Low, AZ (8)
272,354 76,846
CNL Income Fund VII, Ltd.:
Taco Bell -
Kearns, UT
Hardee's - 560,202 139,798
St. Paul, MN
Perkins - 742,333 126,703
Florence, SC (3)
Church's Fried Chicken -1,084,905 75,095
Jacksonville, FL (4)
Shoney's - 233,728 6,272
Colorado Springs, CO
Hardee's - 893,739 151,170
Hartland, MI
841,642 (224,607)
<PAGE>
<TABLE>
<S> <C>
Hardee's -
Columbus, IN 09/04/90 05/30/97 223,590 0 0 0 223,590 0 219,676 219,676 3,914
CNL Income Fund VIII, Ltd.:
Denny's -
Ocoee, FL 03/16/91 07/31/95 1,184,865 0 0 0 1,184,865 0 949,199 949,199 235,666
Church's Fried Chicken -
Jacksonville, FL (4) 09/28/90 12/01/95 0 0 240,000 0 240,000 0 238,153 238,153 1,847
Church's Fried Chicken -
Jacksonville, FL (5) 09/28/90 12/01/95 0 0 220,000 0 220,000 0 215,845 215,845 4,155
Ponderosa -
Orlando, FL (6) 12/17/90 10/24/96 0 0 1,353,775 0 1,353,775 0 1,179,210 1,179,210 174,565
</TABLE>
C-34
TABLE V
SALES OR DISPOSALS OF PROPERTIES
<TABLE>
<CAPTION>
====================================================================================================================================
Cost of Properties
Including Closing and Selling Price, Net of
Soft Costs Closing Costs and GAAP Adjustments
--------------------- ----------------------------------
Purchase Total
Cash money Adjustments acquisition
received Mortgage mortgage resulting cost, capital
net of balance taken from Original improvements
Date Date of closing at time back by application mortgage closing and
Property Acquired Sale costs of sale program of GAAP Total financing soft costs (1)
====================================================================================================================================
<S> <C>
CNL Income Fund IX, Ltd.:
Burger King -
Woodmere, OH 05/31/91 12/12/96 918,445 0 0 0 918,445 0 918,445
Burger King -
Alpharetta, GA 09/20/91 06/30/97 1,053,571 0 0 0 1,053,571 0 713,866
CNL Income Fund X, Ltd.:
Shoney's -
Denver, CO 03/04/92 08/11/95 1,050,186 0 0 0 1,050,186 0 987,679
CNL Income Fund XI, Ltd.:
Burger King -
Philadelphia, PA 09/29/92 11/07/96 1,044,750 0 0 0 1,044,750 0 818,850
CNL Income Fund XII, Ltd.:
Golden Corral -
Houston, TX 12/28/92 04/10/96 1,640,000 0 0 0 1,640,000 0 1,636,643
CNL Income Fund XIII, Ltd.:
Checkers -
Houston, TX 03/31/94 04/24/95 286,411 0 0 0 286,411 0 286,411
Checkers -
Richmond, VA 03/31/94 11/21/96 550,000 0 0 0 550,000 0 413,288
CNL Income Fund XIV, Ltd.:
Checkers -
Knoxville, TN 03/31/94 03/01/95 339,031 0 0 0 339,031 0 339,031
Checkers -
Dallas, TX 03/31/94 03/01/95 356,981 0 0 0 356,981 0 356,981
TGI Friday's -
Woodridge, NJ (7) 01/01/95 09/27/96 1,753,533 0 0 0 1,753,533 0 1,510,245
Wendy's -
Woodridge, NJ (7) 11/28/94 09/27/96 747,058 0 0 0 747,058 0 672,746
</TABLE>
Selling Price, Net of
Closing Costs and GAAP Adjustments
----------------------------------
Excess
(deficiency)
of property
operating cash
receipts over
cash
Property Total expenditures
================================================================
[S] [C]
CNL Income Fund IX, Ltd.:
Burger King -
Woodmere, OH 918,445 0
Burger King -
Alpharetta, GA 713,866 339,705
CNL Income Fund X, Ltd.:
Shoney's -
Denver, CO 987,679 62,507
CNL Income Fund XI, Ltd.:
Burger King -
Philadelphia, PA 818,850 225,900
CNL Income Fund XII, Ltd.:
Golden Corral -
Houston, TX 1,636,643 3,357
CNL Income Fund XIII, Ltd.:
Checkers -
Houston, TX 286,411 0
Checkers -
Richmond, VA 413,288 136,712
CNL Income Fund XIV, Ltd.:
Checkers -
Knoxville, TN 339,031 0
Checkers -
Dallas, TX 356,981 0
TGI Friday's -
Woodridge, NJ (7) 1,510,245 243,288
Wendy's -
Woodridge, NJ (7) 672,746 74,312
<PAGE>
<TABLE>
<S> <C>
CNL Income Fund XV, Ltd.:
Checkers -
Knoxville, TN 05/27/94 03/01/95 263,221 0 0 0 263,221 0 263,221 263,221 0
Checkers -
Leavenworth, KS 06/22/94 03/01/95 259,600 0 0 0 259,600 0 259,600 259,600 0
Checkers -
Knoxville, TN 07/08/94 03/01/95 288,885 0 0 0 288,885 0 288,885 288,885 0
TGI Friday's -
Woodridge, NJ (7) 01/01/95 09/27/96 1,753,533 0 0 0 1,753,533 0 1,510,245 1,510,245 243,288
</TABLE>
C-35
<PAGE>
TABLE V
SALES OR DISPOSALS OF PROPERTIES
<TABLE>
<CAPTION>
====================================================================================================================================
Cost of Properties
Including Closing and Selling Price, Net of
Soft Costs Closing Costs and GAAP Adjustments
--------------------- ----------------------------------
Purchase Total
Cash money Adjustments acquisition
received Mortgage mortgage resulting cost, capital
net of balance taken from Original improvements
Date Date of closing at time back by application mortgage closing and
Property Acquired Sale costs of sale program of GAAP Total financing soft costs (1)
====================================================================================================================================
<S> <C>
Wendy's -
Woodridge, NJ (7) 11/28/94 09/27/96 747,058 0 0 0 747,058 0 672,746
CNL Income Fund XVI, Ltd.:
Long John Silver's -
Appleton, WI 06/24/95 04/24/96 775,000 0 0 0 775,000 0 613,838
Checker's -
Oviedo, FL 11/14/94 02/28/97 610,384 0 0 0 610,384 0 506,311
Selling Price, Net of
Closing Costs and GAAP Adjustments
----------------------------------
Excess
(deficiency)
of property
operating cash
receipts over
cash
Property Total expenditures
===================================================================
Wendy's -
Woodridge, NJ (7) 672,746 74,312
CNL Income Fund XVI, Ltd.:
Long John Silver's -
Appleton, WI 613,838 161,162
Checker's -
Oviedo, FL 506,311 104,073
(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.
(6) Amounts shown are face value and do not represent discounted current value.
Each mortgage note bears interest at a rate of 10.75% per annum and
provides for 12 monthly payments of interest only and thereafter, 168 equal
monthly payments of principal and interest.
(7) CNL Income Fund XIV, Ltd. and CNL Income Fund XV, Ltd. each owned a 50
percent interest in Wood-Ridge Real Estate Joint Venture, which owned two
properties. The amounts presented for each of CNL Income Fund XIV, Ltd.
and CNL Income Fund XV, Ltd. represent each partnership's 50 percent
interest in the properties owned by Wood-Ridge Real Estate Joint Venture.
(8) CNL Income Fund II, Ltd. owns a 64 percent interest and CNL Income Fund VI,
Ltd. owns a 36 percent interest in this joint venture. The amounts
presented for each of CNL Income Fund II, Ltd. and CNL Income Fund VI, Ltd.
represent each partnership's percent interest in the properties owned by
Show Low Joint Venture.
C-36
<PAGE>
ADDENDUM TO
EXHIBIT F
STATEMENT OF ESTIMATED
TAXABLE OPERATING RESULTS
THE STATEMENT OF ESTIMATED TAXABLE OPERATING RESULTS IN THIS ADDENDUM UPDATES
AND REPLACES EXHIBIT F TO THE ATTACHED PROSPECTUS, DATED MAY 9, 1997.
<PAGE>
STATEMENT OF ESTIMATED TAXABLE OPERATING RESULTS
CNL INCOME FUND XVIII, LTD.
PROPERTIES ACQUIRED FROM INCEPTION
THROUGH OCTOBER 22, 1997
For the Period October 12, 1996 (the date operations commenced)
through December 31, 1996 (Unaudited)
The following statement presents unaudited estimated taxable operating
results of each Property acquired by CNL XVIII from inception through October
22, 1997. The statement presents estimated taxable operating results for each
Property that was operational as if the Property had been acquired and
operational on October 12, 1996 (the date CNL XVIII commenced operations)
through December 31, 1996. The statement should be read in light of the
accompanying footnotes.
These estimates do not purport to present actual or expected operations
of CNL XVIII for any period in the future. These estimates were prepared on the
basis described in the accompanying notes which should be read in conjunction
herewith. No single lessee or group of affiliated lessees lease Properties with
an aggregate purchase price in excess of 20% of the expected total net offering
proceeds of CNL XVIII.
</TABLE>
<TABLE>
<CAPTION>
Burger King Golden Corral Jack in the Box Jack in the Box
Kinston, NC Houston #1, TX (7) Echo Park, CA (6) Henderson, NV (6)
----------- ------------------ ------------------ -----------------
<S> <C>
Estimated Taxable Operating Results:
Base Rent (1) $ 19,862 (5) (5) (5)
Management Fees (2) (199) (5) (5) (5)
General and Administrative
Expenses (3) (993) (5) (5) (5)
--------
Estimated Cash Available from
Operations 18,670 (5) (5) (5)
Depreciation Expense (4) (3,660) (5) (5) (5)
--------
Estimated Taxable Operating Results $ 15,010 (5) (5) (5)
========
</TABLE>
See Footnotes
F-2
<PAGE>
<TABLE>
<CAPTION>
Jack in the Box Golden Corral Boston Market Black-eyed Pea
Centerville, TX (6) Galveston, TX (7) Raleigh, NC Atlanta, GA
------------------- ----------------- ------------- ------------
<S> <C>
Estimated Taxable Operating Results:
Base Rent (1) (5) (5) $ 27,144 $ 15,358
Management Fees (2) (5) (5) (271) (154)
General and Administrative
Expenses (3) (5) (5) (1,357) (768)
-------- --------
Estimated Cash Available from
Operations (5) (5) 25,516 14,436
Depreciation Expense (4) (5) (5) (2,672) (3,596)
-------- --------
Estimated Taxable Operating Results (5) (5) $ 22,844 $ 10,840
======== ========
</TABLE>
See Footnotes
F-3
<PAGE>
<TABLE>
<CAPTION>
Golden Corral Boston Market On The Border Boston Market
Stow, OH San Antonio #1, TX San Antonio #2, TX Minnetonka, MN
------------- -------------------- ------------------ ---------------
<S> <C>
Estimated Taxable Operating Results:
Base Rent (1) $42,009 (5) (5) (9)
Management Fees (2) (420) (5) (5) (9)
General and Administrative
Expenses (3) (2,100) (5) (5) (9)
--------
Estimated Cash Available from
Operations 39,489 (5) (5) (9)
Depreciation Expense (4) (7,047) (5) (5) (9)
--------
Estimate Taxable Operating Results $ 32,442 (5) (5) (9)
========
</TABLE>
See Footnotes
F-4
<PAGE>
<TABLE>
<CAPTION>
Wendy's Boston Market Jack in the Box Golden Corral
Sparta, TN Timonium, MD Houston #2, TX (6) Elizabethtown, KY (7)
---------- ------------- ------------------ ---------------------
<S> <C>
Estimated Taxable Operating Results:
Base Rent (1) (5) (5) (5) (5)
Management Fees (2) (5) (5) (5) (5)
General and Administrative
Expenses (3) (5) (5) (5) (5)
Estimated Cash Available from
Operations (5) (5) (5) (5)
Depreciation Expense (4) (5) (5) (5) (5)
Estimate Taxable Operating Results (5) (5) (5) (5)
</TABLE>
See Footnotes
F-5
<PAGE>
<TABLE>
<CAPTION>
IHOP Arby's IHOP Golden Corral
Santa Rosa, CA (8) Lexington, NC Bridgeview, IL(8) Destin, FL (7)
------------------ ------------- ----------------- --------------
<S> <C>
Estimated Taxable Operating Results:
Base Rent (1) $ 28,547 $ 13,861 $ 31,579 (5)
Management Fees (2) (285) (139) (316) (5)
General and Administrative
Expenses (3) (1,427) (693) (1,579) (5)
-------- -------- -------
Estimated Cash Available from
Operations 26,835 13,029 29,684 (5)
Depreciation Expense (4) (4,678) (2,499) (6,267) (5)
-------- -------- --------
Estimate Taxable Operating Results $ 22,157 $ 10,530 $ 23,417 (5)
======== ======== ========
</TABLE>
See Footnotes
F-6
<PAGE>
<TABLE>
<CAPTION>
Ground Round
Rochester, NY Total
------------- -----
<S> <C>
Estimated Taxable Operating Results:
Base Rent (1) $107,159 $285,519
Management Fees (2) (1,072) (2,856)
General and Administrative
Expenses (3) (5,358) (14,275)
-------- --------
Estimated Cash Available from
Operations 100,729 268,388
Depreciation Expense (4) (14,478) (44,897)
-------- --------
Estimate Taxable Operating Results $ 86,251 $223,491
======== ========
</TABLE>
- ----------------------------------
FOOTNOTES:
(1) Represents rental income from leases for eight of the 21 Properties
acquired from inception through October 22, 1997, which were
operational at the time acquired by CNL XVIII, for the period
commencing October 12, 1996 (the date CNL XVIII commenced operations)
through December 31, 1996. The 12 Properties acquired by CNL XVIII that
are under construction are not presented due to the fact that they were
not operational for the period presented.
(2) The Properties are managed pursuant to a management agreement between
CNL XVIII and an Affiliate of the General Partners, pursuant to which
the Affiliate receives an annual management fee in an amount equal to
one percent of the gross revenues that CNL XVIII earns from its
Properties. See "Management Compensation."
(3) Estimated at five percent of gross rental income based on the previous
experience of Affiliates of the General Partners with 17 public limited
partnerships which own properties similar to that owned by CNL XVIII.
(4) The estimated federal tax basis of the depreciable portion (the
building portion) of the Properties has been depreciated on the
straight-line method over 40 years.
(5) This Property is under construction and therefore was not operational
for the period presented. The development agreements for the Properties
which are to be constructed, provide that construction must be
completed no later than the dates set forth below:
Property Estimated Final Completion Date
Houston #1 Property Opened for business April 1, 1997
Echo Park Property Opened for business June 26, 1997
Henderson Property Opened for business June 30, 1997
Centerville Property Opened for business April 18, 1997
Galveston Property Opened for business May 19, 1997
San Antonio #1 Property Opened for business August 18, 1997
F-7
<PAGE>
Property Estimated Final Completion Date
San Antonio #2 Property Opened for business September 2, 1997
Sparta Property Opened for business August 25, 1997
Timonium Property Opened for business July 13, 1997
Houston #2 Property Opened for business September 24, 1997
Elizabethtown Property Opened for business October 21, 1997
Destin Property March 16, 1998
(6) The lessee of the Echo Park, Henderson, Centerville and Houston #2
Properties is the same unaffiliated lessee.
(7) The lessee of the Houston #1, Galveston, Elizabethtown and Destin
Properties is the same unaffiliated lessee.
(8) The lessee of the Santa Rosa and Bridgeview Properties is the same
unaffiliated lessee.
(9) This Property was originally acquired with the intent to construct a
Boston Market restaurant. The tenant has subsequently decided not to
develop on this location. CNL XVIII and the tenant are currently in
discussions regarding the disposition of the Property or development
into a different restaurant concept. If sold, any proceeds received
from the sale of the Property will be used by CNL XVIII to acquire an
additional Property.
F-8
