-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, T89JhbzBN0lBhR+OCQ605x71Blek7Uh1ahrZQf/b5kmEiBV97Y/JoDepXPy0MDJ7 tF5PznqY6k26QrrPGZmWNQ== 0000893571-01-500003.txt : 20010814 0000893571-01-500003.hdr.sgml : 20010814 ACCESSION NUMBER: 0000893571-01-500003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20010630 FILED AS OF DATE: 20010813 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CNL INCOME FUND XIV LTD CENTRAL INDEX KEY: 0000893571 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 593078854 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-23974 FILM NUMBER: 1706147 BUSINESS ADDRESS: STREET 1: 450 S ORANGE AVE CITY: ORLANDO STATE: FL ZIP: 32801 BUSINESS PHONE: 4074221574 MAIL ADDRESS: STREET 1: 400 E SOUTH STREET STE 500 CITY: ORLANDO STATE: FL ZIP: 32810 10-Q 1 if14-jun01.txt FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT of 1934 For the quarterly period ended June 30, 2001 -------------------------------------------------------------------------- OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT of 1934 For the transition period from _________________________ to ____________________ Commission file number 0-23974 --------------------------------------- CNL Income Fund XIV, Ltd. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Florida 59-3143096 - ---------------------------------------------- --------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 450 South Orange Avenue Orlando, Florida 32801 - ---------------------------------------------- --------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number (including area code) (407) 540-2000 --------------------------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No _________ CONTENTS
Part I Page ---- Item 1. Financial Statements: Condensed Balance Sheets 1 Condensed Statements of Income 2 Condensed Statements of Partners' Capital 3 Condensed Statements of Cash Flows 4 Notes to Condensed Financial Statements 5-7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8-12 Item 3. Quantitative and Qualitative Disclosures About Market Risk 12 Part II Other Information 13-14
CNL INCOME FUND XIV, LTD. (A Florida Limited Partnership) CONDENSED BALANCE SHEETS
June 30, December 31, 2001 2000 ------------------- ------------------- ASSETS Land and buildings on operating leases, less accumulated depreciation and allowance for loss on assets $ 24,018,962 $ 24,460,091 Net investment in direct financing leases, less allowance for loss on assets 6,389,428 6,663,943 Investment in joint ventures 4,616,075 5,055,505 Cash and cash equivalents 1,338,447 1,038,555 Receivables, less allowance for doubtful accounts of $33,656 and $29,921, respectively 30,996 177,442 Due from related parties 19,410 18,745 Prepaid expenses 19,743 30,081 Lease costs, less accumulated amortization of $8,498 and $6,848, respectively 24,502 26,152 Accrued rental income, less allowance for doubtful accounts of $48,635, in 2001 and 2000. 2,222,711 2,162,073 ------------------- ------------------- $ 38,680,274 $ 39,632,587 =================== =================== LIABILITIES AND PARTNERS' CAPITAL Accounts payable $ 3,459 $ 75,746 Accrued and escrowed real estate taxes payable 34,666 28,426 Distributions payable 928,130 928,130 Due to related parties 113,540 130,423 Rents paid in advance and deposits 140,812 101,406 Deferred rental income 53,228 55,012 ------------------- ------------------- Total liabilities 1,273,835 1,319,143 Partners' capital 37,406,439 38,313,444 ------------------- ------------------- $ 38,680,274 $ 39,632,587 =================== =================== See accompanying notes to condensed financial statements.
CNL INCOME FUND XIV, LTD. (A Florida Limited Partnership) CONDENSED STATEMENTS OF INCOME
Quarter Ended Six Months Ended June 30, June 30, 2001 2000 2001 2000 ------------- ------------- -------------- ------------- Revenues: Rental income from operating leases $ 685,910 $ 714,458 $ 1,385,452 $1,532,148 Adjustments to accrued rental income (66,245 ) -- (66,245 ) -- Earned income from direct financing leases 178,978 183,152 359,557 358,915 Contingent rental income 16,837 1,418 16,837 1,418 Interest and other income 11,257 11,439 21,771 65,909 ------------- ------------- -------------- ------------- 826,737 910,467 1,717,372 1,958,390 ------------- ------------- -------------- ------------- Expenses: General operating and administrative 87,208 55,688 225,164 99,802 Professional services 32,518 9,819 53,564 23,785 Management fees to related party 8,767 9,378 19,338 20,453 Real estate taxes 6,683 2,021 15,887 2,021 State and other taxes 4,182 -- 65,579 32,170 Depreciation and amortization 97,242 97,334 194,452 194,771 Transaction costs -- 26,619 -- 77,526 ------------- ------------- -------------- ------------- 236,600 200,859 573,984 450,528 ------------- ------------- -------------- ------------- Income Before Equity in Earnings (Losses) of Joint Ventures and Provision for Loss on Assets 590,137 709,608 1,143,388 1,507,862 Equity in Earnings (Losses) of Joint Ventures 175,560 (22,668 ) 266,569 61,484 Provision for Loss on Assets (460,702 ) -- (460,702 ) (9,858 ) ------------- ------------- -------------- ------------- Net Income $ 304,995 $ 686,940 $ 949,255 $1,559,488 ============= ============= ============== ============= Allocation of Net Income: General partners $ -- $ -- $ -- $ -- Limited partners 304,995 686,940 949,255 1,559,488 ------------- ------------- -------------- ------------- $ 304,995 $ 686,940 $ 949,255 $1,559,488 ============= ============= ============== ============= Net Income Per Limited Partner Unit $ 0.07 $ 0.15 $ 0.21 $ 0.35 ============= ============= ============== ============= Weighted Average Number of Limited Partner Units Outstanding 4,500,000 4,500,000 4,500,000 4,500,000 ============= ============= ============== ============= See accompanying notes to condensed financial statements.
CNL INCOME FUND XIV, LTD. (A Florida Limited Partnership) CONDENSED STATEMENTS OF PARTNERS' CAPITAL
Six Months Ended Year Ended June 30, December 31, 2001 2000 ----------------------- ------------------ General partners: Beginning balance $ 209,255 $ 209,255 Net income -- -- ----------------------- ------------------ 209,255 209,255 ----------------------- ------------------ Limited partners: Beginning balance 38,104,189 38,625,071 Net income 949,255 3,191,638 Distributions ($0.41 and $0.83 per limited partner unit, respectively) (1,856,260 ) (3,712,520 ) ----------------------- ------------------ 37,197,184 38,104,189 ----------------------- ------------------ Total partners' capital $ 37,406,439 $ 38,313,444 ======================= ================== See accompanying notes to condensed financial statements.
CNL INCOME FUND XIV, LTD. (A Florida Limited Partnership) CONDENSED STATEMENTS OF CASH FLOWS
Six Months Ended June 30, 2001 2000 -------------- -------------- Increase (Decrease) in Cash and Cash Equivalents Net Cash Provided by Operating Activities $1,756,152 $1,830,221 -------------- -------------- Cash Flows from Investing Activities: Return of capital from joint ventures 400,000 -- Investment in joint ventures -- (390,878 ) Decrease in restricted cash -- 384,096 -------------- -------------- Net cash provided by (used in) investing activities 400,000 (6,782 ) -------------- -------------- Cash Flows from Financing Activities: Distributions to limited partners (1,856,260 ) (1,856,260 ) -------------- -------------- Net cash used in financing activities (1,856,260 ) (1,856,260 ) -------------- -------------- Net Increase (Decrease) in Cash and Cash Equivalents 299,892 (32,821 ) Cash and Cash Equivalents at Beginning of Period 1,038,555 1,543,691 -------------- -------------- Cash and Cash Equivalents at End of Period $1,338,447 $1,510,870 ============== ============== Supplemental Schedule of Non-Cash Financing Activities: Distributions declared and unpaid at end of period $ 928,130 $ 928,130 ============== ============== See accompanying notes to condensed financial statements.
CNL INCOME FUND XIV, LTD. (A Florida Limited Partnership) NOTES TO CONDENSED FINANCIAL STATEMENTS Quarters and Six Months Ended June 30, 2001 and 2000 1. Basis of Presentation: The accompanying unaudited condensed financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles. The financial statements reflect all adjustments, consisting of normal recurring adjustments, which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Operating results for the quarter and six months ended June 30, 2001, may not be indicative of the results that may be expected for the year ending December 31, 2001. Amounts as of December 31, 2000, 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 XIV, Ltd. (the "Partnership") for the year ended December 31, 2000. 2. Reclassification: ---------------- Certain items in the prior year's financial statements have been reclassified to conform to 2001 presentation. These reclassifications had no effect on total partners' capital or net income. 3. Land and Buildings on Operating Leases: -------------------------------------- Land and building on operating leases consisted of the following at:
June 30, December 31, 2000 2001 ------------------ ------------------ Land $ 15,324,747 $ 15,324,747 Buildings 11,446,115 11,446,115 ------------------ ------------------ 26,770,862 26,770,862 Less accumulated depreciation (2,377,024 ) (2,184,738 ) ------------------ ------------------ 24,393,838 24,586,124 Less allowance for loss on assets (374,876 ) (126,033 ) ------------------ ------------------ $ 24,018,962 $ 24,460,091 ================== ==================
CNL INCOME FUND XIV, LTD. (A Florida Limited Partnership) NOTES TO CONDENSED FINANCIAL STATEMENTS Quarters and Six Months Ended June 30, 2001 and 2000 3. Land and Building on Operating Leases - Continued: ------------------------------------------------- At June 30, 2001, the Partnership recorded a provision for loss on assets in the amount of $36,984 for financial reporting purposes relating to the property located in Akron, Ohio. The tenant for this property filed for bankruptcy and ceased payments of rents under the terms of its lease agreement. The allowance represented the difference between the carrying value of the property at June 30, 2001 and the estimated net realizable value for the property. In addition, at June 30, 2001, the Partnership recorded a provision for loss on assets of $211,859 for financial reporting purposes relating to the property located in Las Vegas, Nevada, the building portion of which is classified as a direct financing lease (see Note 4). The tenant of this property vacated the property and ceased operations. The allowance represented the difference between the carrying value of the property at June 30, 2001 and the estimated net realizable value for the property. 4. Net Investment in Direct Financing Leases: ----------------------------------------- At June 30, 2001 the Partnership recorded an allowance of $211,859 for impairment of the carrying value of the property in Las Vegas, Nevada, due to the fact that the tenant of this property vacated the property and ceased operations. The allowance represented the difference between the carrying value of the property at June 30, 2001 and the estimated net realizable value for the property. 5. Investment in Joint Ventures: ---------------------------- In May 2001, Wood-Ridge Real Estate Joint Venture, in which the Partnership owns a 50% interest, sold its property in Paris, Texas to the tenant for $800,000, in accordance with the purchase option under the lease agreement. The sale resulted in a loss to the joint venture of approximately $84,500 for financial reporting purposes. In connection with the sale, the joint venture received $200,000 in lease termination income in consideration for the joint venture releasing the tenant from its obligations under the lease. As of June 30, 2001, the Partnership and the other joint venture partner each received $400,000 representing a return of capital of the net sales proceeds. CNL INCOME FUND XIV, LTD. (A Florida Limited Partnership) NOTES TO CONDENSED FINANCIAL STATEMENTS Quarters and Six Months Ended June 30, 2001 and 2000 5. Investment in Joint Ventures - Continued: ---------------------------------------- The following presents the combined, condensed financial information for all of the Partnership's investments in joint ventures and properties held as tenants-in-common at:
June 30, December 31, 2001 2000 ---------------------- ---------------------- ---------------------- ---------------------- Land and buildings on operating leases, less accumulated depreciation and allowance for loss on assets $ 10,178,924 $ 11,173,080 Net investment in direct financing lease 346,090 351,555 Cash 142,871 96,732 Receivables 16,348 29,955 Accrued rental income 453,105 380,924 Other assets 19,613 18,074 Liabilities 159,299 170,367 Partners' capital 10,997,652 11,879,953 Revenues 653,956 1,152,258 Lease termination income 200,000 -- Loss on sale of assets (84,473) -- Provision for loss on assets -- (219,053) Net income 612,119 661,064
The Partnership recognized income totaling $266,569 and $61,484 during the six months ended June 30, 2001 and 2000, respectively, from these joint ventures and recognized income of $175,560 and a loss of $22,668 during the quarters ended June 30, 2001 and 2000, respectively. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS CNL Income Fund XIV, Ltd. (the "Partnership") is a Florida limited partnership that was organized on September 25, 1992, to acquire for cash, either directly or through joint venture arrangements, both newly constructed and existing restaurants, as well as land upon which restaurants were to be constructed (the "Properties"), which are leased primarily to operators of national and regional fast-food and family-style restaurant chains. The leases generally are triple-net leases, with the lessee responsible for all repairs and maintenance, property taxes, insurance and utilities. As of June 30, 2001, the Partnership owned 55 Properties, which included interests in 11 Properties owned by joint ventures in which the Partnership is a co-venturer and one Property owned with an affiliate as tenants-in-common. Capital Resources The Partnership's primary source of capital for the six months ended June 30, 2001 and 2000 was cash from operations (which includes cash received from tenants, distributions from joint ventures, and interest and other income received, less cash paid for expenses). Cash from operations was $1,756,152 and $1,830,221 for the six months ended June 30, 2001 and 2000, respectively. The decrease in cash from operations for the six months ended June 30, 2001, as compared to the six months ended June 30, 2000, was primarily a result of changes in income and expenses as described in "Results of Operations" below and changes in the Partnership's working capital. Other sources and uses of capital included the following during the six months ended June 30, 2001. In May 2001, Wood-Ridge Real Estate Joint Venture, in which the Partnership owns a 50% interest, sold its Property in Paris, Texas to the tenant for $800,000, in accordance with the purchase option under the lease agreement. The sale resulted in a loss to the joint venture of approximately $84,500 for financial reporting purposes. In connection with the sale, the joint venture received $200,000 in lease termination income in consideration for the joint venture releasing the tenant from its obligations under the lease. As of June 30, 2001, the Partnership and the other joint venture partner each received $400,000 representing a return of capital of the net sales proceeds. Currently, rental income from the Partnership's Properties is invested in money market accounts or other short-term, highly liquid investments such as demand deposit accounts at commercial banks, money market accounts and certificates of deposit with less than a 30-day maturity date, pending the Partnership's use of such funds to pay Partnership expenses or to make distributions to the partners. At June 30, 2001, the Partnership had $1,338,447 invested in such short-term investments, as compared to $1,038,555 at December 31, 2000. The increase in cash and cash equivalents at June 30, 2001 as compared to December 31, 2000 was partially attributable to the Partnership receiving $400,000 as a return of capital from Wood-Ridge Real Estate Joint Venture, as described above. The funds remaining at June 30, 2001 will be used to pay distributions and other liabilities of the Partnership. Short Term Liquidity The Partnership's short-term liquidity requirements consist primarily of the operating expenses of the Partnership. The Partnership's investment strategy of acquiring Properties for cash and leasing them under triple-net leases to operators who generally meet specified financial standards minimizes the Partnership's operating expenses. The general partners believe that the leases will continue to generate cash flow in excess of operating expenses. The general partners have the right, but not the obligation, to make additional capital contributions if they deem it appropriate in connection with the operations of the Partnership. The Partnership generally distributes cash from operations remaining after the payment of operating expenses of the Partnership, to the extent that the general partners determine that such funds are available for distribution. Based on current and anticipated future cash from operations the Partnership declared distributions to the limited partners of $1,856,260 for each of the six months ended June 30, 2001 and 2000 ($928,130 for each of the quarters ended June 30, 2001 and 2000). This represents distributions for each applicable six months of $0.41 per unit ($0.21 per each applicable quarter). No distributions were made to the general partners for the quarters and six months ended June 30, 2001 and 2000. No amounts distributed to the limited partners for the six months ended June 30, 2001 and 2000 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 contribution. The Partnership intends to continue to make distributions of cash available for distribution to the limited partners on a quarterly basis. Total liabilities of the Partnership, including distributions payable, decreased to $1,273,835 at June 30, 2001, from $1,319,143 at December 31, 2000. The decrease in liabilities at June 30, 2001 was primarily due to a decrease in accounts payable and amounts due to related parties at June 30, 2001, as compared to December 31, 2000. The decrease in liabilities at June 30, 2001 as compared to June 30, 2000 was partially offset by an increase in rents paid in advance at June 30, 2001. The general partners believe that the Partnership has sufficient cash on hand to meet its current working capital needs. Long Term Liquidity The Partnership has no long-term debt or other long-term liquidity requirements. Results of Operations During the six months ended June 30, 2001 and 2000, the Partnership owned and leased 43 wholly owned Properties to operators of fast food and family style restaurant chains. In connection therewith, during the six months ended June 30, 2001 and 2000, the Partnership earned $1,678,764 and $1,891,063, respectively, in rental income from operating leases (net of adjustments to accrued rental income) and earned income from direct financing leases from these Properties, $798,643 and $897,610 of which was earned during the quarters ended June 30, 2001 and 2000, respectively. The decrease in rental and earned income during the quarter and six months ended June 30, 2001, as compared to the quarter and six months ended June 30, 2000, was partially due a decrease in rental income of approximately $55,000 and $109,900 during the quarter and six months ended June 30, 2001, respectively, as a result of the sale of the Property in Columbus, Ohio in September 2000. The decrease in rental and earned income during the quarter and six months ended June 30, 2001, was partially offset by an increase of approximately $50,200 and $100,400 during the quarter and six months ended June 30, 2001 and 2000, respectively, due to the fact that in June 2000, the Partnership reinvested a portion of the net sales proceeds from the sale of several Properties in a Property in Bristol, Virginia. The decrease in rental and earned income during the six months ended June 30, 2001, was partially attributable to the fact that during the six months ended June 30, 2000, the Partnership collected and recognized as income approximately $84,000 in bankruptcy proceeds relating to Long John Silver's, Inc., which filed for bankruptcy during 1998 and rejected the leases relating to five Properties in 1998 and 1999. No such amounts were recognized during the six months ended June 30, 2001. As of June 30, 2001, the Partnership had entered into new leases, each with a new tenant, for two of the five Properties, and had sold two of the Properties. The Partnership will not recognize any rental and earned income from the remaining vacant Property located in Laurens, South Carolina, until a replacement tenant is located, or until the Property is sold and the proceeds from the sale are reinvested in an additional Property. At this time, there is no commitment to re-lease or sell the Property. The lost revenues resulting from the vacant Property could have an adverse effect on the results of operations of the Partnership, if the Partnership is not able to re-lease the Property in a timely manner. The Partnership is currently seeking either a new tenant or purchaser for this Property. In addition, rental and earned income decreased during the quarter and six months ended June 30, 2001, by approximately $18,800 and $37,500, respectively, due to the fact that during 2000, Elias Brothers Restaurants, Inc., which leased a Property in Akron, Ohio, filed for bankruptcy and rejected its lease. As a result, this tenant ceased making rental payments. The Partnership will not recognize any rental and earned income from the vacant Property until a replacement tenant for this Property is located or until the Property is sold and the proceeds from the sale are reinvested in an additional Property. The lost revenues resulting from the vacant Property could have an adverse effect on the results of operations of the Partnership, if the Partnership is not able to re-lease the Property in a timely manner. The Partnership is currently seeking either a new tenant or purchaser for this Property. The decrease in rental and earned income during the quarter and six months ended was also due to the fact that the tenant of the Property in Las Vegas, Nevada ceased restaurant operations and vacated the Property during the quarter and six months end June 30, 2001. In conjunction with the tenant vacating the Property, the Partnership reversed approximately $66,200 of accrued rental income during the quarter and six months ended June 30, 2001. The accrued rental income was the accumulated amount of non-cash accounting adjustments previously recorded in order to recognize future scheduled rent increases as income evenly over the term of the lease. No such amounts were recorded during the quarter and six months ended June 30, 2000. The Partnership will not recognize any future rental and earned income relating to this Property until it locates a new tenant for this Property or sells the Property and reinvests the net sales proceeds in an additional Property. The Partnership is currently seeking a new tenant or purchaser for this Property. During the six months ended June 30, 2001 and 2000, the Partnership also earned $16,837 and $1,418, respectively, in contingent rental income, $16,837 and $1,418 of which was earned during the quarters ended June 30, 2001 and 2000, respectively. The increase in contingent rental income during the quarter and six months ended June 30, 2001 as compared to the quarter and six months ended June 30, 2000, was primarily attributable to an increase in gross sales of certain restaurant Properties, the leases of which require the payment of contingent rental income. In addition, during the six months ended June 30, 2001 and 2000, the Partnership earned $21,771 and $65,909, respectively, in interest and other income, $11,257 and $11,439 of which was earned during the quarters ended June 30, 2001 and 2000, respectively. Interest and other income was lower during the six months ended June 30, 2001 than that earned during the six months ended June 30, 2000, primarily due to the fact that during the six months ended June 30, 2000, the Partnership earned interest on the net sales proceeds relating to the sale of several Properties during 1999, pending reinvestment in additional Properties. As of June 30, 2000, these net sales proceeds had been reinvested in additional Properties. For the six months ended June 30, 2001 and 2000, the Partnership owned and leased 12 Properties indirectly through joint venture arrangements (including one Property which was sold in May 2001), and one Property with an affiliate as tenants-in-common. In connection therewith, during the quarters and six months ended June 30, 2001 and 2000, the Partnership earned $266,569 and $61,484, respectively, attributable to net income earned by these joint ventures and recorded income of $175,560 and a loss of $22,668 during the quarters ended June 30, 2001 and 2000, respectively. The increase in net income earned by these joint ventures during the quarter and six months ended June 30, 2001, as compared to the quarter and six months ended June 30, 2000, was primarily due to the fact that in January 2000, the Partnership invested in a Property, as tenants-in-common, with an affiliate of the general partners. The increase in net income earned by the joint ventures was also attributable to the fact that Melbourne Joint Venture, in which the Partnership owns a 50% interest, recorded an allowance for loss on assets of approximately $219,100 during the quarter and six months ended June 30, 2000. The allowance represented the difference between the Property's net carrying value at June 30, 2000, and the current estimated net realizable value of the Property. No such allowance was recorded during the quarter and six months ended June 30, 2001. The increase in net income earned by the joint ventures was partially offset due to the fact that in May 2001, Wood-Ridge Real Estate Joint Venture, in which the Partnership owns a 50% interest, sold its Property in Paris, Texas to the tenant, in accordance with the purchase option under the lease agreement, for $800,000. This resulted in a loss to the joint venture of approximately $84,500 for financial reporting purposes. The increase in net income was also attributable to the fact that in conjunction with the sale of its Property in Paris, Texas, Wood-Ridge Real Estate Joint Venture received $200,000 in consideration for the Partnership releasing the tenant from its obligations under the lease. Operating expenses, including depreciation and amortization expense, were $573,984 and $450,528 for the six months ended June 30, 2001 and 2000, of which $236,600 and $200,859 were incurred during the quarters ended June 30, 2001 and 2000, respectively. The increase in operating expenses during the quarter and six months ended June 30 2001, as compared to the quarter and six months ended June 30, 2000, was partially attributable to an increase in the costs incurred for administrative expenses for servicing the Partnership and its Properties, as permitted by the Partnership agreement. In addition, the increase in operating expenses was partially due to the Partnership incurring additional state taxes due to changes in the tax laws of a state in which the Partnership conducts business. In addition, during the quarter and six months ended June 30, 2001, the Partnership incurred certain expenses, such as legal fees, real estate taxes, insurance and maintenance, relating to the Property in Laurens, South Carolina and the Property in Akron, Ohio, whose leases were rejected by their respective tenants and which remain vacant, as described above. The Partnership will continue to incur these expenses, relating to these vacant Properties until new tenants or purchasers are located. The Partnership is currently seeking a replacement tenant or purchaser for these Properties. The increase in operating expenses during the quarter and six months ended June 30, 2001, as compared to the quarter and six months ended June 30, 2000, partially offset by the fact that during the quarter and six months ended June 30, 2000, the Partnership incurred $26,619 and $77,526 in transaction costs related to the general partners retaining financial and legal advisors to assist them in evaluating and negotiating the proposed merger with CNL American Properties Fund, Inc. ("APF"). On March 1, 2000 the general partners and APF mutually agreed to terminate the merger. No such expenses were incurred during the quarter and six months ended June 30, 2001. At June 30, 2001, the Partnership recorded a provision for loss on assets in the amount of $36,984 for financial reporting purposes relating to the Property in Akron, Ohio. The tenant for this Property filed for bankruptcy and ceased payments of rents under the terms of its lease agreement, as described above. The allowance represented the difference between the carrying value of the Property at June 30, 2001 and the estimated net realizable value for the Property. In addition, during the quarter and six months ended June 30, 2001, the Partnership recorded a provision for loss on assets of $423,718 relating to the Property in Las Vegas, Nevada, due to the fact that the tenant of this Property vacated the Property and ceased operations. The allowance represented the difference between the carrying value of the Property at June 30, 2001 and the estimated net realizable value of the Property. During the six months ended June 30, 2000, the Partnership recorded a provision for loss on assets of $9,858 for financial reporting purposes relating to the Long John Silver's Property in Laurens, South Carolina, the lease for which was rejected by the tenant, as described above. The allowance represented the differences between the carrying value of the Property at June 30, 2000 and the estimated net realizable value of the Property. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable. PART II. OTHER INFORMATION Item 1. Legal Proceedings. Inapplicable. ------------------ Item 2. Changes in Securities. Inapplicable. -------------------------- Item 3. Default upon Senior Securities. Inapplicable. ------------------------------- Item 4. Submission of Matters to a Vote of Security Holders. Inapplicable. ---------------------------------------------------- Item 5. Other Information. Inapplicable. ------------------ Item 6. Exhibits and Reports on Form 8-K. --------------------------------- (a) Exhibits 3.1 Affidavit and Certificate of Limited Partnership of CNL Income Fund XIV, Ltd. (Included as Exhibit 3.2 to Registration Statement No. 33-53672-01 on Form S-11 and incorporated herein by reference.) 4.1 Affidavit and Certificate of Limited Partnership of CNL Income Fund XIV, Ltd. (Included as Exhibit 3.2 to Registration Statement No. 33-53672-01 on Form S-11 and incorporated herein by reference.) 4.2 Amended and Restated Agreement of Limited Partnership of CNL Income Fund XIV, Ltd. (Included as Exhibit 4.2 to Form 10-K filed with the Securities and Exchange Commission on April 13, 1994, incorporated herein by reference.) 10.1 Management Agreement between CNL Income Fund XIV, Ltd. and CNL Investment Company (Included as Exhibit 10.1 to Form 10-K filed with the Securities and Exchange Commission on April 13, 1994, and incorporated herein by reference.) 10.2 Assignment of Management Agreement from CNL Investment Company to CNL Income Fund Advisors, Inc. (Included as exhibit 10.2 to Form 10-K filed with the Securities and Exchange Commission on March 30, 1995, and incorporated herein by reference.) 10.3 Assignment of Management Agreement from CNL Income Fund Advisors, Inc. to CNL Fund Advisors, Inc. (Included as Exhibit 10.3 to Form 10-K filed with the Securities and Exchange Commission on April 1, 1996, and incorporated herein by reference.) 10.4 Assignment of Management Agreement from CNL Fund Advisors, Inc. to CNL APF Partners, LP. (Filed herewith.) (b) Reports on Form 8-K No reports on Form 8-K were filed during the quarter ended June 30, 2001. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. DATED this 8th day of August, 2001. CNL INCOME FUND XIV, LTD. By: CNL REALTY CORPORATION General Partner By: /s/ James M. Seneff, Jr. --------------------------------------- JAMES M. SENEFF, JR. Chief Executive Officer (Principal Executive Officer) By: /s/ Robert A. Bourne --------------------------------------- ROBERT A. BOURNE President and Treasurer (Principal Financial and Accounting Officer) EXHIBIT INDEX Exhibit Number 3.1 Affidavit and Certificate of Limited Partnership of CNL Income Fund XIV, Ltd. (Included as Exhibit 3.2 to Registration Statement No. 33-53672-01 on Form S-11 and incorporated herein by reference.) 4.1 Affidavit and Certificate of Limited Partnership of CNL Income Fund XIV, Ltd. (Included as Exhibit 3.2 to Registration Statement No. 33-53672-01 on Form S-11 and incorporated herein by reference.) 4.2 Amended and Restated Agreement of Limited Partnership of CNL Income Fund XIV, Ltd. (Included as Exhibit 4.2 to Form 10-K filed with the Securities and Exchange Commission on April 13, 1994, incorporated herein by reference.) 10.1 Management Agreement between CNL Income Fund XIV, Ltd. and CNL Investment Company (Included as Exhibit 10.1 to Form 10-K filed with the Securities and Exchange Commission on April 13, 1994, and incorporated herein by reference.) 10.2 Assignment of Management Agreement from CNL Investment Company to CNL Income Fund Advisors, Inc. (Included as exhibit 10.2 to Form 10-K filed with the Securities and Exchange Commission on March 30, 1995, and incorporated herein by reference.) 10.3 Assignment of Management Agreement from CNL Income Fund Advisors, Inc. to CNL Fund Advisors, Inc. (Included as Exhibit 10.3 to Form 10-K filed with the Securities and Exchange Commission on April 1, 1996, and incorporated herein by reference.) 10.4 Assignment of Management Agreement from CNL Fund Advisors, Inc. to CNL APF Partners, LP. (Filed herewith.) EX-10 3 assign-xiv.txt EXHIBIT 10-2 ASSIGNMENT THIS ASSIGNMENT, made as of July 1, 2000, by and between CNL FUND ADVISORS, INC., a Florida corporation ("Assignor") and CNL APF PARTNERS, LP, a Delaware limited partnership ("Assignee"). WITNESSETH: WHEREAS, the CNL Investment Company entered into that certain Management Agreement dated September 13, 1993 with CNL Income Fund XIV, Ltd. ("Agreement"); and WHEREAS, CNL Investment Company assigned its rights, duties and obligations under the Agreement to CNL Income Fund Advisors, Inc. by Assignment dated January 1, 1995; and WHEREAS, CNL Income Fund Advisors, Inc. assigned its rights, duties and obligations under the Agreement to CNL Fund Advisors, Inc. by Assignment dated October 1, 1995; and WHEREAS, the Assignor desires to assign its rights, duties and obligations under the Agreement to Assignee, and Assignee desires to accept such assignment and assume Assignor's duties and obligations under the Agreement, as assigned. NOW, THEREFORE, the parties agree as follows: 1. Assignment. Assignor hereby assigns and transfers to Assignee, all of Assignor's rights, title and interest in, to, and under the Agreement as assigned. Any funds or property of CNL Income Fund XIV, Ltd. in Assignor's possession shall be, or have been, delivered to Assignee upon the full execution of this Assignment. 2. Acceptance and Assumption. Assignee hereby accepts the foregoing assignment and further hereby assumes and agrees to perform, from and after July 1, 2000, all duties, obligations and responsibilities of the property manager arising under the Agreement. 3. Representations. (a) Assignor hereby represents and warrants to Assignee: (i) that the Agreement is in full force and effect; (ii) that Assignor has fully performed all of its duties under the Agreement through the date of this Assignment; (iii) that Assignor has no notice or knowledge of any claim, cost, or liability (other than as specifically contemplated under the Agreement, all of which have been satisfied or discharged) which arose under the Agreement or which may arise after the date hereof; and (iv) that this Assignment has been duly authorized by all requisite corporate action and has been properly executed by a duly authorized officer of Assignor. (b) CNL Income Fund XIV, Ltd. hereby represents and warrants to Assignee that the Agreement is in full force and effect, and that no defaults or violations of such Agreement exist as of the date of this Assignment. IN WITNESS WHEREOF, this Assignment is executed the date above first written. ASSIGNOR: CNL FUND ADVISORS, INC., a Florida corporation By: /s/ MICHAEL I. WOOD ------------------------------------------------ Michael I. Wood, Executive Vice President ASSIGNEE: CNL APF PARTNERS, LP, a Delaware limited partnership BY: CNL APF GP Corp., a Delaware corporation, as its general partner By: /s/ JAMES M. SENEFF, JR. --------------------------------------- James M. Seneff, Jr., President CONSENT AND JOINDER CNL Income Fund XIV, Ltd. hereby consents to the foregoing Assignment and joins in such agreement for the purpose of making the representations set forth in subparagraph 3(b) thereof. CNL Income Fund XIV, Ltd., a Florida limited partnership BY: CNL REALTY CORPORATION, a Florida corporation, as General Partner By: /s/ ROBERT A. BOURNE ------------------------------ Robert A. Bourne, President BY: /s/ JAMES M. SENEFF, JR. ----------------------------------- James M. Seneff, Jr., General Partner BY: /s/ ROBERT A. BOURNE ----------------------------------- Robert A. Bourne, General Partner -----END PRIVACY-ENHANCED MESSAGE-----