CNL INCOME FUND VI LTD - 10-K Annual Report

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM 10-K

(Mark One)

[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the fiscal year ended December 31, 2000

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 0-19144

CNL INCOME FUND VI, LTD.
(Exact name of registrant as specified in its charter)

Florida 59-2922954
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)

450 South Orange Avenue
Orlando, Florida 32801
(Address of principal executive offices, including zip code)

Registrant's telephone number, including area code: (407) 540-2000

Securities registered pursuant to Section 12 (b) of the Act:

Title of each class: Name of exchange on which registered:
None Not Applicable

Securities registered pursuant to section 12(g) of the Act:

Units of limited partnership interest ($500 per Unit)
(Title of class)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or 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

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [x]

Aggregate market value of the voting stock held by nonaffiliates of the
registrant: The registrant registered an offering of 70,000 units of limited
partnership interest (the "Units") on Form S-11 under the Securities Act of
1933, as amended. Since no established market for such Units exists, there is no
market value for such Units. Each Unit was originally sold at $500 per Unit.

DOCUMENTS INCORPORATED BY REFERENCE:
None

PART I

Item 1. Business

CNL Income Fund VI, Ltd. (the "Registrant" or the "Partnership") is a
limited partnership which was organized pursuant to the laws of the State of
Florida on August 17, 1988. The general partners of the Partnership are Robert
A. Bourne, James M. Seneff, Jr. and CNL Realty Corporation, a Florida
corporation (the "General Partners"). Beginning on June 8, 1989, the Partnership
offered for sale up to $35,000,000 in limited partnership interests (the
"Units") (70,000 Units at $500 per Unit) pursuant to a registration statement on
Form S-11 under the Securities Act of 1933, as amended, effective December 16,
1988. The offering terminated on January 22, 1990, at which date the maximum
offering proceeds of $35,000,000 had been received from investors who were
admitted to the Partnership as limited partners (the "Limited Partners").

The Partnership was organized to acquire both newly constructed and
existing restaurant properties, as well as properties upon which restaurants
were to be constructed (the "Properties"), which are leased primarily to
operators of selected national and regional fast-food and family-style
restaurant chains (the "Restaurant Chains"). Net proceeds to the Partnership
from its offering of Units, after deduction of organizational and offering
expenses, totaled $30,975,000, and were used to acquire 42 Properties, including
interests in four Properties owned by joint ventures in which the Partnership is
a co-venturer.

During the year ended December 31, 1994, the Partnership sold its
Properties in Batesville and Heber Springs, Arkansas, to the tenant and
reinvested the net sales proceeds in a Jack in the Box Property in Dallas,
Texas, and a Jack in the Box Property in Yuma, Arizona, which is owned as
tenants-in-common with an affiliate of the General Partners. In addition, during
1995, the Partnership sold its Property in Little Canada, Minnesota, and
reinvested the net sales proceeds in a Denny's Property in Broken Arrow,
Oklahoma, in 1995 and in a Property located in Clinton, North Carolina, with
affiliates of the General Partners as tenants-in-common, in 1996. Also, during
1996, the Partnership sold its Property in Dallas, Texas, and in 1997, the
Partnership reinvested the net sales proceeds in a Bertucci's Property located
in Marietta, Georgia. In addition, during 1997, the Partnership sold its
Properties in Plattsmouth, Nebraska; Venice, Florida; Naples, Florida; and
Whitehall, Michigan, and the Property in Yuma, Arizona, which was held as
tenants-in-common with an affiliate of the General Partners, and reinvested a
portion of these net sales proceeds in two IHOP Properties, one in each of
Elgin, Illinois, and Manassas, Virginia, and in a Property in Vancouver,
Washington, as tenants-in-common with affiliates of the General Partners. In
addition, Show Low Joint Venture, a joint venture in which the Partnership is a
co-venturer with an affiliate of the General Partners, sold its Property in Show
Low, Arizona. The joint venture reinvested the net sales proceeds in a Property
in Greensboro, North Carolina. During 1998, the Partnership reinvested the net
sales proceeds from the sales of the Properties in Whitehall, Michigan and
Plattsmouth, Nebraska in one Property in Overland Park, Kansas and one Property
in Memphis, Tennessee, as tenants-in-common, with affiliates of the General
Partners. In addition, in 1998, the Partnership sold its Properties in Deland,
Florida; Liverpool, New York; Melbourne, Florida; and Bellevue, Nebraska. The
Partnership reinvested the net sales proceeds from the sale of the Property in
Deland, Florida in one Property in Fort Myers, Florida, as tenants-in-common,
with an affiliate of the General Partners and the Partnership reinvested the net
sales proceeds from the sales of the Properties in Melbourne, Florida and
Bellevue, Nebraska in two joint ventures, Warren Joint Venture and Melbourne
Joint Venture, respectively, to each purchase and hold one restaurant Property.
In 1999, the Partnership sold four of its Burger King Properties all located in
Tennessee and reinvested a portion of the net sales proceeds in Properties in
Baytown and Round Rock, Texas and Dublin, California, each as tenants-in-common
with affiliates of the General Partners. In 2000, the Partnership reinvested the
majority of the remaining net sales proceeds in a Property in Niles, Illinois,
as tenants-in-common with an affiliate of the General Partners. In addition,
during 2000, the Partnership sold four of its Popeye's Properties all located in
Florida.

As a result of the above transactions, as of December 31, 2000, the
Partnership owned 38 Properties. The 38 Properties include six Properties owned
by joint ventures in which the Partnership is a co-venturer and nine Properties
owned with affiliates as tenants-in-common. During February 2001, the
Partnership reinvested the net sale proceeds from the sale of the four
Properties in Florida in two Properties located in Burley, Indiana and Cleburne,
Texas. Generally, the Properties are leased on a triple-net basis with the
lessees responsible for all repairs and maintenance, property taxes, insurance
and utilities.

The Partnership will hold its Properties until the General Partners
determine that the sale or other disposition of the Properties is advantageous
in view of the Partnership's investment objectives. In deciding whether to sell
Properties, the General Partners will consider factors such as potential capital
appreciation, net cash flow and federal income tax considerations. Certain
lessees also have been granted options to purchase Properties, generally at the
Property's then fair market value after a specified portion of the lease term
has elapsed. The Partnership has no obligation to sell all or any portion of a
Property at any particular time, except as may be required under property or
joint venture purchase options granted to certain lessees.

On March 11, 1999, the Partnership entered into an Agreement and Plan
of Merger with CNL American Properties Fund, Inc. ("APF"), pursuant to which the
Partnership would be merged with and into a subsidiary of APF (the "Merger").
APF is a real estate investment trust whose primary business is the ownership of
restaurant properties leased on a long-term, "triple-net" basis to operators of
national and regional restaurant chains. Under the Agreement and Plan of Merger,
APF was to issue shares of its common stock as consideration for the Merger. On
March 1, 2000, the General Partners and APF announced that they had mutually
agreed to terminate the Agreement and Plan of Merger. The agreement to terminate
the Agreement and Plan of Merger was based, in large part, on the General
Partners' concern that, in light of market conditions relating to publicly
traded real estate investment trusts, the value of the transaction had
diminished. As a result of such diminishment, the General Partners' ability to
unequivocally recommend voting for the transaction, in the exercise of their
fiduciary duties, had become questionable.

Leases

Although there are variations in the specific terms of the leases, the
following is a summarized description of the general structure of the
Partnership's leases. The leases of the Properties owned by the Partnership, the
joint ventures in which the Partnership is a co-venturer and the properties
owned with affiliates as tenants-in-common provide for initial terms, ranging
from five to 20 years (the average being 18 years), and expire between 2003 and
2019. The leases generally are on a triple-net basis, with the lessees
responsible for all repairs and maintenance, property taxes, insurance and
utilities. The leases of the Properties provide for minimum base annual rental
payments (payable in monthly installments) ranging from approximately $37,900 to
$222,800. Generally, 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 the fourth to sixth lease year, the percentage rent will be an
amount equal to the greater of the percentage rent calculated under the lease
formula or a specified percentage (ranging from one to five percent) of the
purchase price or gross sales.

Generally, the leases of the Properties provide for two to four
five-year renewal options subject to the same terms and conditions as the
initial lease. Lessees of 32 of the Partnership's 38 Properties also have been
granted options to purchase Properties at the Property's then fair market value,
or pursuant to a formula based on the original purchase price of the Property,
after a specified portion of the lease term has elapsed. Fair market value will
be determined through an appraisal by an independent appraisal firm.

The leases also generally provide that, in the event the Partnership
wishes to sell the Property subject to that lease, the Partnership first must
offer the lessee the right to purchase the Property on the same terms and
conditions, and for the same price, as any offer which the Partnership has
received for the sale of the Property.

In January 2000, the Partnership reinvested in the net sales proceeds
from the 1999 sale of a Property in Sevierville, Tennessee, in a Property
located in Niles , Illinois, with an affiliate of the General Partners, as
tenants-in-common, also as described below in "Joint Venture and Tenancy in
Common Arrangement." In addition, in February 2001, the Partnership reinvested
the net sales proceeds from the four Properties sold in Florida in two
Properties located in Burley, Indiana and Cleburne, Texas. The lease terms for
these Properties are substantially the same as the Partnership's other leases,
as described above.

Major Tenants

During 2000, two lessees of the Partnership and its consolidated joint
venture, Golden Corral Corporation and IHOP Properties, Inc., each contributed
more than ten percent of the Partnership's total rental and earned income
(including rental income from the Partnership's consolidated joint venture in
which the Partnership is a co-venturer and the Partnership's share of the rental
and earned income from the five Properties owned by unconsolidated joint
venturers and nine Properties owned with affiliates of the General Partners as
tenants-in-common). As of December 31, 2000, Golden Corral Corporation was the
lessee under leases relating to five restaurants and IHOP Properties, Inc. was
the lessee under leases relating to eight restaurants. It is anticipated that,
based on the minimum rental payments required by the leases, these two lessees
each will continue to contribute more than ten percent of the Partnership's
total rental and earned income in 2001. In addition, two Restaurant Chains,
Golden Corral Family Steakhouse Restaurants ("Golden Corral") and IHOP, each
accounted for more than ten percent of the Partnership's total rental and earned
income in 2000 (including rental income from the Partnership's consolidated
joint venture and the Partnership's share of the rental and earned income from
the five Properties owned by unconsolidated joint ventures in which the
Partnership is a co-venturer and nine Properties owned with affiliates of the
General Partners as tenants-in-common). In 2001, it is anticipated that these
two Restaurant Chains each will continue to account for more than ten percent of
the total rental and earned income to which the Partnership is entitled under
the terms of the leases. Any failure of these lessees or Restaurant Chains could
materially affect the Partnership's income if the Partnership is not able to
re-lease the Properties in a timely manner. As of December 31, 2000, Golden
Corral Corporation and IHOP Properties, Inc. leased Properties with an aggregate
carrying value in excess of 20 percent of the total assets of the Partnership.

Joint Venture and Tenancy in Common Arrangements

The Partnership has entered into a joint venture arrangement, Caro
Joint Venture, with an unaffiliated entity to purchase and hold one Property. In
addition, the Partnership has entered into the following separate joint venture
arrangements: Auburn Joint Venture with CNL Income Fund IV, Ltd.; Show Low Joint
Venture with CNL Income Fund II, Ltd.; Asheville Joint Venture with CNL Income
Fund VIII, Ltd.; Melbourne Joint Venture with CNL Income Fund XIV, Ltd.; and
Warren Joint Venture with CNL Income Fund IV, Ltd. Each joint venture was formed
to purchase and hold one property. Each CNL Income Fund is an affiliate of the
General Partners and is a limited partnership organized pursuant to the laws of
the State of Florida.

The joint venture arrangements provide for the Partnership and its
joint venture partners to share in all costs and benefits associated with the
joint venture in accordance with their respective percentage interest in the
joint venture. The Partnership has 66.14% interest in Caro Joint Venture, a 3.9%
interest in Auburn Joint Venture, a 36 percent interest in Show Low Joint
Venture, a 14.46% interest in Asheville Joint Venture, a 50 percent interest in
Melbourne Joint Venture, and a 64.29% interest in Warren Joint Venture. The
Partnership and its joint venture partners are jointly and severally liable for
all debts, obligations and other liabilities of the joint venture.

Each joint venture has an initial term of 20 years and, after the
expiration of the initial term, continues in existence from year to year unless
terminated at the option of either joint venturer by an event of dissolution.
Events of dissolution include the bankruptcy, insolvency or termination of any
joint venturer, sale of the Property owned by the joint venture and mutual
agreement of the Partnership and its joint venture partner to dissolve the joint
venture.

The Partnership has management control of Caro Joint Venture and shares
management control equally with affiliates of the General Partners for Auburn
Joint Venture, Show Low Joint Venture, Asheville Joint Venture, Melbourne Joint
Venture, and Warren Joint Venture. The joint venture agreements restrict each
venturer's ability to sell, transfer to assign its joint venture interest
without first offering it for sale to its joint venture partner, either upon
such terms and conditions as to which the venturers may agree or, in the event
the venturers cannot agree, on the same terms and conditions as any offer from a
third party to purchase such joint venture interest.

Net cash flow from operations of Auburn Joint Venture, Show Low Joint
Venture, Caro Joint Venture, Asheville Joint Venture, Melbourne Joint Venture,
and Warren Joint Venture is distributed 3.9%, 36.0%, 66.14%, 14.46%, 50 percent
and 64.29%, respectively, to the Partnership and the balance is distributed to
each of the other joint venture partners in accordance with its respective
percentage interest in the joint venture. Any liquidation proceeds, after paying
joint venture debts and liabilities and funding reserves for contingent
liabilities, will be distributed first to the joint venture partners with
positive capital account balances in proportion to such balances until such
balances equal zero, and thereafter in proportion to each joint venture
partner's percentage interest in the joint venture.

In addition to the above joint venture arrangements, the Partnership
has entered into agreements to hold a Property in Vancouver, Washington, as
tenants-in-common, with CNL Income Fund, Ltd., CNL Income Fund II, Ltd., and CNL
Income Fund V, Ltd., a Property in Clinton, North Carolina, as
tenants-in-common, with CNL Income Fund IV, Ltd., CNL Income Fund X, Ltd., and
CNL Income Fund XV, Ltd., a Property in Overland Park, Kansas, as
tenants-in-common, with CNL Income Fund II, Ltd. and CNL Income Fund III, Ltd.,
a Property in Memphis, Tennessee, as tenants-in-common, with CNL Income Fund II,
Ltd. and CNL Income Fund XVI, Ltd., a Property in Ft. Myers, Florida, as
tenants-in-common, with CNL Income Fund XV, Ltd., a Property in Baytown, Texas,
as tenants-in-common, with CNL Income Fund III, Ltd., a Property in Round Rock,
Texas, as tenants-in-common, with CNL Income Fund XI, Ltd. and a Property in
Dublin, California, as tenants-in-common with CNL Income Fund IX, Ltd. Each CNL
Income Fund is an affiliate of the General Partners. The agreements provide for
the Partnership and the affiliates to share in the profits and losses of the
Property and net cash flow from the Properties, in proportion to each party's
percentage interest. The Partnership owns a 23.04%, an 18 percent, a 34.74%, a
46.2%, an 85 percent, an 80 percent, an 77 percent and an 75 percent interest in
the Properties in Vancouver, Washington; Clinton, North Carolina; Overland Park,
Kansas; Memphis, Tennessee; and Ft. Myers, Florida; Bay Town, Texas,; Round
Rock, Texas; and Dublin, California, respectively.

In January 2000, the Partnership entered into an agreement to hold a
Baker's Square Property in Niles, Illinois, as tenants-in-common, with CNL
Income Fund XIV, Ltd., affiliate of the General Partners. The agreement provides
for the Partnership and the affiliates to share in the profits and losses of the
Property and net cash flow from the Property, in proportion to each
co-venturer's percentage interest. The Partnership owns a 74 percent interest in
this Property.

Each of the affiliates is a limited partnership organized pursuant to
the laws of the state of Florida. The tenancy in common agreement restricts each
party's ability to sell, transfer, or assign its interest in the tenancy in
common's Property without first offering it for sale to the remaining parties.

The use of joint venture and tenancy in common arrangements allows the
Partnership to fully invest its available funds at times at which it would not
have sufficient funds to purchase an additional property, or at times when a
suitable opportunity to purchase an additional property is not available. The
use of joint venture and tenancy in common arrangements also provides the
Partnership with increased diversification of its portfolio among a greater
number of properties. In addition, tenancy in common arrangements may allow the
Partnership to defer the gain for federal income tax purposes upon the sale of a
Property if the proceeds are reinvested in an additional Property.

Certain Management Services

CNL Fund Advisors, Inc., an affiliate of the General Partners, provides
certain services relating to management of the Partnership and its Properties
pursuant to a management agreement with the Partnership. Under this agreement,
CNL Fund Advisors, Inc. is responsible for collecting rental payments,
inspecting the Properties and the tenants' books and records, assisting the
Partnership in responding to tenant inquiries and notices and providing
information to the Partnership about the status of the leases and the
Properties. CNL Fund Advisors, Inc. also assists the General Partners in
negotiating the leases. For these services, the Partnership has agreed to pay
CNL Fund Advisors, Inc. an annual fee of one percent of the sum of gross rental
revenues from Properties wholly owned by the Partnership plus the Partnership's
allocable share of gross revenues of joint ventures in which the Partnership is
a co-venturer and the Property held as tenants-in-common with an affiliate, but
not in excess of competitive fees for comparable services. Under the management
agreement, the management fee is subordinated to receipt by the Limited Partners
of an aggregate, ten percent, cumulative noncompounded annual return on their
adjusted capital contributions (the "10% Preferred Return"), calculated in
accordance with the Partnership's limited partnership agreement (the
"Partnership Agreement"). In any year in which the Limited Partners have not
received the 10% Preferred Return, no property management fee will be paid.

The management agreement continues until the Partnership no longer owns
an interest in any Properties unless terminated at an earlier date upon 60 days'
prior notice by either party.

Competition

The fast-food and family-style restaurant business is characterized by
intense competition. The restaurants on the Partnership's Properties compete
with independently owned restaurants, restaurants which are part of local or
regional chains, and restaurants in other well-known national chains, including
those offering different types of food and service.

Employees

The Partnership has no employees. The officers of CNL Realty
Corporation and the officers and employees of APF, the parent company of CNL
Fund Advisors, Inc., perform certain services for the Partnership. In addition,
the General Partners have available to them the resources and expertise of the
officers and employees of CNL Financial Group, Inc., a diversified real estate
company, and its affiliates, who may also perform certain services for the
Partnership.

Item 2. Properties

As of December 31, 2000, the Partnership owned 38 Properties. Of the 38
Properties, 23 are owned by the Partnership in fee simple, six are owned through
joint venture arrangements and nine owned through tenancy in common
arrangements. See Item 1. Business - Joint Venture and Tenancy in Common
Arrangements. The Partnership is not permitted to encumber its Properties under
the terms of its partnership agreement. Reference is made to the Schedule of
Real Estate and Accumulated Depreciation for a listing of the Properties and
their respective costs, including acquisition fees and certain acquisition
expenses.

Description of Properties

Land. The Partnership's Property sites range from approximately 11,500
to 88,200 square feet depending upon building size and local demographic
factors. Sites purchased by the Partnership are in locations zoned for
commercial use which have been reviewed for traffic patterns and volume.

The following table lists the Properties owned by the Partnership as of
December 31, 2000 by state. More detailed information regarding the location of
the Properties is contained in the Schedule of Real Estate and Accumulated
Depreciation for the year ended December 31, 2000.

State Number of Properties

California 1
Florida 7
Georgia 1
Illinois 2
Indiana 1
Kansas 1
Massachusetts 1
Michigan 3
North Carolina 3
New Mexico 1
Ohio 1
Oklahoma 2
Pennsylvania 1
Tennessee 4
Texas 5
Virginia 2
Washington 1
Wyoming 1
-------------
TOTAL PROPERTIES 38
=============

Buildings. Each of the Properties owned by the Partnership includes a
building that is one of a Restaurant Chain's approved designs. The buildings
generally are rectangular and are constructed from various combinations of
stucco, steel, wood, brick and tile. Building sizes range from approximately
1,175 to 10,700 square feet. All buildings on Properties are freestanding and
surrounded by paved parking areas. Buildings are suitable for conversion to
various uses, although modifications may be required prior to use for other than
restaurant operations. As of December 31, 2000, the Partnership had no plans for
renovation of the Properties. Depreciation expense is computed for buildings and
improvements using the straight-line method using depreciable lives of 31.5 and
39 years for federal income tax purposes.

As of December 31, 2000, the aggregate cost of the Properties owned by
the Partnership (including its consolidated joint venture) and joint ventures
(including Properties owned through tenancy in common arrangements) for federal
income tax purposes was $19,834,603 and $18,239,974, respectively.

The following table lists the Properties owned by the Partnership as of
December 31, 2000 by Restaurant Chain.

Restaurant Chain Number of Properties

5 & Diner 1
Arby's 1
Baker's Square 1
Bennigan's 1
Burger King 1
Captain D's 1
Chevy's Fresh Mex 1
Church's 2
Darryl's 1
Denny's 2
Durango's Steakhouse of Atlanta 1
Golden Corral 5
Hardee's 2
IHOP 8
Jack in the Box 1
KFC 3
Loco Lupe's Mexican Restaurant 1
Shoney's 1
Taco Bell 1
Waffle House 3
-----------------

TOTAL PROPERTIES 38
=================

The General Partners consider the Properties to be well-maintained and
sufficient for the Partnership's operations.

The General Partners believe that the Properties are adequately covered
by insurance. In addition, the General Partners have obtained contingent
liability and property coverage for the Partnership. This insurance is intended
to reduce the Partnership's exposure in the unlikely event a tenant's insurance
policy lapses or is insufficient to cover a claim relating to the Property.

Leases. The Partnership leases the Properties to operators of selected
national and regional fast-food restaurant chains. The leases are generally on a
long-term "triple net" basis, meaning that the tenant is responsible for
repairs, maintenance, property taxes, utilities and insurance. Generally, a
lessee is required, under the terms of its lease agreement, to make such capital
expenditures as may be reasonably necessary to refurbish buildings, premises,
signs and equipment so as to comply with the lessee's obligations, if
applicable, under the franchise agreement to reflect the current commercial
image of its Restaurant Chain. These capital expenditures are required to be
paid by the lessee during the term of the lease. The terms of the leases of the
Properties owned by the Partnership are described in Item 1. Business - Leases.

At December 31, 2000, 1999, 1998, 1997, and 1996, the Properties were
97%, 100%, 95%, 98%, and 100% occupied, respectively. The following is a
schedule of the average rent per Property for the years ended December 31:

2000 1999 1998 1997 1996
-------------- ------------- -------------- -------------- --------------

Rental Revenues (1) $ 3,456,021 $ 3,417,147 $ 3,342,220 $ 3,139,283 $3,568,754
Properties (2) 37 41 42 39 42
Average Rent per
Property $ 93,406 $ 83,345 $ 79,577 $ 80,494 $ 84,970

(1) Rental income includes the Partnership's share of rental income from
the Properties owned through joint venture arrangements and the
Properties owned through tenancy in common arrangements. Rental
revenues have been adjusted, as applicable, for any amounts for which
the Partnership has established an allowance for doubtful accounts.

(2) Excludes Properties that were vacant at December 31, and that did not
generate rental revenues during the year ended December 31.

The following is a schedule of lease expirations for leases in place as
of December 31, 2000 for the next ten years and thereafter.

Percentage of
Expiration Year Number Annual Rental Gross Annual
of Leases (1) Revenues Rental Income
----------------- ---------------- --------------------- --------------------------
2001 -- $ -- --
2002 -- -- --
2003 1 54,000 1.41%
2004 3 515,141 13.47%
2005 3 316,868 8.29%
2006 -- -- --
2007 -- -- --
2008 3 128,440 3.36%
2009 3 273,725 7.16%
2010 7 485,100 12.69%
Thereafter 17 2,049,890 53.62%
---------- ------------- -------------
Total 37 $ 3,823,164 100.00%
========== ============= =============

(1) Excludes one Property which was vacant at December 31, 2000.

Leases with Major Tenants. The terms of each of the leases with the
Partnership's major tenants as of December 31, 2000 (see Item 1. Business -
Major Tenants) are substantially the same as those described in Item 1. Business
- - Leases.

Golden Corral Corporation leases five Golden Corral restaurants. The
initial term of each lease is 15 years (expiring between 2004 and 2011) and the
average minimum base annual rent is approximately $152,900 (ranging from
approximately $88,000 to $185,700).

IHOP Corp. leases eight IHOP restaurants. The initial term of each
lease is 20 years (expiring between 2017 and 2019) and the average minimum base
annual rent is approximately $137,600 (ranging from approximately $114,500 to
$163,200).

Item 3. Legal Proceedings

Neither the Partnership, not its General Partners or any affiliate of
the General Partners, nor any of their respective Properties, is party to, or
subject to, any material pending legal proceedings.

Item 4. Submission of Matters to a Vote of Security Holders

Not applicable.

PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters

(a) As of March 15, 2001, there were 2,976 holders of record of the Units. There
is no public trading market for the Units, and it is not anticipated that a
public market for the Units will develop. During 2000, Limited Partners who
wished to sell their Units may have offered the Units for sale pursuant to the
Partnership's distribution reinvestment plan (the "Plan"), and Limited Partners
who wished to have their distributions used to acquire additional Units (to the
extent Units were available for purchase), may have done so pursuant to such
Plan. The General Partners had the right to prohibit transfers of Units. The
price paid for any Unit transferred pursuant to the Plan was $475 per Unit. The
price paid for any Unit transferred other than pursuant to the Plan was subject
to negotiation by the purchaser and the selling Limited Partner. The Partnership
will not redeem or repurchase Units.

The following table reflects, for each calendar quarter, the high, low
and average sales prices for transfers of Units during 2000 and 1999 other than
pursuant to the Plan, net of commissions.

2000 (1) 1999 (1)
----------------------------------- -----------------------------------
High Low Average High Low Average
--------- -------- ---------- --------- -------- -----------
First Quarter $ 380 $380 $ 380 $ 475 $ 475 $ 475
Second Quarter 382 371 378 475 418 466
Third Quarter 387 334 363 475 260 429
Fourth Quarter 395 300 346 475 386 434

(1) A total of 216 1/3 and 592 3/4 Units were transferred other than
pursuant to the Plan for the years ended December 31, 2000 and 1999,
respectively.

The capital contribution per Unit was $500. All cash available for
distribution will be distributed to the partners pursuant to the provisions of
the Partnership Agreement.

For the years ended December 31, 2000 and 1999, the Partnership
declared cash distributions of $3,150,000 and $3,150,000, respectively, to the
Limited Partners. Distributions of $787,500 were declared at the close of each
of the Partnership's calendar quarter during 2000 and 1999 to the Limited
Partners. No amounts distributed to partners for the years ended December 31,
2000 and 1999, are required to be or have been treated by the Partnership as a
return of capital for purposes of calculating the Limited Partners' return on
their adjusted capital contributions. No distributions have been made to the
General Partners to date. These amounts include monthly distributions made in
arrears for the Limited Partners electing to receive distributions on this
basis.

The Partnership intends to continue to make distributions of cash
available for distribution to the Limited Partners on a quarterly basis,
although some Limited Partners, in accordance with their election, receive
monthly distributions, for an annual fee.

(b) Not applicable.

Item 6. Selected Financial Data

2000 1999 1998 1997 1996
-------------- --------------- -------------- --------------- ---------------
Year ended December 31:
Revenues (1) $3,211,507 $3,461,440 $3,370,532 $3,456,406 $3,565,493
Net income (2)(4) 3,016,796 3,510,474 3,020,881 2,899,882 2,803,601
Cash distributions
declared (3) 3,150,000 3,150,000 3,220,000 3,150,000 3,220,000
Net income per Unit (2) 43.10 49.67 42.75 41.06 39.65
Cash distributions
declared per Unit (3) 45.00 45.00 46.00 45.00 46.00

At December 31:
Total assets $29,820,589 $30,120,859 $29,655,896 $29,993,069 $30,129,286
Partners' capital 28,822,400 28,955,604 28,595,130 28,794,249 29,044,367

(1) Revenues include equity in earnings of unconsolidated joint ventures
and minority interest in income of the consolidated joint venture.

(2) Net income for the years ended December 31, 2000, 1997 and 1996,
includes provision for loss on assets of $368,430, $263,186 and
$77,023, respectively. In addition, net income for the years ended
December 31, 1997 and 1996, includes $79,777 and $1,706, respectively,
from a loss on sale of assets. Net income for the years ended December
31, 2000, 1999, 1998, and 1997, also includes $639,806, $848,303,
$345,122, and $626,804, respectively, from gains on sale of land and
buildings.

(3) Distributions for the years ended December 31, 1998 and 1996, include a
special distribution to the Limited Partners of $70,000, which
represented cumulative excess operating reserves.

(4) Net income for the year ended December 31, 2000, includes $175,000 from
lease termination income.

The above selected financial data should be read in conjunction with
the financial statements and related notes contained in Item 8 hereof.

Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations

The Partnership was organized on August 17, 1988, to acquire for cash,
either directly or through joint venture arrangements, both newly constructed
and existing restaurant Properties, as well as land upon which restaurant
Properties were to be constructed, which are leased primarily to operators of
selected national and regional fast-food and family-style Restaurant Chains. The
leases are generally triple-net leases, with the lessees responsible for all
repairs and maintenance, property taxes, insurance and utilities. As of December
31, 2000, the Partnership owned 38 Properties, either directly or indirectly
through joint venture or tenancy in common arrangements.

Capital Resources

During the years ended December 31, 2000, 1999, and 1998, the
Partnership generated cash from operations (which includes cash received from
tenants, distributions from joint ventures and interest received, less cash paid
for expenses) of $3,136,299, $3,204,934, and $3,243,660, respectively. The
decrease in cash from operations during 2000 and 1999, each as compared to the
previous year, was primarily a result of changes in income and expenses as
described in "Results of Operations" below.

In 1996, the Partnership entered into an agreement with the tenant of
the Properties in Chester, Pennsylvania, and Orlando, Florida, for payment of
certain rental payment deferrals the Partnership had granted to the tenant
through March 31, 1996. Under the agreement, the Partnership agreed to abate
approximately $42,700 of the rental payment deferral amounts. The tenant made
payments of approximately $18,600 in each of April 1996, March 1997, April 1998,
and April 1999 in accordance with the terms of the agreement, and the remaining
balance of approximately $55,800 was collected during 2000. In addition, during
2000, the Partnership terminated the lease with the tenant of the Property
located in Chester, Pennsylvania due to financial difficulties the tenant was
experiencing. In connection with the terminated lease, the Partnership received
$175,000 in consideration for the Partnership releasing the tenant from its
obligations under the lease terms.

In June 1997, the Partnership terminated the lease with the tenant of
the Property in Greensburg, Indiana. In connection therewith, the Partnership
accepted a promissory note from the former tenant for $13,077 for amounts
relating to past due real estate taxes the Partnership had incurred as a result
of the former tenant's financial difficulties. The promissory note, which is
uncollateralized, bears interest at a rate of ten percent per annum, and is
being collected in 36 monthly installments. Receivables at December 31, 2000,
included $1,657 of such amounts. In July 1997, the Partnership entered into a
new lease for the Property in Greensburg, Indiana, with a new tenant to operate
the Property as an Arby's restaurant. In connection therewith, the Partnership
paid $125,000 in renovation costs. The renovations were completed in October
1997, at which time payments of rent commenced.

In January 1998, the Partnership reinvested the net sales proceeds from
the 1997 sale of the Property in Plattsmouth, Nebraska, in an IHOP Property in
Memphis, Tennessee, with affiliates of the General Partners as
tenants-in-common. In connection therewith, the Partnership and the affiliates
entered into an agreement whereby each party will share in the profits and
losses of the Property in proportion to its applicable percentage interest. As
of December 31, 2000, the Partnership owned a 46.2% interest in this Property.

In January 1998, the Partnership sold its Property in Deland, Florida,
to the tenant, for $1,250,000 and received net sales proceeds of $1,234,122,
resulting in a gain of $345,122 for financial reporting purposes. This Property
was originally acquired by the Partnership in October 1989 and had a cost of
approximately $1,000,000, excluding acquisition fees and miscellaneous
acquisition expenses; therefore, the Partnership sold the Property for
approximately $234,100 in excess of its original purchase price. In June 1998,
the Partnership reinvested the majority of the net sales proceeds in a Property
in Fort Myers, Florida, with an affiliate of the General Partners as
tenants-in-common. As of December 31, 2000, the Partnership owned an 85 percent
interest in this Property. The transaction relating to the sale of the Property
in Deland, Florida, and the reinvestment of the net sales proceeds, qualified as
a like-kind exchange transaction for federal income tax purposes.

In February 1998, the Partnership sold its Property in Melbourne,
Florida, for $590,000 and received net sales proceeds of $552,910. Due to the
fact that during 1997, the Partnership recorded an allowance for loss of
$158,239 for this Property, no gain or loss was recognized for financial
reporting purposes in February 1998, relating to the sale. In April 1998, the
Partnership contributed approximately $494,900, of the net sales proceeds to
Melbourne Joint Venture to construct and hold one restaurant Property. As of
December 31, 2000, the Partnership had contributed an additional $44,120 for
such construction costs. As of December 31, 2000, the Partnership owned a 50
percent interest in the profits and losses of the joint venture.

In addition, in February 1998, the Partnership sold its Property in
Liverpool, New York, for $157,500 and received net sales proceeds of $145,221.
Due to the fact that in prior years the Partnership recorded an allowance for
loss of $181,970 for this Property, no gain or loss was recognized for financial
reporting purposes in February 1998, relating to the sale. In November 1999, the
Partnership used the net sales proceeds from the sale to invest approximately
$145,000 in an IHOP Property in Dublin, California, with CNL Income Fund IX,
Ltd., an affiliate of the General Partners, as tenants-in-common for a 75
percent interest in this Property. The Partnership distributed amounts
sufficient to enable the Limited Partners to pay federal and state income taxes,
at a level reasonably assumed by the General Partners, resulting from the sale.

In June 1998, the Partnership sold its Property in Bellevue, Nebraska,
to a third party and received gross sales proceeds of $900,000. Due to the fact
that during 1998 the Partnership reversed $155,528 in accrued rental income,
representing non-cash amounts that the Partnership had recognized as income
since the inception of the lease relating to the straight-lining of future
scheduled rent increases in accordance with generally accepted accounting
principles, no gain or loss was recorded for financial reporting purposes in
June 1998 relating to this sale. This Property was originally acquired by the
Partnership in December 1989 and had a cost of approximately $899,500, excluding
acquisition fees and miscellaneous acquisition expenses; therefore, the
Partnership sold the Property for approximately $500 in excess of its original
purchase price. In September 1998, the Partnership contributed approximately
$898,100 of the net sales proceeds to Warren Joint Venture to acquire a
restaurant Property. The Partnership has a 64.29% interest in the profits and
losses of Warren Joint Venture and the remaining interest in this joint venture
is held by an affiliate of the General Partners.

In June 1999, the Partnership sold four Burger King Properties, one in
each of Sevierville, Walker Springs, Broadway and Greeneville, Tennessee, to the
tenant in accordance with the purchase options under the lease agreements for a
total of approximately $4,354,000 and received net sales proceeds of $4,316,145,
resulting in a total gain of $848,303 for financial reporting purposes. These
Properties were originally acquired by the Partnership in January 1990 and had
costs totaling approximately $3,535,700, excluding acquisition fees and
miscellaneous acquisition expenses; therefore, the Partnership sold these
Properties for a total of approximately $780,400 in excess of their original
purchase prices.

In October 1999, the Partnership used the majority of the net sales
proceeds from the sales of the Properties in Walker Springs and Broadway,
Tennessee, to invest approximately $2,108,100 in two Properties, one in each of
Baytown, Texas and Round Rock, Texas, with CNL Income Fund III, Ltd. and CNL
Income Fund XI, Ltd., respectively, affiliates of the General Partners, as
tenants-in-common for an 80 percent and a 77 percent interest, respectively, in
the Properties. In addition, in November 1999, the Partnership used the majority
of the net sales proceeds from the sale of the Property in Greeneville,
Tennessee, to invest an additional amount of approximately $1,017,600 in the
IHOP Property in Dublin, California, as described above. In January 2000, the
Partnership invested a majority of the net sales proceeds from the sale of the
Property in Sevierville, Tennessee, in a Property in Niles, Illinois, with CNL
Income Fund XIV, Ltd., an affiliate of the General Partners as tenants-in-common
for a 74 percent interest in the Property. The Partnership acquired the Property
from an affiliate of the General Partners. The affiliate had purchased and
temporarily held title to the Property in order to facilitate the acquisition of
the Property by the Partnership. The purchase price paid by the Partnership
represented the costs incurred by the affiliate to acquire the Property,
including closing costs. A portion of the transaction relating to the sales of
the four Properties and the reinvestment of the net sales proceeds qualified as
a like-kind exchange transaction for federal income tax purposes. However, the
Partnership will distribute amounts sufficient to enabled the Limited Partners
to pay federal and state income taxes, if any (at a level reasonably assumed by
the General Partners) resulting from the sales.

In September 2000, the Partnership sold four of its Popeyes Properties,
three in Jacksonville, Florida and one in Tallahassee, Florida, to a third party
for a total of approximately $2,081,800 and received net sales proceeds totaling
approximately $2,071,800 resulting in gains totaling approximately $639,800 for
financial reporting purposes. These Properties were originally acquired by the
Partnership in 1990 and had costs totaling approximately $1,708,900 excluding
acquisition fees and miscellaneous acquisition expenses; therefore, the
Partnership sold these Properties for approximately $362,900 in excess of their
original purchase prices. In January 2001, the Partnership invested a portion of
these net sales proceeds in two Properties located in Burley, Indiana and
Cleburne, Texas at an approximate cost of $2,098,400. The General Partners
believe a portion of the transaction relating to the sale of these four
Properties and the reinvestment of the net sales proceeds will qualify as a
like-kind exchange transaction for federal income tax purposes. However, the
Partnership will distribute amounts sufficient to enable the Limited Partners to
pay federal and state income taxes, if any (at a level reasonably assumed by the
General Partners) resulting from the sales.

None of the Properties owned by the Partnership, or the joint ventures
or tenancy in common arrangements in which the Partnership owns an interest, is
or may be encumbered. Under its partnership agreement, the Partnership is
prohibited from borrowing for any purpose; provided, however, that the General
Partners or their affiliates are entitled to reimbursement, at cost, for actual
expenses incurred by the General Partners or their affiliates on behalf of the
Partnership. Affiliates of the General Partners from time to time incur certain
operating expenses on behalf of the Partnership for which the Partnership
reimburses the affiliates without interest.

Currently, rental income from the Partnership's Properties and net
sales proceeds from the sale of Properties, pending reinvestment in additional
Properties, are invested in money market accounts or other short-term, highly
liquid investments such as demand deposit accounts at commercial banks, money
market accounts and certificates of deposit with less than a 30-day maturity
date, pending the Partnership's use of such funds to pay Partnership expenses or
to make distributions to the partners. At December 31, 2000, the Partnership had
$972,373 invested in such short-term investments (including a certificate of
deposit in the amount of $100,000) as compared to $2,125,493 at December 31,
1999. The decrease in cash and cash equivalents during 2000 was primarily a
result of the Partnership investing in a Property located in Niles, Illinois,
with an affiliate of the General Partners, as tenants-in-common, as described
above. For the year ending December 31, 2000, the average interest rate earned
on the rental income deposited in demand deposit accounts at commercial banks
was approximately 4.13% annually. The funds remaining at December 31, 2000,
after payment of distributions and other liabilities, will be used to meet the
Partnership's working capital and other needs.

Short-Term Liquidity

The Partnership's short-term liquidity requirements consist primarily
of the operating expenses of the Partnership.

The Partnership's investment strategy of acquiring Properties for cash
and leasing them under triple-net leases to operators who generally meet
specified financial standards minimizes the Partnership's operating expenses.
The General Partners believe that the leases will continue to generate cash flow
in excess of operating expenses.

Due to low operating expenses and ongoing cash flow, the General
Partners do not believe that working capital reserves are necessary at this
time. In addition, because 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 will be established 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 maintenance and repairs.

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 the operating expenses of the Partnership, to the extent
that the General Partners determine that such funds are available for
distribution. Based on cash from operations, and cumulative excess operating
reserves for the year ended December 31, 1998, the Partnership declared
distributions to the Limited Partners of $3,150,000, $3,150,000, and $3,220,000
for the years ended December 31, 2000, 1999, and 1998, respectively. This
represents distributions of $45, $45, and $46 per Unit for the years ended
December 31, 2000, 1999, and 1998, respectively. No amounts distributed to the
Limited Partners for the years ended December 31, 2000, 1999, and 1998, 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.

During 2000, the General Partners waived their right to receive future
distributions from the Partnership, including both distributions of operating
cash flow and distributions of liquidation proceeds, to the extent that the
cumulative amount of such distributions would exceed the balance in the General
Partners' capital account as of December 31, 1999. Accordingly, the General
Partners were not allocated any net income and did not receive any distributions
during the year ended December 31, 2000.

As of December 31, 2000 and 1999, the Partnership owed $5,396 and
$65,220, respectively, to affiliates for operating expenses andaccounting and
administrative services. As of March 15, 2001, the Partnership had reimbursed
all such amounts to the affiliates. Other liabilities of the Partnership,
including distributions payable decreased to $842,460 at December 31, 2000, from
$946,165 at December 31, 1999. The decrease in other liabilities was primarily
attributable to the fact that during 2000, the Partnership paid amounts that
were accrued at December 31, 1999 relating to the proposed merger with APF, as
described in "Termination of Merger." 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 1998, the Partnership and its consolidated joint venture, Caro
Joint Venture, owned and leased 36 wholly owned Properties (including four
Properties which were sold in 1998), and during 1999, the Partnership owned and
leased 32 wholly owned Properties (including four Properties which were sold
during 1999), and during 2000, the Partnership owned and leased 28 wholly owned
Properties (including four Properties which were sold during 2000). In addition,
during 1998 and 1999, the Partnership was a co-venturer in five separate joint
ventures that owned and leased a total of five Properties and during 2000 the
Partnership was a co-venturer in one additional joint venture that owned and
leased one Property. During 1998, the Partnership owned and leased five
Properties with affiliates as tenants-in-common and during 1999, the Partnership
owned and leased eight Properties with affiliates as tenants-in-common and
during 2000 the Partnership owned and leased nine Properties with affiliates as
tenants-in-common. As of December 31, 2000, the Partnership owned, either
directly, or through joint venture arrangements, 38 Properties which are
generally subject to long-term, triple-net leases. The leases of the Properties
provide for minimum base annual rental amounts (payable in monthly installments)
ranging from approximately $37,900 to $222,800. Generally, 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 the fourth to sixth lease year,
the percentage rent will be an amount equal to the greater of the percentage
rent calculated under the lease formula or a specified percentage (ranging from
one to five percent) of the purchase price or gross sales. For further
description of the Partnership's leases and Properties, see Item 1. Business -
Leases and Item 2. Properties, respectively.

During the years ended December 31, 2000, 1999, and 1998, the
Partnership and its consolidated joint venture earned $2,355,377, $2,675,958,
and $2,823,377, respectively, in rental income from operating leases (net of
adjustments to accrued rental income) and earned income from direct financing
leases. Rental and earned income decreased during 2000 and 1999, each as
compared to the previous year, by approximately $249,700 and $324,600,
respectively, primarily as a result of the sales of Properties during 2000, 1999
and 1998, described above in "Capital Resources". Rental and earned income are
expected to remain at reduced amounts while equity in earnings of joint ventures
is expected to increase due to the fact that the Partnership reinvested the net
sales proceeds from the 2000 and 1999 sales at Properties in joint ventures or
in Properties with affiliates of the General Partners, as tenants-in-common.

Rental and earned income decreased during 2000, as compared to 1999,
due to the fact that the Partnership recorded an allowance for doubtful accounts
during 2000 by approximately $34,000 for rental amounts relating to the Denny's
Property located in Broken Arrow, Oklahoma, in accordance with generally
accepted accounting principles. The General Partners will continue to pursue
collection of these past due amounts and will recognize such amounts as income,
if collected. No such allowance was recorded in 1999 or 1998.

The decrease in rental and earned income during 2000 and 1999, each as
compared to the previous year, was offset by the fact that the Partnership
collected and recorded as income approximately $53,700 and $18,600 during 2000
and 1999, in rental payment deferrals for the two Properties leased by the same
tenant in Chester, Pennsylvania, and Orlando, Florida. Previously, the
Partnership had established an allowance for doubtful accounts for these
amounts. These amounts were collected in accordance with the agreement entered
into in March 1996, with the tenant to pay the remaining balance of the rental
payment deferral amounts as discussed above in "Capital Resources." During 2000,
the tenant terminated its lease relating to the Property in Chester,
Pennsylvania. In connection with the termination, the Partnership received
termination income in consideration for the Partnership releasing the tenant
from its obligations under the lease. The Partnership will not recognize any
rental income relating to this Property until the Property is re-leased or the
Property is sold and the proceeds are reinvested in an additional Property. The
General Partners are currently seeking a replacement tenant or purchaser for
this Property. The lost revenues from this 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 decrease in rental and earned income during 1999, as compared to
1998, was partially offset by the fact that during 1999 the Partnership
collected and recognized as income a portion of the past due rental amounts owed
by the former tenant of the Property located in Melbourne, Florida, for which
the Partnership had previously established an allowance for doubtful accounts of
$107,100 in 1997. The former tenant vacated this Property in October 1997 and
the Partnership had been pursuing collection of the past due rental amounts. The
Partnership sold this Property in February 1998.

The decrease in rental and earned income during 1999, as compared to
1998, was partially offset by the fact that during 1999, the Partnership's
consolidated joint venture collected and recognized as income past due rental
amounts of approximately $33,000 for which the joint venture had previously
established an allowance for doubtful accounts. No such allowance was
established during 2000.

The decrease in rental and earned income for 1999 as compared to 1998,
was partially offset by the fact that during June 1998, the Partnership reversed
approximately $155,500 in accrued rental income (non-cash accounting adjustments
relating to the straight-lining of future scheduled rent increases over the
lease term in accordance with generally accepted accounting principles) relating
to the Property in Bellevue, Nebraska to adjust the carrying value of the asset
to the net proceeds received from the sale of this Property in June 1998.

In addition, for the years ended December 31, 2000, 1999, and 1998, the
Partnership earned $672,749, $524,643, and $323,105, respectively, attributable
to net income earned by joint ventures in which the Partnership is a
co-venturer. The increase in net income earned by joint ventures during 2000 and
1999, each as compared to the previous year, was primarily due to the fact that
in 1999 and 2000, the Partnership reinvested the net sales proceeds it received
from the 1999 sales of four Burger King Properties in four Properties with
affiliates of the general partners as tenants-in-common. The increase in net
income earned by joint ventures during 2000 was partially offset by the fact
that during 2000, the lease relating to the Property owned by Melbourne Joint
Venture, in which the Partnership owns a 50 percent interest, was amended to
provide for rent reductions starting in February 2000. In June 2000, the
operator of this Property vacated the Property and discontinued operations. As a
result, during 2000, the joint venture established an allowance for doubtful
accounts for past due rental amounts. The joint venture will continue to pursue
collection of past due rental amounts and will recognize such amounts as income
if collected. The joint venture will not recognize any rental income relating to
this Property until such time as the joint venture executes a new lease or until
the Property is sold and the proceeds from such sale are reinvested in an
additional Property. In addition, the joint venture established an allowance for
loss on assets for this Property of approximately $219,100. The allowance
represented the difference between the Property's net carrying value at December
31, 2000 and the current estimated net realizable value for the Property. Net
income earned during 2000 and 1999 was also higher due to the fact that in 1998,
the Partnership reinvested the net sales proceeds it received from the 1997 and
1998 sales of three Properties in additional Properties in Overland Park,
Kansas; Memphis, Tennessee and Fort Myers, Florida with affiliates of the
General Partners as tenants-in-common.

During the year ended December 31, 2000, two of the Partnership's
lessees, Golden Corral Corporation, and IHOP Properties, Inc., each contributed
more than ten percent of the Partnership's total rental and earned income
(including rental income from the Partnership's consolidated joint venture and
the Partnership's share of the rental and earned income from the Properties
owned by five unconsolidated joint ventures in which the Partnership is a
co-venturer and nine Properties owned with affiliates of the General Partners as
tenants-in-common). As of December 31, 2000, Golden Corral Corporation was the
lessee under leases relating to five restaurants, IHOP Properties, Inc. was the
lessee under leases relating to eight restaurants. It is anticipated that, based
on the minimum annual rental payments required by the leases, these two lessees
each will continue to contribute more than ten percent of the Partnership's
total rental income during 2001. In addition, two Restaurant Chains, Golden
Corral and IHOP, each accounted for more than ten percent of the Partnership's
total rental and earned income during the year ended December 31, 2000
(including rental income from the Partnership's consolidated joint venture and
the Partnership's share of the rental and earned income from the Properties
owned by five unconsolidated joint ventures in which the Partnership is a
co-venturer and nine Properties owned with affiliates of the General Partners as
tenants-in-common). In 2001, it is anticipated that these Restaurant Chains each
will continue to account for more than ten percent of the Partnership's total
rental and earned income to which the Partnership is entitled under the terms of
the leases. Any failure of these lessees or Restaurant Chains could materially
affect the Partnership's income if the Partnership is not able to re-lease the
Properties in a timely manner.

For the years ended 2000, 1999, and 1998, the Partnership also earned
$58,100, $147,908, and $110,502, respectively, in interest and other income.
Interest and other income during the year ended December 31, 1999, as compared
to the years ended December 31, 2000 and 1998, was higher primarily due to the
high number of dollars uninvested during 1999, as compared to 2000 and 1998
amount of interest earned on the net sales proceeds received and held in escrow
relating to the sale of the four Burger King Properties, until such proceeds
were reinvested in additional Properties, as described above in "Capital
Resources."

Operating expenses, including depreciation and amortization expense,
were $641,087, $799,269, and $694,773, for the years ended December 31, 2000,
1999, and 1998, respectively. The decrease in operating expenses during 2000, as
compared to 1999, and the increase during 1999, as compared to 1998, was
primarily due to the amount of the transaction costs the Partnership incurred
related to the General Partners retaining financial and legal advisors to assist
them in evaluating and negotiating the proposed and terminated Merger with APF,
as described in "Termination of Merger." The decrease during 2000, as compared
to 1999, was partially attributed to, and the increase during 1999, as compared
to 1998, was partially offset by, a decrease in depreciation expense due to
sales of several Properties in 2000, 1999 and 1998.

As a result of the sale of four Popeye's Properties, as described above
in "Capital Resources," the Partnership recognized gains of $639,806 during the
year ended December 31, 2000, for financial reporting purposes. As a result of
the sale of the four Burger King Properties, as described above in "Capital
Resources", the Partnership recognized gains of $848,303 during the year ended
December 31, 1999, for financial reporting purposes. In addition, as a result of
the sale of the Property in Deland, Florida, as described above in "Capital
Resources," the Partnership recognized a gain of $345,122 during the year ended
December 31, 1998, for financial reporting purposes.

During the year ended December 31, 2000, the Partnership recorded a
provision for loss on assets in the amount of $368,430, for financial reporting
purposes for the Property in Chester, Pennsylvania. This lease for this Property
was terminated in 2000, as described above in "Capital Resources." The allowance
at December 31, 2000, represented the difference between the Property's carrying
value at December 31, 2000, and the estimated net realizable value for this
Property. No such provision was recorded during the years ended December 31,
1999 and 1998. In connection with the lease termination, the Partnership
received $175,000 as lease termination income as consideration of the
Partnership releasing the tenant from its obligations and the lease, as
described in "Capital Resources."

The Partnership's leases as of December 31, 2000, are generally
triple-net leases and contain provisions that the General Partners believe
mitigate the adverse effect of inflation. Such provisions include clauses
requiring the payment of percentage rent based on certain restaurant sales above
a specified level and/or automatic increases in base rent at specified times
during the term of the lease. Management expects that increases in restaurant
sales volumes due to inflation and real sales growth should result in an
increase in rental income over time. Continued inflation also may cause capital
appreciation of the Partnership's Properties. Inflation and changing prices,
however, also may have an adverse impact on the sales of the restaurants and on
potential capital appreciation of the Properties.

In December 1999, the Securities and Exchange Commission released SAB
101, which provides the staff's view in applying generally accepted accounting
principles to selected revenue recognition issues. SAB 101 requires the
Partnership to defer recognition of certain percentage rental income until
certain defined thresholds are met. The Partnership adopted SAB 101 beginning
January 1, 2000. Implementation of SAB 101 did not have a material impact on the
Partnership results of operations.

In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities." The Statement establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments, embedded in other contracts (collectively referred to as
derivatives), and for hedging activities. The Statement requires that an entity
recognize all derivatives as either assets or liabilities in the balance sheet
and measure those instruments at fair value. In June 1999, the Financial
Accounting Standards Board issued Statement of Financial Accounting Standards
No. 137, "Accounting for Derivative Instruments and Hedging Activities -
Deferral of the Effective Date of FASB Statement No. 133, an Amendment of FASB
Statement No. 133." FAS 137 deferred the effective date of FAS 133 for one year.
FAS 133, as amended, is now effective for all fiscal quarters of all fiscal
years beginning after June 15, 2000. The Partnership has reviewed both
statements and has determined that both FAS 133 and FAS 137 do not apply to the
Partnership as of December 31, 2000.

Termination of Merger

On March 11, 1999, the Partnership entered into an Agreement and Plan
of Merger with APF, pursuant to which the Partnership would be merged with and
into a subsidiary of APF. Under the Agreement and Plan of Merger, APF was to
issue shares of its common stock as consideration for the Merger. On March 1,
2000, the General Partners and APF announced that they had mutually agreed to
terminate the Agreement and Plan of Merger. The agreement to terminate the
Agreement and Plan of Merger was based, in large part, on the General Partners'
concern that, in light of market conditions relating to publicly traded real
estate investment trusts, the value of the transaction had diminished. As a
result of such diminishment, the General Partners' ability to unequivocally
recommend voting for the transaction, in the exercise of their fiduciary duties,
had become questionable.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 8. Financial Statements and Supplementary Data

CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)

CONTENTS

Page

Report of Independent Certified Public Accountants 18

Financial Statements:

Balance Sheets 19

Statements of Income 20

Statements of Partners' Capital 21

Statements of Cash Flows 22-23

Notes to Financial Statements 24-40

Report of Independent Certified Public Accountants

To the Partners
CNL Income Fund VI, Ltd.

In our opinion, the financial statements listed in the index appearing under
item 14(a)(1) present fairly, in all material respects, the financial position
of CNL Income Fund VI, Ltd. (a Florida limited partnership) at December 31, 2000
and 1999, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 2000 in conformity with accounting
principles generally accepted in the United States of America. In addition, in
our opinion, the financial statement schedules listed in the index appearing
under item 14(a)(2) present fairly, in all material respects, the information
set forth therein when read in conjunction with the related financial
statements. These financial statements and financial statement schedules are the
responsibility of the Partnership's management; our responsibility is to express
an opinion on these financial statements and financial statement schedules based
on our audits. We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States of America, which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

Orlando, Florida
February 2, 2001

CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)

BALANCE SHEETS

December 31,
2000 1999
------------------ --------------------

ASSETS

Land and buildings on operating leases, less accumulated
depreciation and allowance for loss on land and building $13,428, 503 $ 15,069,805
Net investment in direct financing leases 3,324,866 3,864,455
Investment in joint ventures 9,280,761 8,377,455
Cash and cash equivalents 868,873 2,125,493
Certificate of deposit 103,500 --
Restricted cash 2,062,036 --
Receivables, less allowance for doubtful accounts of $193,869
and $240,497, respectively 141,085 134,477
Due from related parties 13,593 19,111
Prepaid expenses 30,010 2,847
Lease costs, less accumulated amortization of $10,481 and
$8,831, respectively 7,219 8,869
Accrued rental income, less allowance for doubtful accounts
of $47,718 in 2000 and 1999 533,412 491,616
Other assets 26,731 26,731
------------------ --------------------

$ 29,820,589 $ 30,120,859
================== ====================

LIABILITIES AND PARTNERS' CAPITAL

Accounts payable $ 41,715 $ 131,093
Escrowed real estate taxes payable 11,126 11,572
Due to related parties 5,396 65,220
Distributions payable 787,500 787,500
Rents paid in advance and deposits 12,119 16,000
------------------ --------------------
Total liabilities 857,856 1,011,385

Minority interest 140,333 153,870

Partners' capital 28,822,400 28,955,604
------------------ --------------------

$ 29,820,589 $ 30,120,859
================== ====================

See accompanying notes to financial statements.

CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)

STATEMENTS OF INCOME

Year Ended December 31,
2000 1999 1998
------------------ --------------- ---------------

Revenues:
Rental income from operating leases $ 1,935,866 $ 2,226,183 $ 2,520,346
Adjustments to accrued rental income -- (8,774 ) (167,227 )
Earned income from direct financing leases 419,511 458,549 470,258
Contingent rental income 152,450 149,981 156,676
Interest and other income 58,100 147,908 110,502
--------------- --------------- ---------------
2,565,927 2,973,847 3,090,555
------------------ --------------- ---------------
Expenses:
General operating and administrative 169,603 158,011 160,358
Professional services 45,719 45,076 32,400
Bad debt expense -- -- 12,854
Real estate taxes 3,780 -- --
State and other taxes 18,720 10,042 10,392
Depreciation and amortization 368,978 411,907 458,558
Transaction costs 34,287 174,233 20,211
------------------ --------------- ---------------
641,087 799,269 694,773
------------------ --------------- ---------------
Income Before Minority Interest in Income of Consolidated
Joint Venture, Equity in Earnings of Unconsolidated
Joint Ventures, Gain on Sale of Assets, Provision for
Loss on Assets, and Lease Termination Income 1,924,840 2,174,578 2,395,782

Minority Interest in Income of Consolidated Joint Venture (27,169 ) (37,050 ) (43,128 )

Equity in Earnings of Unconsolidated Joint Ventures 672,749 524,643 323,105

Gain on Sale of Assets 639,806 848,303 345,122

Provision for Loss on Assets (368,430 ) -- --

Lease Termination Income 175,000 -- --
--------------- --------------- ---------------

Net Income $ 3,016,796 $ 3,510,474 $ 3,020,881
================== =============== ===============

Allocation of Net Income:
General partners $ -- $ 33,908 $ 28,327
Limited partners 3,016,796 3,476,566 2,992,554
------------------ --------------- ---------------

$ 3,016,796 $ 3,510,474 $ 3,020,881
================== =============== ===============

Net Income Per Limited Partner Unit $ 43.10 $ 49.67 $ 42.75
================== =============== ===============

Weighted Average Number of Limited Partner Units Outstanding
70,000 70,000 70,000
================== =============== ===============

See accompanying notes to financial statements.

CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)

STATEMENTS OF PARTNERS' CAPITAL

Years Ended December 31, 2000, 1999 and 1998

General Partners Limited Partners
------------------------------ ----------------------------------------------------------------------
Accumulated Accumulated Syndication
Contributions Earnings Contributions Distributions Earnings Costs Total
------------- ----------- --------------- --------------- --------------- ------------ ------------

Balance, December 31, 1997 $ 1,000 $228,363 $ 35,000,000 $ (25,584,226 ) $ 23,164,112 $(4,015,000)$28,794,249

Distributions to limited
partners ($46.00 per
limited partner unit) -- -- -- (3,220,000 ) -- -- (3,220,000)
Net income -- 28,327 -- -- 2,992,554 -- 3,020,881
------------- -------------- --------------- --------------- ------------- ------------ -----------

Balance, December 31, 1998 1,000 256,690 35,000,000 (28,804,226 ) 26,156,666 (4,015,000) 28,595,130

Distributions to limited
partners ($45.00 per
limited partner unit) -- -- -- (3,150,000 ) -- -- (3,150,000)
Net income -- 33,908 -- -- 3,476,566 -- 3,510,474
------------- -------------- --------------- --------------- --------------- ------------ ---------

Balance, December 31, 1999 1,000 290,598 35,000,000 (31,954,226 ) 29,633,232 (4,015,000) 28,955,604

Distributions to limited
partners ($45.00 per
limited partner unit) -- -- -- (3,150,000 ) -- -- (3,150,000)
Net income -- -- -- -- 3,016,796 -- 3,016,796
------------- -------------- --------------- --------------- --------------- ------------ ---------

Balance, December 31, 2000 $ 1,000 $290,598 $ 35,000,000 $ (35,104,226 ) $ 32,650,028 (4,015,000)$28,822,400
============= ============== =============== =============== =============== ============ =========

See accompanying notes to financial statements.

CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)

STATEMENTS OF CASH FLOWS

Year Ended December 31,
2000 1999 1998
--------------- --------------- ---------------

Increase ( Decrease) in Cash and Cash Equivalents:

Cash Flows from Operating Activities:
Cash received from tenants $ 2,647,604 $ 2,817,707 $ 3,092,644
Distributions from unconsolidated joint ventures 881,943 483,152 328,721
Cash paid for expenses (437,139) (227,913) (270,339)
Interest received 43,891 131,988 92,634
------------------ ------------------ ------------------
Net cash provided by operating activities 3,136,299 3,204,934 3,243,660
------------------ ------------------ ------------------

Cash Flows from Investing Activities:
Proceeds from sale of assets 2,071,847 4,316,145 2,832,253
Additions to land and buildings on operating leases
-- -- (125,000)
Investment in joint ventures (1,112,500) (3,314,843) (3,896,598)
Investment in certificate of deposit (100,000) -- --
Decrease (increase) in restricted cash (2,061,560) -- 697,650
Payment of lease costs -- (3,300) (3,300)
Other -- -- (84)
------------------ ------------------ ------------------

Net cash provided by (used in) investing
activities (1,202,213) 998,002 (495,079)
------------------ ------------------ ------------------

Cash Flows from Financing Activities:
Distributions to limited partners (3,150,000) (3,220,000) (3,150,000)
Distributions to holder of minority interest (40,706) (28,129) (42,654)
------------------ ------------------ ------------------
Net cash used in financing activities (3,190,706) (3,248,129) (3,192,654)
------------------ ------------------ ------------------

Net Increase (Decrease) in Cash and Cash
Equivalents (1,256,620) 954,807 (444,073)

Cash and Cash Equivalents at Beginning of Year 2,125,493 1,170,686 1,614,759
------------------ ------------------ ------------------

Cash and Cash Equivalents at End of Year $ 868,873 $ 2,125,493 $ 1,170,686
================== ================== ==================

See accompanying notes to financial statements.

CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)

STATEMENTS OF CASH FLOWS - CONTINUED

Year Ended December 31,
2000 1999 1998
--------------- --------------- ---------------

Reconciliation of Net Income to Net Cash Provided by Operating
Activities:

Net income $ 3,016,796 $ 3,510,474 $ 3,020,881
--------------- --------------- ---------------

Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation 367,328 410,257 456,958
Amortization 1,650 1,650 1,600
Bad debt expense -- -- 12,854
Equity in earnings of unconsolidated joint ventures,
net of distributions 209,194 (41,491 ) 5,616
Gain on sale of assets (639,806 ) (848,303 ) (345,122 )
Provision for loss on assets 368,430 -- --
Minority interest in income of consolidated joint
venture 27,169 37,050 43,128
Decrease in due from related parties 5,518 -- --
Decrease (increase) in receivables (10,584 ) (2,676 ) 8,649
Decrease (increase) in prepaid expenses (27,163 ) (1,898 ) 3,286
Decrease in net investment in direct financing leases 68,794 64,697 63,868
Decrease (increase) in accrued rental income (97,498 ) (95,735 ) 51,142
Increase (decrease) in accounts payable and accrued
expenses (89,824 ) 135,333 (37,246 )
Increase (decrease ) in due to related parties (59,824 ) 45,817 (12,532 )
Increase (decrease) in rents paid in advance and
deposits (3,881 ) (10,241 ) (29,422 )
--------------- --------------- ---------------
Total adjustments 119,503 (305,540 ) 222,779
--------------- --------------- ---------------

Net Cash Provided by Operating Activities $ 3,136,299 $ 3,204,934 $ 3,243,660
=============== =============== ===============

Supplemental Schedule of Non-Cash Financing Activities:

Distributions declared and unpaid at December 31 $ 787,500 $ 787,500 $ 857,500
=============== =============== ===============

See accompanying notes to financial statements.

CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)

NOTES TO FINANCIAL STATEMENTS

Years Ended December 31, 2000, 1999, and 1998

1. Significant Accounting Policies:
-------------------------------

Organization and Nature of Business - CNL Income Fund VI, Ltd. (the
"Partnership") is a Florida limited partnership that was organized for
the purpose of acquiring both newly constructed and existing restaurant
properties, as well as properties upon which restaurants were to be
constructed, which are leased primarily to operators of national and
regional fast-food and family-style restaurant chains.

The general partners of the Partnership are CNL Realty Corporation (the
"Corporate General Partner"), James M. Seneff, Jr. and Robert A.
Bourne. Mr. Seneff and Mr. Bourne are also 50 percent shareholders of
the Corporate General Partner. The general partners have responsibility
for managing the day-to-day operations of the Partnership.

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
generally on a triple-net basis, whereby the tenant is 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) (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 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 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.

CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Years Ended December 31, 2000, 1999, and 1998

1. Significant Accounting Policies - Continued:
-------------------------------------------

Accrued rental income represents the aggregate amount of
income recognized on a straight-line basis in excess of
scheduled rental payments to date. Whenever a tenant defaults
under the terms of its lease, or events or changes in
circumstance indicate that the tenant will not lease the
property through the end of the lease term, the Partnership
either reserves or reverses the cumulative accrued rental
income balance.

When the properties are sold, the related cost and accumulated
depreciation for operating leases and the net investment for direct
financing leases, plus any accrued rental income, are removed from the
accounts and gains or losses from sales are reflected in income. The
general partners of the Partnership review properties for impairment
whenever events or changes in circumstances indicate that the carrying
amount of the assets may not be recoverable through operations. The
general partners determine whether an impairment in value has occurred
by comparing the estimated future undiscounted cash flows, including
the residual value of the property, with the carrying cost of the
individual property. If an impairment is indicated, the assets are
adjusted to the fair value. Although the general partners have made
their best estimate of these factors based on current conditions, it is
reasonably possible that changes could occur in the near term which
could adversely affect the general partners' best estimate of net cash
flows expected to be generated from its properties and the need for
asset impairment write-downs.

When the collection of amounts recorded as rental or other income is
considered to be doubtful, an adjustment is made to increase the
allowance for doubtful accounts, which is netted against receivables
and accrued rental income, and to decrease rental or other income or
increase bad debt expense for the current period, although the
Partnership continues to pursue collection of such amounts. If amounts
are subsequently determined to be uncollectible, the corresponding
receivable and allowance for doubtful accounts are decreased
accordingly.

Investment in Joint Ventures - The Partnership accounts for its 66
percent interest in Caro Joint Venture, a Florida general partnership,
using the consolidation method. Minority interests represent the
minority joint venture partners' proportionate share of equity in the
Partnership's consolidated joint venture. All significant intercompany
accounts and transactions have been eliminated.

CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Years Ended December 31, 2000, 1999, and 1998

1. Significant Accounting Policies - Continued:
-------------------------------------------

The Partnership's investments in Auburn Joint Venture, Show Low Joint
Venture, Asheville Joint Venture, Warren Joint Venture, and Melbourne
Joint Venture and properties in Clinton, North Carolina; Vancouver,
Washington; Overland Park, Kansas; Memphis, Tennessee; Fort Myers,
Florida; Baytown, Texas; Round Rock, Texas; Dublin, California; and
Niles, Illinois, each of which is held as tenants-in-common with
affiliates of the general partners, are accounted for using the equity
method since the Partnership shares control with the affiliates.

Cash and Cash Equivalents - The Partnership considers all highly liquid
investments with a maturity of three months or less when purchased to
be cash equivalents. Cash and cash equivalents consist of demand
deposits at commercial banks and money market funds (some of which are
backed by government securities). Cash equivalents are stated at cost
plus accrued interest, which approximates market value.

Cash accounts maintained on behalf of the Partnership in demand
deposits at commercial banks and money market funds may exceed
federally insured levels; however, the Partnership has not experienced
any losses in such accounts.

Lease Costs - Brokerage fees and lease incentive costs incurred in
finding new tenants and negotiating new leases for the Partnership's
properties are amortized over the terms of the new leases using the
straight-line method.

Income Taxes - Under Section 701 of the Internal Revenue Code, all
income, expenses and tax credit items flow through to the partners for
tax purposes. Therefore, no provision for federal income taxes is
provided in the accompanying financial statements. The Partnership is
subject to certain state taxes on its income and property.

Additionally, for tax purposes, syndication costs are included in
Partnership equity and in the basis of each partner's investment. For
financial reporting purposes, syndication costs are netted against
partners' capital and represent a reduction of Partnership equity and a
reduction in the basis of each partner's investment.

CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Years Ended December 31, 2000, 1999, and 1998

1. Significant Accounting Policies - Continued:
-------------------------------------------

Use of Estimates - The general partners of the Partnership have 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. The more significant areas requiring
the use of management estimates relate to the allowance for doubtful
accounts and future cash flows associated with long-lived assets.
Actual results could differ from those estimates.

Staff Accounting Bulletin No. 101 ("SAB 101") - In December 1999, the
Securities and Exchange Commission released SAB 101, which provides the
staff's view in applying generally accepted accounting principles to
selected revenue recognition issues. SAB 101 requires the Partnership
to defer recognition of certain percentage rental income until certain
defined thresholds are met. The Partnership adopted SAB 101 beginning
January 1, 2000. Implementation of SAB 101 did not have a material
impact on the Partnership results of operations.

Statement of Financial Accounting Standards No. 133 ("FAS 133") and
Statement of Financial Accounting Standards No. 137 ("FAS 137") - In
June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities." The Statement establishes
accounting and reporting standards for derivative instruments,
including certain derivative instruments, embedded in other contracts
(collectively referred to as derivatives), and for hedging activities.
The Statement requires that an entity recognize all derivatives as
either assets or liabilities in the balance sheet and measure those
instruments at fair value. In June 1999, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards No.
137, "Accounting for Derivative Instruments and Hedging Activities -
Deferral of the Effective Date of FASB Statement No. 133, an Amendment
of FASB Statement No. 133." FAS 137 deferred the effective date of FAS
133 for one year. FAS 133, as amended, is now effective for all fiscal
quarters of all fiscal years beginning after June 15, 2000. The
Partnership has reviewed both statements and has determined that both
FAS 133 and FAS 137 do not apply to the Partnership as of December 31,
2000.

CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Years Ended December 31, 2000, 1999, and 1998

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." The leases generally are
classified as operating leases; however, some leases have been
classified as direct financing leases. For the leases classified as
direct financing leases, the building portions of the property leases
are accounted for as direct financing leases while the land portions of
some of these leases are operating leases. Substantially all leases are
for 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 tenants to renew
the leases for two to four 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 buildings on operating leases consisted of the following at
December 31:

2000 1999
------------------- ------------------

Land $ 6,719,502 $ 7,094,433
Buildings 10,239,615 11,233,038

------------------- ------------------

16,959,117 18,327,471
Less accumulated depreciation (3,162,184 ) (3,257,666 )
------------------- ------------------
13,796,933 15,069,805
Less allowance for loss on
land and building (368,430 ) --
------------------- ------------------

$ 13,428,503 $ 15,069,805
=================== ==================

In June 1999, the Partnership sold four Burger King properties, one in
each of Sevierville, Walker Springs, Broadway and Greeneville,
Tennessee, to the tenant in accordance with the purchase options under
the lease agreements, for a total of approximately $4,354,000 and
received net sales proceeds of $4,316,145, resulting in a total gain of
$848,303 for financial reporting purposes. These properties were
originally

CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Years Ended December 31, 2000, 1999, and 1998

3. Land and Buildings on Operating Leases - Continued:
---------------------------------------------------

acquired by the Partnership in January 1990 and had costs totaling
approximately $3,535,700, excluding acquisition fees and miscellaneous
acquisition expenses; therefore, the Partnership sold these properties
for a total of approximately $780,400 in excess of their original
purchase prices. In October 1999, the Partnership reinvested a portion
of the net sales proceeds in two properties located in Baytown, Texas
and Round Rock, Texas, each as tenants-in-common with affiliates of the
general partners. In addition, in November 1999, the Partnership
acquired a property in Dublin, California, as tenants-in common with an
affiliate of the general partners. In January 2000, the Partnership
reinvested the remaining net sales proceeds in a property located in
Niles, Illinois, as a tenants-in-common with affiliates of the general
partners (see Note 5).

In September 2000, the Partnership sold four of its properties, three
in Jacksonville, Florida and one in Tallahassee, Florida, to a third
party for a total of approximately $2,081,800 and received net sales
proceeds totaling approximately $2,071,800 resulting in gains totaling
approximately $639,800 for financial reporting purposes. These
properties were originally acquired by the Partnership in 1990 and had
costs totaling approximately $1,708,900 excluding acquisition fees and
miscellaneous acquisition expenses; therefore, the Partnership sold the
properties for approximately $362,900 in excess of their original
purchase prices. In February 2001, the Partnership reinvested the net
sales proceeds to acquire two properties located in Burley, Indiana and
Cleburne, Texas at an approximate cost of $2,098,400 (see Note 13).

During 2000, the Partnership recorded a provision for loss on assets of
$368,430 relating to the property located in Chester, Pennsylvania due
to the fact that the operator of this property vacated the property and
ceased operations. The provision for loss represented the difference
between the net carrying value of the property at December 31, 2000,
and the realizable value for this property.

Some leases provide for escalating guaranteed minimum rents throughout
the lease terms. Income from these scheduled rent increases is
recognized on a straight-line basis over the terms of the leases. For
the years ended December 31, 2000, 1999, and 1998, the Partnership
recognized income of $97,498, $95,735 (net of $8,774 in reserves), and
a loss of $51,142 (net of $155,528 in reversals and $11,699 in
reserves), respectively, of such rental income. The following is a
schedule of the future minimum lease payments to be received on
noncancellable operating leases at December 31, 2001:

CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Years Ended December 31, 2000, 1999, and 1998

3. Land and Buildings on Operating Leases - Continued:
---------------------------------------------------

2001 $1,733,526
2002 1,748,610
2003 1,740,021
2004 1,727,876
2005 1,059,857
Thereafter 6,363,472
----------------

$14,373,362
================

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 the tenant's gross sales.

4. Net Investment in Direct Financing Leases:
------------------------------------------

The following lists the components of the net investment in direct
financing leases at December 31:

2000 1999
---------------- -----------------

Minimum lease payments receivable $ 5,684,730 $ 6,726,045
Estimated residual values 1,244,870 1,440,446
Less unearned income (3,604,734 ) (4,302,036 )
----------------- ----------------

Net investment in direct financing leases $ 3,324,866 $ 3,864,455
================ =================

CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Years Ended December 31, 2000, 1999, and 1998

4. Net Investment in Direct Financing Leases - Continued:
------------------------------------------------------

The following is a schedule of future minimum lease payments to be
received on direct financing leases at December 31, 2000:

2001 $ 439,616
2002 439,616
2003 439,616
2004 439,616
2005 442,505
Thereafter 3,483,761
-----------------
$ 5,684,730
=================

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).

During the year ended December 31, 2000, the tenant relating to the
property in Chester, Pennsylvania, defaulted under the terms of its
lease and vacated the property and terminated its lease. In connection
with the termination, the Partnership received termination income in
consideration for the Partnership releasing the tenant from its
obligations under the lease. As a result, the Partnership reclassified
the related assets from net investment in direct financing leases to
land and building on operating leases. In accordance with Statement of
Financial Accounting Standards No. 13, "Accounting for Leases," the
Partnership recorded the reclassified asset at the lower of original
cost, present fair value, or present carrying value. No loss on
termination of direct financing leases was recorded for financial
reporting purposes (see Note 3).

5. Investment in Joint Ventures:
----------------------------

The Partnership has a 3.9%, 36 percent, 14.46%, 64.29%, 23.04%, 18
percent, 34.74%, 46.2% and 85 percent interest in the profits and
losses of Auburn Joint Venture, Show Low Joint Venture, Asheville Joint
Venture, Warren Joint Venture, a property in Vancouver, Washington, a
property in Clinton, North Carolina, a property in Overland Park,
Kansas, and a property in Memphis, Tennessee, and a property in Fort
Myers, Florida, held as tenants-in-common, respectively. The remaining
interests in these joint ventures and the properties held as tenants in
common are held by affiliates of the Partnership which have the same
general partners.

CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Years Ended December 31, 2000, 1999, and 1998

5. Investment in Joint Ventures - Continued:
----------------------------------------

In October 1999, the Partnership used the majority of the net sales
proceeds from the sales of the properties in Walker Springs and
Broadway, Tennessee, to invest in two properties, one in each of
Baytown, Texas and Round Rock, Texas, with CNL Income Fund III, Ltd.
and CNL Income Fund XI, Ltd., respectively, affiliates of the general
partners, as tenants-in-common, for an 80 percent and a 77 percent
interest, respectively, in the properties. As of December 31, 2000, the
Partnership had contributed a total of approximately $2,108,100 to
these tenancy in common arrangements.

In addition, in November 1999, the Partnership used the majority of the
net sales proceeds from the sale of the property in Greeneville,
Tennessee, and the property in Liverpool, New York, to invest
$1,162,602 in an IHOP Property in Dublin, California with CNL Income
Fund IX, Ltd., an affiliate of the general partners, as
tenants-in-common, for 75 percent interest in the property.

In April 1998, the Partnership entered into a joint venture
arrangement, Melbourne Joint Venture, with an affiliate of the general
partners, to construct and hold one restaurant property. During 1999
and 1998, the Partnership contributed approximately $44,120 and
$494,900, respectively, to purchase land and pay construction costs
relating to the property owned by the joint venture. At December 31,
1999, the Partnership had an approximate 50 percent interest in the
profits and losses of the joint venture.

During 2000, the lease relating to the property owned by Melbourne
Joint Venture was amended to provide for rent reductions. As a result,
the joint venture reclassified the building portion of the property
from a net investment in direct financing lease to an operating lease.
In accordance with Statement of Financial Accounting Standards No. 13,
"Accounting for Leases" the joint venture recorded the reclassified
asset at the lower of original cost, present fair value, or present
carrying value. No loss on termination of direct financing leases was
recorded for financial reporting purposes. As of December 31, 2000, the
joint venture, in which the Partnership has a 50 percent interest,
recorded a provision for loss on assets totaling approximately $219,100
for financial reporting purposes, due to the fact that the operator of
this property vacated the property and ceased operations. The allowance
represented the difference between the property's net carrying value at
December 31, 2000 and the current estimate of net realizable value of
the property.

CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Years Ended December 31, 2000, 1999, and 1998

5. Investment in Joint Ventures - Continued:
----------------------------------------

In January 2000, the Partnership used the net sales proceeds received
from the 1999 sale of a property in Sevierville, Tennessee, to acquire
an interest in a Baker's Square property in Niles, Illinois, with CNL
Income Fund XIV, Ltd., a Florida limited partnership and an affiliate
of the general partners, as tenants-in-common. The Partnership acquired
this interest from CNL BB Corp., an affiliate of the general partners.
In connection therewith, the Partnership and CNL Income Fund XIV, Ltd.
entered into an agreement whereby each co-venturer will share in the
profits and losses of the property in proportion to its applicable
percentage interest. The Partnership accounts for its interest in this
property using the equity method since the Partnership shares control
with an affiliate. As of December 31, 2000, the Partnership owned a 74
percent interest in this property.

Auburn Joint Venture, Show Low Joint Venture, Asheville Joint Venture,
Melbourne Joint Venture, Warren Joint Venture, and the Partnership and
affiliates as tenants-in-common in nine separate tenancy-in-common
arrangements, each own and lease one property to an operator of
national fast-food and family-style restaurants. The following presents
the combined, condensed financial information for the joint ventures
and the properties held as tenants-in-common with affiliates at
December 31:

2000 1999
----------------------- --------------------

Land and buildings on operating leases, less
accumulated depreciation and
allowance for loss on assets $ 14,169,149 $ 12,510,374
Net investment in direct financing leases 3,273,874 3,938,686
Cash 43,276 83,127
Receivables, less allowance for
doubtful accounts 41,191 103,745
Accrued rental income 476,522 350,510
Other assets 1,927 2,320
Liabilities 23,270 93,231
Partners' capital 17,982,669 16,895,531
Revenues 1,861,676 1,435,647
Provision for loss on assets (219,053 ) --
Net income 1,320,968 1,258,086

CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Years Ended December 31, 2000, 1999, and 1998

5. Investment in Joint Ventures - Continued:
----------------------------------------

The Partnership recognized income totaling $672,749, $524,643, and
$323,105 for the years ended December 31, 2000, 1999, and 1998,
respectively, from these joint ventures.

6. Restricted Cash:
---------------

As of December 31, 2000, the net sales proceeds of $2,061,560 from the
sales of the four Popeye's properties, plus accrued interest of $476,
were being held in interest-bearing escrow accounts pending the release
of funds by the escrow agent to acquire additional properties on behalf
of the Partnership.

7. Receivables:
-----------

In June 1997, the Partnership terminated the lease with the tenant of
the property in Greensburg, Indiana. In connection therewith, the
Partnership accepted a promissory note from the former tenant for
$13,077 for amounts relating to past due real estate taxes the
Partnership had incurred as a result of the former tenant's financial
difficulties. The promissory note, which is uncollateralized, bears
interest at a rate of ten percent per annum and is being collected in
36 monthly installments. Receivables at December 31, 2000 and 1999,
included $1,657 and $3,437, respectively, of such amounts.

8. Allocations and Distributions:
-----------------------------

From inception through December 31, 1999, generally, all net income and
net losses of the Partnership, excluding gains and losses from the sale
of properties, were allocated 99 percent to the limited partners and
one percent to the general partners. From inception through December
31, 1999 distributions of net cash flow were made 99 percent to the
limited partners and one percent to the general partners; provided
however, that the one percent of net cash flow to be distributed to the
general partners was subordinated to receipt by the limited partners of
an aggregate, ten percent, cumulative, noncompounded annual return on
their adjusted capital contributions (the "10% Preferred Return").

From inception through December 31, 1999, generally, net sales proceeds
from the sale of properties not in liquidation of the Partnership, to
the extent distributed, were distributed first to the limited partners
in an amount sufficient to provide them with their 10% Preferred
Return, plus the return of their adjusted capital contributions. The
general

CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Years Ended December 31, 2000, 1999, and 1998

8. Allocations and Distributions - Continued:
-----------------------------------------

partners then received, to the extent previously subordinated and
unpaid, a one percent interest in all prior distributions of net cash
flow and a return of their capital contributions. Any remaining sales
proceeds were distributed 95 percent to the limited partners and five
percent to the general partners. Any gain from the sale of a property
not in liquidation of the Partnership was, in general, allocated in the
same manner as net sales proceeds are distributable. Any loss from the
sale of a property was, in general, allocated first, on a pro rata
basis, to partners with positive balances in their capital accounts;
and thereafter, 95 percent to the limited partners and five percent to
the general partners.

Generally, net sales proceeds from a liquidating sale of properties,
will be used in the following order: (i) first to pay and discharge all
of the Partnership's liabilities to creditors, (ii) second, to
establish reserves that may be deemed necessary for any anticipated or
unforeseen liabilities or obligations of the Partnership, (iii) third,
to pay all of the Partnership's liabilities, if any, to the general and
limited partners, (iv) fourth, after allocations of net income, gains
and/or losses, to distribute to the partners with positive capital
accounts balances, in proportion to such balances, up to amounts
sufficient to reduce such positive balances to zero, and (v)
thereafter, any funds remaining shall then be distributed 95 percent to
the limited partners and five percent to the general partners.

Effective January 1, 2000, the general partners waived their right to
receive future distributions from the Partnership, including both
distributions of operating cash flow and distributions of liquidation
proceeds, to the extent that the cumulative amount of such
distributions would exceed the balance in the general partners' capital
account as of December 31, 1999. Accordingly, for years commencing
January 1, 2000 and after, the Partnership's net income will be
allocated entirely among the limited partners. However, if losses are
allocated to the general partners in a year, an amount of income equal
to the sum of such losses may be allocated to the general partner in
succeeding years. Accordingly, the general partners were not allocated
any net income and did not receive any distributions during the year
ended December 31, 2000.

During the years ended December 31, 2000, 1999, and 1998, the
Partnership declared distributions to the limited partners of
$3,150,000, $3,150,000, and $3,220,000, respectively. No distributions
have been made to the general partners to date.

CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Years Ended December 31, 2000, 1999, and 1998

9. Income Taxes:
------------

The following is a reconciliation of net income for financial reporting
purposes to net income for federal income tax purposes for the years
ended December 31:

2000 1999 1998
--------------- ---------------- ---------------

Net income for financial reporting purposes 3,016,796 $ 3,510,474 $ 3,020,881

Depreciation for tax reporting purposes in excess of
depreciation for financial reporting purposes (57,187) (61,184) (65,666)

Allowance for loss on assets 368,430 -- --

Direct financing leases recorded as operating leases for
tax reporting purposes 68,794 64,696 63,868

Gain and loss on sale of land and buildings for financial
reporting purposes in excess of gain and loss on sale
for tax reporting purposes (639,806) (459,787) (543,697)

Equity in earning of unconsolidated joint ventures for
financial reporting purposes in excess of equity
in earnings of unconsolidated joint ventures for tax
reporting purposes 4,976 (70,289) (14,400)

Allowance for doubtful accounts (46,628) (83,316) (39,597)

Accrued rental income (97,498) (95,735) 51,142

Rents paid in advance (4,381) (10,241) (30,922)

Capitalization (deduction) of transaction costs for tax (194,444) 174,233 20,211
reporting purposes

Minority interest in timing differences of consolidated
joint venture 3,761 15,618 14,513
--------------- ---------------- ---------------

Net income for federal income tax purposes $ 2,422,813 $ 2,984,469 $ 2,476,333
=============== ================ ===============

CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Years Ended December 31, 2000, 1999, and 1998

10. Related Party Transactions:
--------------------------

One of the individual general partners, James M. Seneff, Jr., is one of
the principal shareholders of CNL Holdings, Inc. The other individual
general partner, Robert A. Bourne, serves as President and Treasurer of
CNL Financial Group, Inc., a wholly owned subsidiary of CNL Holdings,
Inc.. CNL Fund Advisors, Inc. (the "Advisor") was a majority owned
subsidiary of CNL Financial Group, Inc. until it merged with CNL
American Properties Fund, Inc. ("APF"), effective September 1, 1999.
The individual general partners are stockholders and directors of APF.

The Advisor provides certain services relating to management of the
Partnership and its properties pursuant to a management agreement with
the Partnership. In connection therewith, the Partnership agreed to pay
the Advisor a management fee of one percent of the sum of gross
revenues from properties wholly owned by the Partnership and the
Partnership's allocable share of gross revenues from joint ventures and
the property held as tenants-in-common with an affiliate, but not in
excess of competitive fees for comparable services. These fees are
payable only after the limited partners receive their 10% Preferred
Return. Due to the fact that these fees are noncumulative, if the
limited partners have not received their 10% Preferred Return in any
particular year, no management fees will be due or payable for such
year. As a result of such threshold, no management fees were incurred
during the years ended December 31, 2000 and 1998.

The Advisor 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 the Advisor provides a
substantial amount of services in connection with the sale. However, if
the sales proceeds are reinvested in a placement property, no such real
estate disposition fees will be incurred until such replacement
property is sold and the net sales proceeds are distributed. The
payment of the real estate disposition fee is subordinated to the
receipt by the limited partners of their aggregate 10% Preferred
Return, plus their adjusted capital contributions. No deferred,
subordinated real estate disposition fees have been incurred since
inception.

During the year ended December 31, 2000, the Partnership and CNL Income
Fund XIV, Ltd., as tenants-in-common, acquired an interest in a Baker's
Square property from CNL BB Corp., an affiliate of the general
partners, for a purchase price of $1,112,500. CNL Income Fund XIV,
Ltd., is a Florida limited partnership and an affiliate of the general

CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Years Ended December 31, 2000, 1999, and 1998

10. Related Party Transactions - Continued:
--------------------------------------

partners. CNL BB Corp. had purchased and temporarily held title to this
property in order to facilitate the acquisition of the property by the
Partnership. The purchase price paid by the Partnership represents the
costs incurred by CNL BB Corp. to acquire and carry the property,
including closing costs. In accordance with the Statement of Policy of
Real Estate Programs for the North American Securities Administrators
Association, Inc., all income, expense, profits and losses generated by
or associated with the property were treated as belonging to the
Partnership. As of December 31, 2000, other income of the
tenants-in-common includes $2,103 of such amounts.

During the years ended December 31, 2000, 1999, and 1998, the Advisor
and its affiliates provided accounting and administrative services to
the Partnership on a day-to-day basis including services relating to
the proposed and terminated merger. The Partnership incurred $97,772,
$118,067, and $107,969 for the years ended December 31, 2000, 1999, and
1998, respectively, for such services.

The due to related parties at December 31, 2000 and 1999, totaled
$5,396 and $65,220, respectively.

11. Concentration of Credit Risk:
----------------------------

The following schedule presents total rental and earned income from
individual lessees, each representing more than ten percent of the
Partnership's total rental and earned income (including the
Partnership's share of total rental and earned income from joint
ventures and the properties held as tenants-in-common with affiliates
of the general partners) for each of the years ended December 31:

2000 1999 1998
-------------- ---------------- ---------------

IHOP Properties, Inc. $864,889 $ 574,011 $454,889
Golden Corral Corporation 771,099 761,226 758,646
Restaurant Management of S.C. Inc.
N/A 404,659 438,257
Mid-America Corporation N/A N/A 439,519

CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Years Ended December 31, 2000, 1999, and 1998

11. Concentration of Credit Risk - Continued:
----------------------------------------

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
(including the Partnership's share of total rental and earned income
from joint ventures and the properties held as tenants-in-common with
affiliates of the general partners) for each of the years ended
December 31:

2000 1999 1998
-------------- ---------------- ----------------

IHOP $864,889 $ 574,011 $ 454,889
Golden Corral Family Steakhouse Restaurants
771,099 761,226 758,646
Burger King N/A N/A 453,634

The information denoted by N/A indicates that for each period
presented, the tenant and the chains did not represent more than ten
percent of the Partnership's total rental and earned income.

Although the Partnership's properties are geographically diverse
throughout the United States and the Partnership's lessees operate a
variety of restaurant concepts, default by any one of these lessees or
restaurant chains could significantly impact the results of operations
of the Partnership if the Partnership is not able to re-lease the
properties in a timely manner.

CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Years Ended December 31, 2000, 1999, and 1998

12. Selected Quarterly Financial Data:
----------------------------------

The following table presents selected unaudited quarterly financial
data for each full quarter during the years ended December 31, 2000 and
1999.

2000 Quarter First Second Third Fourth Year
------------------------ -------------- ------------- ------------- -------------- --------------

Revenue (1) $872,222 $685,446 $830,586 $823,253 $ 3,211,507
Net income 660,915 506,573 1,484,346 364,962 3,016,796
Net income per
limited partner
unit 9.35 7.16 21.02 5.57 43.10

1999 Quarter First Second Third Fourth Year
------------------------ -------------- ------------- ------------- -------------- --------------

Revenue (1) $858,723 $862,048 $796,457 $944,212 $ 3,461,440
Net income 656,386 1,472,556 605,178 776,354 3,510,474
Net income per
limited partner
unit 9.28 20.84 8.56 10.99 49.67

(1) Revenues include equity in earnings of unconsolidated joint
ventures, minority interest in income of consolidated joint
ventures and interest and other income.

13. Subsequent Event:
----------------

In January 2001, the Partnership used approximately $2,098,400 of the
net sales proceeds received from the sale of four of its properties,
(three in Jacksonville, Florida and one in Tallahassee, Florida), to
acquire two properties located in Burley, Indiana and Cleburne, Texas
from CNL Funding 2001-A, LP, a Delaware limited partnership and an
affiliate of the general partners. CNL Funding 2001-A, LP, had
purchased and temporarily held title to these properties in order to
facilitate the acquisition of the property by the Partnership.

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

None.

PART III

Item 10. Directors and Executive Officers of the Registrant

The General Partners of the Registrant are James M. Seneff, Jr., Robert
A. Bourne and CNL Realty Corporation, a Florida corporation. The
General Partners manage and control the Partnership's affairs and have
general responsibility and the ultimate authority in all matters
affecting the Partnership's business. The Partnership has available to
it the services, personnel and experience of CNL Fund Advisors, Inc.,
CNL Financial Group, Inc. and their affiliates, all of which are
affiliates of the General Partners.

James M. Seneff, Jr., age 54. Since 1971, Mr. Seneff has been active in
the acquisition, development, and management of real estate projects
and, directly or through an affiliated entity, has served as a general
partner or co-venturer in over 100 real estate ventures. These ventures
have involved the financing, acquisition, construction, and leasing of
restaurants, office buildings, apartment complexes, hotels, and other
real estate. Mr. Seneff has served as Director and Chairman of the
Board of CNL American Properties Fund, Inc. ("APF"), a public, unlisted
real estate investment trust, since 1994. Mr. Seneff served as Chief
Executive Officer of APF from 1994 through August 1999 and has served
as Co-Chief Executive Officer of APF since December 2000. Mr. Seneff
served as Chairman of the Board and Chief Executive Officer of CNL Fund
Advisors (the "Advisor") until it merged with APF in September 1999,
and in June 2000, was re-elected to those positions of the Advisor. Mr.
Seneff is a principal stockholder of CNL Holdings, Inc., the parent
company of CNL Financial Group, Inc. (formerly CNL Group, Inc.), a
diversified real estate company, and has served as a director, Chairman
of the Board and Chief Executive Officer of CNL Financial Group, Inc.
since its formation in 1980. CNL Financial Group, Inc. is the parent
company, either directly or indirectly through subsidiaries, of CNL
Real Estate Services, Inc., CNL Capital Markets, Inc., CNL Investment
Company and CNL Securities Corp. Mr. Seneff also serves as a Director,
Chairman of the Board and Chief Executive Officer of CNL Hospitality
Properties, Inc., a public, unlisted real estate investment trust, as
well as, CNL Hospitality Corp., its advisor. In addition, he serves as
a Director, Chairman of the Board and Chief Executive Officer of CNL
Retirement Properties, Inc., a public, unlisted real estate investment
trust and its advisor, CNL Retirement Corp. Since 1992, Mr. Seneff has
also served as a Director, Chairman of the Board and Chief Executive
Officer of Commercial Net Lease Realty, Inc., a public real estate
investment trust that is listed on the New York Stock Exchange. Mr.
Seneff has also served as a Director, Chairman of the Board and Chief
Executive Officer of CNL Securities Corp. since 1979; CNL Investment
Company since 1990; and CNL Institutional Advisors, Inc., a registered
investment advisor for pension plans, since 1990. Mr. Seneff formerly
served as a Director of First Union National Bank of Florida, N.A., and
currently serves as the Chairman of the Board of CNL Bank. Mr. Seneff
previously served on the Florida State Commission on Ethics and is a
former member and past Chairman of the State of Florida Investment
Advisory Council, which recommends to the Florida Board of
Administration investments for various Florida employee retirement
funds. The Florida Board of Administration, Florida's principal
investment advisory and money management agency, oversees the
investment of more than $60 billion of retirement funds. Mr. Seneff
received his degree in Business Administration from Florida State
University in 1968.

Robert A. Bourne, age 53. Mr. Bourne has participated as a general
partner or co-venturer in over 100 real estate ventures involved in the
financing, acquisition, construction, and leasing of restaurants,
office buildings, apartment complexes, hotels, and other real estate.
Mr. Bourne is Director and Vice Chairman of the Board of Directors of
APF. Mr. Bourne served as President of APF from 1994 through February
1999. He also served as Treasurer from February 1999 through August
1999 and from May 1994 through December 1994. He also served in various
executive positions with the Advisor prior to its merger with APF
including, President from 1994 through September 1997, and Director
from 1994 through August 1999. Mr. Bourne serves as President and
Treasurer of CNL Financial Group, Inc. (formerly CNL Group, Inc.);
Director, Vice Chairman of the Board and President of CNL Hospitality
Properties, Inc., a public, unlisted real estate investment trust; as
well as, Director and President of CNL Hospitality Corp., its advisor.
In addition, Mr. Bourne serves as Director and President of CNL
Retirement Properties, Inc., a public, unlisted real estate investment
trust; as well as, a Director and President of its advisor, CNL
Retirement Corp. Mr. Bourne also serves as a Director of CNL Bank. He
has served as a Director since 1992, Vice Chairman of the Board since
February 1996, Secretary and Treasurer from February 1996 through 1997,
and President from July 1992 through February 1996, of Commercial Net
Lease Realty, Inc., a public real estate investment trust listed on the
New York Stock Exchange. Mr. Bourne also serves as Director, President
and Treasurer for various affiliates of CNL Financial Group, Inc.
including, CNL Investment Company, CNL Securities Corp. and CNL
Institutional Advisors, Inc., a registered investment advisor for
pension plans. Mr. Bourne began his career as a certified public
accountant employed by Coopers & Lybrand, Certified Public Accountants,
from 1971 through 1978, where he attained the position of Tax Manager
in 1975. Mr. Bourne graduated from Florida State University in 1970
where he received a B.A. in Accounting, with honors.

Curtis B. McWilliams, age 45. Mr. McWilliams has served as Co-Chief
Executive Officer of APF since December 2000 and previously served as
Chief Executive Officer from September 1999 through December 2000.
Prior to the acquisition of the Advisor, Mr. McWilliams served as
President of APF from February 1999 until September 1999. From April
1997 to February 1999, he served as Executive Vice President of APF.
Mr. McWilliams joined CNL Financial Group, Inc. (formerly CNL Group,
Inc.) in April 1997 and served as an Executive Vice President until
September 1999. In addition, Mr. McWilliams served as President of the
Advisor and CNL Financial Services, Inc. from April 1997 until the
acquisition of such entities by APF in September 1999. From September
1983 through March 1997, Mr. McWilliams was employed by Merrill Lynch &
Co. The majority of his career at Merrill Lynch & Co. was in the
Investment Banking division where he served as a Managing Director. Mr.
McWilliams received a B.S.E. in Chemical Engineering from Princeton
University in 1977 and a Master of Business Administration degree with
a concentration in finance from the University of Chicago in 1983.

John T. Walker, age 42. Mr. Walker has served as President of APF since
September 1999 and as Chief Operating Officer since March 1995. Mr.
Walker also served as a board member of CNL Restaurant Property
Services, Inc., a subsidiary of APF from December 1999 until December
2000. Previously, he served as Executive Vice President of APF from
January 1996 to September 1999. Mr. Walker joined the Advisor in
September 1994, as Senior Vice President responsible for Research and
Development. He served as the Chief Operating Officer of the Advisor
from April 1995 until September 1999 and as Executive Vice President
from January 1996 until September 1999, at which time it merged with
APF. Mr. Walker also served as Executive Vice President of CNL
Hospitality Properties, Inc. and CNL Hospitality Corp. (formerly CNL
Hospitality Advisors, Inc.) from 1997 to October 1998. From May 1992 to
May 1994, he was Executive Vice President for Finance and
Administration and Chief Financial Officer of Z Music, Inc., a cable
television network which was subsequently acquired by Gaylord
Entertainment, where he was responsible for overall financial and
administrative management and planning. From January 1990 through April
1992, Mr. Walker was Chief Financial Officer of the First Baptist
Church in Orlando, Florida. From April 1984 through December 1989, he
was a partner in the accounting firm of Chastang, Ferrell & Walker,
P.A., where he was the partner in charge of audit and consulting
services, and from 1981 to 1984, Mr. Walker was a Senior
Consultant/Audit Senior at Price Waterhouse. Mr. Walker is a cum laude
graduate of Wake Forest University with a Bachelor of Science degree in
Accountancy and is a certified public accountant.

Steven D. Shackelford, age 37. Mr. Shackelford was promoted to
Executive Vice President and Chief Financial Officer of APF in July
2000. He served as Senior Vice President and Chief Financial Officer of
APF since January 1997. Mr. Shackelford also served as Secretary and
Treasurer of APF since September 1999. He also served as Chief
Financial Officer of the Advisor from September 1996 to September 1999.
From March 1995 to July 1996, Mr. Shackelford was a senior manager in
the national office of Price Waterhouse LLP where he was responsible
for advising foreign clients seeking to raise capital and a public
listing in the United States. From August 1992 to March 1995, he was a
manager in the Paris, France office of Price Waterhouse, serving
several multi-national clients. Mr. Shackelford was an audit staff and
senior from 1986 to 1992 in the Orlando, Florida office of Price
Waterhouse. Mr. Shackelford received a Bachelor of Arts degree in
Accounting, with honors, and a Master of Business Administration degree
from Florida State University and is a certified public accountant.

Item 11. Executive Compensation

Other than as described in Item 13, the Partnership has not paid and
does not intend to pay any executive compensation to the General Partners or any
of their affiliates. There are no compensatory plans or arrangements regarding
termination of employment or change of control.

Item 12. Security Ownership of Certain Beneficial Owners and Management

As of March 15, 2001, no person was known to the Registrant to be a
beneficial owner of more than five percent of the Units.

The following table sets forth, as of March 15, 2001, the beneficial
ownership interests of the General Partners in the Registrant.

Title of Class Name of Partner Percent of Class
-------------- --------------- ----------------

General Partnership Interests James M. Seneff, Jr. 45%
Robert A. Bourne 45%
CNL Realty Corporation 10%
--------
100%
========

Neither the General Partners, nor any of their affiliates, owns any
interest in the Registrant, except as noted above.

Item 13. Certain Relationships and Related Transactions

The table below summarizes the types, recipients, methods of
computation and amounts of compensation, fees and distributions paid or payable
by the Partnership to the General Partners and their affiliates for the year
ended December 31, 2000, exclusive of any distributions to which the General
Partners or their affiliates may be entitled by reason of their purchase and
ownership of Units.

Amount Incurred
Type of Compensation For the Year
and Recipient Method of Computation Ended December 31, 2000
- ---------------------------------- -------------------------------------- ------------------------------

Reimbursement to affiliates for Operating expenses are reimbursed at Accounting and
operating expenses the lower of cost or 90 percent of administrative services:
the prevailing rate at which $97,772
comparable services could have been
obtained in the same geographic
area. Affiliates of the General
Partners from time to time incur
certain operating expenses on behalf
of the Partnership for which the
Partnership reimburses the
affiliates without interest.

Annual, subordinated One percent of the sum of gross $-0-
management fee to affiliates operating revenues from Properties
wholly owned by the Partnership plus
the Partnership's allocable share of
gross revenues of joint ventures in
which the Partnership is a
co-venturer and the Property owned
with an affiliate as
tenants-in-common, subordinated to
certain minimum returns to the
Limited Partners. The management
fee will not exceed competitive fees
for comparable services. Due to the
fact that these fees are
noncumulative, if the Limited
Partners have not received their 10%
Preferred Return in any particular
year, no management fees will be due
or payable for such year.

Amount Incurred
Type of Compensation For the Year
and Recipient Method of Computation Ended December 31, 2000
- --------------------------------- -------------------------------------- ------------------------------

Deferred, subordinated real A deferred, subordinated real estate $-0-
estate disposition fee payable disposition fee, payable upon sale
to affiliates of one or more Properties, in an
amount equal to the lesser of (i)
one-half of a competitive real
estate commission, or (ii) three
percent of the sales price of such
Property or Properties. Payment of
such fee shall be made only if
affiliates of the General Partners
provide a substantial amount of
services in connection with the sale
of a Property or Properties and
shall be subordinated to certain
minimum returns to the Limited
Partners. However, if the net sales
proceeds are reinvested in a
replacement Property, no such real
estate disposition fee will be
incurred until such replacement
Property is sold and the net sales
proceeds are distributed.

General Partners' deferred, A deferred, subordinated share equal $-0-
subordinated share of to one percent of Partnership
Partnership net cash flow distributions of net cash flow,
subordinated to certain minimum
returns to the Limited Partners.

General Partners' deferred, A deferred, subordinated share equal $-0-
subordinated share of to five percent of Partnership
Partnership net sales proceeds distributions of such net sales
from a sale or sales not in proceeds, subordinated to certain
liquidation of the Partnership minimum returns to the Limited
Partners.

Amount Incurred
Type of Compensation For the Year
And Recipient Method of Computation Ended December 31, 2000
- --------------------------------- -------------------------------------- ------------------------------

General Partners' share of Distributions of net sales proceeds $-0-
Partnership net sales proceeds from a sale or sales of
from a sale or sales in substantially all of the
liquidation of the Partnership Partnership's assets will be
distributed in the following order
or priority: (i) first, to pay all
debts and liabilities of the
Partnership and to establish
reserves; (ii) second, to Partners
with positive capital account
balances, determined after the
allocation of net income, net loss,
gain and loss, in proportion to such
balances, up to amounts sufficient
to reduce such balances to zero; and
(iii) thereafter, 95% to the Limited
Partners and 5% to the General Partners.

In addition, during 2000, the Partnership and CNL Income Fund XIV, Ltd., an
affiliate of the General Partners, as tenants-in-common, acquired an interest in
a Baker's Square Property from CNL BB Corp., an affiliate of the General
Partners, for a purchase price of $1,112,500. CNL BB Corp. had purchased and
temporarily held title to this Property in order to facilitate the acquisition
of the Property by the Partnership. The purchase price paid by the Partnership
represents the costs incurred by CNL BB Corp. to acquire and carry the Property,
including closing costs.

PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a) The following documents are filed as part of this report.

1. Financial Statements

Report of Independent Certified Public Accountants

Balance Sheets at December 31, 2000 and 1999

Statements of Income for the years ended December 31, 2000,
1999, and 1998

Statements of Partners' Capital for the years ended December
31, 2000, 1999, and 1998

Statements of Cash Flows for the years ended December 31,2000,
1999, and 1998

Notes to Financial Statements

2. Financial Statement Schedule

Schedule II -Valuation and Qualifying Accounts for the years
ended December 31, 2000, 1999 and 1998

Schedule III - Real Estate and Accumulated Depreciation at
December 31, 2000

Notes to Schedule III - Real Estate and Accumulated
Depreciation at December 31, 2000

All other Schedules are omitted as the required information is
inapplicable or is presented in the financial statements or
notes thereto.

3. Exhibits

3.1 Certificate of Limited Partnership of CNL Income Fund
VI, Ltd. (Included as Exhibit 3.3 to Registration
Statement No. 33-23892 on Form S-11 and incorporated
herein by reference.)

4.1 Certificate of Limited Partnership of CNL Income Fund
VI, Ltd. (Included as Exhibit 4.2 to Registration
Statement No. 33-23892 on Form S-11 and incorporated
herein by reference.)

4.2 Agreement and Certificate of Limited Partnership of
CNL Income Fund VI, Ltd. (Included as Exhibit 4.2 to
Form 10-K filed with the Securities and Exchange
Commission on April 1, 1996, and incorporated herein
by reference.)

10.1 Management Agreement (Included as Exhibit 10.1 to
Form 10-K filed with the Securities and Exchange
Commission on March 31, 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.)

(b) The Registrant filed no reports on Form 8-K during the period
October 1, 2000 through December 31, 2000.

(c) Not Applicable.

(d) Other Financial Information

The Partnership is required to file audited financial
information of two of its tenants (Golden Corral Corporation
and IHOP Properties, Inc.) as a result of these tenants
leasing more than 20 percent of the Partnership's total assets
for the year ended December 31, 2000. Golden Corral
Corporation is a privately-held company and its financial
information is not available to the Partnership to include in
this filing. The Partnership will file the financial
information for Golden Corral Corporation and IHOP Properties,
Inc. under cover of a Form 10-K/A as soon as it is available.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on the 28th, day of
March, 2001.

CNL INCOME FUND VI, LTD.

By: CNL REALTY CORPORATION
General Partner

/s/ Robert A. Bourne
-----------------------------------
ROBERT A. BOURNE, President

By: ROBERT A. BOURNE
General Partner

/s/ Robert A. Bourne
-----------------------------------
ROBERT A. BOURNE

By: JAMES M. SENEFF, JR.
General Partner

/s/ James M. Seneff, Jr.
-----------------------------------
JAMES M. SENEFF, JR.

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

Signature Title Date

/s/ Robert A. Bourne President, Treasurer and Director March 28, 2001
- ------------------------------------
Robert A. Bourne (Principal Financial and Accounting
Officer)

/s/ James M. Seneff, Jr. Chief Executive Officer and Director March 28, 2001
- ------------------------------------
James M. Seneff, Jr. (Principal Executive Officer)

CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

Years Ended December 31, 2000, 1999, and 1998

Additions Deductions
------------------------------------------------- --------------------------------
Collected
or Deter-
Balance at Charged to Charged to Deemed mined to Balance
Beginning Costs and Other Uncollec- be Col- at End
Year Description of Year Expenses Accounts tible lectible of Year
- ---------- ----------------- -------------- --------------- ---------------- ------------- -------------- ------------

1998 Allowance for
doubtful
accounts (a) $ 390,655 $ $ 46,023 (b) $ 12,264 (c) $ 61,657 $ 362,757
--
============== =============== ================ ============= ============== ============

1999 Allowance for
doubtful
accounts (a) $ 362,757 $ -- $ 29,049 (b) $ -- $ 103,59 $ 288,215
============== =============== ================ ============= ============== ============

2000 Allowance for
doubtful
accounts (a) $ 288,215 $ -- $ 37,003 (b) $ -- $ 83,631 $ 241,587
============== =============== ================ ============= ============== ===========

(a) Deducted from receivables and accrued rental income on the balance sheet.

(b) Reduction of rental and other income.

(c) Amounts written off as uncollectible.

CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED

December 31, 2000

Costs Capitalized
Subsequent to
Initial Cost Acquisition
------------------------ -------------------
Encum- Buildings and Improve- Carrying
brances Land Improvements ments Costs
----------- ----------- ----------- ---------- -------
Properties the Partnership
has Invested in Under
Operating Leases:

Bertucci's:
Marietta, Georgia - $399,885 $712,762 - -

Church's Fried Chicken
Restaurant:
Orlando,Florida - 177,440 270,985 - -

Golden Corral Family
Steakhouse Restaurants:
Albuquerque, New Mexi- 717,708 1,018,823 - -
Amarillo, Texas - 773,627 908,171 - -
Lawton, Oklahoma - 559,095 838,642 - -
El Paso, Texas - 670,916 - 837,317 -

Hardee's Restaurants:
Greensburg, Indiana - 222,559 - 640,529 -
Springfield, Tennessee - 203,159 413,221 - -

IHOP:
Elgin, Illinois - 426,831 - - -
Manassas, Virginia - 366,992 759,788 - -

Jack in the Box Restaurant:
San Antonio, Texas - 272,300 - - -

KFC Restaurants:
Caro, Michigan - 150,804 - 373,558 -
Gainesville, Florida - 321,789 287,429 - -

Popeyes Famous Fried
Chicken Restaurants:
Gainesville, Florida - 83,542 208,564 192,227 -

Shoney's Restaurants:
Nashville, Tennessee - 320,540 531,507 - -

Captain D's
Chester, Pennsylvania - 98,259 372,536 - -

Waffle House Restaurants:
Clearwater Florida - 130,499 268,580 - -
Roanoke, Virginia - 119,533 236,219 - -
Atlantic Beach, Florida - 141,627 263,021 - -

Other:
Hermitage, Tennessee - 391,157 - 720,026 -
----------- ----------- ---------- -------

$6,719,502 $7,090,248 $3,149,366 -
=========== =========== ========== =======

Property of Joint Venture in Which
the Partnership has a 36%
Interest and has Invested in
Under an Operating Lease:

Darryl's Restaurant:
Greensboro, North Carolin- $261,013 - - -
=========== =========== ========== =======

Property of Joint Venture in Which
the Partnership has a 3.9%
Interest and has Invested in
Under an Operating Lease:

KFC Restaurant:
Auburn, Massachusetts - $484,362 - - -
=========== =========== ========== =======

Property of Joint Venture in Which
the Partnership has a 14.46%
Interest and has Invested in
Under an Operating Lease:

Burger King Restaurant:
Asheville, North Carolina- $438,695 $450,432 - -
=========== =========== ========== =======

Property in Which the Partner-
ship has a 18% Interest as
Tenants-in-Common and has
Invested in Under an Operating
Lease:

Golden Corral Family
Steakhouse Restaurant:
Clinton, North Caroli-a $138,382 $676,588 - -
=========== =========== ========== =======

Property in Which the Partner-
ship has a 23.04% Interest as
Tenants-in-Common andhas
Invested in Under an Operating
Lease:

Chevy's Fresh Mex Restaurant:
Vancouver, Washington - $875,659 $1,389,366 - -
=========== =========== ========== =======

Property in Which Partnership has
a 46.20% Interest as
Tenants-in-Common has Invested
in Under an Operating Lease:

IHOP Restaurant:
Memphis, Tennessee - $678,890 $825,076 - -
=========== =========== ========== =======

Property of Joint Venture in Which
the Partnership has a 50%
Interest and has Invested in
Under an Operating Lease:

5 & Diner Restaurant:
Melbourne, Florida(h) - $438,972 $639,141 - -
=========== =========== ========== =======

Property in Which the Partnership
has a 85% Interest as
Tenants-in-Common and has
Invested in Under an Operating
Lease:

Bennigan's Restaurant:
Fort Myers, Florida - $638,026 - - -
=========== =========== ========== =======

Property of Joint Venture in Which
the Partnership has a 64.29%
Interest and has Invested in
Under an Operating Lease:

IHOP Restaurant:
Warren,nMichiganan - $507,965 $889,080 - -
=========== =========== ========== =======

Property in Which the Partnership
has a 80% as Tenants-in-Common
Interest and has Invested in
Under an Operating Lease:

IHOP Restaurant:
Boytown,,Texasigan - $495,847 $799,469 - -
=========== =========== ========== =======

Property in Which the Partnership
has a 77% as Tenants-in-Common
Interest and has Invested in
Under an Operating Lease:

IHOP Restaurant:
RoundrRock,iTexasn - $685,578 $706,459 - -
=========== =========== ========== =======

Property in Which the Partnership
has a 75% as Tenants-in-Common
Interest and has Invested in
Under an Operating Lease:

IHOP Restaurant:
Dublin,nCalifornia - $670,899 $879,237 - -
=========== =========== ========== =======

Property in Which the Partnership
has a 74% as Tenants-in-Common
Interest and has Invested in
Under an Operating Lease:

Baker's Square
Niles, Illinois - $664,944 $838,434 - -
=========== =========== ========== =======

Properties the Partnership
has Invested in Under
Direct Financing Leases:

Denny's Restaurant:
Cheyenne, Wyoming - $162,209 $648,839 - -
Broken Arrow, Oklahoma - 164,640 559,972 - -

IHOP:
Elgin, Illinois - - 1,057,282 - -

Hardee's Restaurant:
Waynesburg, Ohio - 136,242 441,299 - -

Jack in the Box Restaurant:
San Antonio, Texas - - 420,568 - -

----------- ----------- ---------- -------

- $463,091 $3,127,960 - -
=========== =========== ========== =======

Property of Joint Venture in
Which the Partnership has a
3.9% Interest and has
Invested in Under a Direct
Financing Lease:

KFC Restaurant:
Auburn, Massachusetts - - - $434,947 -
=========== =========== ========== =======

Property of Joint Venture
in Which the Partnership
has a 36% Interest and
has Invested in Under
a Direct Financing Lease

Darryl's Restaurant:
Greensboro, North Carolin- - - $521,400 -
=========== =========== ========== =======

Property in Which the Partnerhsip
has a 34.74% Interest as
Tenants-in-Common and has
Invested in Under a Direct
Financing Lease:

IHOP Restaurant:
Overland Park, Kansas - $335,374 $1,273,134 - -
=========== =========== ========== =======

Property in Which the Partnership
has a 85% Interest as
Tenants-in-Common and has
Invested in Under a Direct
Financing Lease:

Bennigan's Restaurant:
Fort Myers, Florida - - $831,741 - -
=========== =========== ========== =======

Property of Joint Venture
in Which the Partnership
has a 50% Interest
and has Invested in Under
a Direct Financing Lease:

5 & Diner Restaurant:
Melbourne, Florida - - 639,141 - -
=========== =========== ========== =======

Gross Amount at Which Life on Which
Carried at Close of Period (c) Depreciation in
- ------------------------------------------ Date Latest Income
Buildings and Accumulated of Con- Date Statement is
Land Improvements Total Depreciation struction Acquired Computed
- ------------- ----------- ----------- ----------- ------ ------- ------------

$399,885 $712,762 $1,112,647 $91,429 1993 02/97 (b)

177,440 270,985 448,425 96,441 1985 04/90 (b)

717,708 1,018,823 1,736,531 374,132 1989 12/89 (b)
773,627 908,171 1,681,798 333,494 1989 12/89 (b)
559,095 838,642 1,397,737 307,962 1989 12/89 (b)
670,916 837,317 1,508,233 290,805 1990 04/90 (b)

222,559 640,529 863,088 209,461 1989 07/89 (b)
203,159 413,221 616,380 139,325 1990 11/90 (b)

426,831 (f) 426,831 (d) 1997 12/97 (d)
366,992 759,788 1,126,780 76,115 1986 12/97 (b)

272,300 (f) 272,300 (d) 1990 08/90 (d)

150,804 373,558 524,362 133,859 1990 03/90 (b)
321,789 287,429 609,218 97,411 1985 11/90 (b)

83,542 400,791 484,333 138,410 1990 04/90 (b)

320,540 531,507 852,047 200,057 1988 09/89 (b)

98,259 372,536 470,795 4,138 1991 01/91 (h)

130,499 268,580 399,079 98,210 1988 01/90 (b)
119,533 236,219 355,752 86,376 1987 01/90 (b)
141,627 263,021 404,648 95,888 1986 01/90 (b)

391,157 720,027 1,111,184 248,125 1990 02/90 (b)
- ------------- ----------- ----------- -----------

$6,719,502 $10,239,615 $16,959,117 $3,162,184
============= =========== =========== ===========

$261,013 (f) $261,013 (d) 1974 06/97 (d)
============= ===========

$484,362 (f) $484,362 (d) 1989 01/90 (d)
============= ===========

$438,695 $450,432 $889,127 $146,977 1986 03/91 (b)
============= =========== =========== ===========

$138,382 $676,588 $814,970 $111,380 1996 01/96 (b)
============= =========== =========== ===========

$875,659 $1,389,366 $2,265,025 $139,061 1994 12/97 (b)
============= =========== =========== ===========

$678,890 $825,076 $1,503,966 $81,648 - 01/98 (b)
============= =========== =========== ===========

$438,972 $639,141 $1,078,113 $16,220 1998 04/98 (i)
============= =========== =========== ===========

$638,026 (f) $638,026 (d) - 06/98 (d)
============= ===========

$507,965 $889,080 $1,397,045 $68,040 - 09/98 (b)
============= =========== =========== ===========

$495,847 $799,469 $1,295,316 $31,967 1998 10/99 (b)
============= =========== =========== ===========

$685,578 $706,459 $1,392,037 $27,796 1998 10/99 (b)
============= =========== =========== ===========

$670,899 $879,237 $1,550,136 $33,276 1998 11/99 (b)
============= =========== =========== ===========

$664,944 $838,434 $1,503,378 $27,947 2000 01/00 (b)
============= =========== =========== ===========

(f) (f) (f) (e) 1980 12/89 (e)
(f) (f) (f) (e) 1982 08/95 (e)

- (f) (f) (e) 1997 12/97 (e)

(f) (f) (f) (e) 1990 11/90 (e)

- (f) (f) (d) 1990 08/90 (d)

- -------------

-
=============

- (f) (f) (d) 1989 01/90 (d)
=============

- (f) (f) (d) 1974 06/97 (d)
=============

$335,374 $1,273,134 (f) (d) - 01/98 (d)
============= ===========

- (f) (f) (d) - 06/98 (d)
=============

- (f) (f) (e) 1998 04/98 (e)
=============

CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)

NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2000

(a) Transactions in real estate and accumulated depreciation during 2000,
1999, and 1998, are summarized as follows:

Accumulated
Cost Depreciation
---------------------- ---------------------

Properties the Partnership has invested in Under
Operating leases:

Balance, December 31, 1997 $ 24,390,423 $ 3,327,334
Dispositions (2,244,493 ) (198,206 )
Depreciation expense -- 456,958
---------------------- ---------------------

Balance, December 31, 1998 22,145,930 3,586,086
Dispositions (3,818,459 ) (738,677 )
Depreciation -- 410,257
---------------------- ---------------------

Balance, December 31, 1999 18,327,471 3,257,666
Dispositions (1,839,149 ) (462,810 )
Reclassified from capital lease (h) 470,795 --
Depreciation -- 367,328
---------------------- ---------------------

Balance, December 31, 2000 $ 16,959,117 $ 3,162,184
====================== =====================

Property of Joint Venture in Which the Partnership
has a 36% Interest and has Invested in Under an
Operating Lease:

Balance, December 31, 1997 $ 261,013 $ --
Depreciation expense (d) -- --
---------------------- ---------------------

Balance, December 31, 1998 261,013 --
Depreciation expense (d) -- --
---------------------- ---------------------

Balance, December 31, 1999 261,013 --
Depreciation expense (d) -- --
---------------------- ---------------------

Balance, December 31, 2000 $ 261,013 $ --
====================== =====================

CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)

NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED
DEPRECIATION - CONTINUED

December 31, 2000

Accumulated
Cost Depreciation
--------------------- --------------------

Properties of Joint Venture in Which the Partnership
has a 3.9% Interest and has Invested in Under an
Operating Lease:

Balance, December 31, 1997 $ 484,362 $ --
Depreciation expense (d) -- --
--------------------- --------------------

Balance, December 31, 1998 484,362 --
Depreciation expense (d) -- --
--------------------- --------------------

Balance, December 31, 1999 484,362 --
Depreciation expense (d) -- --
--------------------- --------------------

Balance, December 31, 2000 $ 484,362 $ --
===================== ====================

Properties of Joint Venture in Which the Partnership
has a 14.46% Interest and has Invested in Under an
Operating Lease:

Balance, December 31, 1997 $ 889,127 $ 101,933
Depreciation expense -- 15,015
--------------------- --------------------

Balance, December 31, 1998 889,127 116,948
Depreciation expense -- 15,014
--------------------- --------------------

Balance, December 31, 1999 889,127 131,962
Depreciation expense -- 15,015
--------------------- --------------------

Balance, December 31, 2000 $ 889,127 $ 146,977
===================== ====================

CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)

NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED
DEPRECIATION - CONTINUED

December 31, 2000

Accumulated
Cost Depreciation
--------------------- ------------------ ---

Properties of Joint Venture in Which the Partnership
has a 64.29% Interest and has Invested in Under an
Operating Lease:

Balance, December 31, 1997 $ -- $ --
Acquisitions 1,397,045 --
Depreciation expense -- 8,769
---------------------- -------------------

Balance, December 31, 1998 1,397,045 8,769
Depreciation expense -- 29,636
---------------------- -------------------

Balance, December 31, 1999 1,397,045 38,405
Depreciation expense -- 29,635
---------------------- -------------------

Balance, December 31, 2000 $ 1,397,045 $ 68,040
====================== ===================

Properties in Which the Partnership has an 18%
Interest as Tenants-in-Common and has Invested in Under
an Operating Lease:

Balance, December 31, 1997 $ 814,970 $ 43,595
Depreciation expense -- 22,679
---------------------- -------------------

Balance, December 31, 1998 814,970 66,274
Depreciation expense -- 22,553
---------------------- -------------------

Balance, December 31, 1999 814,970 88,827
Depreciation expense -- 22,553
---------------------- -------------------

Balance, December 31, 1999 $ 814,970 $ 111,380
====================== ===================

CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)

NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED
DEPRECIATION - CONTINUED

December 31, 2000

Accumulated
Cost Depreciation
---------------------- --------------------

Properties in Which the Partnership has a 23.04%
Interest as Tenants-in-Common and has Invested in Under
an Operating Lease:

Balance, December 31, 1997 $ 2,265,025 $ 124
Depreciation expense -- 46,313
---------------------- --------------------

Balance, December 31, 1998 2,265,025 46,437
Depreciation expense -- 46,312
---------------------- --------------------

Balance, December 31, 1999 2,265,025 92,749
Depreciation expense -- 46,312
---------------------- --------------------

Balance, December 31, 2000 $ 2,265,025 $ 139,061
====================== ====================

Property in Which the Partnership has a 46.20%
Interest as Tenants-in-Common and has Invested in Under
an Operating Lease:

Balance, December 31, 1997 $ -- $ --
Acquisition 1,503,966 --
Depreciation expense -- 26,642
---------------------- --------------------

Balance, December 31, 1998 1,503,966 26,642
Depreciation expense -- 27,503
---------------------- --------------------

Balance, December 31, 1999 1,503,966 54,145
Depreciation expense -- 27,503
---------------------- --------------------

Balance, December 31, 2000 $ 1,503,966 $ 81,648
====================== ====================

CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)

NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED
DEPRECIATION - CONTINUED

December 31, 2000

Accumulated
Cost Depreciation
---------------------- --------------------

Property of Joint Venture in Which the Partnership has
a 50% Interest and has Invested in Under an Operating
Lease:

Balance, December 31, 1997 $ -- $ --
Acquisition 1,042,865 --
Depreciation expense -- 937
---------------------- --------------------

Balance, December 31, 1998 1,042,865 937
Reclassified to capital lease (g) (603,893 ) (937 )
Depreciation expense -- --
---------------------- --------------------

Balance, December 31, 1999 438,972 --
Reclassified to capital lease (i) 639,141 --
Depreciation expense -- 16,220
---------------------- --------------------

Balance, December 31, 2000 $ 1,078,113 $ 16,220
====================== ====================

Property in Which the Partnership has a 85% Interest as
Tenants-in-Common and has Invested in Under an Operating
Lease:

Balance, December 31, 1997 $ -- $ --
Acquisition 638,026 --
Depreciation expense -- --
---------------------- --------------------

Balance, December 31, 1998 638,026 --
Depreciation expense (d) -- --
---------------------- --------------------

Balance, December 31, 1999 638,026 --
Depreciation expense (d) -- --
---------------------- --------------------

Balance, December 31, 2000 $ 638,026 $ --
====================== ====================

CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)

NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED
DEPRECIATION - CONTINUED

December 31, 2000

Accumulated
Cost Depreciation
---------------------- --------------------

Property of Joint Venture in Which the Partnership has
a 80% Interest as Tenants-in-Common and has Invested in
Under an Operating Lease:

Balance, December 31, 1998 $ -- $ --
Acquisition 1,295,316 --
Depreciation expense -- 5,318
---------------------- --------------------

Balance, December 31, 1999 1,295,316 5,318
Depreciation expense -- 26,649
---------------------- --------------------

Balance, December 31, 2000 $ 1,295,316 $ 31,967
====================== ====================

Property in Which the Partnership has a 77% Interest as
Tenants-in-Common has Invested in Under an Operating Lease:

Balance, December 31, 1998 $ -- $ --
Acquisition 1,392,037 --
Depreciation expense -- 4,247
---------------------- --------------------

Balance, December 31, 1999 1,392,037 4,247
Depreciation expense -- 23,549
---------------------- --------------------

Balance, December 31, 2000 $ 1,392,037 $ 27,796
====================== ====================

Property in Which the Partnership has a 75% Interest as
Tenants-in-Common has Invested in Under an Operating
Lease:

Balance, December 31, 1998 $ -- $ --
Acquisition 1,550,136 --
Depreciation expense -- 3,968
---------------------- --------------------

Balance, December 31, 1999 1,550,136 3,968
Depreciation expense -- 29,308
---------------------- --------------------

Balance, December 31, 2000 $ 1,550,136 $ 33,276
====================== ====================

CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)

NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED
DEPRECIATION - CONTINUED

December 31, 2000

Accumulated
Cost Depreciation
---------------------- --------------------

Property in Which the Partnership has a 74% Interest as
Tenants-in-Common has Invested in Under an Operating
Lease:

Balance, December 31, 1999 $ -- $ --
Acquisition 1,503,378 --
Depreciation expense -- 27,947
---------------------- --------------------

Balance, December 31, 2000 $ 1,503,378 $ 27,947
====================== ====================

(b) Depreciation expense is computed for buildings and improvements based
upon estimated lives of 30 years.

(c) As of December 31, 2000, the aggregate cost of the Properties owned by
the Partnership and its consolidated joint venture, and the
unconsolidated joint ventures (including the two Properties held as
tenants-in-common) for federal income tax purposes was $19,834,603 and
$18,239,974, respectively. All of the leases are treated as operating
leases for federal income tax purposes.

(d) For financial reporting purposes, the portion of the lease relating to
the building has been recorded as a direct financing lease. The cost of
the building has been included in net investment in direct financing
leases; therefore, depreciation is not applicable.

(e) For financial reporting purposes, the lease for the land and building
has been recorded as a direct financing lease. The cost of the land and
building has been included in net investment in direct financing
leases; therefore, depreciation is not applicable.

(f) For financial reporting purposes, certain components of the lease
relating to land and building have been recorded as a direct financing
lease. Accordingly, costs relating to these components of this lease
are not shown.

(g) Effective September 24, 1999, the lease for this Property was amended
resulting in the reclassification of the building portion of the lease
as a capital lease.

(h) For financial reporting purposes, the undepreciated cost of the
Property in Chester, Pennsylvania, was written down to net realizable
value due to an impairment in value. The Partnership recognized the
impairment by recording an allowance for loss on assets in the amount
of $368,430 at December 31, 2000. The impairment represented the
difference between the Property's carrying value and the estimated net
realizable value of the Property at December 31, 2000. The cost of the
Property presented o this schedule is the gross amount at which the
Property was carried at December 31, 2000, excluding the allowance for
loss on assets.

CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)

NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED
DEPRECIATION - CONTINUED

December 31, 2000

(i) For financial reporting purposes, during 2000, the undepreciated cost
of the Property in Melbourne, Florida, was reduced to its estimated net
realizable value due to an impairment in value. The tenant of this
Property vacated the Property and ceased restaurant operations,
resulting in a reclassification of the building portion of the lease to
an operating lease. The building was recorded at net book value and
depreciated over its remaining estimated life of approximately 29
years.

EXHIBITS

EXHIBIT INDEX

Exhibit Number

3.1 Certificate of Limited Partnership of CNL Income Fund VI, Ltd.
(Included as Exhibit 3.3 to Registration Statement No.
33-23892 on Form S-11 and incorporated herein by reference.)

4.1 Certificate of Limited Partnership of CNL Income Fund VI, Ltd.
(Included as Exhibit 4.2 to Registration Statement No.
33-23892 on Form S-11 and incorporated herein by reference.)

4.2 Agreement and Certificate of Limited Partnership of CNL Income
Fund VI, Ltd. (Included as Exhibit 4.2 to Form 10-K filed with
the Securities and Exchange Commission on April 1, 1996, and
incorporated herein by reference.)

10.1 Management Agreement (Included as Exhibit 10.1 to Form 10-K
filed with the Securities and Exchange Commission on March 31,
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
From 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.)