<PAGE>

                                 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, 1999

                                       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
<PAGE>

                                     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 Property in Deland,
Florida, Liverpool, New York, Melbourne, Florida, and Bellevue, Nebraska. The
Partnership reinvested the net sales proceeds from the sales 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 addition, in January 2000, the
Partnership reinvested the majority of the net sales proceeds in a Property in
Niles, Illinois, as tenants-in-common with an affiliate of the General Partners.

     As a result of the above transactions, as of December 31, 1999, the
Partnership owned 41 Properties. The 41 Properties include six Properties owned
by joint ventures in which the Partnership is a co-venturer and eight Properties
owned with affiliates as tenants-in-common. During January 2000, the Partnership
reinvested the net sales proceeds from the sale of the Property in Sevierville,
Tennessee, in one Property in Niles, Illinois, as tenants-in-common, with an
affiliate of the General Partners. Generally, the Properties are leased on a
triple-net basis with the lessees responsible for all repairs and maintenance,
property taxes, insurance and utilities.

                                       1
<PAGE>

     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 "Termination
of 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.  All 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 $30,000 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, three or four
five-year renewal options subject to the same terms and conditions as the
initial lease.  Lessees of 36 of the Partnership's 41 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 October 1999, the Partnership reinvested the majority of the net
sales proceeds from the sales of the Properties in Walker Springs and Broadway,
Tennessee, in a Property located in Baytown, Texas and a Property in Round Rock,
Texas, each with affiliates of the General Partners, as tenants-in-common, as
described below in "Joint Venture and Tenancy in Common Arrangements".  In
addition, in November 1999, the Partnership reinvested a portion of the net
sales proceeds from the sale of the Property in Greeneville, Tennessee, in a
Property located in Dublin, California, with affiliates of the General Partners,
as tenants-in-common, also as described below in "Joint Venture and Tenancy in
Common Arrangements".  In addition, in January 2000, the Partnership invested in
a Baker's Square Property in Niles, Illinois, as tenants-in-common with
affiliates of the General Partners.  The lease terms for these Properties are
substantially the same as the Partnership's other leases, as described above.

                                       2
<PAGE>

Major Tenants

     During 1999, three lessees of the Partnership and its consolidated joint
venture, Golden Corral Corporation, Restaurant Management of S.C., Inc. and IHOP
Corp., each contributed more than ten percent of the Partnership's total rental
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 income from the five Properties owned by unconsolidated joint
venturers and eight Properties owned with affiliates of the General Partners as
tenants-in-common). As of December 31, 1999, Golden Corral Corporation was the
lessee under leases relating to five restaurants, Restaurant Management of S.C.,
Inc. was the lessee under leases relating to seven restaurants, and IHOP Corp.
was the lessee under leases relating to eight restaurants. It is anticipated
that, based on the minimum rental payments required by the leases, these three
lessees each will continue to contribute more than ten percent of the
Partnership's total rental income in 2000. 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 income in
1999 (including the Partnership's consolidated joint venture and the
Partnership's share of the rental income from the five Properties owned by
unconsolidated joint ventures in which the Partnership is a co-venturer and
eight Properties owned with affiliates of the General Partners as tenants-in-
common). In 2000, it is anticipated that these two Restaurant Chains each will
continue to account for more than ten percent of the total rental 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. No single tenant or group of affiliated tenants lease 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

                                       3
<PAGE>

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.,
and a Property in Ft. Myers, Florida, as tenants-in-common, with CNL Income Fund
XV, 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% and an 85 percent interest in the Properties in
Vancouver, Washington; Clinton, North Carolina; Overland Park, Kansas; Memphis,
Tennessee; and Ft. Myers, Florida, respectively.

     In addition to the above joint venture agreements, in 1999, the Partnership
entered into agreements to hold  Properties in Baytown, Texas; Round Rock,
Texas; and Dublin, California each as tenants-in-common with affiliates of the
General Partners.  The agreements provide for the Partnership and the affiliates
to share in the profits and losses of the Properties in proportion to each
party's percentage interest.  The Partnership owns an 80 percent, 77 percent,
and 75 percent interest in the Properties, respectively.

     In addition, in January 2000, the Partnership entered into an agreement to
hold a Baker's Square Property in Niles, Illinois, as tenants-in-common, with
affiliates 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.

                                       4
<PAGE>

Employees

     The Partnership has no employees.  The officers of CNL Realty Corporation
and the officers and employees of CNL American Properties Fund, Inc. ("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. (formerly CNL 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, 1999, the Partnership owned 41 Properties.  Of the 41
Properties, 27 are owned by the Partnership in fee simple, six are owned through
joint venture arrangements and eight 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, 1999 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, 1999.

<TABLE>
<CAPTION>
     State                                  Number of Properties
     ------                                 --------------------
     <S>                                    <C>
     California                                   1
     Florida                                      11
     Georgia                                      1
     Illinois                                     1
     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                             41
                                            =============
</TABLE>

     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, 1999, 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,
1999, the aggregate cost of the Properties owned by the

                                       5
<PAGE>

     Partnership (including its consolidated joint venture) and joint ventures
(including Properties owned through tenancy in common arrangements) for federal
income tax purposes was $14,104,900 and $10,163,639, respectively.

     The following table lists the Properties owned by the Partnership as of
December 31, 1999 by Restaurant Chain.

<TABLE>
<CAPTION>
        Restaurant Chain                      Number of Properties
        ----------------                      --------------------
<S>                                            <C>
        5 & Diner                                       1
        Arby's                                          1
        Bennigan's                                      1
        Bertucci's                                      1
        Burger King                                     1
        Captain D's                                     1
        Chevy's Fresh Mex                               1
        Church's                                        2
        Darryl's                                        1
        Denny's                                         2
        Golden Corral                                   5
        Hardee's                                        2
        IHOP                                            8
        Jack in the Box                                 1
        KFC                                             3
        Loco Lupe's Mexican Restaurant                  1
        Popeyes                                         4
        Shoney's                                        1
        Taco Bell                                       1
        Waffle House                                    3
                                              --------------------
        TOTAL PROPERTIES                               41
                                              ====================
</TABLE>

     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.

                                       6
<PAGE>

     At December 31, 1999, 1998, 1997, 1996 and 1995, the Properties were 100%,
95%, 98%, 100%, and 100% occupied, respectively. The following is a schedule of
the average rent per Property for the years ended December 31:

<TABLE>
<CAPTION>
                       1999                1998                1997                 1996                 1995
                 ---------------     ---------------     ---------------     ----------------     ----------------

<S>                <C>                 <C>                 <C>                 <C>                  <C>
Rental Revenues (1)   $3,417,147          $3,342,220          $3,139,283           $3,568,754           $3,431,074
Properties                    41                  42                  39                   42                   42
Average Rent per
   Property           $   83,345          $   79,577          $   80,494           $   84,970           $   81,692
</TABLE>

(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.

     The following is a schedule of lease expirations for leases in place as of
December 31, 1999 for the next ten years and thereafter.

<TABLE>
<CAPTION>
                                                                                            Percentage of
      Expiration                        Number                 Annual Rental                Gross Annual
         Year                          of Leases                  Revenues                  Rental Income
    --------------                   ------------            ------------------           ---------------
    <S>                              <C>                     <C>                           <C>
       2000                                    --                    $       --                        --
       2001                                    --                            --                        --
       2002                                    --                            --                        --
       2003                                     1                        54,000                      1.58%
       2004                                     3                       515,141                     15.04%
       2005                                     3                       314,814                      9.19%
       2006                                    --                            --                        --
       2007                                    --                            --                        --
       2008                                     3                       124,101                      3.62%
       2009                                     4                       208,521                      6.09%
       Thereafter                              27                     2,208,467                     64.48%
                                     ------------            ------------------           ---------------
       Total                                   41                    $3,425,044                    100.00%
                                     ============            ==================           ===============
</TABLE>

     Leases with Major Tenants.  The terms of each of the leases with the
Partnership's major tenants as of December 31, 1999 (see Item 1.  Business -
Major Tenants) are substantially the same as those described in Item 1. Business
- Leases.

     Restaurant Management of S.C., Inc. leases four Popeyes restaurants, two
Church's Fried Chicken restaurant and one other restaurant (formerly operated as
a Captain D's).  The initial term of each lease is 20 years (expiring between
2009 and 2010) and the average minimum base annual rent is approximately $49,600
(ranging from approximately $30,000 to $61,900).

     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 $96,700 (ranging from approximately $114,500 to $163,200).

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

                                       7
<PAGE>

regional chains, and restaurants in other well-known national chains, including
those offering different types of food and service.


Item 3.   Legal Proceedings

     On May 11, 1999, four limited partners in several CNL Income Funds served a
derivative and purported class action lawsuit filed April 22, 1999 against the
General Partners and APF in the Circuit Court of the Ninth Judicial Circuit of
Orange County, Florida, alleging that the General Partners breached their
fiduciary duties and violated provisions of certain of the CNL Income Fund
partnership agreements in connection with the proposed Merger.  The plaintiffs
are seeking unspecified damages and equitable relief.  On July 8, 1999, the
plaintiffs filed an amended complaint which, in addition to naming three
additional plaintiffs, includes allegations of aiding and abetting and
conspiring to breach fiduciary duties, negligence and breach of duty of good
faith against certain of the defendants and seeks additional equitable relief.
As amended, the caption of the case is Jon Hale, Mary J. Hewitt, Charles A.
                                      -------------------------------------
Hewitt, Gretchen M. Hewitt, Bernard J. Schulte, Edward M. and Margaret Berol
----------------------------------------------------------------------------
Trust, and Vicky Berol v. James M. Seneff, Jr., Robert A. Bourne, CNL Realty
----------------------------------------------------------------------------
Corporation, and CNL American Properties Fund, Inc., Case No. CIO-99-0003561.
----------------------------------------------------

     On June 22, 1999, a limited partner of several CNL Income Funds served a
purported class action lawsuit filed April 29, 1999 against the General Partners
and APF, Ira Gaines, individually and on behalf of a class of persons similarly
         ----------------------------------------------------------------------
situated, v. CNL American Properties Fund, Inc., James M. Seneff, Jr., Robert A.
--------------------------------------------------------------------------------
Bourne, CNL Realty Corporation, CNL Fund Advisors, Inc., CNL Financial
----------------------------------------------------------------------
Corporation a/k/a CNL Financial Corp., CNL Financial Services, Inc. and CNL
---------------------------------------------------------------------------
Group, Inc., Case NO. CIO-99-3796, in the Circuit Court of the Ninth Judicial
-----------
Circuit of Orange County, Florida, alleging that the General Partners breached
their fiduciary duties and that APF aided and abetted their breach of fiduciary
duties in connection with the proposed Merger. The plaintiff is seeking
unspecified damages and equitable relief.

     On September 23, 1999, Judge Lawrence Kirkwood entered an order
consolidating the two cases under the caption In re: CNL Income Funds
                                              -----------------------
Litigation, Case No. 99-3561.  Pursuant to this order, the plaintiffs in these
----------------------------
cases filed a consolidated and amended complaint on November 8, 1999.  On
December 22, 1999, the General Partners and CNL Group, Inc. filed motions to
dismiss and motions to strike.  On December 28, 1999, APF and CNL Fund Advisors,
Inc. filed motions to dismiss.  On March 6, 2000, all of the defendants filed a
Joint Notice of Filing Form 8-K Reports and Suggestion of Mootness.


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, 2000, there were 2,978 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 1999, 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.

                                       8
<PAGE>

     The following table reflects, for each calendar quarter, the high, low and
average sales prices for transfers of Units during 1999 and 1998 other than
pursuant to the Plan, net of commissions.

<TABLE>
<CAPTION>
                                                  1999 (1)                                      1998 (1)
                                ------------------------------------------    ------------------------------------------
                                    High            Low          Average          High            Low          Average
                                -----------    -----------    ------------    -----------     ---------    -------------
<S>                               <C>            <C>            <C>             <C>             <C>          <C>
     First Quarter                     $475           $475            $475           $475          $475             $475
     Second Quarter                     475            418             466            475           442              468
     Third Quarter                      475            260             429            485           399              464
     Fourth Quarter                     475            386             434            475           410              458
</TABLE>


(1)  A total of 592 3/4 and 768 Units were transferred other than pursuant to
     the Plan for the years ended December 31, 1999 and 1998, 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, 1999 and 1998, the Partnership declared
cash distributions of $3,150,000 and $3,220,000, respectively, to the Limited
Partners. Distributions for 1998 include $70,000 declared as a special
distribution to the Limited Partners which represented cumulative excess
operating reserves. No amounts distributed to partners for the years ended
December 31, 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. No distributions have
been made to the General Partners to date. As indicated in the chart below,
these distributions were declared at the close of each of the Partnership's
calendar quarters. These amounts include monthly distributions made in arrears
for the Limited Partners electing to receive distributions on this basis.

<TABLE>
<CAPTION>
        Quarter Ended               1999                1998
        ----------------      ---------------     ---------------
        <S>                     <C>                 <C>
        March 31                     $787,500            $787,500
        June 30                       787,500             787,500
        September 30                  787,500             787,500
        December 31 (1)               787,500             857,500
</TABLE>

(1)  Includes a special distribution to Limited Partners of $70,000, which
     represented cumulative excess operating reserves, for the quarter ended
     December 31, 1998.

     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


<TABLE>
<CAPTION>
                                  1999                1998                1997               1996               1995
                            -----------------   -----------------   ----------------   ----------------   -----------------
Year ended December 31:
<S>                           <C>                 <C>                <C>                <C>                 <C>
  Revenues (1)                    $ 3,461,440         $ 3,370,532        $ 3,456,406        $ 3,565,493         $ 3,438,286
  Net income (2)                    3,510,474           3,020,881          2,899,882          2,803,601           2,861,381
  Cash distributions
   declared (3)                     3,150,000           3,220,000          3,150,000          3,220,000           3,150,000
  Net income per Unit (2)               49.67               42.75              41.06              39.65               40.47
  Cash distributions
   declared per Unit (3)                45.00               46.00              45.00              46.00               45.00
</TABLE>

                                       9
<PAGE>

<TABLE>
<S>                               <C>                 <C>                <C>                <C>                 <C>
At December 31:
  Total assets                    $30,120,859         $29,655,896        $29,993,069        $30,129,286         $30,442,314
  Partners' capital                28,955,604          28,595,130         28,794,249         29,044,367          29,460,766
</TABLE>

(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, 1997 and 1996, includes
     provision for loss on land and building of $263,186 and $77,023,
     respectively.  In addition, net income for the years ended December 31,
     1997, 1996, and 1995, includes $79,777, $1,706 and $7,370, respectively,
     from a loss on sale of land and buildings.  Net income for the years ended
     December 31, 1999, 1998, 1997, and 1996, also includes $848,303, $345,122,
     $626,804, and $103,283, 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.

     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, 1999, the Partnership owned 41 Properties, either directly or
indirectly through joint venture or tenancy in common arrangements.

Capital Resources

     During the years ended December 31, 1999, 1998, and 1997, 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 $3,204,934, $3,243,660, and $3,156,041, respectively.  The decrease
in cash from operations during 1999, as compared to 1998, and the increase
during 1998, as compared to 1997, 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 has agreed to
pay the Partnership the remaining balance due of approximately $55,800 in three
remaining annual installments through 2002.  At December 31, 1999, the tenant
was in arrears for an additional $16,800.  The Partnership has provided an
allowance for doubtful accounts of the entire amount due from the tenant.

     In February 1997, the Partnership reinvested the net sales proceeds, from
the 1996 sale of its Property in Dallas, Texas, along with additional funds, in
a Bertucci's Property located in Marietta, Georgia, for a total cost of
approximately $1,112,600.  The transaction relating to the sale of the Property
in Dallas, Texas and the reinvestment of the net sales proceeds qualified as a
like-kind exchange transaction for federal income tax purposes.

     In January 1997, Show Low Joint Venture, in which the Partnership owns a 36
percent interest, sold its Property to the tenant for $970,000, resulting in a
gain to the joint venture of approximately $360,000 for financial reporting
purposes.  The Property was originally contributed to Show Low Joint Venture in
July 1990 and had a total cost of approximately $663,500, excluding acquisition
fees and miscellaneous acquisition expenses; therefore, the joint venture sold
the Property for approximately $306,500 in excess of its original purchase
price.  In June

                                       10
<PAGE>

1997, Show Low Joint Venture reinvested $782,413 of the net sales proceeds in a
Property in Greensboro, North Carolina.  As of December 31, 1999, the
Partnership had received approximately $70,000 representing a return of capital
for its prorata share of the uninvested net sales proceeds.

     In July 1997, the Partnership sold the Property in Whitehall, Michigan, to
an unrelated third party for $665,000 and received net sales proceeds of
$626,907, resulting in a loss of $79,777 for financial reporting purposes, as
described below in "Results of Operations."  The net sales proceeds were
reinvested in a Property in Overland Park, Kansas, with affiliates of the
General Partners as tenants-in-common, in January 1998.  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, 1999, the Partnership
owned a 34.74% interest in this Property.

     In addition, in July 1997, the Partnership sold its Property in Naples,
Florida, to an unrelated third party for $1,530,000 and received net sales
proceeds of $1,477,780, resulting in a gain of $186,550 for financial reporting
purposes.  This Property was originally acquired by the Partnership in December
1989 and had a cost of approximately $1,083,900, excluding acquisition fees and
miscellaneous acquisition expenses; therefore, the Partnership sold the Property
for approximately $393,900 in excess of its original purchase price.  In
December 1997, the Partnership reinvested the majority of the net sales proceeds
in an IHOP Property in Elgin, Illinois, for a total cost of approximately
$1,484,100.  A portion of the transaction, relating to the sale of the Property
in Naples, Florida, and the reinvestment of the net sales proceeds, qualified as
a like-kind exchange transaction for federal income tax purposes.  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 addition, in July 1997, the Partnership sold its Property in
Plattsmouth, Nebraska, to the tenant for $700,000 and received net sales
proceeds of $697,650, resulting in a gain of $156,401 for financial reporting
purposes.  This Property was originally acquired by the Partnership in January
1990 and had a cost of approximately $561,000, excluding acquisition fees and
miscellaneous acquisition expenses; therefore, the Partnership sold the Property
for approximately $136,700 in excess of its original purchase price.  In January
1998, the Partnership reinvested the net sales proceeds 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, 1999, the Partnership owned a 46.2% 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 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, 1999,
included $3,437 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
agreed to fund $125,000 in renovation costs.  The renovations were completed in
October 1997, at which time payments of rent commenced.

     In September 1997, the Partnership sold its Property in Venice, Florida, to
an unrelated third party, for $1,245,000 and received net sales proceeds of
$1,201,648, resulting in a gain of $283,853 for financial reporting purposes.
This Property was originally acquired by the Partnership in August 1989 and had
a cost of approximately $1,032,400, excluding acquisition fees and miscellaneous
acquisition expenses; therefore, the Partnership sold the Property for
approximately $169,200 in excess of its original purchase price.  In December
1997, the Partnership reinvested the majority of the net sales proceeds in an
IHOP Property in Manassas, Virginia, for a total cost of approximately
$1,126,800.  A portion of the transaction relating to the sale of the Property
in Venice, Florida, and the reinvestment of the net sales proceeds qualified as
a like-kind exchange transaction for federal income tax purposes.  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 October 1997, the Partnership and an affiliate, as tenants-in-common,
sold the Property in Yuma, Arizona, in which the Partnership owned a 51.67%
interest, for a total sales price of $1,010,000 and received net sales proceeds
of $982,025, resulting in a gain to the tenancy -in- common of approximately
$128,400 for financial

                                       11
<PAGE>

reporting purposes.  The Property was originally acquired in July 1994 and had a
total cost of approximately $861,700, excluding acquisition fees and
miscellaneous acquisition expenses; therefore, the Property was sold for
approximately $120,300 in excess of its original purchase price.  The
Partnership received approximately $455,000, representing a return of capital
for its prorata share of the net sales proceeds.  In December 1997, the
Partnership reinvested the amounts received, in a Property in Vancouver,
Washington, as tenants in common with affiliates of the General Partners.  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, 1999, the Partnership owned a 23.04% interest in this Property.  The
transaction relating to the sale of the Property in Yuma, Arizona and the
reinvestment of the net sales proceeds qualified as a like-kind exchange
transaction for federal income tax purposes.

     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, 1999, 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, 1999, the
Partnership had contributed an additional $44,120 for such construction costs.
As of December 31, 1999, 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.

                                       12
<PAGE>

     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.  The General Partners believe a portion of
the transaction relating to the sales of the 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 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.

     None of the Properties owned by the Partnership, or the joint ventures or
tenancy in common arrangement 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,
certificates of deposit and money market accounts 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, 1999, the
Partnership had $2,125,493 invested in such short-term investments as compared
to $1,170,686 at December 31, 1998.  The increase in cash and cash equivalents
during 1999 was primarily due to the receipt of approximately $1,168,300 in net
sales proceeds from the sale of the Property in Sevierville, Tennessee, in June
1999, which is being held at December 31, 1999, pending reinvestment in an
additional Property.  For the year ending December 31, 1999, the average
interest rate earned on the rental income deposited in demand deposit accounts
at commercial banks was approximately 2.60% annually.  The funds remaining at
December 31, 1999, after payment of distributions and other liabilities, will be
used to invest in an additional Property as described above and 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.

                                       13
<PAGE>

     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, $3,220,000, and $3,150,000 for the years ended
December 31, 1999, 1998, and 1997, respectively.  This represents distributions
of $45, $46, and $45 per Unit for  the years ended December 31, 1999, 1998, and
1997, respectively.  No amounts distributed to the Limited Partners for the
years ended December 31, 1999, 1998, and 1997, are required to be or have been
treated by the Partnership as a return of capital for purposes of calculating
the Limited Partners' return on their adjusted capital contributions.  The
Partnership intends to continue to make distributions of cash available for
distribution to the Limited Partners on a quarterly basis.

     During 1999, 1998, and 1997, affiliates of the General Partners incurred on
behalf of the Partnership $157,964, $103,157, and $82,503, respectively, for
certain operating expenses.  As of December 31, 1999 and 1998, the Partnership
owed $65,220 and $19,403, respectively, to affiliates for such amounts and
accounting and administrative services.  Other liabilities of the Partnership,
including distributions payable increased to $946,165 at December 31, 1999, from
$896,414 at December 31, 1998.  The increase in other liabilities was primarily
attributable to the Partnership accruing transaction costs relating to the
proposed merger with APF, as described in "Termination of Merger".  The increase
during 1999 was partially offset by a decrease in distributions payable as a
result of the Partnership accruing a special distribution payable to the Limited
Partners of $70,000 at December 31, 1998.  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 1997, the Partnership and its consolidated joint venture, Caro Joint
Venture, owned and leased 39 wholly owned Properties (including three Properties
which were sold in 1997), during 1998, the Partnership owned and leased 36
wholly owned Properties (including four Properties which were sold in 1998) and
during 1999, the Partnership owned and leased 32 Properties (including four
Properties which were sold during 1999).  In addition, during 1997, the
Partnership was a co-venturer in three separate joint ventures that owned and
leased a total of five Properties (including one Property in Show Low, Arizona,
which was sold in January 1997) and during 1998 and 1999, the Partnership was a
co-venturer in five separate joint ventures that owned and leased a total of
five Properties.  During 1997, the Partnership also owned and leased four
Properties with affiliates as tenants-in-common (including one Property in Yuma,
Arizona, which was sold in October, 1997), 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.  As of December 31, 1999, the Partnership owned, either directly, as
tenants-in-common with affiliates, or through joint venture arrangements, 41
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 $30,000 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, 1999, 1998, and 1997, the Partnership
and its consolidated joint venture earned $2,675,958, $2,823,377, and
$2,897,402, 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 1999 and 1998, each as
compared to the previous year, by approximately $324,600 and $215,500,
respectively, primarily as a result of the sales of Properties during 1999, 1998
and 1997, 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 1999 and 1998 sales at Properties in joint ventures or
in Properties with affiliates of the General Partners, as tenants-in-common.
The decrease during 1998, as compared to 1997, was partially offset by an
increase of approximately

                                       14
<PAGE>

$293,800 in rental and earned income due to the fact that the Partnership
reinvested the net sales proceeds from the 1997 sales of two Properties in two
IHOP Properties in Elgin, Illinois and Manassas, Virginia in December 1997.

     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 and 1998, each as
compared to the previous year, was partially offset by the fact that during 1999
and 1998, the Partnership's consolidated joint venture collected and recognized
as income past due rental amounts of approximately $33,000 and $36,000,
respectively, for which the joint venture had previously established an
allowance for doubtful accounts.  The decrease in rental income was less in 1997
than in 1998,  partially due to the fact that the consolidated joint venture
established an allowance for doubtful accounts for rental amounts unpaid by the
tenant of the Property in Caro, Michigan totaling approximately $84,500 during
1997.  During 1997, the Partnership established an allowance for doubtful
accounts totaling approximately $107,100 for rental amounts relating to the
Property located in Melbourne, Florida, due to the fact that the tenant vacated
the Property in October 1997.  The Partnership sold this Property in February
1998, as described above in "Capital Resources".  No such allowance was
established during 1999 or 1998.

     Rental and earned income was also less in 1997 than 1998 because the
Partnership increased its allowance for doubtful accounts during 1997 by
approximately $40,500 for rental amounts relating to the Hardee's Property
located in Greensburg, Indiana, due to financial difficulties the tenant was
experiencing.  No such allowance was recorded in 1999 or 1998.  A new tenant
began operating this Property in 1997 after it was renovated into an Arby's
restaurant.

     The decrease in rental and earned income for 1999 as compared to 1998, was
partially offset by, and the decrease during 1998, as compared to 1997, was
partially attributable to, 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.

     The decrease in rental and earned income during 1999 and 1998, each as
compared to 1997, was offset by the fact that the Partnership collected and
recorded as income approximately $18,600 during each year, 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."

     For the years ended December 31, 1999, 1998, and 1997, the Partnership also
earned $149,981, $156,676, and $147,437, respectively, in contingent rental
income.  Contingent rental income was higher during 1998 primarily due to
increases during 1998, in gross sales relating to certain Properties whose
leases require the payment of contingent rent.

     In addition, for the years ended December 31, 1999, 1998, and 1997, the
Partnership earned $524,643, $323,105, and $280,331, 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 1999, as
compared to 1998, was partially due to the reinvestment of net sales proceeds
received from the sales of three Properties sold during 1999, in additional
Properties in Baytown and Round Rock, Texas and Dublin, California, each as
tenants-in-common with affiliates of the General Partners.  Net income earned
during 1999 and 1998 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.  The increase in net income earned by joint
ventures during 1998, as compared to 1997, was partially offset by the fact that
in January 1997, Show Low Joint Venture, in which the Partnership owns a 36
percent interest, recognized a gain of approximately $360,000 for financial
reporting purposes as a result of the sale of its Property.  Show Low Joint
Venture reinvested the majority of the net sales proceeds in a

                                       15
<PAGE>

replacement Property in June 1997. In addition, in October 1997, the Partnership
and an affiliate, as tenants-in-common, sold the Property in Yuma, Arizona, and
recognized a gain of approximately $128,400 for financial reporting purposes, as
described above in "Capital Resources." The Partnership owned a 51.67% interest
in the Property in Yuma, Arizona, held as tenants-in-common with an affiliate.
The Partnership reinvested its portion of the net sales proceeds in a Property
in Vancouver, Washington, in December 1997, as described above in "Capital
Resources."

     During the year ended December 31, 1999, three of the Partnership's
lessees, Golden Corral Corporation, Restaurant Management of S.C., Inc., and
IHOP Corp., each contributed more than ten percent of the Partnership's total
rental income (including rental income from the Partnership's consolidated joint
venture and the Partnership's share of the rental income from the Properties
owned by five unconsolidated joint ventures in which the Partnership is a co-
venturer and eight Properties owned with affiliates of the General Partners as
tenants-in-common).  As of December 31, 1999, Golden Corral Corporation was the
lessee under leases relating to five restaurants, Restaurant Management of S.C.,
Inc. was the lessee under leases relating to seven restaurants and IHOP Corp.
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
three lessees each will continue to contribute more than ten percent of the
Partnership's total rental income during 2000.  In addition, two Restaurant
Chains, Golden Corral and IHOP, each accounted for more than ten percent of the
Partnership's total rental income during the year ended December 31, 1999
(including the Partnership's consolidated joint venture and the Partnership's
share of the rental income from the Properties owned by five unconsolidated
joint ventures in which the Partnership is a co-venturer and eight Properties
owned with affiliates of the General Partners as tenants-in-common).  In 2000,
it is anticipated that these Restaurant Chains each will continue to account for
more than ten percent of the Partnership's total rental 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 1999, 1998, and 1997, the Partnership also earned
$147,908, $110,502, and $119,961, respectively, in interest and other income.
The increase in interest and other income during the year ended December 31,
1999, as compared to the year ended December 31, 1998, was primarily
attributable to 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
$799,269, $694,773, and $840,365 for the years ended December 31, 1999, 1998,
and 1997, respectively.  The increase in operating expenses during 1999, as
compared to 1998, was primarily due to, and the decrease during 1998, as
compared to 1997, was partially offset by, the fact that the Partnership
incurred $174,233 and $20,211 in transaction costs during 1999 and 1998,
respectively, relating to the General Partners retaining financial and legal
advisors to assist them in evaluating and negotiating the proposed merger with
APF as described in "Termination of Merger".  The increase during 1999, as
compared to 1998, was partially offset by, and the decrease during 1998, as
compared to 1997, was partially attributable to, a decrease in depreciation
expense due to sales of several Properties in 1999 and 1998.

     The decrease in operating expenses during 1998, as compared to 1997, was
partially due to the fact that the Partnership recorded approximately $122,400
in bad debt expense and approximately $19,400 in real estate tax expense during
1997 for the Property located in Melbourne, Florida, due to the fact that the
tenant vacated the Property in October 1997.  The Partnership sold this Property
in February 1998, as described above in "Capital Resources."  In addition,
during 1997, the Partnership's consolidated joint venture recorded bad debt
expense and real estate tax expense of approximately $26,200 relating to the
Property located in Caro, Michigan, representing past due rental and other
amounts.  No such bad debt expense and real estate tax expense were recorded
during the years ended December 31, 1999 and 1998 due to the fact that the
tenant has been making rental payments in accordance with the terms of its lease
agreement.

     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.  As a result of the sales of the Properties in Naples, Florida;
Plattsmouth, Nebraska and Venice, Florida, as described above in "Capital
Resources," the Partnership recognized a gain of $626,804 during 1997 for
financial reporting

                                       16
<PAGE>

purposes. The gain for 1997 was partially offset by a loss of $79,777 for
financial reporting purposes, resulting from the July 1997 sale of the Property
in Whitehall, Michigan, as described above in "Capital Resources."

     During the year ended December 31, 1997, the Partnership recorded a
provision for loss on land and building in the amount of $104,947, for financial
reporting purposes for the Property in Liverpool, New York.  This lease was
terminated in 1996.  The allowance at December 31, 1997 represented the
difference between the Property's carrying value at December 31, 1997 and the
net realizable value of the Property based on the net sales proceeds received in
February 1998 from the sale of the Property.  No such provision was recorded
during the years ended December 31, 1999 and 1998.

     During the year ended December 31, 1997, the Partnership established an
allowance for loss on land and an allowance for impairment in the carrying value
of the net investment in direct financing lease for its Property in Melbourne,
Florida, in the amount of $158,239.  The tenant of this Property vacated the
Property in October 1997 and ceased making rental payments.  The allowance
represented the difference between the Property's carrying value at December 31,
1997 and the net sales proceeds received in February 1998 from the sale of the
Property, as described above in "Capital Resources."  No such provision was
recorded during the years ended December 31, 1999 and 1998.

     The Partnership's leases as of December 31, 1999, 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.

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.

Overview of Year 2000 Problem

     The year 2000 problem concerns the inability of information and non-
information technology systems to properly recognize and process date-sensitive
information beyond January 1, 2000.  The failure to accurately recognize the
year 2000 could result in a variety of problems from data miscalculations to the
failure of entire systems.

Status

     The Partnership generally does not directly own information technology
systems.  The General Partners and their affiliates generally provide all
services requiring the use of information and some non-information technology
systems.  In early 1998, affiliates of the General Partners formed a year 2000
committee ("the Y2K Team") that assessed the readiness of any systems that are
date sensitive and completed upgrades for the hardware equipment and software
that was not year 2000 compliant, as necessary.  The cost for these upgrades and
other remedial measures is the responsibility of the General Partners and their
affiliates.  The General Partners and their affiliates do not expect that the
Partnership will incur any costs in connection with the year 2000 remedial
measures.  In addition, the Y2K Team requested and received certifications of
compliance from other companies with which the General Partners, their
affiliates, and the Partnership have material third party relationships.

     In assessing the risks presented by the year 2000 problem, the Y2K Team
identified potential worst case

                                       17
<PAGE>

scenarios involving the future of the information and non-information technology
systems used by the Partnership's transfer agent, financial institutions and
tenants. As of January 14, 2000, the General Partners and their affiliates have
tested the information and non-information technology systems used by the
Partnership and have not experienced material disruption or other significant
problems. In addition, as of the same date, the General Partners are not aware
of any material year 2000 problems relating to information and non-information
technology systems of third parties with which the Partnership maintains
material relationships, including those of the Partnership's transfer agent,
financial institutions and tenants. In addition, in the Partnership's
interactions with its transfer agent, financial institutions and tenants, the
systems of these third parties have functioned normally. Until the Partnership's
first distribution in 2000 and the delivery of the information by the transfer
agent to stockholders in early 2000, the General Partners will continue to
monitor the year 2000 compliance of the transfer agent. In addition, the General
Partners will continue to monitor the systems used by the Partnership and to
maintain contact with third parties with which the Partnership has material
relationships with respect to year 2000 compliance and any year 2000 issues that
may arise at a later date. The General Partners will develop contingency plans
relating to ongoing year 2000 issues at the time that such issues are identified
and such plans are deemed necessary.

     Based on the information provided to the Y2K Team, the upgrades and
remedial measures by the General Partners and their affiliates, and the normal
functioning to date of information and non-information technology systems used
by the Partnership and those third parties, the General Partners do not foresee
significant risks associated with its year 2000 compliance at this time. In
addition, the General Partners and their affiliates do not expect to incur any
additional costs in connection with the year 2000 remedial efforts. However,
there can be no assurance that the General Partners and their affiliates or any
third parties will not have ongoing year 2000 issues that may have adverse
effects on the Partnership.


Item 7A.   Quantitative and Qualitative Disclosures About Market Risk

     Not applicable.

Item 8.  Financial Statements and Supplementary Data

                                       18
<PAGE>

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

                                   CONTENTS
                                   --------

                                                      Page
                                                      ----

Report of Independent Certified Public Accountants      20

Financial Statements:

  Balance Sheets                                        21

  Statements of Income                                  22

  Statements of Partners' Capital                       23

  Statements of Cash Flows                              24

  Notes to Financial Statements                         26

                                       19
<PAGE>

              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, 1999
and 1998, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 1999 in conformity with accounting
principles generally accepted in the United States.  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 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 the opinion expressed above.



/s/ PricewaterhouseCoopers LLP


Orlando, Florida
February 4, 2000, except for Note 11 for which the date is March 1, 2000

                                       20
<PAGE>

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

                                BALANCE SHEETS
                                --------------

<TABLE>
<CAPTION>
                                                                               December 31,
                                                                     1999                       1998
                                                             ------------------        ---------------------
<S>                                                          <C>                       <C>
              ASSETS
              ------

Land and buildings on operating leases, less
 accumulated depreciation                                           $15,069,805                  $18,559,844

Net investment in direct financing leases                             3,864,455                    3,929,152
Investment in joint ventures                                          8,377,455                    5,021,121
Cash and cash equivalents                                             2,125,493                    1,170,686
Receivables, less allowance for doubtful
 accounts of $240,497 and $323,813, respectively                        134,477                      150,912

Due from related parties                                                 19,111                           --
Prepaid expenses                                                          2,847                          949
Lease costs, less accumulated amortization of
 $8,831 and $7,181, respectively                                          8,869                       10,519

Accrued rental income, less allowance for
 doubtful accounts of $47,718 and $38,944,                              491,616                      785,982
 respectively

Other assets                                                             26,731                       26,731
                                                             ------------------        ---------------------

                                                                    $30,120,859                  $29,655,896
                                                             ==================        =====================

LIABILITIES AND PARTNERS' CAPITAL
-------------------------------------------------

Accounts payable                                                    $   131,093                  $     8,173
Accrued and escrowed real estate taxes payable                           11,572                        2,500
Due to related parties                                                   65,220                       19,403
Distributions payable                                                   787,500                      857,500
Rents paid in advance and deposits                                       16,000                       28,241
                                                             ------------------        ---------------------
    Total liabilities                                                 1,011,385                      915,817

Minority interest                                                       153,870                      144,949

Partners' capital                                                    28,955,604                   28,595,130
                                                             ------------------        ---------------------

                                                                    $30,120,859                  $29,655,896
                                                             ==================        =====================
</TABLE>

                See accompanying notes to financial statements

                                       21
<PAGE>

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

                             STATEMENTS OF INCOME
                             --------------------

<TABLE>
<CAPTION>
                                                                                     Year Ended December 31,
                                                                           1999             1998              1997
                                                                        ----------       ----------        ----------
<S>                                                                     <C>              <C>               <C>
Revenues:
  Rental income from operating leases                                   $2,226,183       $2,520,346        $2,465,817
  Adjustments to accrued rental income                                      (8,774)        (167,227)          (17,548)
  Earned income from direct financing leases                               458,549          470,258           449,133
  Contingent rental income                                                 149,981          156,676           147,437
  Interest and other income                                                147,908          110,502           119,961
                                                                        ----------       ----------        ----------
                                                                         2,973,847        3,090,555         3,164,800
                                                                        ----------       ----------        ----------
Expenses:
  General operating and administrative                                     158,011          160,358           156,847
  Professional services                                                     45,076           32,400            25,861
  Bad debt expense                                                              --           12,854           131,184
  Real estate taxes                                                             --               --            43,676
  State and other taxes                                                     10,042           10,392             8,969
  Depreciation and amortization                                            411,907          458,558           473,828
  Transaction costs                                                        174,233           20,211                --
                                                                        ----------       ----------        ----------
                                                                           799,269          694,773           840,365
                                                                        ----------       ----------        ----------
Income Before Minority Interest in Income of Consolidated
  Joint Venture, Equity in Earnings of
  Unconsolidated Joint Ventures, Gain on  Sale of
  Land and Buildings and Net Investment in Direct
  Financing Leases, and Provision for Loss on Land
  and Building and Impairment in Carrying Value of
  Net Investment in Direct Financing Lease                               2,174,578        2,395,782         2,324,435

Minority Interest in Income of Consolidated Joint Venture                  (37,050)         (43,128)           11,275

Equity in Earnings of Unconsolidated Joint Ventures                        524,643          323,105           280,331

Gain on Sale of Land and Buildings and Net
  Investment in Direct Financing Leases                                    848,303          345,122           547,027

Provision for Loss on Land and Buildings and
  Impairment in Carrying Value of Net Investment in
  Direct Financing Lease                                                        --               --          (263,186)
                                                                        ----------       ----------        ----------
Net Income                                                              $3,510,474       $3,020,881        $2,899,882
                                                                        ==========       ==========        ==========
Allocation of Net Income:
  General partners                                                      $   33,908       $   28,327        $   25,353
  Limited partners                                                       3,476,566        2,992,554         2,874,529
                                                                        ----------       ----------        ----------

                                                                        $3,510,474       $3,020,881        $2,899,882
                                                                        ==========       ==========        ==========

Net Income Per Limited Partner Unit                                     $    49.67       $    42.75        $    41.06
                                                                        ==========       ==========        ==========

Weighted Average Number of Limited Partner Units
Outstanding                                                                 70,000           70,000            70,000
                                                                        ==========       ==========        ==========
</TABLE>

                      See accompanying notes to financial statements.

                                       22
<PAGE>

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

                        STATEMENTS OF PARTNERS' CAPITAL
                        -------------------------------

                 Years Ended December 31, 1999, 1998 and 1997

<TABLE>
<CAPTION>
                                          General Partners                                Limited Partners
                                   ----------------------------   -----------------------------------------------------------------
                                                    Accumulated                                        Accumulated     Syndication
                                   Contributions     Earnings     Contributions     Distributions        Earnings          Costs
                                   -------------    -----------   -------------     -------------     ------------    -------------
<S>                                <C>              <C>           <C>              <C>                <C>             <C>
Balance, December 31, 1996               $ 1,000      $ 203,010     $ 29,044,367    $ (22,434,226)    $ 20,289,583    $ (4,015,000)

 Distributions to limited
   partners ($45.00 per
   limited partner unit)                      --             --               --       (3,150,000)              --              --
 Net Income                                   --         25,353               --               --        2,874,529              --
                                         -------      ---------     ------------    -------------     ------------    ------------

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

 Distributions to limited
   partners ($46.00 per
   limited partner unit)                      --             --               --       (3,220,000)              --              --

 Net income                                   --         28,327               --               --        2,992,554              --
                                         -------      ---------     ------------    -------------     ------------    ------------

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

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

Balance, December 31, 1999               $ 1,000      $ 290,598     $ 35,000,000    $ (31,954,226)    $ 29,633,232    $ (4,015,000)
                                         =======      =========     ============    =============     ============    ============

<CAPTION>
                                             Total
                                          -----------
<S>                                       <C>
Balance, December 31, 1996                $29,044,367

 Distributions to limited
   partners ($45.00 per
   limited partner unit)                   (3,150,000)

 Net Income                                 2,899,882
                                          -----------

Balance, December 31, 1997                 28,794,249

 Distribution to limited
   partners ($46.00 per
   limited partner unit)                   (3,220,000)

 Net income                                 3,020,881
                                          -----------

Balance, December 31, 1998                 28,595,130

 Distributions to limited
   partners ($45.00 per
   limited partner unit)                   (3,150,000)

 Net income                                 3,510,474
                                          -----------

Balance, December 31, 1999                $28,955,604
                                          ===========
</TABLE>

                See accompanying notes to financial statements.

                                       23
<PAGE>

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

                           STATEMENTS OF CASH FLOWS
                           ------------------------

<TABLE>
<CAPTION>
                                                                             Year Ended December 31,
                                                              1999                    1998                     1997
                                                      ------------------      ------------------       ------------------
<S>                                                   <C>                     <C>                      <C>
Increase ( Decrease) in Cash and Cash Equivalents:

Cash Flows from Operating Activities:
 Cash received from tenants                                  $ 2,817,707             $ 3,092,644              $ 3,097,751
 Distributions from unconsolidated joint ventures                483,152                 328,721                  144,016
 Cash paid for expenses                                         (227,913)               (270,339)                (180,530)
 Interest received                                               131,988                  92,634                   94,804
                                                      ------------------      ------------------       ------------------
    Net cash provided by operating activities                  3,204,934               3,243,660                3,156,041
                                                      ------------------      ------------------       ------------------

Cash Flows from Investing Activities:
 Proceeds from sale of land and buildings                      4,316,145               2,832,253                4,003,985
 Additions to land and buildings on operating
  leases                                                              --                (125,000)              (2,666,258)
 Investment in direct financing leases                                --                      --               (1,057,282)
 Investment in joint ventures                                 (3,314,843)             (3,896,598)                (521,867)
 Return of capital from joint ventures                                --                      --                  524,975
 Decrease in restricted cash                                          --                 697,650                  279,367
 Payment of lease costs                                           (3,300)                 (3,300)                  (3,300)
 Other                                                                --                     (84)                      --
                                                      ------------------      ------------------       ------------------
    Net cash provided by (used in) investing
     activities                                                  998,002                (495,079)                 559,620
                                                       ------------------      ------------------       ------------------

Cash Flows from Financing Activities:
 Distributions to limited partners                            (3,220,000)             (3,150,000)              (3,220,000)
 Distributions to holder of minority interest                    (28,129)                (42,654)                  (8,832)
                                                      ------------------      ------------------       ------------------
    Net cash used in financing activities                     (3,248,129)             (3,192,654)              (3,228,832)
                                                      ------------------      ------------------       ------------------

Net Increase (Decrease) in Cash and Cash
 Equivalents                                                     954,807                (444,073)                 486,829

Cash and Cash Equivalents at Beginning of Year                 1,170,686               1,614,759                1,127,930
                                                      ------------------      ------------------       ------------------

Cash and Cash Equivalents at End of Year                     $ 2,125,493             $ 1,170,686              $ 1,614,759
                                                      ==================      ==================       ==================
</TABLE>

                See accompanying notes to financial statements.

                                       24
<PAGE>

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

                      STATEMENTS OF CASH FLOWS - CONTINUED
                      ------------------------------------


<TABLE>
<CAPTION>
                                                                                        Year Ended December 31,
                                                                           1999                  1998                   1997
                                                                      ---------------      ----------------       ---------------
<S>                                                                   <C>                  <C>                    <C>
Reconciliation of Net Income to Net Cash Provided by
 Operating Activities:

   Net income                                                              $3,510,474            $3,020,881            $2,899,882
                                                                      ---------------      ----------------       ---------------

   Adjustments to reconcile net income to net cash provided
    by operating activities:
      Depreciation                                                            410,257               456,958               471,938
      Amortization                                                              1,650                 1,600                 1,890
      Bad debt expense                                                             --                12,854               131,184
      Equity in earnings of unconsolidated joint ventures,
       net of distributions                                                   (41,491)                5,616              (136,315)
      Gain on sale of land and building                                      (848,303)             (345,122)             (547,027)
      Minority interest in income of consolidated joint                        37,050                43,128               (11,275)
       venture
      Provision for loss on land and building and impairment
       in carrying value of net investment in direct
       financing lease                                                             --                    --               263,186
      Decrease (increase) in receivables                                       (2,676)                8,649                17,113
      Decrease (increase) in prepaid expenses                                  (1,898)                3,286                (3,072)
      Decrease in net investment in direct financing leases                    64,697                63,868                67,389
      Decrease (increase) in accrued rental income                            (95,735)               51,142               (81,244)
      Increase (decrease) in accounts payable and accrued
       expenses                                                               135,333               (37,246)               25,964
      Increase (decrease) in due to related parties                            45,817               (12,532)               29,470
      Increase (decrease) in rents paid in advance and                        (10,241)              (29,422)               26,958
       deposits
                                                                      ---------------      ----------------       ---------------
      Total adjustments                                                      (305,540)              222,779               256,159
                                                                      ---------------      ----------------       ---------------
Net Cash Provide by Operating Activities
                                                                           $3,204,934            $3,243,660            $3,156,041
                                                                      ===============      ================       ===============
Supplemental Schedule of Non-Cash Financing Activities:

      Distributions declared and unpaid at December 31
                                                                           $  787,500            $  857,500            $  787,500
                                                                      ===============      ================       ===============
</TABLE>
                See accompanying notes to financial statements.

                                       25
<PAGE>

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

                         NOTES TO FINANCIAL STATEMENTS
                         -----------------------------

                 Years Ended December 31, 1999, 1998, and 1997


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.

                                       26
<PAGE>

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

                   NOTES TO FINANCIAL STATEMENTS - CONTINUED
                   -----------------------------------------

                 Years Ended December 31, 1999, 1998, and 1997


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.

                                       27
<PAGE>

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

                   NOTES TO FINANCIAL STATEMENTS - CONTINUED
                   -----------------------------------------

                 Years Ended December 31, 1999, 1998, and 1997


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; and Dublin, California, each of which is held as
     tenants-in-common with affiliate 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.  The Partnership limits investment of temporary cash investments
     to financial institutions with high credit standing; therefore, the
     Partnership believes it is not exposed to any significant credit risk on
     cash and cash equivalents.

     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.

                                       28
<PAGE>

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

                   NOTES TO FINANCIAL STATEMENTS - CONTINUED
                   -----------------------------------------

                 Years Ended December 31, 1999, 1998, and 1997


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.


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 10 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.

                                       29
<PAGE>

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

                   NOTES TO FINANCIAL STATEMENTS - CONTINUED
                   -----------------------------------------

                 Years Ended December 31, 1999, 1998, and 1997


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

     Land and buildings on operating leases consisted of the following at
     December 31:

                                                1999                1998
                                          ----------------    ---------------

       Land                               $      7,094,433    $     8,558,191
       Buildings                                11,233,038         13,587,739
                                          ----------------    ---------------
                                                18,327,471         22,145,930
       Less accumulated depreciation            (3,257,666)        (3,586,086)
                                          ----------------    ---------------
                                               $15,069,805        $18,559,844
                                          ================    ===============

     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 incurred $125,000 in
     renovation costs, which were paid in 1998.

     In 1997, the Partnership recorded a provision for loss on land and building
     in the amount of $104,947 for financial reporting purposes for the property
     in Liverpool, New York.  The allowance represented the difference between
     the property's carrying value at December 31, 1997, and the net realizable
     value of the property based on the net sales proceeds of $145,221 received
     in February 1998 from the sale of the property.  Due to the fact that in
     1997 and prior years, the Partnership had recorded an allowance for loss
     totaling $181,970 for this property, no gain or loss was recognized for
     financial reporting purposes during 1998 relating to the sale of the
     property in February 1998.

     During 1997, the Partnership established an allowance for loss on land in
     the amount of $95,435 for its property in Melbourne, Florida.  The tenant
     of this property vacated the property in October 1997 and ceased making
     rental payments.  The allowance represented the difference between the
     property's carrying value for the land at December 31, 1997, and the net
     realizable value of the land based on the net sales proceeds of $552,910
     received in  February 1998 from the sale of the property.  No gain or loss
     was recognized for financial reporting purposes relating to the sale of
     this property in February 1998.

                                       30
<PAGE>

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

                   NOTES TO FINANCIAL STATEMENTS - CONTINUED
                   -----------------------------------------

                 Years Ended December 31, 1999, 1998, and 1997


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

     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 sold its property in Bellevue, Nebraska, and
     received sales proceeds of $900,000.  Due to the fact that during 1998, the
     Partnership reversed $155,528 in accrued rental income, representing the
     majority of such non-cash income that the Partnership had recognized 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 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
     reinvested a portion of the net sales proceeds in a property 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 (see Note 5).

     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, 1999, 1998, and 1997, the Partnership recognized income of
     $95,735 (net of $8,774 in reserves), a loss of $51,142 (net of $155,528 in
     reversals and $11,699 in reserves), and income of $81,244 (net of $17,548
     in reserves) respectively, of such rental income.  The following is a
     schedule of the future

                                       31
<PAGE>

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

                   NOTES TO FINANCIAL STATEMENTS - CONTINUED
                   -----------------------------------------

                 Years Ended December 31, 1999, 1998, and 1997


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

     minimum lease payments to be received on noncancellable operating leases at
     December 31, 1999:

             2000                                 $ 1,969,834
             2001                                   2,030,742
             2002                                   2,045,826
             2003                                   2,037,236
             2004                                   2,025,092
             Thereafter                             9,091,790
                                                  -----------

                                                  $19,200,520
                                                  ===========

     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.

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

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

<TABLE>
<CAPTION>
                                                            1999                 1998
                                                     ---------------      ---------------
      <S>                                            <C>                  <C>
       Minimum lease payments receivable                 $ 6,726,045          $ 7,212,677
       Estimated residual values                           1,440,446            1,440,446
       Less unearned income                               (4,302,036)          (4,723,971)
                                                     ---------------      ---------------

       Net investment in direct financing leases         $ 3,864,455          $ 3,929,152
                                                     ===============      ===============
</TABLE>

                                       32
<PAGE>

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

                   NOTES TO FINANCIAL STATEMENTS - CONTINUED
                   -----------------------------------------

                 Years Ended December 31, 1999, 1998, and 1997


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, 1999:

          2000                        $  488,772
          2001                           501,492
          2002                           501,492
          2003                           501,492
          2004                           501,492
          Thereafter                   4,231,305
                                      ----------

                                      $6,726,045
                                      ==========

     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).

     As of December 31, 1997, the Partnership had established an allowance for
     impairment in carrying value in the amount of $62,804 for its property in
     Melbourne, Florida.  The allowance represented the difference between the
     carrying value of the net investment in the direct financing lease at
     December 31, 1997, and the net realizable value of the net investment in
     the direct financing lease based on the net sales proceeds received in
     February 1998 from the sale of the property (see Note 3).

     In June 1998, the Partnership sold its property in Bellevue, Nebraska, for
     which the building portion had been classified as a direct financing lease.
     In connection therewith, the gross investment (minimum lease payments
     receivable and estimated residual value) and unearned income relating to
     this property were removed from the accounts (see Note 3).

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

     The Partnership has a 3.9%, 36 percent, 14.46%, 23.04%, and 18 percent
     interest in the profits and losses of Auburn Joint Venture, Show Low Joint
     Venture, Asheville Joint Venture, a property in Vancouver, Washington, and
     a property in Clinton, North Carolina, 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.

                                       33
<PAGE>

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

                   NOTES TO FINANCIAL STATEMENTS - CONTINUED
                   -----------------------------------------

                 Years Ended December 31, 1999, 1998, and 1997

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

     In January 1998, the Partnership contributed approximately $558,800 and
     $694,800 to acquire a property in Overland Park, Kansas, and a property in
     Memphis, Tennessee, respectively, as tenants-in-common with affiliates of
     the general partners.  As of December 31, 1999, the Partnership had a
     34.74% and a 46.2% interest in the property in Overland Park, Kansas and
     Memphis, Tennessee, respectively.  In addition, in June 1998, the
     Partnership contributed approximately $1,249,300 to acquire a property in
     Fort Myers, Florida, as tenants-in-common with an affiliate of the general
     partners.  As of December 31, 1999, the Partnership had an 85 percent
     interest in the property in Fort Myers, Florida.

     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 1999, the lease relating to the property owned by the
     joint venture was amended to provide for rent reductions.  As a result, the
     joint venture reclassified the building portion of the property from an
     operating lease to net investment in direct financing lease in accordance
     with Statement of Financial Accounting Standards No. 13, "Accounting for
     Leases".

     In September 1998, the Partnership entered into a joint venture
     arrangement, Warren Joint Venture, with an affiliate of the general
     partners to hold one restaurant property, and contributed approximately
     $898,100 to the joint venture.  As of December 31, 1999, the Partnership
     owned a 64.29% interest in the profits and losses of the joint venture.

     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, 1999, 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.

                                       34
<PAGE>

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

                   NOTES TO FINANCIAL STATEMENTS - CONTINUED
                   -----------------------------------------

                 Years Ended December 31, 1999, 1998, and 1997


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

     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 eight 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:

<TABLE>
<CAPTION>
                                                                     1999                      1998
                                                            --------------------       -------------------
       <S>                                                  <C>                        <C>
       Land and buildings on operating leases, less
           accumulated depreciation                         $         12,510,374       $         9,030,392
       Net investment in direct financing leases                       3,938,686                 3,331,869
       Cash                                                               83,127                    12,138
       Receivables                                                       103,745                    56,360
       Accrued rental income                                             350,510                   237,451
       Other assets                                                        2,320                     1,190
       Liabilities                                                        93,231                   105,868
       Partners' capital                                              16,895,531                12,563,532
       Revenues                                                        1,435,647                 1,098,957
       Net income                                                      1,258,086                   959,057
</TABLE>


     The Partnership recognized income totaling $524,643, $323,105, and $280,331
     for the years ended December 31, 1999, 1998, and 1997, respectively, from
     these joint ventures.

6.   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, 1999 and 1998, included $3,437 and $9,561, respectively, of
     such amounts.

                                       35
<PAGE>

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

                   NOTES TO FINANCIAL STATEMENTS - CONTINUED
                   -----------------------------------------

                 Years Ended December 31, 1999, 1998, and 1997


7.   Allocations and Distributions:
     -----------------------------

     Generally, all net income and net losses of the Partnership, excluding
     gains and losses from the sale of properties, are allocated 99 percent to
     the limited partners and one percent to the general partners.
     Distributions of net cash flow are 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 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").

     Generally, net sales proceeds from the sale of properties not in
     liquidation of the Partnership, to the extent distributed, will be
     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 partners will then receive, 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 will be 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 is, in
     general, allocated in the same manner as net sales proceeds are
     distributable.  Any loss from the sale of a property is, 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.

     During the years ended December 31, 1999, 1998, and 1997 the Partnership
     declared distributions to the limited partners of $3,150,000, $3,220,000,
     and $3,150,000, respectively.  No distributions have been made to the
     general partners to date.

                                       36
<PAGE>

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

                   NOTES TO FINANCIAL STATEMENTS - CONTINUED
                   -----------------------------------------

                 Years Ended December 31, 1999, 1998, and 1997


8.   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:

<TABLE>
<CAPTION>
                                                                              1999                 1998                 1997
                                                                       ----------------     ----------------     ----------------
<S>                                                                    <C>                  <C>                  <C>
Net income for financial reporting purposes                                  $3,510,474           $3,020,881           $2,899,882

Depreciation for tax reporting purposes in excess of depreciation
 for financial reporting purposes                                               (61,184)             (65,666)             (92,303)

Allowance for loss on land and building                                              --                   --              263,186

Direct financing leases recorded as operating leases for tax
 reporting purposes                                                              64,696               63,868               67,392

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                                                            (459,787)            (543,697)            (335,658)

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                       (70,289)             (14,400)            (147,256)

Allowance for doubtful accounts                                                 (83,316)             (39,597)             369,935

Accrued rental income                                                           (95,735)              51,142              (81,244)

Rents paid in advance                                                           (10,241)             (30,922)              26,458

Capitalization of transaction costs for tax reporting purposes                  174,233               20,211                   --

Minority interest in timing differences of consolidated joint
 venture                                                                         15,618               14,513              (30,778)
                                                                       ----------------     ----------------     ----------------
Net income for federal income tax purposes                                   $2,984,469           $2,476,333           $2,939,614
                                                                       ================     ================     ================
</TABLE>

                                       37
<PAGE>

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

                   NOTES TO FINANCIAL STATEMENTS - CONTINUED
                   -----------------------------------------

                 Years Ended December 31, 1999, 1998, and 1997


9.   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, 1999, 1998, and 1997.

     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.

                                       38
<PAGE>

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

                   NOTES TO FINANCIAL STATEMENTS - CONTINUED
                   -----------------------------------------

                 Years Ended December 31, 1999, 1998, and 1997

9.   Related Party Transactions - Continued:
     --------------------------------------

     During the years ended December 31, 1999, 1998, and 1997, 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 as described in Note 11.  The Partnership
     incurred $118,067, $107,969, and $87,877 for the years ended December 31,
     1999, 1998, and 1997, respectively, for such services.

     The due to related parties at December 31, 1999 and 1998, totaled $65,220
     and $19,403, respectively.

10.  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:

<TABLE>
<CAPTION>
                                                     1999              1998               1997
                                               --------------    ---------------    --------------
       <S>                                     <C>               <C>                <C>
       Golden Corral Corporation                     $761,226           $758,646          $751,866
       IHOP Corp.                                     574,011            454,889               N/A
       Restaurant Management of S.C. Inc.             404,659            438,257           478,750
       Mid-America Corporation                            N/A            439,519           439,519
</TABLE>

     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:

<TABLE>
<CAPTION>
                                                            1999              1998               1997
                                                      --------------    ---------------    ---------------
       <S>                                            <C>               <C>                <C>
       Golden Corral Family Steakhouse Restaurants          $761,226           $758,646           $751,866
       IHOP Corp.                                            574,011            454,889                N/A
       Burger King                                               N/A            453,634            496,487
       Denny's                                                   N/A                N/A            317,041
</TABLE>

                                       39
<PAGE>

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

                   NOTES TO FINANCIAL STATEMENTS - CONTINUED
                   -----------------------------------------

                 Years Ended December 31, 1999, 1998, and 1997


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

     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.

11.  Termination of Merger:
     ---------------------

     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").  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.

12.  Subsequent Event:
     ----------------

     In January 2000, the Partnership contributed approximately $1,108,400, the
     majority of the net sales proceeds received from the sale of a property in
     Sevierville, Tennessee, to acquire a 74 percent interest in a Baker's
     Square property in Niles, Illinois, with CNL Income Fund XIV, Ltd., a
     Florida limited partnership, an affiliate of the general partners as
     tenants-in-common.  BB Corp., an affiliate of the general partners,
     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
     BB Corp. to acquire and carry the property, including closing costs.
     The Partnership will account for its investment in this Property using the
     equity method since the Partnership will share control with an affiliate.

                                       40
<PAGE>

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 53,  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 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.  Mr. Seneff has served as
a director and Chairman of the Board since inception in 1994, and served as
Chief Executive Officer from 1994 through August 1999, of CNL American
Properties Fund, Inc., a public, unlisted real estate investment trust.  He also
served as a director, Chairman of the Board and Chief Executive Officer of CNL
Fund Advisors, Inc., the advisor to CNL American Properties Fund, Inc. until it
merged with the company in September 1999.  In addition, he serves as a
director, Chairman of the Board and Chief Executive Officer of CNL Health Care
Properties, Inc., as well as CNL Health Care Corp., the advisor to the company.
He also serves as 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.  Since 1992, Mr. Seneff
has served as 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 the following affiliated companies
since formation: CNL Securities Corp., since 1979; CNL Investment Company, since
1990; and CNL Institutional Advisors, 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 CNLBank.  Mr. Seneff 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 is Florida's principal investment advisory and
money management agency and 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 52,  Since joining CNL Securities Corp. in 1979, 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 the President and Treasurer of CNL Financial Group,
Inc. (formerly CNL Group, Inc.).  Mr. Bourne has served as a director since
inception in 1994, President from 1994 through February 1999, Treasurer from
February 1999 through August 1999, and Vice Chairman of the Board since February
1999 of CNL American Properties Fund, Inc., a public, unlisted real estate
investment trust.  He also served in the following positions for CNL Fund
Advisors, Inc., the advisor to CNL American Properties Fund, Inc. prior to its
merger with CNL American Properties Fund, Inc.: director from 1994 through
August 1999, Treasurer from July 1998 through August 1999, President from 1994
through September 1997, and Vice Chairman of the Board from September 1997
through August 1999.  Mr. Bourne is a director and President of CNL Health Care
Properties, Inc., as well as a director and President of CNL Health Care Corp.,
the advisor to the company.  He is also a director, Vice Chairman of the Board
and President of CNL Hospitality Properties, Inc., a public, unlisted real
estate investment trust, as well as CNL Hospitality Corp., its advisor.  Mr.
Bourne also serves as a director of CNLBank.  He has served as a director since
1992, Vice Chairman of the Board since February 1996,

                                       41
<PAGE>

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 holds
the following positions for these affiliates of CNL Financial Group, Inc.:
director, President and Treasurer of CNL Investment Company; director,
President, Treasurer, and Registered Principal of CNL Securities Corp., a
subsidiary of CNL Investment Company and director, President, Treasurer, and
Chief Investment Officer of 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.

     CNL Realty Corporation is a corporation organized on November 26, 1985,
under the laws of the State of Florida.  Its sole directors and shareholders are
James M. Seneff, Jr. and Robert A. Bourne, the individual General Partners.  CNL
Realty Corporation was organized to serve as the corporate general partner of
real estate limited partnerships, such as the Partnership, organized by one or
both of the individual General Partners.  CNL Realty Corporation currently
serves as the corporate general partner of the CNL Income Fund Partnerships.

     CNL Fund Advisors, Inc. provides certain management services in connection
with the Partnership and its Properties.  CNL Fund Advisors, Inc. is a
corporation organized in 1994 under the laws of the State of Florida, and its
principal office is located at 450 South Orange Avenue, Orlando, Florida 32801.
CNL Fund Advisors, Inc. was a majority owned subsidiary of CNL Financial Group,
Inc., until its merger effective September 1, 1999.  On September 1, 1999, CNL
American Properties Fund, Inc. acquired CNL Fund Advisors, Inc. and was
organized to perform property acquisition, property management and other
services.

     CNL Financial Group, Inc., which was the parent company of CNL Fund
Advisors, Inc. through August 1999, was organized in 1980 under the laws of the
State of Florida.  CNL Financial Group, Inc. is a diversified real estate
company which provides a wide range of real estate, development and financial
services to companies in the United States through the activities of its
subsidiaries.  These activities are primarily focused on the franchised
restaurant and hospitality industries.  James M. Seneff, Jr., an individual
General Partner of the Partnership, is the Chairman of the Board, Chief
Executive Officer, and a director of CNL Financial Group, Inc.  Mr. Seneff and
his wife own all of the outstanding shares of CNL Holdings, Inc., the Parent
company of CNL Financial Group, Inc.

     The following persons serve as operating officers of CNL Financial Group,
Inc. or its affiliates or subsidiaries in the discretion of the Boards of
Directors of those companies, but, except as specifically indicated, do not
serve as members of the Boards of Directors of those entities.  The Boards of
Directors have the responsibility for creating and implementing the policies of
CNL Financial Group, Inc. and its affiliated companies.

     Curtis B. McWilliams, age 44, joined CNL Financial Group, Inc. in April
1997 and served as an Executive Vice President through August 1999.  He serves
as Chief Executive Officer of CNL American Properties Fund, Inc. and CNL Fund
Advisors, Inc.  In addition, Mr. McWilliams served as President of CNL Fund
Advisors, Inc. and as President of the Restaurant and Financial Services Groups
within CNL Financial Group, Inc. through August 1999.  Mr. McWilliams served as
President of CNL American Properties Fund, Inc. from February 1999 through
August 1999 and previously served as Executive Vice President from February 1998
through February 1999.  From September 1983 through March 1997, Mr. McWilliams
was employed by Merrill Lynch & Co., most recently as Chairman of Merrill
Lynch's Private Advisory Services until March 1997.  Mr. McWilliams received a
B.S.E. in Chemical Engineering from Princeton University in 1977 and a Masters
of Business Administration with a concentration in finance from the University
of Chicago in 1983.

     John T. Walker, age 41, serves as President and Chief Operating Officer of
CNL American Properties Fund, Inc. and CNL Fund Advisors, Inc.  He served as
Executive Vice President of CNL American Properties Fund, Inc. from January 1996
through August 1999, as Chief Operating Officer since March 1995 through August
1999, and previously served as Senior Vice President from December 1994 through
August 1999.  In addition, Mr. Walker has served as Executive Vice President of
CNL Fund Advisors, Inc. since January 1996 through August 1999, Chief Operating
Officer from April 1995 through August 1999, and previously served as Senior
Vice President from November 1994 through January 1996.  In addition, Mr. Walker
previously served as Executive Vice President of CNL Hospitality Properties,
Inc. and CNL Hospitality Advisors, Inc.  As of September 1, 1999, Mr. Walker
serves as President for CNL American Properties Fund, Inc.  From May 1992 to May
1994, Mr. Walker, a certified public accountant, was Executive Vice President
for Finance and Administration and Chief Financial Officer of Z Music, Inc., a
cable television network (subsequently acquired by Gaylord Entertainment), where
he was responsible for overall

                                       42
<PAGE>

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 B.S. in Accountancy and is a
certified public accountant.

     Lynn E. Rose, age 51,  Ms. Rose served as Secretary of CNL American
Properties Fund, Inc., a public, unlisted real estate investment trust, from
1994 through August 1999, and served as Treasurer from 1994 through February
1999.  She also served as Treasurer of CNL Fund Advisors, Inc., from 1994
through July 1998, and served as Secretary and a director from 1994 through
August 1999, at which point it merged with CNL American Properties Fund, Inc.
In addition, she is Secretary and Treasurer of CNL Health Care Properties, Inc.,
and serves as Secretary of its subsidiaries.  In addition, she serves as
Secretary, Treasurer and a director of CNL Health Care Corp., the advisor. to
the company.  Ms. Rose also serves as Secretary and Treasurer of CNL Hospitality
Properties, Inc., a public, unlisted real estate investment trust, as Secretary,
Treasurer and a director of CNL Hospitality Corp., its Advisor, and as Secretary
of the subsidiaries of the company.  Ms. Rose served as Secretary and Treasurer
of Commercial Net Lease Realty, Inc., a public real estate investment trust
listed on the New York Stock Exchange, from 1992 to February 1996, and as
Secretary and a director of CNL Realty Advisors, Inc., its advisor, from its
inception in 1991 through 1997.  She also served as Treasurer of CNL Realty
Advisors, Inc. from 1991 through February 1996.  Ms. Rose, a certified public
accountant, has served as Secretary of CNL Financial Group, Inc. (formerly CNL
Group, Inc.) since 1987, served as Controller from 1987 to 1993 and has served
as Chief Financial Officer since 1993.  She also serves as Secretary of the
subsidiaries of CNL Financial Group, Inc. and holds various other offices in the
subsidiaries.  In addition, she serves as Secretary for approximately 50
additional corporations affiliated with CNL Financial Group, Inc. and its
subsidiaries.  Ms. Rose oversees the tax and legal compliance for over 375
corporations, partnerships and joint ventures, and the accounting and financial
reporting for over 200 entities.  Prior to joining CNL, Ms. Rose was a partner
with Robert A. Bourne in the accounting firm of Bourne & Rose, P.A., Certified
Public Accountants.  Ms. Rose holds a B.A. in Sociology from the University of
Central Florida.  She was licensed as a certified public accountant in 1979.

     Jeanne A. Wall, age 41,  Ms. Wall served as Executive Vice President of CNL
American Properties Fund, Inc., a public, unlisted real estate investment trust,
from 1994 through August 1999, and as Executive Vice President of CNL Fund
Advisors, Inc., its advisor, from 1994 through August 1999, at which point it
merged with CNL American Properties Fund, Inc.  Ms. Wall also serves as
Executive Vice President of CNL Health Care Properties, Inc. and CNL Health Care
Corp., the Advisor to the Company.  Ms. Wall also serves as Executive Vice
President of CNL Hospitality Properties, Inc., a public, unlisted real estate
investment trust, and serves as Executive Vice President and a director of CNL
Hospitality Corp., its advisor. She also serves as a director for CNLBank.  Ms.
Wall serves as Executive Vice President of CNL Financial Group, Inc. (formerly
CNL Group, Inc.).  Ms. Wall has served as Chief Operating Officer of CNL
Investment Company and of CNL Securities Corp. since 1994 and has served as
Executive Vice President of CNL Investment Company since January 1991.  In 1984,
Ms. Wall joined CNL Securities Corp. and in 1985, became Vice President.  In
1987, she became a Senior Vice President and in July 1997, became Executive Vice
President of CNL Securities Corp.  In this capacity, Ms. Wall serves as national
marketing and sales director and oversees the national marketing plan for the
CNL investment programs.  In addition, Ms. Wall oversees product development,
communications and investor services for programs offered through participating
brokers.  Ms. Wall also served as Senior Vice President of CNL Institutional
Advisors Inc., a registered investment advisor, from 1990 to 1993.  Ms. Wall
served as Vice President of Commercial Net Lease Realty, Inc., a public real
estate investment trust listed on the New York Stock Exchange, from 1992 through
1997, and served as Vice President of CNL Realty Advisors, Inc. from its
inception in 1991 through 1997. Ms. Wall currently serves as a trustee on the
Board of the Investment Program Association, is a member of the Corporate
Advisory Council for the International Association for Financial Planning and is
a member of IWF, International Women's Forum.  In addition, she previously
served on the Direct Participation Program committee for the National
Association of Securities Dealers, Inc.  Ms. Wall holds a B.A. in Business
Administration from Linfield College and is a registered principal of CNL
Securities Corp.

     Steven D. Shackelford, age 36, a certified public accountant, serves as
Senior Vice President, Chief Financial Officer, and Secretary of CNL American
Properties Fund, Inc. and CNL Fund Advisors, Inc.  He served as Chief Financial
Officer of CNL American Properties Fund, Inc. from January 1997 and as Chief
Financial Officer of CNL Fund Advisors, Inc. since September 1996 through August
1999.  From March 1995 to July 1996, Mr. Shackelford was a senior manager in the
national office of Price Waterhouse 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 served as a manager in the Price
Waterhouse, Paris, France office serving several multinational clients.  Mr.
Shackelford was an

                                       43
<PAGE>

audit staff and audit senior from 1986 to 1992 in the Orlando, Florida office of
Price Waterhouse. Mr. Shackelford received a B.A. in Accounting, with honors,
and a Masters of Business Administration from Florida State University.

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, 2000, 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, 2000, the beneficial
ownership interests of the General Partners in the Registrant.

<TABLE>
<CAPTION>
             Title of Class                   Name of Partner          Percent of Class
             --------------                   ---------------          ----------------
       <S>                               <C>                           <C>
       General Partnership Interests     James M. Seneff, Jr.               45%
                                         Robert A. Bourne                   45%
                                         CNL Realty Corporation             10%
                                                                         --------
                                                                           100%
                                                                         ========
</TABLE>

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

                                       44
<PAGE>

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, 1999, exclusive of any distributions to which the General Partners
or their affiliates may be entitled by reason of their purchase and ownership of
Units.

<TABLE>
<CAPTION>
    Type of Compensation                                                                      For the Year
      and Recipient                           Method of Computation                       Ended December 31, 1999
--------------------------------       -------------------------------------         ---------------------------------
<S>                                    <C>                                           <C>
Reimbursement to affiliates for        Operating expenses are reimbursed at          Operating expenses incurred on
operating expenses                     the lower of cost or 90 percent of            behalf of the Partnership:
                                       the prevailing rate at which                  $157,964
                                       comparable services could have been
                                       obtained in the same geographic area.         Accounting and administrative
                                       Affiliates of the General Partners            services: $118,067
                                       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.

</TABLE>

                                       45
<PAGE>

<TABLE>
<CAPTION>
     Type of Compensation                                                                     For the Year
         and Recipient                         Method of Computation                     Ended December 31, 1999
-------------------------------        --------------------------------------        ---------------------------------
<S>                                    <C>                                           <C>
Deferred, subordinated real            A deferred, subordinated real estate          $-0-
estate disposition fee                 disposition fee, payable upon sale of
payable to affiliates                  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                  distributions of such net sales
proceeds from a sale or sales          proceeds, subordinated to certain
not in liquidation of the              minimum returns to the Limited
Partnership                            Partners.
</TABLE>

                                       46
<PAGE>

<TABLE>
<CAPTION>
     Type of Compensation                                                                     For the Year
         And Recipient                         Method of Computation                     Ended December 31, 1999
-------------------------------      ----------------------------------------      ---------------------------------
<S>                                  <C>                                           <C>
General Partners' share of             Distributions of net sales proceeds          $-0-
 Partnership net sales                 from a sale or sales of substantially
 proceeds from a sale or sales         all of the Partnership's assets will
 in liquidation of the                 be distributed in the following order
 Partnership                           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.
</TABLE>

                                       47
<PAGE>
                                    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, 1999 and 1998

             Statements of Income for the years ended December 31, 1999, 1998,
             and 1997

             Statements of Partners' Capital for the years ended December 31,
             1999, 1998, and 1997

             Statements of Cash Flows for the years ended December 31, 1999,
             1998, and 1997

             Notes to Financial Statements

     2.  Financial Statement Schedule

             Schedule II -Valuation and Qualifying Accounts for the years ended
             December 31, 1999, 1998 and 1997

             Schedule III - Real Estate and Accumulated Depreciation at December
             31, 1999

             Notes to Schedule III - Real Estate and Accumulated Depreciation at
             December 31, 1999

             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.)

                                       48
<PAGE>
          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.)

          27      Financial Data Schedule (Filed herewith.)

     (b)  The Registrant filed no reports on Form 8-K during the period October
          1, 1999 through December 31, 1999.

                                       49
<PAGE>
                                  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 23rd, day of
March, 2000.

                                         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.
<PAGE>
          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.

<TABLE>
<CAPTION>
             Signature                                 Title                                   Date
             ---------                                 -----                                   ----
<S>                                    <C>                                               <C>
/s/ Robert A. Bourne                     President, Treasurer and Director               March 23, 2000
------------------------------------
Robert A. Bourne                        (Principal Financial and Accounting
                                                     Officer)


/s/ James M. Seneff, Jr.               Chief Executive Officer and Director              March 23, 2000
------------------------------------
James M. Seneff, Jr.                        (Principal Executive Officer)
</TABLE>
<PAGE>

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

                SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                -----------------------------------------------

                 Years Ended December 31, 1999, 1998, and 1997


<TABLE>
<CAPTION>
                                          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
----    ---------------    ------------  ------------  ----------       -------------     ------------     ----------
<S>      <C>               <C>           <C>           <C>              <C>               <C>              <C>
1997     Allowance for
           doubtful
           accounts (a)    $    125,589  $         --  $  285,570 (b)   $       1,914 (c) $     18,590     $  390,655
                           ============  ============  ==========       =============     ============     ==========

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)   $          --     $    103,591     $  288,215
                           ============   ===========  ==========       =============     ============     ==========


</TABLE>

(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.

                                      F-1
<PAGE>

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

            SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
            -------------------------------------------------------

                               December 31, 1999

<TABLE>
<CAPTION>
                                                                              Costs Capitalized          Gross Amount at Which
                                                                                Subsequent to             Carried at Close of
                                                    Initial Cost                 Acquisition                  Period (c)
                                             ---------------------------  ---------------------------  --------------------------
                                                            Buildings                                                 Buildings
                                    Encum-                     and         Improve-      Carrying                        and
                                    brances     Land       Improvements     ments         Costs           Land      Improvements
                                   --------- ------------  ------------   ----------- ---------------  ------------  ------------
<S>                                   <C>    <C>           <C>            <C>         <C>              <C>           <C>
Properties the Partnership
  has Invested in Under
  Operating Leases:

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

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

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

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

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

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

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

     Popeyes Famous Fried
       Chicken Restaurants:
          Jacksonville, Florida        -         121,901        190,505      123,663               -       121,901       314,168
          Jacksonville, Florida        -         141,356        185,933      132,144               -       141,356       318,077
          Gainesville, Florida         -          83,542        208,564      192,227               -        83,542       400,791
          Jacksonville, Florida        -          93,914        158,543      163,399               -        93,914       321,942
          Tallahassee, Florida         -         116,019        233,858      177,915               -       116,019       411,773

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

<CAPTION>
                                                                                         Life on Which
                                                                                        Depreciation in
                                      ----------                    Date                 Latest Income
                                                    Accumulated    of con-     Date       Statement is
                                         Total      Depreciation  struction  Acquired       Computed
                                      ------------  ------------ ----------  ---------- ---------------
<S>                                   <C>           <C>          <C>         <C>        <C>
Properties the Partnership
  has Invested in Under
  Operating Leases:

     Bertucci's:
       Marietta, Georgia               $1,112,647       $67,670     1993       02/97          (b)

     Church's Fried Chicken
       Restaurant:
          Orlando, Florida                448,425        87,408     1985       04/90          (b)

     Golden Corral Family
       Steakhouse Restaurants
          Albuquerque, New Mexico       1,736,531       340,172     1989       12/89          (b)
           Amarillo, Texas              1,681,798       303,221     1989       12/89          (b)
           Lawton, Oklahoma             1,397,737       280,007     1989       12/89          (b)
           El Paso, Texas               1,508,233       262,895     1990       04/90          (b)

     Hardee's Restaurants:
       Greensburg, Indiana                863,088       186,630     1989       07/89          (b)
       Springfield, Tennessee             616,380       125,550     1990       11/90          (b)

     IHOP:
       Elgin, Illinois                    426,831           (d)     1997       12/97          (d)
       Manassas, Virginia               1,126,780        50,789     1986       12/97          (b)

     Jack in the Box Restaurant:
       San Antonio, Texas                 272,300           (d)     1990       08/90          (d)

     KFC Restaurants:
       Caro, Michigan                     524,362       121,407     1990       03/90          (b)
       Gainesville, Florida               609,218        87,830     1985       11/90          (b)

     Popeyes Famous Fried
       Chicken Restaurants:
          Jacksonville, Florida           436,069        99,803     1985       04/90          (b)
          Jacksonville, Florida           459,433       101,191     1985       04/90          (b)
          Gainesville, Florida            484,333       124,835     1990       04/90          (b)
          Jacksonville, Florida           415,856       100,526     1985       04/90          (b)
          Tallahassee, Florida            527,792       128,947     1985       04/90          (b)

     Shoney's Restaurants:
       Nashville, Tennessee               852,047       182,339     1988       09/89          (b)
</TABLE>

                                      F-2
<PAGE>

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

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

<TABLE>
<CAPTION>
                                                                        Costs Capitalized       Gross Amount at Which
                                                                          Subsequent to       Carried at Close of Period
                                                Initial Cost               Acquisition                  (c)
                                         -------------------------  -----------------------  -------------------------------------
                                                      Buildings                                            Buildings
                               Encum-                    and         Improve-      Carrying                   and
                               brances     Land      Improvements     ments         Costs        Land     Improvements     Total
                              ---------- ----------  ------------   ----------   ----------  ----------  ------------- -----------
<S>                           <C>        <C>         <C>            <C>          <C>         <C>         <C>           <C>
     Taco Bell Restaurants:
       Detroit, Michigan          -         171,240             -      385,709            -     171,240      385,709       556,949

     Waffle House
     Restaurants:
       Clearwater Florida         -         130,499       268,580            -            -     130,499      268,580       399,079
       Roanoke, Virginia          -         119,533       236,219            -            -     119,533      236,219       355,752
       Atlantic Beach, Florida    -         141,627       263,021            -            -     141,627      263,021       404,648

     Other:
       Hermitage, Tennessee       -         391,157             -      720,026            -     391,157      720,026     1,111,183
                                         ----------  ------------   ----------  -----------  ----------  -----------   -----------

                                         $7,094,433    $7,486,551   $3,746,487            -  $7,094,433  $11,233,038   $18,327,471
                                         ==========  ============   ==========  ===========  ==========  ===========   ===========

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
       Carolina                   -      $  261,013             -            -            -  $  261,013          (f)   $   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             -            -            -  $  484,362          (f)   $   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            -            -  $  438,695  $   450,432   $   889,127
                                         ==========  ============   ==========  ===========  ==========  ===========   ===========

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

     Golden Corral Family
       Steakhouse Restaurant:
           Clinton, North
            Carolina              -      $  138,382    $  676,588            -            -  $  138,382  $   676,588   $   814,970
                                         ==========  ============   ==========  ===========  ==========  ===========   ===========

<CAPTION>
                                                                                   Life on Which
                                                                                  Depreciation in
                                                        Date                       Latest Income
                                   Accumulated         of Con-          Date        Statement is
                                  Depreciation        struction       Acquired        Computed
                                 -------------       ----------      ----------   ---------------
<S>                              <C>                 <C>             <C>          <C>
     Taco Bell Restaurants:
       Detroit, Michigan               127,689          1990           01/89           (b)

     Waffle House
     Restaurants:
       Clearwater Florida               89,257          1988           01/90           (b)
       Roanoke, Virginia                78,502          1987           01/90           (b)
       Atlantic Beach, Florida          87,121          1986           01/90           (b)

     Other:
       Hermitage, Tennessee            223,877          1990           02/90           (b)
                                 -------------

                                 $   3,257,666
                                 =============

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
       Carolina                            (d)          1974           06/97           (d)

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                       (d)          1989           01/90           (d)

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                  $     131,962          1986           03/91           (b)
                                 =============

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

     Golden Corral Family
       Steakhouse Restaurant:
           Clinton, North
            Carolina             $   88,827             1996           01/96           (b)
                                 ============
</TABLE>

                                      F-3
<PAGE>

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

                                SCHEDULE III -

             REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED

                               December 31, 1999

<TABLE>
<CAPTION>
                                                                        Costs Capitalized           Gross Amount at Which
                                                                          Subsequent to              Carried at Close of
                                                Initial Cost               Acquisition                    Period (c)
                                          ----------  -------------  -----------------------  ------------------------------------
                                                        Buildings                                        Buildings
                               Encum-                     and         Improve-    Carrying                  and
                               brances      Land       Improvements     ments       Costs       Land    Improvements      Total
                              ----------  ---------   -------------  ---------- ------------  --------- ------------    ----------
<S>                           <C>         <C>         <C>            <C>        <C>           <C>       <C>             <C>
Property in Which the
  Partnership has a
  23.04% Interest
  as Tenants-in-Common and
  has Invested in Under an
  Operating Lease:

     Chevy's Fresh Mex
     Restaurant:
       Vancouver,
       Washington                 -        $875,659      $1,389,366           -            -   $875,659   $1,389,366    $2,265,025
                                          =========   =============  ========== ============  ========= ============    ==========

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           -            -   $678,890   $  825,076    $1,503,966
                                          =========   =============  ========== ============  ========= ============    ==========

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               -           -            -   $438,972             (f) $  438,972
                                          =========   =============  ========== ============  =========                 ==========

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               -           -            -   $638,026             (f) $  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, Michigan           -        $507,965      $  889,080           -            -   $507,965   $  889,080    $1,397,045
                                          =========   =============  ========== ============  ========= ============    ==========

<CAPTION>
                                                                          Life on Which
                                                                         Depreciation in
                                                   Date                   Latest Income
                                 Accumulated      of Con-      Date        Statement is
                                Depreciation    struction    Acquired        Computed
                                ------------    ----------  ----------  -----------------
<S>                             <C>             <C>         <C>         <C>
Property in Which the
  Partnership has a
  23.04% interest as
  Tenants-in -Common and
  has Invested in Under an
  Operating Lease:

     Chevy's Fresh Mex
     Restaurant:
       Vancouver,                    $92,749       1994        12/97           (b)
       Washington
                                ============

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

     IHOP Restaurant:
       Memphis, Tennessee            $54,145          -        01/98           (b)
                                ============

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

     5 & Diner Restaurant:
       Melbourne,                        (e)       1998        04/98           (e)
       Florida(h)

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               (d)          -        06/98           (d)

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

     IHOP Restaurant:
       Warren, Michigan              $38,405          -         09/98          (b)
                                ==============
</TABLE>

                                       4
<PAGE>

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

            SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
            -------------------------------------------------------

                               December 31, 1999

<TABLE>
<CAPTION>
                                                                               Costs Capitalized
                                                                                 Subsequent To         Gross Amount at Which
                                                         Initial Cost             Acquisition       Carried at Close of Period (c)
                                                   ------------------------  ---------------------- ------------------------------
                                        Encum-                Buildings and  Improve-    Carrying           Buildings and
                                        brances      Land     Improvements    ments       Costs      Land   Improvements   Total
                                      -----------  ---------  -------------  ---------   ---------  ------- ------------- --------
<S>                                   <C>          <C>        <C>            <C>         <C>        <C>     <C>           <C>
Property in Which
    the Partnership has a 80% as
    Tenants-in-Common Interest
    and has Invested in Under
    an Operating Lease:

     IHOP Restaurant:
       Boytown, Texas                           -  $ 495,847  $   799,469             -           - $495,847   $799,469  $1,295,316
                                                   =========  ===========    ==========  ========== ========   ========  ==========

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

     IHOP Restaurant:
       Round Rock, Texas                        -  $ 685,578  $   706,459             -           - $685,578   $706,459  $1,392,037
                                                   =========  ===========    ==========  ========== ========   ========  ==========

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

     IHOP Restaurant:
       Dublin, California                       -  $ 670,899  $   879,237             -           - $670,899   $879,237  $1,550,136
                                                   =========  ===========    ==========  ========== ========   ========  ==========

<CAPTION>
                                                                                                 Life on Which
                                                                                                Depreciation in
                                                                      Date                       Latest Income
                                                   Accumulated        of Con-        Date         Statement is
                                                   Depreciation      struction      Acquired        Computed
                                                 ---------------   -------------  ------------  ----------------
<S>                                              <C>               <C>            <C>           <C>
Property in Which
    the Partnership has a 80% as
    Tenants-in-Common Interest
    and has Invested in Under
    an Operating Lease:

     IHOP Restaurant:
       Boytown, Texas                                     $5,318        1998         10/99           (b)
                                                 ===============

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

     IHOP Restaurant:
       Round Rock, Texas                                  $4,247        1998         10/99           (b)
                                                 ===============
Property in Which
    the Partnership has a 75% as
    Tenants-in-Common Interest
    and has Invested in Under
    an Operating Lease:

     IHOP Restaurant:
       Dublin, California                                 $3,968        1998         11/99           (b)
                                                 ===============
</TABLE>

                                      F-5
<PAGE>

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

                               December 31, 1999

<TABLE>
<CAPTION>
                                                                          Costs Capitalized
                                                                            Subsequent to             Gross Amount at Which
                                                 Initial Cost                Acquisition            Carried at Close of Period (c)
                                           ------------------------     ---------------------  ------------------------------------
                               Encum-                 Buildings and     Improve-     Carrying              Buildings and
                               brances       Land     Improvements       ments         Costs       Land    Improvements       Total
                               -------     --------   -------------     --------    ---------  ---------   -------------      -----
<S>                            <C>         <C>        <C>               <C>         <C>        <C>         <C>                <C>
Properties the Partnership
  has Invested in Under
  Direct Financing Leases:

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

   IHOP:
     Elgin, Illinois              -               -       1,057,282            -            -         -              (f)        (f)

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

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

   Other:
     Chester, Pennsylvania (g)    -          98,009               -      495,472            -        (f)             (f)        (f)
                                           --------      ----------     --------    ---------

                                  -        $561,100      $3,127,960     $495,472            -
                                           ========      ==========     ========    =========

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            -         -              (f)        (f)
                                           ========      ==========     ========    =========  ========

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 Carolina   -               -               -     $521,400            -         -              (f)        (f)
                                           ========      ==========     ========    =========  ========

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            -    $       -  $335,374      $1,273,134         (f)
                                           ========      ==========     ========    =========  ========      ==========

<CAPTION>
                                                                                  Life on Which
                                                                                 Depreciation in
                                                            Date                  Latest Income

                                         Accumulated       of Con-      Date       Statement is
                                         Depreciation     struction   Acquired       Computed
                                         ------------     ---------   --------   ---------------
<S>                                      <C>              <C>         <C>        <C>
Properties the Partnership
  has Invested in Under
  Direct Financing Leases:

   Denny's Restaurant:
     Cheyenne, Wyoming                            (e)         1980      12/89           (e)
     Broken Arrow, Oklahoma                       (e)         1982      08/95           (e)

   IHOP:
     Elgin, Illinois                              (e)         1997      12/97           (e)

   Hardee's Restaurant:
     Waynesburg, Ohio                             (e)         1990      11/90           (e)

   Jack in the Box
   Restaurant:
     San Antonio, Texas                           (d)         1990      08/90           (d)

   Other:
     Chester, Pennsylvania (g)                    (e)         1991      12/89           (e)

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                        (d)         1989      01/90           (d)

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 Carolina                   (d)         1974      06/97           (d)

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                        (d)           -       01/98           (d)
</TABLE>

                                      F-6
<PAGE>

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

      SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION -CONTINUED
      ------------------------------------------------------------------
                               December 31, 1999

<TABLE>
<CAPTION>
                                                                          Costs Capitalized
                                                                            Subsequent to              Gross Amount at Which
                                                     Initial Cost            Acquisition             Carried at Close of Period (c)
                                           ------------------------     ----------------------     ---------------------------------
                               Encum-                 Buildings and      Improve-     Carrying                Buildings and
                               brances       Land     Improvements        ments         Costs       Land      Improvements     Total
                               -------     --------   -------------     ---------     --------     -------    -------------    -----
<S>                            <C>         <C>        <C>               <C>           <C>          <C>        <C>              <C>
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             -            -           -             (f)      (f)
                                           =======         ========     =========     ========     =======
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            -            -           -              (f)      (f)
                                           =======         ========     =========     ========     =======

<CAPTION>
                                                                          Life on Which
                                                                         Depreciation in
                                                    Date                  Latest Income

                                 Accumulated       of Con-      Date       Statement is
                                 Depreciation     struction   Acquired       Computed
                                 ------------     ---------   --------   ---------------
<S>                              <C>              <C>         <C>        <C>
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                (d)          -        06/98          (d)

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                 (e)       1998        04/98          (e)
</TABLE>

                                      F-7
<PAGE>

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

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

                               December 31, 1999


(a)  Transactions in real estate and accumulated depreciation during 1999, 1998,
     and 1997, are summarized as follows:

<TABLE>
<CAPTION>
                                                                                                          Accumulated
                                                                          Cost                            Depreciation
                                                                --------------------------          -------------------------
<S>                                                             <C>                                 <C>
Properties the Partnership has invested in Under
Operating leases:

 Balance, December 31 ,1996                                                    $24,347,528                         $3,165,150
 Acquisitions                                                                    2,791,258                                 --
 Dispositions                                                                   (2,748,363)                          (309,754)
 Depreciation expense                                                                   --                            471,938
                                                                --------------------------          -------------------------

 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
                                                                ==========================          =========================

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

 Balance, December 31, 1996                                     $                  721,893          $                 168,765
 Acquisitions                                                                      261,013                                 --
 Dispositions                                                                     (721,893)                          (170,478)
 Depreciation expense                                                                   --                              1,713
                                                                --------------------------          -------------------------

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

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

 Balance, December 31, 1999                                     $                  261,013          $                      --
                                                                ==========================          =========================
</TABLE>

                                      F-8
<PAGE>

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

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

                               December 31, 1999

<TABLE>
<CAPTION>
                                                                                                Accumulated
                                                                            Cost                Depreciation
                                                                        ---------------       -----------------
<S>                                                                     <C>                   <C>
Properties of Joint Venture in Which the Partnership has a
 3.9% Interest and has Invested in Under an Operating Lease:

  Balance, December 31, 1996                                            $       484,362         $            --
  Depreciation expense (d)                                                           --                      --
                                                                        ---------------         ---------------

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

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

  Balance, December 31, 1999                                            $       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, 1996                                            $       889,127         $        86,919
  Depreciation expense                                                               --                  15,014
                                                                        ---------------         ---------------

  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
                                                                        ===============         ===============
</TABLE>

                                      F-9
<PAGE>

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

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

                               December 31, 1999


<TABLE>
<CAPTION>
                                                                                                      Accumulated
                                                                               Cost                   Depreciation
                                                                        -------------------        -------------------
<S>                                                                     <C>                        <C>
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
                                                                        ==================         ==================

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

  Balance, December 31, 1996                                                      814,970          $          21,168
  Depreciation expense                                                  $              --                     22,427
                                                                        ------------------         ------------------

  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
                                                                        ==================         ==================
</TABLE>

                                      F-10
<PAGE>

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

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

                               December 31, 1999

<TABLE>
<CAPTION>
                                                                                                          Accumulated
                                                                            Cost                          Depreciation
                                                                    -------------------------        -------------------------
<S>                                                                 <C>                              <C>
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, 1996                                                            --        $                      --
     Acquisition                                                                    2,265,025                               --
     Depreciation expense                                                                  --                              124
                                                                    -------------------------        -------------------------

     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
                                                                    =========================        =========================

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                                     $                      --        $                      --
     Acquisitions                                                                   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
                                                                    =========================        =========================

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

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

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

     Balance, December 31, 1999                                     $                 438,972        $                      --
                                                                    =========================        =========================
</TABLE>

                                       11
<PAGE>

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

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

                               December 31, 1999

<TABLE>
<CAPTION>
                                                                                                              Accumulated
                                                                               Cost                           Depreciation
                                                                      -----------------------         ------------------------
<S>                                                                   <C>                             <C>
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 (d)                                                              --                               --
                                                                      -----------------------         ------------------------

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

     Balance, December 31, 1999                                       $               638,026         $                     --
                                                                      =======================         ========================

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
                                                                      =======================         ========================

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
                                                                      =======================         ========================

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
                                                                      =======================         ========================
</TABLE>

                                       12
<PAGE>

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

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

                               December 31, 1999

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

(c)  As of December 31, 1998, 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 $20,969,927 and $17,260,958, 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)  The tenant of this Property, Restaurant Management of S.C., Inc., subleased
     this Property to a franchisee of a regional restaurant chain.  The
     franchisee vacated the property; however, Restaurant Management of S.C.,
     Inc. continues to be responsible for complying with all of the terms of the
     lease agreement and is continuing to pay rent on this Property, subject to
     certain rent concessions, to the Partnership.

(h)  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.

                                       13
<PAGE>

                                 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.)

     27   Financial Data Schedule (Filed herewith.)

                                       i