SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------------------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
-------------------------------------------------------------------
Date of Report (Date of earliest event reported): June 16, 1999
CNL HOSPITALITY PROPERTIES, INC.
(Exact Name of Registrant as Specified in Charter)
Florida 333-67787 59-3396369
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
400 East South Street 32801
Orlando, Florida (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (407) 650-1000
<PAGE>
Item 2. Acquisition or Disposition of Assets.
Acquisition of Properties
Western International Portfolio. On June 16, 1999, Hotel Investors
purchased three of eight Hotels (the "Additional Hotels") pursuant to a series
of agreements between the Company and Five Arrows as described in the section of
the Prospectus entitled "Business -- Property Acquisitions." Hotel Investors
purchased the Additional Hotels for an aggregate purchase price of $76,767,135.
The Additional Hotels are the Courtyard(R) by Marriott(R) located in Scottsdale,
Arizona (the "Scottsdale Downtown Property"), the Courtyard by Marriott located
in Seattle, Washington (the "Lake Union Property") and the Residence Inn(R) by
Marriott(R) located in Phoenix, Arizona (the "Phoenix Airport Property"). As a
result of these purchases and the purchase of the Initial Hotels, Five Arrows
has funded a total of $48,336,573 of its $50,890,000 commitment to Hotel
Investors and purchased a total of 48,337 shares of Class A Preferred Stock. In
addition, Five Arrows has invested a total of $14,249,622 of its $15 million
commitment to the Company through the purchase of 1,499,960 Shares of the
Company's common stock. In connection with the acquisition of the Additional
Hotels and the Initial Hotels, the Company has funded a total of $37,978,736 of
its $40 million commitment to Hotel Investors and purchased 37,979 shares of
Class B Preferred Stock. Hotel Investors has obtained an advance of $87,791,130
relating to the Hotel Investors Loan in order to facilitate the acquisition of
the Additional Hotels and the Initial Hotels.
Hotel Investors acquired the Scottsdale Downtown Property for
$19,614,216 from SAHD Property, LP, the Lake Union Property for $35,801,212 from
Westlake Hotel Property, LP and the Phoenix Airport Property for $21,351,707
from APRI Hotel Property, LP. In connection with the purchase of the Additional
Hotels, Hotel Investors, as lessor, entered into three separate, long-term lease
agreements. The lessee of the Additional Hotels is the same unaffiliated lessee.
The leases on all seven Properties (the Additional Hotels and the Initial
Hotels) are cross-defaulted. The general terms of the lease agreements are
described in the section of the Prospectus entitled "Business Description of
Property Leases." The principal features of the leases are as follows:
0 The initial term of each lease expires in approximately 20 years, on
December 28, 2018.
0 At the end of the initial lease term, the tenant will have three
consecutive renewal options of fifteen years.
0 The leases will require minimum rent payments as follows.
Minimum Annual Rent
--------------------------------
Year 2 and
Property Year 1 Thereafter
------------------------------- -------------- --------------
Scottsdale Downtown Property $2,022,084 $2,072,636
Lake Union Property 3,690,847 3,783,118
Phoenix Airport Property 2,201,207 2,256,237
0 In addition to minimum rent, for lease years one and two, the leases
will require percentage rent equal to 7.75% of the aggregate amount of
all room revenues combined, for the Additional Hotels and the Initial
Hotels, in excess of a combined threshold of $47,540,000. For lease
year three and thereafter, the leases will require percentage rent
equal to 7.75% of the aggregate amount of all room revenues combined,
for the Additional Hotels and the Initial Hotels, in excess of lease
year two actual room revenues.
<PAGE>
0 The tenant of the Additional Hotels will establish a reserve fund which
will be used for the replacement and renewal of furniture, fixtures and
equipment relating to the Additional Hotels (the "FF&E Reserve").
Deposits to the FF&E Reserve for each of the Additional Hotels will be
made once every four weeks as follows: 1% of gross receipts for the
first lease year; 3% of gross receipts for the second lease year; and
5% of gross receipts every lease year thereafter. Funds in the FF&E
Reserve and all property purchased with funds from the FF&E Reserve
shall be paid, granted and assigned to the Company.
0 The tenant under each lease is required to maintain, for up to three
years from the commencement of the last lease for the Hotels to be
executed (but the period will in no event end earlier than December 31,
2003), a liquid net worth equal to a minimum amount (the "Net Worth
Requirement"), which may be used solely to make payments under the
leases. The Net Worth Requirement may be reduced after twelve months to
the extent by which payment of rent exceeds cash available for lease
payments (gross revenues less property expenses) derived from the
leased Hotels during the one-year period. In addition, providing that
all of the Hotels have been opened for one year, the Net Worth
Requirement will terminate at such time that cash available for lease
payments for all of the leased Hotels equals 125% of total minimum rent
due under the leases for 12 consecutive months; or that the lease is
terminated pursuant to its terms (other than for an event of default).
The estimated federal income tax basis of the depreciable portion of
the Additional Hotels is as follows.
Scottsdale Downtown Property $16,943,000
Lake Union Property 29,296,000
Phoenix Airport Property 19,298,000
Each of the Additional Hotels are newly constructed hotels which
recently commenced operations. The Scottsdale Downtown Property is located
approximately 15 miles northeast of Phoenix Sky Harbor International Airport and
has 176 guest rooms and four suites. The Lake Union Property is in downtown
Seattle, near the University district and the Seattle Center area and has 248
guest rooms and two suites. The Phoenix Airport Property is located
approximately three miles north of Phoenix Sky Harbor International Airport and
has 200 guest suites. Other lodging facilities located in proximity to the
Scottsdale Downtown Property include a Hampton Inn, a Fairfield Inn(R) by
Marriott(R), a Holiday Inn, a Comfort Suites, a Quality Suites, a Days Inn and a
Ramada. Other lodging facilities located in proximity to the Lake Union Property
include a Residence Inn by Marriott, a Hampton Inn & Suites, a Cavanaugh's Inn,
a Warwick Hotel, a Mayflower and a Roosevelt Hotel. Other lodging facilities
located in proximity to the Phoenix Airport Property include a Double Tree
Suites, an Embassy Suites, an Embassy Suites West, a Wyndham Garden Hotel and a
Holiday Inn Select.
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(b) Pro forma financial information.
See Index to Pro Forma Financial Statements on page 4.
<PAGE>
CNL HOSPITALITY PROPERTIES, INC.
AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS
Page
----
Pro Forma Consolidated Financial Information (Unaudited):
Unaudited Pro Forma Consolidated Balance Sheet as of March 31, 1999 6
Unaudited Pro Forma Consolidated Statement of Earnings for the
Quarter Ended March 31, 1999 7
Unaudited Pro Forma Consolidated Statement of Earnings for the Year
Ended December 31, 1998 8
Notes to Unaudited Pro Forma Consolidated Financial Statements for the
Quarter Ended March 31, 1999 and the Year Ended December 31, 1998 9
<PAGE>
PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The following Unaudited Pro Forma Consolidated Balance Sheet of CNL
Hospitality Properties, Inc. and subsidiaries (the "Company") gives effect to
(i) the receipt of $90,749,397 in gross offering proceeds from the sale of
9,074,940 shares of common stock pursuant to a registration statement on Form
S-11 under the Securities Act of 1933, as amended, effective July 9, 1997, for
the period from inception through March 31, 1999 and the receipt of $3,684,745
from borrowings on a convertible loan, and the application of such funds to
purchase two properties, to invest in an unconsolidated subsidiary which owned
four properties as of March 31, 1999, and to pay offering expenses, acquisition
fees and miscellaneous acquisition expenses, (ii) the receipt of $55,638,495 in
gross offering proceeds from the sale of 5,563,850 additional shares for the
period April 1, 1999 through June 17, 1999, (iii) the application of such funds
to invest an additional amount in the unconsolidated subsidiary described above
which acquired three additional properties, to redeem 500 shares of common stock
pursuant to the Company's redemption plan, and to pay offering expenses,
acquisition fees and miscellaneous acquisition expenses, and (iv) the conversion
of the $3,684,745 loan from related party to 387,868 shares of common stock, all
as reflected in the pro forma adjustments described in the related notes. The
Unaudited Pro Forma Consolidated Balance Sheet as of March 31, 1999, includes
the transactions described in (i) above, from its historical balance sheet,
adjusted to give effect to the transactions in (ii), (iii) and (iv) above as if
they had occurred on March 31, 1999.
The Unaudited Pro Forma Consolidated Statements of Earnings for the
quarter ended March 31, 1999 and the year ended December 31, 1998, includes the
historical operating results of the properties described in (i) above from the
date of their acquisitions plus operating results from (A) the later of (1) the
date the property became operational or (2) January 1, 1998, to (B) the earlier
of (1) the date the property was acquired by the Company or its unconsolidated
subsidiary or (2) to the end of the pro forma period presented.
This pro forma consolidated financial information is presented for
informational purposes only and does not purport to be indicative of the
Company's financial results or condition if the various events and transactions
reflected therein had occurred on the dates, or been in effect during the
periods, indicated. This pro forma financial information should not be viewed as
predictive of the Company's financial results or conditions in the future.
<PAGE>
CNL HOSPITALITY PROPERTIES, INC.
AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
MARCH 31, 1999
<TABLE>
<CAPTION>
<S> <C>
Pro Forma
ASSETS Historical Adjustments Pro Forma
------------- -------------- --------------
Land, buildings and equipment on operating leases,
less accumulated depreciation of $615,000 $28,137,549 $ -- $ 28,137,549
Investment in unconsolidated subsidiary 25,841,816 13,842,633 (a) 39,684,449
Cash and cash equivalents 22,840,847 35,611,468 (a) 58,452,315
Restricted cash 139,089 -- 139,089
Certificates of deposit 5,747,142 (730,567 ) (a) 5,016,575
Receivables 32,211 (4,383 ) (a) 27,828
Prepaid expenses 16,946 -- 16,946
Dividends receivable 245,063 -- 245,063
Accrued rental income 60,065 -- 60,065
Loan costs, less accumulated amortization of $50,800 27,482 -- 27,482
Other assets 1,618,073 1,952,194 (a) 3,570,267
------------- ------------- --------------
$84,706,283 $50,671,345 $135,377,628
============== ============= ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Convertible loan from related party $3,684,745 $ (3,684,745 ) (a) $ --
Accounts payable and accrued expenses 63,254 -- 63,254
Due to related parties 423,292 (411,447 ) (a) 11,845
Security deposits 1,417,500 -- 1,417,500
Interest payable 29,478 (29,478 ) (a) --
Other payables 4,901 -- 4,901
-------------- ------------- --------------
Total liabilities 5,623,170 (4,125,670 ) 1,497,500
-------------- ------------- --------------
Stockholders' equity
Preferred stock, without par value.
Authorized and unissued 3,000,000 shares -- -- --
Excess shares, $.01 par value per share.
Authorized and unissued 63,000,000 shares -- -- --
Common stock, $.01 par value per share.
Authorized 60,000,000 shares; issued and
outstanding 9,094,940 shares; issued and
outstanding, as adjusted, 15,026,764 shares 90,949 59,318 (a) 150,267
Capital in excess of par value 79,776,666 54,737,697 (a) 134,514,363
Accumulated distributions in excess of net earnings (784,502 ) -- (784,502 )
-------------- ------------- --------------
Total stockholders' equity 79,083,113 54,797,015 133,880,128
-------------- ------------- --------------
$84,706,283 $50,671,345 $135,377,628
============== ============= ==============
See accompanying notes to unaudited pro forma
consolidated financial statements.
<PAGE>
CNL HOSPITALITY PROPERTIES, INC.
AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
QUARTER ENDED MARCH 31, 1999
Pro Forma
Historical Adjustments Pro Forma
------------ -------------- --------------
Revenues:
Rental income from operating
leases $ 737,618 $ -- $ 737,618
FF&E Reserve income 61,027 -- 61,027
Interest and other income 292,864 (206,487 ) (3) 86,377
Dividend income 241,843 362,765 (4) 604,608
------------- ---------------- ----------------
1,333,352 156,278 1,489,630
------------- ---------------- ----------------
Expenses:
Interest expense and loan cost
amortization 200,573 -- 200,573
General operating and
administrative 188,056 -- 188,056
Professional services 21,206 -- 21,206
Asset management fees to related
party 49,565 8,896 (7) 58,461
State taxes 5,375 -- 5,375
Depreciation and amortization 253,758 -- 253,758
------------- ---------------- ----------------
718,533 8,896 727,429
------------- ---------------- ----------------
Earnings Before Equity in Loss of
Unconsolidated Subsidiary 614,819 147,382 762,201
Equity in Loss of Unconsolidated
Subsidiary (184,539 ) (123,927 ) (9) (308,466 )
------------- ---------------- ----------------
Net Earnings
$ 430,280 $ 23,455 $ 453,735
============= ================ ================
Earnings Per Share of Common
Stock:
Basic $ 0.07 $ 0.07
=============
================
Diluted $ 0.06 $ 0.07
============= ================
Weighted Average Number of Shares
Outstanding:
Basic 6,419,548 6,535,566
============= ================
Diluted 8,244,160 6,535,566
============= ================
See accompanying notes to unaudited pro forma
consolidated financial statements.
<PAGE>
CNL HOSPITALITY PROPERTIES, INC.
AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
YEAR ENDED DECEMBER 31, 1998
Pro Forma
Historical Adjustments Pro Forma
------------ -------------- --------------
Revenues:
Rental income from
operating leases $1,218,500 $1,706,732 (1) $2,925,232
FF&E Reserve income 98,099 140,000 (2) 238,099
Interest income 638,862 (609,975 )(3) 28,887
Dividend income -- 423,938 (4) 423,938
-------------
---------------- ----------------
1,955,461 1,660,695 3,616,156
------------- ---------------- ----------------
Expenses:
Interest expense and loan cost
amortization 350,322 448,718 (5) 799,040
General operating and
administrative 167,951 92,733 (6) 260,684
Asset management fees to
related party 68,114 106,571 (7) 174,685
Professional services 21,581 -- 21,581
Depreciation and amortization 388,554 538,125 (8) 926,679
------------- ---------------- ----------------
996,522 1,186,147 2,182,669
------------- ---------------- ----------------
Earnings Before Equity in Loss
of Unconsolidated Subsidiary 958,939 474,548 1,433,487
Equity in Loss of Unconsolidated
Subsidiary -- (56,464 )(9) (56,464 )
------------- ---------------- ----------------
Net Earnings $ 958,939 $ 418,084 $1,377,023
============= ================ ================
Earnings Per Share of Common
Stock (Basic and Diluted) (10) $ 0.40 $ 0.51
============= ================
Weighted Average Number of
Shares of Common Stock
Outstanding (10) 2,402,344 2,697,355
============= ================
</TABLE>
See accompanying notes to unaudited pro forma
consolidated financial statements.
<PAGE>
CNL HOSPITALITY PROPERTIES, INC.
AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
FOR THE QUARTER ENDED MARCH 31, 1999 AND
THE YEAR ENDED DECEMBER 31, 1998
Unaudited Pro Forma Consolidated Balance Sheet:
(a) Represents gross proceeds of $55,638,495 from the sale of 5,563,850
shares during the period April 1, 1999 through June 17, 1999, the
conversion of the $3,684,745 loan from related party to 387,868 shares
of common stock, and the reimbursement for certificates of deposit and
closing costs totalling $734,950 paid on behalf of CHI in connection
with its permanent financing, used (i) to invest $13,842,633 ($653,708
of which had been recorded as other assets as of March 31, 1999) in an
unconsolidated subsidiary which purchased three additional properties,
(ii) to pay $29,478 in interest to related party in connection with
convertible loan, (iii) to pay acquisition fees and costs of $2,673,091
($67,189 of which was accrued as due to related parties at March 31,
1999), and to pay selling commissions and offering expenses of
$4,865,883 which have been netted against stockholders' equity (a total
of $344,258 of which was accrued as of March 31, 1999) and (iv) to
redeem 500 shares of common stock for $4,600, leaving $35,611,468 for
future investment.
Unaudited Pro Forma Consolidated Statements of Earnings:
(1) Represents adjustment to rental income from operating leases for the
properties acquired by the Company as of June 17, 1999, (the "Pro Forma
Properties"), for the period commencing (A) the later of (i) the date
the Pro Forma Property became operational by the previous owner or (ii)
January 1, 1998, to (B) the earlier of (i) the date the Pro Forma
Property was acquired by the Company or (ii) the end of the pro forma
period presented. The following presents the actual date the Pro Forma
Properties were acquired or placed in service by the Company as
compared to the date the Pro Forma Properties were treated as becoming
operational as a rental property for purposes of the Pro Forma
Consolidated Statements of Earnings.
Date Pro Forma
Date Placed Property Became
in Service Operational as
By the Company Rental Property
-------------- ---------------
Residence Inn Buckhead (Lenox
Park) in Atlanta, GA July 31, 1998 January 1, 1998
Residence Inn Gwinnett Place
in Duluth, GA July 31, 1998 January 1, 1998
Generally, the leases provide for the payment of percentage rent in
addition to base rental income. However, due to the fact that no
percentage rent was due under the leases for the Pro Forma Properties
during the portion of 1998 that the Company held the properties, no pro
forma adjustment was made for percentage rental income for the year
ended December 31, 1998.
(2) Represents reserve funds which will be used for the replacement and
renewal of furniture, fixtures and equipment relating to the Pro Forma
Properties (the "FF&E Reserve"). The funds in the FF&E Reserve and all
property purchased with funds from the FF&E Reserve will be paid,
granted and assigned to the Company as additional rent. In connection
therewith, FF&E Reserve income was earned at approximately $10,000 per
month, per Pro Forma Property.
(3) Represents adjustment to interest income due to the decrease in the
amount of cash available for investment in interest bearing accounts
during the periods commencing (A) the later of (i) the dates the Pro
Forma Properties and the unconsolidated subsidiary's properties became
operational by the previous owners or (ii) January 1, 1998, through (B)
the earlier of (i) the actual date the Pro Forma Properties and the
unconsolidated subsidiary's properties were acquired or (ii) the end of
the pro forma period presented, as described in Note (1) above and Note
(4) below. The estimated pro forma adjustment is based upon the fact
that interest income from interest bearing accounts was earned at a
rate of approximately four percent per annum by the Company during the
year ended December 31, 1998 and the quarter ended March 31, 1999.
<PAGE>
CNL HOSPITALITY PROPERTIES, INC.
AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
STATEMENTS - CONTINUED
FOR THE QUARTER ENDED MARCH 31, 1999 AND
THE YEAR ENDED DECEMBER 31, 1998
(4) Represents adjustment to dividend income earned on the Company's
$24,778,630 investment at March 31, 1999, in the 9.76% Class B
cumulative preferred stock of the unconsolidated subsidiary, for the
period commencing (A) the later of (i) the date the properties owned by
the unconsolidated subsidiary became operational by the previous owner
or (ii) January 1, 1998, to (B) the earlier of (i) the date the
properties owned by the unconsolidated subsidiary were acquired or (ii)
the end of the pro forma period presented. The cash from the Company's
investment, along with loan proceeds and funds from an institutional
investor were used to purchase four hotel properties which were
operational prior to the Company's investment in the unconsolidated
subsidiary. The following presents the actual date the unconsolidated
subsidiary properties were acquired or placed in service by the
unconsolidated subsidiary as compared to the date the unconsolidated
subsidiary's properties were treated as becoming operational for
purposes of the Pro Forma Consolidated Statements of Earnings:
<TABLE>
<CAPTION>
<S> <C>
Pro forma
Date Unconsolidated
Date Placed Subsidiary
in Service Properties Became
By the Operational as
Unconsolidated Subsidiary Rental Property
------------------------- ---------------
Residence Inn Las Vegas, NV February 25, 1999 October 1, 1998
Residence Inn Plano, TX February 25, 1999 October 12, 1998
Marriott Suites Dallas, TX February 25, 1999 November 11, 1998
Courtyard Plano, TX February 25, 1999 December 23, 1998
Residence Inn Phoenix, AZ June 16, 1999 May 14, 1999
Courtyard Scottsdale, AZ June 16, 1999 May 21, 1999
Courtyard Seattle, WA June 16, 1999 May 22, 1999
</TABLE>
(5) Represents adjustment to interest expense incurred at a rate ranging
from 8.05% to 8.8% per annum in connection with the assumed borrowings
from the line of credit of $8,600,000 on January 1, 1998 for the period
January 1, 1998 through July 31, 1998. Also represents amortization of
the loan origination fee of $43,000 (.5% on the $8,600,000 from
borrowings on the line of credit) and $19,149 of other miscellaneous
closing costs, amortized under the straight-line method over a period
of five years.
(6) The Company has incurred operating expenses which, in general, are
those expenses relating to administration of the Company on an ongoing
basis. Pursuant to the advisory agreement, CNL Hospitality Advisors,
Inc. (the "Advisor") is required to reimburse the Company the amount by
which the total operating expenses paid or incurred by the Company
exceed in any four consecutive fiscal quarters the greater of two
percent of average invested assets or 25 percent of net income (the
"Expense Cap"). During the year ended December 31, 1998, the Company's
operating expenses exceeded the Expense Cap by $92,733; therefore, the
Advisor reimbursed the Company such amount in accordance with the
advisory agreement. However, as a result of the increase in pro forma
earnings for the year ended December 31, 1998, the Company's operating
expenses no longer exceeded the Expense Cap. Therefore, this
reimbursement was reversed for pro forma purposes.
(7) Represents increase in asset management fees relating to the Pro Forma
Properties and the investment in unconsolidated subsidiary for the
period commencing (A) the later of (i) the date the Pro Forma
Properties and the unconsolidated subsidiary properties became
operational by the previous owners or (ii) January 1, 1998, through (B)
the earlier of (i) the date the Pro Forma Properties and the
unconsolidated subsidiaries properties were acquired or (ii) the end of
the pro forma period presented, as described in Notes (1) and (4)
above. Asset management fees are equal to 0.60% per year of the
Company's Real Estate Asset Value, including the investment in the
unconsolidated subsidiary, as defined in the Company's prospectus.
<PAGE>
CNL HOSPITALITY PROPERTIES, INC.
AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
STATEMENTS - CONTINUED
FOR THE QUARTER ENDED MARCH 31, 1999 AND
THE YEAR ENDED DECEMBER 31, 1998
(8) Represents incremental increase in depreciation expense of the building
and the furniture, fixture and equipment ("FF&E") portions of the Pro
Forma Properties accounted for as operating leases using the
straight-line method. The buildings and FF&E are depreciated over
useful lives of 40 and seven years, respectively.
(9) Represents adjustment to equity in loss of unconsolidated subsidiary
for the period commencing (A) the date the unconsolidated subsidiary's
properties became operational by the previous owner, through (B) the
earlier of (i) the date the properties were acquired by the
unconsolidated subsidiary or (ii) the end of the pro forma period
presented, as described in Note (4) above. The following represents the
Company's share of net earnings or loss after deduction of preferred
stock dividends declared for the pro forma period ending:
December 31, March 31,
1998 1999
----------- ---------
Unconsolidated Subsidiary
Earnings Before Preferred Dividend $ 752,368 $ 616,738
8% Class A Cumulative Preferred Stock
(institutional investor) (442,261) (639,654)
9.76% Class B Cumulative Preferred Stock
(the Company) (423,938) (604,608)
8% Class C Cumulative Preferred Stock
(other investors) ( 1,402) (2,000)
---------- ----------
Net Loss of Unconsolidated Subsidiary
After Preferred Dividends $(115,233) $(629,524)
========== =========
The Company's 49% Interest in the Loss of
the Unconsolidated Subsidiary $ (56,464) $(308,466)
========== =========
(10) Historical earnings per share were calculated based upon the weighted
average number of shares of common stock outstanding during the quarter
ended March 31, 1999 and the year ended December 31, 1998.
As a result of the two Pro Forma Properties being treated in the Pro
Forma Consolidated Statements of Earnings as operational since January
1, 1998, the Company assumed approximately 2,206,573 shares of common
stock were sold, and the net offering proceeds were available for
purchase of these properties. Due to the fact that approximately
1,929,115, of these shares of common stock were actually sold
subsequently, during the period January 1, 1998 through May 21, 1998,
the weighted average number of shares outstanding for the pro forma
period was adjusted.
In addition, as a result of the investment in the unconsolidated
subsidiary being treated in the Pro Forma Consolidated Statements of
Earnings as invested pro rata beginning on October 1, 1998 (the date
the first property became operational), the Company assumed additional
shares of common stock were sold and net offering proceeds were
available for investment during the period October 1, 1998 through
December 31, 1998 and the period January 1, 1999 through January 26,
1999. Due to the fact that approximately 857,020 of these shares of
common stock were actually sold during the quarter ended March 31,
1999, the weighted average number of shares outstanding for the pro
forma period was adjusted. Pro forma earnings per share were calculated
based upon the weighted average number of shares of common stock
outstanding, as adjusted, during the quarter ended March 31, 1999 and
the year ended December 31, 1998.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be filed on its behalf by
the undersigned thereunto duly authorized.
CNL HOSPITALITY PROPERTIES, INC.
Dated: June 28, 1999 By: /s/ Robert A. Bourne
----------------------------
ROBERT A. BOURNE, President
