SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 16, 1997
CNL AMERICAN PROPERTIES FUND, INC.
(Exact Name of Registrant as Specified in Charter)
Florida 333-15411 59-3239115
(State or other juris- (Commission File Number) (IRS Employer
diction of incorporation) Identification No.)
400 East South Street, Suite 500 32801
Orlando, Florida (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (407) 422-1574
The Form 8-K of CNL American Properties Fund, Inc. (the "Company") dated April
16, 1997, is being amended in order to update the financial information to
include the Pro Forma Consolidated Balance Sheet as of March 31, 1997 and the
Pro Forma Consolidated Statement of Earnings for the quarter ended March 31,
1997. The changes affect the Pro Forma Financial Information in Item 7;
therefore, Item 7 is amended to read as follows.
-1-
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
INDEX TO FINANCIAL STATEMENTS
Page
Pro Forma Consolidated Financial Information (unaudited):
Pro Forma Consolidated Balance Sheet as of March 31, 1997 4
Pro Forma Consolidated Statement of Earnings for the
quarter ended March 31, 1997 5
Pro Forma Consolidated Statement of Earnings for the
year ended December 31, 1996 6
Notes to Pro Forma Consolidated Financial Statements
for the quarter ended March 31, 1997 and the year
ended December 31, 1996 7
-2-
PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The following Pro Forma Consolidated Balance Sheet of the Company gives
effect to (i) property acquisition transactions from inception through March
31, 1997, including the receipt of $177,015,590 in gross offering proceeds
from the sale of 17,701,559 shares of common stock and the application of such
proceeds to purchase 123 properties (including 68 properties which consist of
land and building, one property through a joint venture arrangement which
consists of land and building, 11 properties which consist of building only
and 43 properties consisting of land only), 17 of which were under
construction at March 31, 1997, to provide mortgage financing to the lessees
of the 43 properties consisting of land only, and to pay organizational and
offering expenses, acquisition fees and miscellaneous acquisition expenses,
(ii) the receipt of $17,669,235 in gross offering proceeds from the sale of
1,766,924 additional shares of common stock during the period April 1, 1997
through May 7, 1997, and (iii) the application of such funds and $19,201,056
of cash and cash equivalents at March 31, 1997, to purchase 25 additional
properties acquired during the period April 1, 1997 through May 7, 1997 (22 of
which are under construction and consist of land and building, one property
which consists of land and building, one property which consists of land only
and one property which consists of building only), to pay additional costs for
the 17 properties under construction at March 31, 1997, and to pay offering
expenses, acquisition fees and miscellaneous acquisition expenses, all as
reflected in the pro forma adjustments described in the related notes. The
Pro Forma Consolidated Balance Sheet as of March 31, 1997, includes the
transactions described in (i) above from its historical consolidated balance
sheet, adjusted to give effect to the transactions in (ii) and (iii) above, as
if they had occurred on March 31, 1997.
The Pro Forma Consolidated Statements of Earnings for the quarter ended
March 31, 1997 and the year ended December 31, 1996, include the historical
operating results of the properties described in (i) above from the dates of
their acquisitions plus operating results for six of the properties that were
acquired by the Company during the period January 1, 1996 through May 7, 1997,
and had a previous rental history prior to the Company's acquisition of such
properties, from (A) the later of (1) the date the property became operational
as a rental property by the previous owner or (2) January 1, 1996, to (B) the
earlier of (1) the date the property was acquired by the Company or (2) the
end of the pro forma period presented. No pro forma adjustments have been
made to the Pro Forma Consolidated Statement of Earnings for the remaining
properties acquired by the Company during the period January 1, 1996 through
May 7, 1997, due to the fact that these properties did not have a previous
rental history.
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 consolidated financial
information should not be viewed as predictive of the Company's financial
results or conditions in the future.
-3-
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
MARCH 31, 1997
<TABLE>
<CAPTION>
Pro Forma
ASSETS Historical Adjustments Pro Forma
------------ ---------------- ------------
<S> <C> <C> <C>
Land and buildings on operating
leases, less accumulated
depreciation $ 82,040,349 $ 25,614,903 (a) $107,655,252
Net investment in direct
financing leases (b) 19,816,023 6,202,556 (a) 26,018,579
Cash and cash equivalents 44,132,920 (19,201,056)(a) 24,931,864
Restricted cash 231,787 231,787
Receivables 334,698 334,698
Mortgage notes receivable 17,803,151 17,803,151
Organization costs, less
accumulated amortization 12,682 12,682
Loan costs, less accumulated
amortization 25,599 25,599
Accrued rental income 606,879 606,879
Other assets 2,718,273 (822,569)(a) 1,895,704
------------ ------------ ------------
$167,722,361 $ 11,793,834 $179,516,195
============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Note payable $ 5,469,649 $ 5,469,649
Accrued interest payable 13,936 13,936
Accrued construction costs payable 4,409,764 $ (4,409,764)(a) -
Accounts payable and other accrued
expenses 83,986 83,986
Due to related parties 733,581 733,581
Rents paid in advance 227,391 227,391
Deferred rental income 592,125 26,353 (a) 618,478
Other payables 13,495 13,495
------------ ------------ ------------
Total liabilities 11,543,927 (4,383,411) 7,160,516
------------ ------------ ------------
Minority interest 287,647 287,647
------------ ------------ ------------
Stockholders' equity:
Preferred stock, without par
value. Authorized and unissued
3,000,000 shares - -
Excess shares, $.01 par value per
share. Authorized and unissued
23,000,000 shares - -
Common stock, $.01 par value per
share. Authorized 20,000,000
shares; issued and outstanding
17,721,559 shares; issued and
outstanding, as adjusted,
19,488,483 shares 177,215 17,669 (a) 194,884
Capital in excess of par value 157,115,036 16,159,576 (a) 173,274,612
Accumulated distributions in
excess of net earnings (1,401,464) (1,401,464)
------------ ------------ ------------
155,890,787 16,177,245 172,068,032
------------ ------------ ------------
$167,722,361 $ 11,793,834 $179,516,195
============ ============ ============
</TABLE>
See accompanying notes to unaudited pro forma
consolidated financial statements.
-4-
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
QUARTER ENDED MARCH 31, 1997
Pro Forma
Historical Adjustments Pro Forma
---------- -------------- ----------
Revenues:
Rental income from
operating leases $1,643,074 $ 8,188 (1) $1,651,262
Earned income from
direct financing leases (2) 446,711 446,711
Interest income from
mortgage notes receivable 375,357 375,357
Other interest and income 474,416 (8,185)(3) 466,231
---------- ---------- ----------
2,939,558 3 2,939,561
---------- ---------- ----------
Expenses:
General operating and
administrative 255,456 255,456
Professional services 38,463 38,463
Asset and mortgage management
fees to related party 110,516 2,126 (4) 112,642
State and other taxes 35,350 35,350
Depreciation and amortization 240,038 2,142 (6) 242,180
---------- ---------- ----------
679,823 4,268 684,091
---------- ---------- ----------
Earnings Before Minority
Interest in Income of
Consolidated Joint Venture 2,259,735 (4,265) 2,255,470
Minority Interest in Income of
Consolidated Joint Venture (7,893) (7,893)
---------- ---------- ----------
Net Earnings $2,251,842 $ (4,265) $2,247,577
========== ========== ==========
Earnings Per Share of
Common Stock (7) $ 0.14 $ 0.14
========== ==========
Weighted Average Number of
Shares of Common Stock
Outstanding (7) 15,630,532 15,630,532
========== ==========
See accompanying notes to unaudited pro forma
consolidated financial statements.
-5-
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
YEAR ENDED DECEMBER 31, 1996
Pro Forma
Historical Adjustments Pro Forma
---------- -------------- ----------
Revenues:
Rental income from
operating leases $3,717,886 $ 62,167 (1) $3,780,053
Earned income from
direct financing leases (2) 625,492 34,282 (1) 659,774
Contingent rental income 13,920 13,920
Interest income from
mortgage notes receivable 1,069,349 1,069,349
Other interest and income 780,037 (33,667)(3) 746,370
---------- ---------- ----------
6,206,684 62,782 6,269,466
---------- ---------- ----------
Expenses:
General operating and
administrative 542,564 542,564
Professional services 58,976 58,976
Asset and mortgage management
fees to related party 251,200 7,945 (4) 259,145
State and other taxes 56,184 1,218 (5) 57,402
Depreciation and amortization 521,871 6,852 (6) 528,723
---------- ---------- ----------
1,430,795 16,015 1,446,810
---------- ---------- ----------
Earnings Before Minority
Interest in Income of
Consolidated Joint Venture 4,775,889 46,767 4,822,656
Minority Interest in Income of
Consolidated Joint Venture (29,927) (29,927)
---------- ---------- ----------
Net Earnings $4,745,962 $ 46,767 $4,792,729
========== ========== ==========
Earnings Per Share of
Common Stock (7) $ 0.59 $ 0.59
========== ==========
Weighted Average Number of
Shares of Common Stock
Outstanding (7) 8,071,670 8,071,670
========== ==========
See accompanying notes to unaudited pro forma
consolidated financial statements.
-6-
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
FOR THE QUARTER ENDED MARCH 31, 1997 AND THE YEAR ENDED DECEMBER 31, 1996
Pro Forma Consolidated Balance Sheet:
(a) Represents gross proceeds of $17,669,235 from the issuance of 1,766,924
shares of common stock during the period April 1, 1997 through May 7,
1997, the receipt of $26,353 of rental income during construction
(capitalized as deferred rental income), and $19,201,056 of cash and
cash equivalents used (i) to acquire 25 properties for $27,467,979 of
which one property consists of building only, one property consists of
land only and 23 properties consist of land and building, (ii) to fund
estimated construction costs of $7,141,559 ($4,409,764 of which was
accrued as construction costs payable at March 31, 1997) relating to 17
wholly-owned properties under construction at March 31, 1997, (iii) to
pay acquisition fees of $795,116 and reclassify from other assets
$822,569 of acquisition fees previously incurred relating to the
acquired properties and (iv) to pay selling commissions and offering
expenses (stock issuance costs) of $1,491,990, which have been netted
against capital in excess of par value.
The pro forma adjustments to land and buildings on operating leases and
net investment in direct financing leases as a result of the above
transactions were as follows:
<TABLE>
<CAPTION>
Estimated
purchase price
(including con-
struction and Acquisition
closing costs) fees
and additional allocated
construction costs to property Total
------------------ ----------- -----------
<S> <C> <C> <C>
Jack in the Box in Oxnard, CA $ 1,244,340 $ 66,661 $ 1,311,001
Bennigan's in Arvada, CO 1,907,025 102,162 2,009,187
Boston Market in Cedar Park, TX 820,389 43,949 864,338
Boston Market in Collinsville, IL 786,924 42,157 829,081
Boston Market in Taylorsville, UT 1,296,749 69,469 1,366,218
Burger King in Ooltewah, TN 1,200,786 64,328 1,265,114
Boston Market in Arvada, CO 1,140,718 61,110 1,201,828
Boston Market in Liberty, MO 755,854 40,492 796,346
Einstein Bros. Bagels in Dearborn, MI 659,867 35,350 695,217
Jack in the Box in Enumclaw, WA 842,431 45,130 887,561
Shoney's in Guadalupe, AZ 1,445,517 77,438 1,522,955
Black-eyed Pea in Scottsdale, AZ 768,363 41,162 809,525
Pizza Hut in Dover, OH 224,378 12,020 236,398
Jack in the Box in Bacliff, TX 1,048,420 56,165 1,104,585
Boston Market in Indianapolis, IN 1,648,988 88,339 1,737,327
Boston Market in San Antonio, TX 749,581 40,156 789,737
Boston Market in Baltimore, MD 1,366,123 73,185 1,439,308
Boston Market in Gambrills, MD 1,253,116 67,131 1,320,247
Boston Market in Jessup, MD 1,273,959 68,248 1,342,207
Boston Market in Lansing, MI 1,024,386 54,878 1,079,264
Boston Market in Riverdale, MD 1,031,598 55,264 1,086,862
Boston Market in Vacaville, CA 1,424,970 76,338 1,501,308
Boston Market in Waldorf, MD 1,345,516 72,081 1,417,597
Einstein Bros. Bagels in Springfield, VA 626,546 33,565 660,111
Golden Corral in Jacksonville, FL 1,581,435 84,721 1,666,156
17 wholly owned properties under
construction at March 31, 1997 2,731,795 146,186 2,877,981
----------- ----------- -----------
$30,199,774 $ 1,617,685 $31,817,459
=========== =========== ===========
Adjustment classified as follows:
Land and buildings on operating leases $25,614,903
Net investment in direct financing leases 6,202,556
-----------
$31,817,459
===========
</TABLE>
-7-
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
STATEMENTS - CONTINUED
FOR THE QUARTER ENDED MARCH 31, 1997 AND THE YEAR ENDED DECEMBER 31, 1996
Pro Forma Consolidated Balance Sheet - Continued:
(b) In accordance with generally accepted accounting principles, leases in
which the present value of future minimum lease payments equals or
exceeds 90 percent of the value of the related properties are treated as
direct financing leases rather than as land and buildings. The
categorization of the leases has no effect on rental revenues received.
Pro Forma Consolidated Statement of Earnings:
(1) Represents rental income from operating leases and earned income from
direct financing leases for six of the properties acquired during the
period January 1, 1996 through May 7, 1997, which had a previous rental
history prior to the acquisition of the property by the Company (the
"Pro Forma Properties"), for the period commencing (A) the later of (i)
the date the Pro Forma Property became operational as a rental property
by the previous owner or (ii) January 1, 1996, 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. Each of the six Pro Forma
Properties was acquired from an affiliate who had purchased and
temporarily held title to the property. The noncancellable leases for
the Pro Forma Properties in place during the period the affiliate owned
the properties were assigned to the Company at the time the Company
acquired the properties. 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 Statement of Earnings.
Date Pro Forma
Date Placed Property Became
in Service Operational as
By the Company Rental Property
-------------- ---------------
Mr. Fable's in Grand
Rapids, MI March 1996 January 1996
Denny's in McKinney, TX June 1996 January 1996
Boston Market in Merced, CA October 1996 July 1996
Boston Market in
St. Joseph, MO December 1996 June 1996
Burger King in Kent, OH February 1997 December 1996
Golden Corral in
Hopkinsville, KY February 1997 October 1996
In accordance with generally accepted accounting principles, lease
revenue from leases accounted for under the operating method is
recognized over the terms of the leases. For operating leases providing
escalating guaranteed minimum rents, income is reported on a straight-
line basis over the terms of the leases. For leases accounted for as
direct financing leases, future minimum lease payments are recorded as a
receivable. The difference between the receivable and the estimated
residual values less the cost of the properties is recorded as unearned
income. The unearned income is amortized over the lease terms to
provide a constant rate of return. Accordingly, pro forma rental income
from operating leases and earned income from direct financing leases
does not necessarily represent rental payments that would have been
received if the properties had been operational for the full pro forma
period.
-8-
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
STATEMENTS - CONTINUED
FOR THE QUARTER ENDED MARCH 31, 1997 AND THE YEAR ENDED DECEMBER 31, 1996
Pro Forma Consolidated Statement of Earnings - Continued:
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 1996 and 1997 that the previous owners held the
properties, no pro forma adjustment was made for percentage rental
income for the quarter ended March 31, 1997 and the year ended
December 31, 1996.
(2) See Note (b) under "Pro Forma Consolidated Balance Sheet" above for a
description of direct financing leases.
(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) on the later of (i) the dates the Pro
Forma Properties became operational as rental properties by the previous
owners or (ii) January 1, 1996, through (B) the earlier of (i) the
actual dates of acquisition by the Company or the end of the pro forma
period presented, as described in Note (1) above. The estimated pro
forma adjustment is based upon the fact that interest income on interest
bearing accounts was earned at a rate of approximately four percent per
annum by the Company during the quarter ended March 31, 1997 and the
year ended December 31, 1996.
(4) Represents incremental increase in asset management fees relating to the
Pro Forma Properties for the period commencing (A) on the later of (i)
the date the Pro Forma Properties became operational as rental
properties by the previous owners or (ii) January 1, 1996 through (B)
the earlier of (i) the date the Pro Forma Properties were acquired by
the Company or (ii) the end of the pro forma period presented, as
described in Note (1) above. Asset management fees are equal to 0.60%
of the Company's Real Estate Asset Value (estimated to be approximately
$2,126,000 and $4,762,000 for the Pro Forma Properties for the quarter
ended March 31, 1997 and the year ended December 31, 1996,
respectively), as defined in the Company's prospectus.
(5) Represents adjustment to state tax expense due to the incremental
increase in rental revenues of Pro Forma Properties. Estimated pro
forma state tax expense was calculated based on an analysis of state
laws of the various states in which the Company has acquired the Pro
Forma Properties. The estimated pro forma state taxes consist primarily
of income and franchise taxes ranging from zero to approximately two
percent of the Company's pro forma rental income of each Pro Forma
Property. Due to the fact that the Company's leases are triple net, the
Company has not included any amounts for real estate taxes in the pro
forma statement of earnings.
(6) Represents incremental increase in depreciation expense of the building
portions of the Pro Forma Properties accounted for as operating leases
using the straight-line method over an estimated useful life of 30
years.
(7) Historical earnings per share were calculated based upon the weighted
average number of shares of common stock outstanding during the quarter
ended March 31, 1997 and the year ended December 31, 1996.
-9-
EXHIBITS
None.
-10-
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 AMERICAN PROPERTIES FUND, INC.
Dated: June 18, 1997 By: /s/ Robert A. Bourne
---------------------------
ROBERT A. BOURNE, President
