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): May 21, 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
ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
Not applicable.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
STATUS OF THE OFFERING
On February 6, 1997, the Company commenced an offering (the
"Offering") of up to 27,500,000 shares of common stock (the "Shares"). As
of June 12, 1997, the Company had received subscription proceeds of
$62,986,327 (6,298,633 Shares) including $269,438 (26,944 Shares) issued
pursuant to the Reinvestment Plan, from 3,012 stockholders in connection
with the Offering. The proceeds of the Offering will be used primarily to
acquire properties (the "Properties") located across the United States to be
leased on a long-term, triple-net basis to creditworthy operators of selected
national and regional fast-food, family-style and casual dining restaurant
chains. The Company may also provide financing (the "Mortgage Loans") for
the purchase of buildings, generally by lessees that lease the underlying
land from the Company.
ACQUISITION OF PROPERTIES
Between May 8, 1997 and June 12, 1997, the Company acquired 27
Properties consisting of land and building, with the proceeds of the Offering.
These Properties are two Golden Corral Properties (one in each of Corpus
Christi, Texas, and Jacksonville, Florida), one IHOP Property (in Leesburg,
Virginia), one Popeyes Property (in Starke, Florida), two Jack in the Box
Properties (one in each of Fresno, California, and Corinth, Texas), one Ruth's
Chris Steak House Property (in Tampa, Florida), two Charley's Place Properties
(one in each of King of Prussia, Pennsylvania, and McLean, Virginia), 15
Darryl's Properties (one in each of Evansville, Indiana; Louisville, Kentucky;
Hampton, Virginia; Winston-Salem, North Carolina; Huntsville, Mobile and
Montgomery, Alabama; Knoxville and Nashville, Tennessee; Orlando and Pensacola,
Florida; and two in each of Raleigh, North Carolina, and Richmond, Virginia)
and three Houlihan's Properties (one in each of Bethel Park, Langhorne and
Plymouth Meeting, Pennsylvania).
In connection with the purchase of these 27 Properties, the Company,
as lessor, entered into long-term lease agreements with unaffiliated lessees.
The leases are on a triple-net basis, with the lessee responsible for all
repairs and maintenance, property taxes, insurance and utilities. The lessee
also is required to pay for special assessments, sales and use taxes, and the
cost of any renovations permitted under the lease. For the Properties that
are to be constructed or renovated, the Company has entered into development
and indemnification and put agreements with the lessees.
The following table sets forth the location of the 27 Properties,
consisting of land and building, acquired by the Company from May 8, 1997
through June 12, 1997, a description of the competition, and a summary of the
principal terms of the acquisition and lease of each Property.
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<TABLE>
PROPERTY ACQUISITIONS
From May 8, 1997 through June 12, 1997
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Lease Expira-
Purchase Date tion and Minimum Option
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
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GOLDEN CORRAL (7) $558,820 05/21/97 05/2012; four 10.75% of Total for each lease during the
(the "Corpus Christi Property") (excluding five-year Cost (4) year, 5% of the first
Restaurant to be constructed closing and renewal options amount by which through
development annual gross seventh
The Corpus Christi Property is costs) (3) sales exceed lease years
located on the southwest corner $2,708,230 (5) and the
of South Padre Island Drive and tenth
Silverberry Drive, in Corpus through
Christi, Nueces County, Texas, in fifteenth
an area of mixed retail, lease years
commercial, and residential only
development. Other fast-food and
family-style restaurants located
in proximity to the Corpus
Christi Property include a Dairy
Queen, a Popeyes Famous Fried
Chicken, a Church's Fried
Chicken, and several local
restaurants.
IHOP $1,181,818 05/21/97 05/2017; three $119,659; for each lease during the
(the "Leesburg Property") five-year increases by year, (i) 4% of eleventh
Existing restaurant renewal options 10% after the annual gross lease year
fifth lease sales minus and at the
The Leesburg Property is located year and after (ii) the end of the
at the northwest quadrant of the every five minimum annual initial
intersection of Highway 15 Bypass years rent for such lease term
and Edwards Ferry Road, in thereafter lease year
Leesburg, Loudon County, during the
Virginia, in an area of mixed lease term
retail, commercial, and
residential development. Other
fast-food and family-style
restaurants located in proximity
to the Leesburg Property include
a Ponderosa Steak House, a Burger
King, a Taco Bell, a McDonald's,
an Applebee's, a Ruby Tuesday,
and a Domino's Pizza.
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Lease Expira-
Purchase Date tion and Minimum Option
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
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POPEYES $199,354 05/22/97 05/2017; two 11.50% of Total for each lease at any time
(the "Starke Property") (excluding five year Cost (4); year, (i) 6% of after the
Restaurant to be constructed development renewal options increases by annual gross seventh
costs) (3) 10% after the sales minus lease year
The Starke Property is located on fifth lease (ii) the
the east side of U.S. Highway year and after minimum annual
301, just south of Alligator every five rent for such
Creek, in Starke, Bradford years lease year
County, Florida, in an area of thereafter
mixed retail, commercial, and during the
residential development. Other lease term
fast-food and family-style
restaurants located in proximity
to the Starke Property include a
Shoney's, a Taco Bell, a
McDonald's, a Captain D's, a KFC,
a Western Steer, a Checkers, a
Burger King, a Wendy's, and a
local restaurant.
JACK IN THE BOX (8) $839,981 05/30/97 05/2015; four $86,098 (6); for each lease at any time
(the "Fresno Property") (3)(6) five-year increases by 8% year, (i) 5% of after the
Restaurant to be constructed renewal options after the fifth annual gross seventh
lease year and sales minus lease year
The Fresno Property is located after every (ii) the
within the northwest corner of five years minimum annual
the intersection of Golden State thereafter rent for such
Boulevard and Ashlon Avenue, in during the lease year (5)
Fresno, Fresno County, lease term
California, in an area of mixed
retail, commercial, and
residential development. Other
fast-food and family-style
restaurants located in proximity
to the Fresno Property include a
Dairy Queen and several local
restaurants.
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Lease Expira-
Purchase Date tion and Minimum Option
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
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JACK IN THE BOX (8) $955,333 06/05/97 06/2015; four $97,922 (6); for each lease at any time
(the "Corinth Property") (3)(6) five-year increases by 8% year, (i) 5% of after the
Restaurant to be constructed renewal options after the fifth annual gross seventh
lease year and sales minus lease year
The Corinth Property is located after every (ii) the
on the northwest corner of five years minimum annual
Interstate Highway 35 and FM thereafter rent for such
2181, in Corinth, Denton County, during the lease year (5)
Texas, in an area of mixed lease term
retail, commercial, and
residential development.
RUTH'S CHRIS STEAK HOUSE $2,000,000 06/05/97 08/2011; two $175,000; for each lease None
(the "Tampa Property") (excluding five-year increases by year, 6% of
Existing restaurant closing renewal options $25,000 after annual gross
costs) the fifth lease sales in excess
The Tampa Property is located at year and after of $3,400,000,
the southwest corner of Union every five but less than
Street and North West Shore years $4,000,000,
Boulevard in Tampa, Hillsborough thereafter plus 8% of
County, Florida, in an area of during the annual gross
mixed retail, commercial, and lease term sales in excess
residential development. Other of $4,000,000
fast-food and family-style
restaurants located in proximity
to the Tampa Property include a
Steak and Ale and a local
restaurant.
GOLDEN CORRAL (7) $527,801 06/06/97 06/2012; four 10.75% of Total for each lease during the
(the "Jacksonville Property") (excluding five-year Cost (4) year, 5% of the first
Restaurant to be constructed closing and renewal options amount by which through
development annual gross seventh
The Jacksonville Property is costs) (3) sales exceed lease years
located at the northwest quadrant $2,920,205 (5) and the
of the intersection of Southside tenth
Boulevard and Touchton Road, in through
Jacksonville, Duval County, fifteenth
Florida, in an area of mixed lease years
retail, commercial, and only
residential development. Other
fast-food and family-style
restaurants located in proximity
to the Jacksonville Property
include a Burger King.
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Lease Expira-
Purchase Date tion and Minimum Option
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
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CHARLEY'S PLACE (9) $1,435,865 06/11/97 06/2017; two $150,766; for each lease None
(the "King of Prussia Property") five-year increases by year (i) 4.50%
Existing restaurant renewal options 10% after the of annual gross
fifth lease sales minus
The King of Prussia Property is year and after (ii) the
located on the northwest corner every five minimum annual
of the intersection of North years rent for such
Gulph Road and Goddard Boulevard thereafter lease year
in King of Prussia, Upper Merion during the
Township, Montgomery County, lease term
Pennsylvania, in an area of mixed
retail, commercial, and
residential development. Other
fast-food and family-style
restaurants located in proximity
to the King of Prussia Property
include a Bennigan's, a Denny's,
a Chili's, a Pizzeria Uno, a TGI
Friday's, a Houlihan's, a
McDonald's, a Burger King, a Lone
Star Steakhouse & Saloon, and
several local restaurants.
CHARLEY'S PLACE (9) $1,549,822 06/11/97 06/2017; two $162,731; for each lease None
(the "McLean Property") five-year increases by year (i) 4.50%
Existing restaurant renewal options 10% after the of annual gross
fifth lease sales minus
The McLean Property is located year and after (ii) the
within the intersection of Dolly every five minimum annual
Madison Boulevard and Old years rent for such
Dominion Drive, in McLean, thereafter lease year
Fairfax County, Virginia, in an during the
area of mixed retail, commercial, lease term
and residential development.
Other fast-food and family-style
restaurants located in proximity
to the McLean Property include a
Roy Rogers, a McDonald's, a Pizza
Hut, and several local
restaurants.
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Lease Expira-
Purchase Date tion and Minimum Option
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
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DARRYL'S (9) $1,458,656 06/11/97 06/2017; two $153,159; for each lease None
(the "Evansville Property") five-year increases by year (i) 4.50%
Existing restaurant renewal options 10% after the of annual gross
fifth lease sales minus
The Evansville Property is year and after (ii) the
located on the east side of Green every five minimum annual
River Road, within the Eastland years rent for such
Place shopping center, in thereafter lease year
Evansville, Vanderburg County, during the
Indiana, in an area of mixed lease term
retail, commercial, and
residential development. Other
fast-food and family-style
restaurants located in proximity
to the Evansville Property
include a Denny's, a Chili's, a
Grandy's, a Chi Chi's, a
Fazoli's, a Lone Star Steakhouse
& Saloon, an Olive Garden, a
Morrison's Cafeteria, and several
local restaurants.
DARRYL'S (9) $1,203,391 06/11/97 06/2017; two $126,356; for each lease None
(the "Hampton Property") five-year increases by year (i) 4.50%
Existing restaurant renewal options 10% after the of annual gross
fifth lease sales minus
The Hampton Property is located year and after (ii) the
on the east side of Coliseum every five minimum annual
Drive, north of Mercury years rent for such
Boulevard, in Hampton, York thereafter lease year
County, Virginia, in an area of during the
mixed retail, commercial, and lease term
residential development. Other
fast-food and family-style
restaurants located in proximity
to the Hampton Property include a
Boston Market, a Bennigan's, a
Steak and Ale, a Piccadilly
Cafeteria, an Applebee's, a
Burger King, a Pizza Hut, a KFC,
a Chili's, a McDonald's, a Golden
Corral, a Chi Chi's, a Waffle
House, a Schlotzsky's, a Red
Lobster, a Rally's, an Olive
Garden, a Denny's, and several
local restaurants.
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Lease Expira-
Purchase Date tion and Minimum Option
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
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DARRYL'S (9) $1,367,490 06/11/97 06/2017; two $143,586; for each lease None
(the "Huntsville Property") five-year increases by year (i) 4.50%
Existing restaurant renewal options 10% after the of annual gross
fifth lease sales minus
The Huntsville Property is year and after (ii) the
located on the south side of every five minimum annual
University Drive Northwest, east years rent for such
of Route 53, in Huntsville, thereafter lease year
Madison County, Alabama, in an during the
area of mixed retail, commercial, lease term
and residential development.
Other fast-food and family-style
restaurants located in proximity
to the Huntsville Property
include a Quincy's, a Steak and
Ale, an Olive Garden, a
McDonald's, a Wendy's, an Arby's,
and several local restaurants.
DARRYL'S (9) $1,231,653 06/11/97 06/2017; two $129,324; for each lease None
(the "Knoxville Property") five-year increases by year (i) 4.50%
Existing restaurant renewal options 10% after the of annual gross
fifth lease sales minus
The Knoxville Property is located year and after (ii) the
on the northeast side of every five minimum annual
Merchants Center Boulevard, north years rent for such
of Merchants Drive, in Knoxville, thereafter lease year
Knox County, Tennessee, in an during the
area of mixed retail, commercial, lease term
and residential development.
Other fast-food and family-style
restaurants located in proximity
to the Knoxville Property include
a Red Lobster, a Bob Evans, a
McDonald's, a Burger King, two
Waffle Houses, a Captain D's, a
Subway Sandwich Shop, a Cracker
Barrel, a Denny's, a Sonic Drive-
In, an Applebee's, a Ryan's
Family Steak House, and several
local restaurants.
-7-
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Lease Expira-
Purchase Date tion and Minimum Option
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
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DARRYL'S (9) $1,481,448 06/11/97 06/2017; two $155,552; for each lease None
(the "Louisville Property") five-year increases by year (i) 4.50%
Existing restaurant renewal options 10% after the of annual gross
fifth lease sales minus
The Louisville Property is year and after (ii) the
located on the west side of every five minimum annual
Bardstown Road and the southeast years rent for such
side of Gardiner Lane, in thereafter lease year
Louisville, Jefferson County, during the
Kentucky, in an area of mixed lease term
retail, commercial, and
residential development. Other
fast-food and family-style
restaurants located in proximity
to the Louisville Property
include a Boston Market and a
Steak N Shake.
DARRYL'S (9) $1,426,748 06/11/97 06/2017; two $149,809; for each lease None
(the "Mobile Property") five-year increases by year (i) 4.50%
Existing restaurant renewal options 10% after the of annual gross
fifth lease sales minus
The Mobile Property is located on year and after (ii) the
the south side of South Beltline every five minimum annual
Highway, west of Airport years rent for such
Boulevard, in Mobile, Mobile thereafter lease year
County, Alabama, in an area of during the
mixed retail, commercial, and lease term
residential development. Other
fast-food and family-style
restaurants located in proximity
to the Mobile Property include a
Denny's, a Chili's, an Olive
Garden, an Outback Steakhouse,
and several local restaurants.
-8-
<CAPTION>
Lease Expira-
Purchase Date tion and Minimum Option
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------------------- ----------- -------- --------------- --------------- --------------- -----------
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DARRYL'S (9) $1,230,741 06/11/97 06/2017; two $129,228; for each lease None
(the "Montgomery Property") five-year increases by year (i) 4.50%
Existing restaurant renewal options 10% after the of annual gross
fifth lease sales minus
The Montgomery Property is year and after (ii) the
located on the east side of every five minimum annual
Eastern Boulevard, north of years rent for such
Vaughn Road, in Montgomery, thereafter lease year
Montgomery County, Alabama, in an during the
area of mixed retail, commercial, lease term
and residential development.
Other fast-food and family-style
restaurants located in proximity
to the Montgomery Property
include an Olive Garden, a Kenny
Rogers Roasters, a Wendy's, and
several local restaurants.
DARRYL'S (9) $1,185,158 06/11/97 06/2017; two $124,442; for each lease None
(the "Nashville Property") five-year increases by year (i) 4.50%
Existing restaurant renewal options 10% after the of annual gross
fifth lease sales minus
The Nashville Property is located year and after (ii) the
on the west side of Sidco Drive, every five minimum annual
in Nashville, Davidson County, years rent for such
Tennessee, in an area of mixed thereafter lease year
retail, commercial, and during the
residential development. Other lease term
fast-food and family-style
restaurants located in proximity
to the Nashville Property include
a Cracker Barrel, a Waffle House,
and several local restaurants.
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Lease Expira-
Purchase Date tion and Minimum Option
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
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DARRYL'S (9) $2,142,401 06/11/97 06/2017; two $224,952; for each lease None
(the "Orlando Property") five-year increases by year (i) 4.50%
Existing restaurant renewal options 10% after the of annual gross
fifth lease sales minus
The Orlando Property is located year and after (ii) the
at the southwest quadrant of the every five minimum annual
intersection of International years rent for such
Drive and Jamaican Court, in thereafter lease year
Orlando, Orange County, Florida, during the
in an area of mixed retail, lease term
commercial, and residential
development. Other fast-food and
family-style restaurants located
in proximity to the Orlando
Property include a Pizzeria Uno,
a Golden Corral, a McDonald's, a
Perkins, a Denny's, and several
local restaurants.
DARRYL'S (9) $1,057,526 06/11/97 06/2017; two $111,040; for each lease None
(the "Pensacola Property") five-year increases by year (i) 4.50%
Existing restaurant renewal options 10% after the of annual gross
fifth lease sales minus
The Pensacola Property is located year and after (ii) the
on the north side of Plantation every five minimum annual
Road, west of Davis Highway, in years rent for such
Pensacola, Escambia County, thereafter lease year
Florida, in an area of mixed during the
retail, commercial, and lease term
residential development. Other
fast-food and family-style
restaurants located in proximity
to the Pensacola Property include
a Bennigan's, a Denny's, a
Shoney's, a Steak and Ale, a
Perkins, and a local restaurant.
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Lease Expira-
Purchase Date tion and Minimum Option
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
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DARRYL'S (9) $1,276,324 06/11/97 06/2017; two $134,014; for each lease None
(the "Raleigh #1 Property") five-year increases by year (i) 4.50%
Existing restaurant renewal options 10% after the of annual gross
fifth lease sales minus
The Raleigh #1 Property is year and after (ii) the
located on the west side of Old every five minimum annual
Wake Forest Road and the north years rent for such
side of Ollie Street, in Raleigh, thereafter lease year
Wake County, North Carolina, in during the
an area of mixed retail, lease term
commercial, and residential
development. Other fast-food and
family-style restaurants located
in proximity to the Raleigh #1
Property include a Pizza Hut, a
Boston Market, a Cooker Bar &
Grille, a Red Lobster, a Lone
Star Steakhouse & Saloon, a TGI
Friday's, and a local restaurant.
DARRYL'S (9) $1,754,946 06/11/97 06/2017; two $184,269; for each lease None
(the "Raleigh #2 Property") five-year increases by year (i) 4.50%
Existing restaurant renewal options 10% after the of annual gross
fifth lease sales minus
The Raleigh #2 Property is year and after (ii) the
located on the north side of every five minimum annual
Glenwood Avenue and the west side years rent for such
of Deblyn Avenue, in Raleigh, thereafter lease year
Wake County, North Carolina, in during the
an area of mixed retail, lease term
commercial, and residential
development. Other fast-food and
family-style restaurants located
in proximity to the Raleigh #2
Property include a Miami Subs, a
Boston Market, a Golden Corral, a
Chili's, a Taco Bell, and several
local restaurants.
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Lease Expira-
Purchase Date tion and Minimum Option
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
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DARRYL'S (9) $1,321,907 06/11/97 06/2017; two $138,800; for each lease None
(the "Richmond #1 Property") five-year increases by year (i) 4.50%
Existing restaurant renewal options 10% after the of annual gross
fifth lease sales minus
The Richmond #1 Property is year and after (ii) the
located on the north side of every five minimum annual
Midlothian Turnpike, east of years rent for such
Fairwood Drive and west thereafter lease year
Providence Road, in Richmond, during the
Chesterfield County, Virginia, in lease term
an area of mixed retail,
commercial, and residential
development. Other fast-food and
family-style restaurants located
in proximity to the Richmond #1
Property include a Fuddrucker's,
a Morrison's Cafeteria, a Golden
Corral, a Bob Evans, a Chili's, a
Friendly's, a Steak and Ale, a
Red Lobster, and several local
restaurants.
DARRYL'S (9) $911,660 06/11/97 06/2017; two $95,724; for each lease None
(the "Richmond #2 Property") five-year increases by year (i) 4.50%
Existing restaurant renewal options 10% after the of annual gross
fifth lease sales minus
The Richmond #2 Property is year and after (ii) the
located on the southwest quadrant every five minimum annual
of Starling Drive and Quioccasin years rent for such
Road, in Richmond, Henrico thereafter lease year
County, Virginia, in an area of during the
mixed retail, commercial, and lease term
residential development. Other
fast-food and family-style
restaurants located in proximity
to the Richmond #2 Property
include an Arby's, a Boston
Market, an Applebee's, a
Hardee's, a McDonald's, a Subway
Sandwich Shop, a KFC, a Pizza
Hut, and several local
restaurants.
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Lease Expira-
Purchase Date tion and Minimum Option
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
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DARRYL'S (9) $1,185,158 06/11/97 06/2017; two $124,442; for each lease None
(the "Winston-Salem Property") five-year increases by year (i) 4.50%
Existing restaurant renewal options 10% after the of annual gross
fifth lease sales minus
The Winston-Salem Property is year and after (ii) the
located on the north side of every five minimum annual
Brownsboro Road and the east side years rent for such
of University Parkway, in thereafter lease year
Winston-Salem, Forsyth County, during the
North Carolina, in an area of lease term
mixed retail, commercial, and
residential development. Other
fast-food and family-style
restaurants located in proximity
to the Winston-Salem Property
include a Golden Corral, a
Bennigan's, an IHOP, and several
local restaurants.
HOULIHAN'S (9) $1,367,490 06/11/97 06/2017; two $143,586; for each lease None
(the "Bethel Park Property") five-year increases by year (i) 4.50%
Existing restaurant renewal options 10% after the of annual gross
fifth lease sales minus
The Bethel Park Property is year and after (ii) the
located at the northeast corner every five minimum annual
of the intersection of Washington years rent for such
Road and Fort Couch Road, in thereafter lease year
Bethel Park, Allegheny County, during the
Pennsylvania, in an area of mixed lease term
retail, commercial, and
residential development. Other
fast-food and family-style
restaurants located in proximity
to the Bethel Park Property
include a TGI Friday's, an Olive
Garden, a Burger King, an
Einstein Bros. Bagels, and a
Boston Market.
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Lease Expira-
Purchase Date tion and Minimum Option
Property Location and Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
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HOULIHAN'S (9) $1,390,282 06/11/97 06/2017; two $145,980; for each lease None
(the "Langhorne Property") five-year increases by year (i) 4.50%
Existing restaurant renewal options 10% after the of annual gross
fifth lease sales minus
The Langhorne Property is located year and after (ii) the
on the north side of Old Lincoln every five minimum annual
Highway, in Langhorne, Middletown years rent for such
Township, Burks County, thereafter lease year
Pennsylvania, in an area of mixed during the
retail, commercial, and lease term
residential development. Other
fast-food and family-style
restaurants located in proximity
to the Langhorne Property include
a Red Lobster, an Olive Garden, a
Burger King, a Boston Market, a
Pizzeria Uno, a Taco Bell, a Chi
Chi's, a Macaroni Grill, and
several local restaurants.
HOULIHAN'S (9) $1,982,861 06/11/97 06/2017; two $208,200; for each lease None
(the "Plymouth Meeting Property") five-year increases by year (i) 4.50%
Existing restaurant renewal options 10% after the of annual gross
fifth lease sales minus
The Plymouth Meeting Property is year and after (ii) the
located at the northwest quadrant every five minimum annual
of the intersection of West years rent for such
Germantown Pike and Hickory Road, thereafter lease year
in Plymouth Meeting, Montgomery during the
County, Pennsylvania, in an area lease term
of mixed retail, commercial, and
residential development. Other
fast-food and family-style
restaurants located in proximity
to the Plymouth Meeting Property
include a Friendly's, and several
local restaurants.
-14-
</TABLE>
FOOTNOTES:
(1) The estimated federal income tax basis of the depreciable portion (the
building portion) of each of the Properties acquired, and for
construction Properties, once the buildings are constructed, is set forth
below:
<TABLE>
<CAPTION>
Property Federal Tax Basis Property Federal Tax Basis
-------- ----------------- -------- -----------------
<S> <C> <S> <C>
Corpus Christi Property $ 984,000 Mobile Property $1,005,000
Leesburg Property 579,000 Montgomery Property 949,000
Starke Property 405,000 Nashville Property 734,000
Fresno Property 601,000 Orlando Property 770,000
Corinth Property 615,000 Pensacola Property 723,000
Tampa Property 1,056,000 Raleigh #1 Property 503,000
Jacksonville Property 1,124,000 Raleigh #2 Property 717,000
King of Prussia Property 547,000 Richmond #1 Property 773,000
McLean Property 687,000 Richmond #2 Property 648,000
Evansville Property 971,000 Winston-Salem Property 810,000
Hampton Property 536,000 Bethel Park Property 593,000
Huntsville Property 661,000 Langhorne Property 646,000
Knoxville Property 706,000 Plymouth Meeting Property 905,000
Louisville Property 912,000
</TABLE>
(2) Minimum annual rent for each of the Properties became payable on the
effective date of the lease, except as indicated below. For the Corpus
Christi and Jacksonville Properties, minimum annual rent will become due
and payable on the earlier of (i) 180 days after execution of the lease,
(ii) the date the certificate of occupancy for the restaurant is issued,
or (iii) the date the restaurant opens for business to the public. For
the Starke Property, minimum annual rent will become due and payable on
the earlier of (i) 120 days after execution of the lease, (ii) the date
the certificate of occupancy for the restaurant is issued, (iii) the
date the restaurant opens for business to the public, or (iv) the date
the tenant receives from the landlord its final funding of the
construction costs. During the period commencing with the effective
date of the lease to the date minimum annual rent becomes payable for
the Corpus Christi and Jacksonville Properties, as described above,
interim rent equal to 10% per annum of the amount funded by the Company
in connection with the purchase and construction of the Properties shall
accrue and be payable in a single lump sum at the time of final funding
of the construction costs. During the period commencing with the
effective date of the lease to the date minimum annual rent becomes
payable for the Starke Property, as described above, the tenant shall
pay monthly "interim rent" equal to 11.50% per annum of the amount
funded by the Company in connection with the purchase and construction
of the Property.
-15-
(3) The development agreements for the Properties which are to be
constructed, provide that construction must be completed no later than
the dates set forth below. The maximum cost to the Company, (including
the purchase price of the land (if applicable), development costs (if
applicable), and closing and acquisition costs) is not expected to, but
may, exceed the amounts set forth below:
Estimated Final
Property Estimated Maximum Cost Completion Date
-------- ---------------------- ---------------
Corpus Christi Property $1,577,372 November 17, 1997
Starke Property 599,800 September 19, 1997
Fresno Property 839,981 November 26, 1997
Corinth Property 955,333 December 2, 1997
Jacksonville Property 1,696,394 December 3, 1997
(4) The "Total Cost" is equal to the sum of (i) the purchase price of the
Property, (ii) closing costs, and (iii) actual development costs
incurred under the development agreement.
(5) Percentage rent shall be calculated on a calendar year basis (January 1
to December 31).
(6) The Company paid for all construction or renovation costs in advance at
closing; therefore, minimum annual rent was determined on the date
acquired and is not expected to change.
(7) The lessee of the Corpus Christi and Jacksonville Properties is the same
unaffiliated lessee.
(8) The lessee of the Fresno and Corinth Properties is the same unaffiliated
lessee.
(9) The lessee of the King of Prussia, McLean, Evansville, Hampton,
Huntsville, Knoxville, Louisville, Mobile, Montgomery, Nashville,
Orlando, Pensacola, Raleigh #1, Raleigh #2, Richmond #1, Richmond #2,
Winston-Salem, Bethel Park, Langhorne and Plymouth Meeting Properties is
the same unaffiliated lessee.
-16-
PRO FORMA ESTIMATE OF TAXABLE INCOME BEFORE DIVIDENDS PAID DEDUCTION OF
CNL AMERICAN PROPERTIES FUND, INC.
GENERATED FROM THE OPERATIONS OF PROPERTIES ACQUIRED FROM MAY 8, 1997
THROUGH JUNE 12, 1997
FOR A 12-MONTH PERIOD (UNAUDITED)
The following schedule represents pro forma unaudited estimates of
taxable income before dividends paid deduction of each Property acquired by
the Company from May 8, 1997 through June 12, 1997, for the 12-month period
commencing on the date of the inception of the respective lease on such
Property. The schedule should be read in light of the accompanying footnotes.
These estimates do not purport to present actual or expected operations
of the Company for any period in the future. These estimates were prepared on
the basis described in the accompanying notes which should be read in
conjunction herewith. No single lessee or group of affiliated lessees lease
Properties or has borrowed funds from the Company with an aggregate purchase
price in excess of 20% of the expected total net offering proceeds of the
Company.
<TABLE>
<CAPTION>
Golden Corral IHOP Popeyes Jack in the Box
Corpus Christi, TX (5)(6) Leesburg, VA Starke, FL (5) Fresno, CA (5)(7)
------------------------- ------------ -------------- -----------------
<S> <C> <C> <C> <C>
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction:
Base Rent (1) $158,817 $119,659 $ 66,324 $ 86,098
Asset Management Fees (2) (8,870) (7,068) (3,434) (5,034)
General and Administrative
Expenses (3) (9,847) (7,419) (4,112) (5,338)
-------- -------- -------- --------
Estimated Cash Available from
Operations 140,100 105,172 58,778 75,726
Depreciation and Amortization
Expense (4) (25,236) (14,835) (10,374) (15,406)
-------- -------- -------- --------
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction of the Company $114,864 $ 90,337 $ 48,404 $ 60,320
======== ======== ======== ========
See Footnotes
-17-
<CAPTION>
Jack in the Box Ruth's Chris Steak House Golden Corral
Corinth, TX (5)(7) Tampa, FL Jacksonville, FL (5)(6)
------------------ ------------------------ -----------------------
<S> <C> <C> <C>
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction:
Base Rent (1) $ 97,922 $175,000 $171,612
Asset Management Fees (2) (5,726) (12,127) (9,471)
General and Administrative
Expenses (3) (6,071) (10,850) (10,640)
-------- -------- --------
Estimated Cash Available from
Operations 86,125 152,023 151,501
Depreciation and Amortization
Expense (4) (15,771) (27,123) (28,822)
-------- -------- --------
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction of the Company $ 70,354 $124,900 $122,679
======== ======== ========
See Footnotes
-18-
<CAPTION>
Charley's Place Charley's Place Darryl's Darryl's
King of Prussia, PA (8) McLean, VA (8) Evansville, IN (8) Hampton, VA (8)
----------------------- --------------- ------------------ ---------------
<S> <C> <C> <C> <C>
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction:
Base Rent (1) $150,766 $162,731 $153,159 $126,356
Asset Management Fees (2) (8,593) (9,269) (8,724) (7,198)
General and Administrative
Expenses (3) (9,347) (10,089) (9,496) (7,834)
-------- -------- -------- --------
Estimated Cash Available from
Operations 132,826 143,373 134,939 111,324
Depreciation and Amortization
Expense (4) (14,036) (17,608) (24,887) (13,745)
-------- -------- -------- --------
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction of the Company $118,790 $125,765 $110,052 $ 97,579
======== ======== ======== ========
See Footnotes
-19-
<CAPTION>
Darryl's Darryl's Darryl's Darryl's
Huntsville, AL (8) Knoxville, TN (8) Louisville, KY (8) Mobile, AL (8)
------------------ ----------------- ------------------ --------------
<S> <C> <C> <C> <C>
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction:
Base Rent (1) $143,586 $129,324 $155,552 $149,809
Asset Management Fees (2) (8,179) (7,367) (8,865) (8,534)
General and Administrative
Expenses (3) (8,902) (8,018) (9,644) (9,288)
-------- -------- -------- --------
Estimated Cash Available from
Operations 126,505 113,939 137,043 131,987
Depreciation and Amortization
Expense (4) (16,960) (18,112) (23,376) (25,774)
-------- -------- -------- --------
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction of the Company $109,545 $ 95,827 $113,667 $106,213
======== ======== ======== ========
See Footnotes
-20-
<CAPTION>
Darryl's Darryl's Darryl's Darryl's
Montgomery, AL (8) Nashville, TN (8) Orlando, FL (8) Pensacola, FL (8)
------------------ ----------------- --------------- -----------------
<S> <C> <C> <C> <C>
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction:
Base Rent (1) $129,228 $124,442 $224,952 $111,040
Asset Management Fees (2) (7,368) (7,089) (12,813) (6,326)
General and Administrative
Expenses (3) (8,012) (7,715) (13,947) (6,884)
-------- -------- -------- --------
Estimated Cash Available from
Operations 113,848 109,638 198,192 97,830
Depreciation and Amortization
Expense (4) (24,326) (18,809) (19,739) (18,536)
-------- -------- -------- --------
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction of the Company $ 89,522 $ 90,829 $178,453 $ 79,294
======== ======== ======== ========
See Footnotes
-21-
<CAPTION>
Darryl's Darryl's Darryl's Darryl's
Raleigh #1, NC (8) Raleigh #2, NC (8) Richmond #1, VA (8) Richmond #2, VA (8)
------------------ ------------------ ------------------- -------------------
<S> <C> <C> <C> <C>
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction:
Base Rent (1) $134,014 $184,269 $138,800 $ 95,724
Asset Management Fees (2) (7,634) (10,496) (7,907) (5,454)
General and Administrative
Expenses (3) (8,309) (11,425) (8,606) (5,935)
-------- -------- -------- --------
Estimated Cash Available from
Operations 118,071 162,348 122,287 84,335
Depreciation and Amortization
Expense (4) (12,905) (18,379) (19,813) (16,607)
-------- -------- -------- --------
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction of the Company $105,166 $143,969 $102,474 $ 67,728
======== ======== ======== ========
See Footnotes
-22-
<CAPTION>
Darryl's Houlihan's Houlihan's Houlihan's
Winston-Salem, NC Bethel Park, PA Langhorne, PA Plymouth Meeting, PA
(8) (8) (8) (8)
----------------- --------------- ------------- --------------------
<S> <C> <C> <C> <C>
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction:
Base Rent (1) $124,442 $143,586 $145,980 $208,200
Asset Management Fees (2) (7,089) (8,179) (8,316) (11,859)
General and Administrative
Expenses (3) (7,715) (8,902) (9,051) (12,908)
-------- -------- -------- --------
Estimated Cash Available from
Operations 109,638 126,505 128,613 183,433
Depreciation and Amortization
Expense (4) (20,758) (15,213) (16,572) (23,213)
-------- -------- -------- --------
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction of the Company $ 88,880 $111,292 $112,041 $160,220
======== ======== ======== ========
See Footnotes
-23-
</TABLE>
Total
----------
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction:
Base Rent (1) $3,811,392
Asset Management Fees (2) (218,989)
General and Administrative
Expenses (3) (236,304)
----------
Estimated Cash Available from
Operations 3,356,099
Depreciation and Amortization
Expense (4) (516,935)
----------
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction of the Company $2,839,164
==========
FOOTNOTES:
(1) Base rent does not include percentage rents which become due if
specified levels of gross receipts are achieved.
(2) The Properties will be managed pursuant to an advisory agreement between
the Company and CNL Fund Advisors, Inc. (the "Advisor"), pursuant to
which the Advisor will receive monthly asset management fees in an
amount equal to one-twelfth of .60% of the Company's Real Estate Asset
Value as of the end of the preceding month as defined in such agreement.
(3) Estimated at 6.2% of gross rental income based on the previous
experience of affiliates of the Advisor with 17 public limited
partnerships which own properties similar to those owned by the Company.
Amount does not include soliciting dealer servicing fee due to the fact
that such fee will not be incurred until December 31 of the year
following the year in which the offering terminates.
(4) The estimated federal tax basis of the depreciable portion (the building
portion) of each Property has been depreciated on the straight-line
method over 39 years.
-24-
(5) The development agreements for the Properties which are to be
constructed, provide that construction must be completed no later than
the dates set forth below:
Property Estimated Final Completion Date
-------- -------------------------------
Corpus Christi Property November 17, 1997
Starke Property September 19, 1997
Fresno Property November 26, 1997
Corinth Property December 2, 1997
Jacksonville Property December 3, 1997
(6) The lessee of the Corpus Christi and Jacksonville Properties is the same
unaffiliated lessee.
(7) The lessee of the Fresno and Corinth Properties is the same unaffiliated
lessee.
(8) The lessee of the King of Prussia, McLean, Evansville, Hampton,
Huntsville, Knoxville, Louisville, Mobile, Montgomery, Nashville,
Orlando, Pensacola, Raleigh #1, Raleigh #2, Richmond #1, Richmond #2,
Winston-Salem, Bethel Park, Langhorne and Plymouth Meeting Properties is
the same unaffiliated lessee.
-25-
ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Not applicable.
ITEM 5. OTHER EVENTS.
Not applicable.
ITEM 6. RESIGNATION OF REGISTRANT'S DIRECTORS.
Not applicable.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
-26-
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 29
Pro Forma Consolidated Statement of Earnings for the
quarter ended March 31, 1997 30
Pro Forma Consolidated Statement of Earnings for the
year ended December 31, 1996 31
Notes to Pro Forma Consolidated Financial Statements
for the quarter ended March 31, 1997 and the year
ended December 31, 1996 32
-27-
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 which consist 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 $36,562,502 in gross offering proceeds from the sale of
3,656,251 additional shares of common stock during the period April 1, 1997
through June 12, 1997, and (iii) the application of such funds and $39,734,272
of cash and cash equivalents at March 31, 1997, to purchase 52 additional
properties acquired during the period April 1, 1997 through June 12, 1997 (27
of which are under construction and consist of land and building, 23
properties which consist 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 the 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 June 12,
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 June 12, 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.
-28-
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
MARCH 31, 1997
Pro Forma
ASSETS Historical Adjustments Pro Forma
------------ ---------------- ------------
Land and buildings on operating
leases, less accumulated
depreciation $ 82,040,349 $ 55,434,634 (a) $137,474,983
Net investment in direct
financing leases (b) 19,816,023 14,836,103 (a) 34,652,126
Cash and cash equivalents 44,132,920 (39,734,272)(a) 4,398,648
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 (1,927,623)(a) 790,650
------------ ------------ ------------
$167,722,361 $ 28,608,842 $196,331,203
============ ============ ============
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,
21,377,810 shares 177,215 36,563 (a) 213,778
Capital in excess of par
value 157,115,036 32,955,690 (a) 190,070,726
Accumulated distributions in
excess of net earnings (1,401,464) (1,401,464)
------------ ------------ ------------
155,890,787 32,992,253 188,883,040
------------ ------------ ------------
$167,722,361 $ 28,608,842 $196,331,203
============ ============ ============
See accompanying notes to unaudited pro forma
consolidated financial statements.
-29-
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.
-30-
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.
-31-
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 $36,562,502 from the issuance of 3,656,251
shares of common stock during the period April 1, 1997 through June 12,
1997, the receipt of $26,353 of rental income during construction
(capitalized as deferred rental income), and $39,734,272 of cash and
cash equivalents used (i) to acquire 52 properties for $63,966,006 of
which one property consists of building only, one property consists of
land only and 50 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 $1,645,313 and reclassify from other assets
$1,927,623 of acquisition fees previously incurred relating to the
acquired properties and (iv) to pay selling commissions and offering
expenses (stock issuance costs) of $3,570,249, which have been netted
against capital in excess of par value.
-32-
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:
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
construction and
closing costs) Acquisition fees
and additional allocated to
construction costs 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
Golden Corral in Corpus Christi, TX 1,478,274 79,192 1,557,466
IHOP in Leesburg, VA 1,177,929 63,103 1,241,032
Popeyes in Starke, FL 572,263 30,657 602,920
Jack in the Box in Fresno, CA 838,981 44,945 883,926
Jack in the Box in Corinth, TX 954,333 51,125 1,005,458
Ruth's Chris Steak House in Tampa, FL 2,021,130 108,275 2,129,405
Golden Corral in Jacksonville, FL 1,578,529 84,564 1,663,093
Charley's Place in King of Prussia, PA 1,432,248 76,728 1,508,976
Charley's Place in McLean, VA 1,544,915 82,763 1,627,678
Darryl's in Evansville, IN 1,454,068 77,897 1,531,965
Darryl's in Hampton, VA 1,199,696 64,269 1,263,965
Darryl's in Huntsville, AL 1,363,221 73,030 1,436,251
Darryl's in Knoxville, TN 1,227,859 65,778 1,293,637
Darryl's in Louisville, KY 1,477,432 79,148 1,556,580
Darryl's in Mobile, AL 1,422,271 76,193 1,498,464
Darryl's in Montgomery, AL 1,227,992 65,785 1,293,777
Darryl's in Nashville, TN 1,181,527 63,296 1,244,823
Darryl's in Orlando, FL 2,135,420 114,398 2,249,818
Darryl's in Pensacola, FL 1,054,342 56,483 1,110,825
Darryl's in Raleigh #1, NC 1,272,374 68,163 1,340,537
Darryl's in Raleigh #2, NC 1,749,321 93,714 1,843,035
Darryl's in Richmond #1, VA 1,317,797 70,596 1,388,393
Darryl's in Richmond #2, VA 908,986 48,696 957,682
Darryl's in Winston-Salem, NC 1,181,527 63,296 1,244,823
Houlihan's in Bethel Park, PA 1,363,221 73,030 1,436,251
Houlihan's in Langhorne, PA 1,385,933 74,246 1,460,179
Houlihan's in Plymouth Meeting, PA 1,976,438 105,881 2,082,319
17 wholly owned properties under
construction at March 31, 1997 2,731,795 146,186 2,877,981
----------- ----------- -----------
$66,697,801 $ 3,572,936 $70,270,737
=========== =========== ===========
Adjustment classified as follows:
Land and buildings on operating leases $55,434,634
Net investment in direct financing leases 14,836,103
-----------
$70,270,737
===========
</TABLE>
-33-
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 June 12, 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.
-34-
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.
-35-
ITEM 8. CHANGE IN FISCAL YEAR.
Not applicable.
EXHIBITS
None.
-36-
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 24, 1997 By: /s/ Robert A. Bourne
---------------------------
ROBERT A. BOURNE, President
