FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number
0-28380
CNL American Properties Fund, Inc.
(Exact name of registrant as specified in its charter)
Maryland 59-3239115
(State or other juris- (I.R.S. Employer
diction of incorporation Identification No.)
or organization)
400 E. South Street, #500
Orlando, Florida 32801
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number
(including area code) (407) 422-1574
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
24,393,721 shares of common stock, $.01 par value, outstanding as of August 5,
1997.
CONTENTS
Part I Page
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets 1
Condensed Consolidated Statements of
Earnings 2
Condensed Consolidated Statements of
Stockholders' Equity 3
Condensed Consolidated Statements of
Cash Flows 4-5
Notes to Condensed Consolidated
Financial Statements 6-16
Item 2. Management's Discussion and Analysis
of Financial Condition and
Results of Operations 17-23
Part II
Other Information 24
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
ASSETS 1997 1996
<S> <C> ------------ ------------
Land and buildings on operating leases,
less accumulated depreciation $140,983,397 $ 60,243,146
Net investment in direct financing leases 22,703,193 15,186,686
Cash and cash equivalents 31,097,346 42,450,088
Receivables 497,307 160,675
Mortgage notes receivable 17,737,107 13,389,607
Organization costs, less accumulated
amortization of $8,318 and $6,318 11,682 13,682
Loan costs, less accumulated amortization
of $36,680 and $22,034 23,954 32,499
Accrued rental income 861,703 422,076
Other assets 1,026,053 2,926,589
------------ ------------
$214,941,742 $134,825,048
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Note payable $ 4,756,658 $ 3,521,816
Accrued interest payable 26,751 13,164
Accrued construction costs payable 10,524,476 6,587,573
Accounts payable and accrued expenses 113,317 79,817
Due to related parties 790,223 997,084
Rents paid in advance 305,524 118,900
Deferred rental income 1,005,050 335,849
Other payables 10,315 15,117
----------- -----------
Total liabilities 17,532,314 11,669,320
----------- -----------
Minority interest 286,992 288,301
----------- -----------
Commitments (Note 12)
Stockholders' equity:
Preferred stock, without par value.
Authorized and unissued 3,000,000
shares - -
Excess shares, $.01 par value per share.
Authorized and unissued 78,000,000
shares - -
Common stock, $.01 par value per share.
Authorized 75,000,000 shares, issued
and outstanding 22,404,318 and
13,944,715, respectively 224,043 139,447
Capital in excess of par value 198,913,717 123,687,929
Accumulated distributions in excess of
net earnings (2,015,324) (959,949
------------ ------------
Total stockholders' equity 197,122,436 122,867,427
------------ ------------
$214,941,742 $134,825,048
============ ============
</TABLE>
See accompanying notes to condensed consolidated
financial statements.
1
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C>
Revenues:
Rental income from
operating leases $2,363,731 $ 854,846 $4,006,805 $1,618,001
Earned income from
direct financing
leases 511,781 50,258 958,492 86,184
Interest income from
mortgage notes
receivable 439,835 280,549 815,192 465,498
Other interest and
income 460,329 135,940 934,745 211,789
---------- ---------- ---------- ----------
3,775,676 1,321,593 6,715,234 2,381,472
---------- ---------- ---------- ----------
Expenses:
General operating and
administrative 225,755 143,790 481,211 272,897
Professional services 6,216 18,699 44,679 48,391
Asset and mortgage
management fees to
related party 148,740 57,303 259,256 97,673
State and other taxes 72,513 9,486 107,863 12,384
Depreciation and
amortization 339,366 140,290 579,404 238,762
---------- --------- ---------- ---------
792,590 369,568 1,472,413 670,107
---------- --------- ---------- ---------
Earnings Before Minority
Interest in Income of
Consolidated Joint
Venture 2,983,086 952,025 5,242,821 1,711,365
Minority Interest in
Income of Consolidated
Joint Venture (7,833) (7,571) (15,726) (22,323)
---------- ---------- ---------- ----------
Net Earnings $2,975,253 $ 944,454 $5,227,095 $1,689,042
========== ========== =========== ==========
Earnings Per Share of
Common Stock $ 0.15 $ 0.14 $ 0.29 $ 0.30
========== ========== =========== ==========
Weighted Average Number
of Shares of Common
Stock Outstanding 19,997,391 6,649,040 17,826,025 5,649,041
========== ========== =========== ==========
</TABLE>
See accompanying notes to condensed consolidated
financial statements.
2
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Six Months Ended June 30, 1997 and
Year Ended December 31, 1996
<TABLE>
<CAPTION>
Accumulated
distributions
Common stock Capital in in excess
Number Par excess of of net
of shares value par value earnings Total
----------- -------- ----------- ----------- -----------
<S> <C>
Balance at
December 31, 1995 3,865,416 $ 38,654 $ 32,211,833 $ (269,839) $ 31,980,648
Subscriptions
received for
common stock
through public
offering and
distribution
reinvestment
plan 10,079,299 100,793 100,692,198 - 100,792,991
Stock issuance
costs - - (9,216,102) - (9,216,102)
Net earnings - - - 4,745,962 4,745,962
Distributions
declared and
paid ($.71
per share) - - - (5,436,072) (5,436,072)
--------- ------- ----------- ----------- -----------
Balance at
December 31, 199613,944,715 139,447 123,687,929 (959,949) 122,867,427
Subscriptions
received for
common stock
through public
offering and
distribution
reinvestment
plan 8,459,603 84,596 84,511,434 84,596,030
Stock issuance
costs (9,285,646) (9,285,646)
Net earnings 5,227,095 5,227,095
Distributions
declared and
paid ($.35
per share) (6,282,470) (6,282,470)
---------- -------- ----------- ------------ ------------
Balance at
June 30, 1997 22,404,318 $224,043 $198,913,717 $ (2,015,324) $197,122,436
</TABLE>
See accompanying notes to condensed consolidated
financial statements.
3
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1997 1996
------------ -------------
<S> <C>
Increase (Decrease) in Cash and Cash
Equivalents:
Net Cash Provided by Operating
Activities $ 6,314,003 $ 1,573,575
------------ ------------
Cash Flows From Investing Activities:
Additions to land and buildings
on operating leases (75,111,847) (18,316,555)
Investment in direct financing
leases (14,391,675) (1,555,641)
Proceeds from sale of buildings and
equipment under direct financing
leases 6,216,357 -
Investment in mortgage notes
receivable (4,443,982) (12,363,000)
Collection of deferred financing
income 42,000 43,270
Collection on mortgage notes
receivable 117,192 41,022
Increase in other assets - (644,752)
----------- ------------
Net cash used in investing
activities (87,571,955) (32,795,656)
----------- ------------
Cash Flows From Financing Activities:
Reimbursement of acquisition and
stock issuance costs paid by
related parties on behalf of
the Company (1,524,434) (556,511)
Proceeds of borrowing on line
of credit 2,888,163 603,745
Payment on line of credit (1,653,321) -
Payment of loan costs (6,101) (53,500)
Contribution from minority
interest of consolidated
joint venture - 97,419
Subscriptions received from
stockholders 84,646,030 38,362,490
Distributions to minority interest (17,035) (22,010)
Distributions to stockholders (6,282,470) (1,871,820)
Payment of stock issuance costs (8,145,622) (3,502,100)
Other - 25,500
------------ ------------
Net cash provided by
financing activities 69,905,210 33,083,213
------------ ------------
Net Increase (Decrease) in Cash and Cash
Equivalents (11,352,742) 1,861,132
Cash and Cash Equivalents at Beginning
of Period 42,450,088 11,508,445
------------ ------------
Cash and Cash Equivalents at End
of Period $ 31,097,346 $ 13,369,577
============ ============
</TABLE>
See accompanying notes to condensed consolidated
financial statements.
4
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1997 1996
------------ ------------
<S> <C>
Supplemental Schedule of Non-Cash
Investing and Financing Activities:
Related parties paid certain
acquisition and stock issuance
costs on behalf of the Company
as follows:
Acquisition costs $ 329,237 $ 107,383
Stock issuance costs 1,361,009 495,800
------------ ------------
$ 1,690,246 $ 603,183
============ ============
</TABLE>
See accompanying notes to condensed consolidated
financial statements.
5
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Quarters and Six Months Ended June 30, 1997 and 1996
1. Organization and Nature of Business:
CNL American Properties Fund, Inc. (the "Company") was organized in
Maryland on May 2, 1994, primarily for the purpose of acquiring,
directly or indirectly through joint venture or co-tenancy arrangements,
restaurant properties (the "Properties") to be leased on a long-term,
triple-net basis to operators of certain national and regional fast-
food, family-style and casual dining restaurant chains. The Company may
provide financing ("Mortgage Loans") for the purchase of buildings,
generally by tenants that lease the underlying land from the Company.
To a lesser extent, the Company may offer furniture, fixtures and
equipment financing ("Secured Equipment Leases") to operators of
restaurant chains.
2. Basis of Presentation:
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with the instructions to Form 10-Q and
do not include all of the information and note disclosures required by
generally accepted accounting principles. The financial statements
reflect all adjustments, consisting of normal recurring adjustments,
which are, in the opinion of management, necessary to a fair statement
of the results for the interim periods presented. Operating results for
the quarter and six months ended June 30, 1997, may not be indicative of
the results that may be expected for the year ending December 31, 1997.
Amounts as of December 31, 1996, included in the financial statements,
have been derived from audited financial statements as of that date.
These unaudited financial statements should be read in conjunction with
the financial statements and notes thereto included in the Company's
Form 10-K for the year ended December 31, 1996.
The Company accounts for its 85.47% interest in CNL/Corral South Joint
Venture using the consolidation method. Minority interest represents
the minority joint venture partner's proportionate share of the equity
in the Company's consolidated joint venture. All significant
intercompany accounts and transactions have been eliminated.
Certain items in the prior year's financial statements have been
reclassified to conform to 1997 presentation. These reclassifications
had no effect on stockholders' equity or net earnings.
6
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30, 1997 and 1996
2. Basis of Presentation - Continued:
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standard No. 128, "Earnings Per
Share." The Statement, which is effective for fiscal years ending after
December 15, 1997, provides for a revised computation of earnings per
share. The Company will adopt this Standard in 1997 and does not expect
compliance with such Standard to have a material effect, if any, on the
Company's earnings per share.
3. Leases:
The Company leases its land, buildings and equipment subject to Secured
Equipment Leases to operators or franchisees of national and regional
fast-food, family-style and casual dining restaurants. The leases are
accounted for under the provisions of Statement of Financial Accounting
Standards No. 13, "Accounting for Leases." The leases relating to 152
of the Company's Properties have been classified as operating leases
(including the leases relating to 33 properties under construction as of
June 30, 1997) and the leases relating to 22 Properties and 14 Secured
Equipment Leases have been classified as direct financing leases. For
the leases classified as direct financing leases, the building portions
of the leases are accounted for as direct financing leases while the
land portions of 14 of these leases are accounted for as operating
leases.
4. Land and Buildings on Operating Leases:
In May 1997, the Company sold four of its Properties and the equipment
relating to two secured Equipment Leases to the tenant. The Company
received net proceeds of approximately $6,216,400 which was equal to the
carrying value of the Properties and the equipment at the time of the
sale. As a result, no gain or loss was recognized for financial
reporting purposes.
7
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30, 1997 and 1996
4. Land and Buildings on Operating Leases - Continued:
Land and buildings on operating leases consisted of the following at:
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
------------ ------------
<S> <C>
Land $ 79,480,653 $ 33,850,436
Buildings 49,214,317 24,152,610
------------ ------------
128,694,970 58,003,046
Less accumulated
depreciation (1,185,404) (611,396)
------------ ------------
127,509,566 57,391,650
Construction in
progress 13,473,831 2,851,496
------------ ------------
$140,983,397 $ 60,243,146
============ ============
</TABLE>
Some leases provide for scheduled rent increases throughout the lease
term and/or rental payments during the construction of a Property prior
to the date it is placed in service. Such amounts are recognized on a
straight-line basis over the terms of the leases commencing on the date
the Property is placed in service. For the six months ended June 30,
1997 and 1996, the Company recognized $616,027 and $176,080,
respectively, of such rental income, $346,287 and $63,175 of which was
earned during the quarters ended June 30, 1997 and 1996, respectively.
The following is a schedule of future minimum lease payments to be
received on the noncancellable operating leases at June 30, 1997:
1997 $ 5,899,037
1998 10,723,569
1999 10,737,880
2000 10,761,481
2001 10,953,725
Thereafter 165,685,054
------------
$214,760,746
============
Since leases are renewable at the option of the tenant, the above table
only presents future minimum lease payments due during the initial lease
terms. In addition, this table does not include any amounts for future
contingent rents which may be received on the leases based on the
percentage of the tenant's gross sales. These amounts do not include
minimum lease payments that will become due when Properties under
development are completed (See Note 12).
8
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30, 1997 and 1996
5. Net Investment in Direct Financing Leases:
The following lists the components of the net investment in direct
financing leases at:
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
------------- -------------
<S> <C>
Minimum lease payments
receivable $ 46,870,056 $ 30,162,465
Estimated residual
values 3,527,032 1,346,332
Less unearned income (27,693,895) (16,322,111)
------------ ------------
Net investment in
direct financing
leases $ 22,703,193 $ 15,186,686
============ ============
The following is a schedule of future minimum lease payments to be
received on the direct financing leases at June 30, 1997:
1997 $ 1,635,590
1998 3,273,686
1999 3,273,686
2000 3,273,686
2001 3,045,726
Thereafter 32,367,682
-----------
$46,870,056
===========
</TABLE>
The above table does not include future minimum lease payments for
renewal periods or for contingent rental payments that may become due in
future periods (see Note 4).
6. Mortgage Notes Receivable:
In March 1997, in connection with the acquisition of land for eight
Pizza Hut restaurants, the Company accepted a promissory note in the
principal sum of $4,200,000, collateralized by a mortgage on the
buildings on the eight Pizza Hut Properties and three additional Pizza
Hut buildings. The promissory note bears interest at a rate of 10.5%
per annum and is being collected in 240 equal monthly installments of
$41,943.
9
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30, 1997 and 1996
6. Mortgage Notes Receivable - Continued:
Mortgage notes receivable consisted of the following at:
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
----------- ------------
<S> <C>
Outstanding principal $16,795,958 $12,713,151
Accrued interest income 79,162 35,285
Deferred financing income (87,562) (46,268)
Unamortized loan costs 949,549 687,439
----------- -----------
$17,737,107 $13,389,607
=========== ===========
</TABLE>
Management believes that the estimated fair value of mortgage notes
receivable at June 30, 1997, approximates the outstanding principal
amount based on estimated current rates at which similar loans would be
made to borrowers with similar credit and for similar maturities.
7. Note Payable:
On March 5, 1996, the Company entered into a line of credit and security
agreement (the "Loan") with a bank to be used by the Company to offer
Secured Equipment Leases. The Loan provides that the Company will be
able to receive advances of up to $15,000,000 until March 4, 1998. As
of June 30, 1997, $4,756,658 of principal was outstanding relating to
the Loan, plus $26,751 of accrued interest. In general, advances under
the Loan are fully amortizing term loans repayable over six years and
bear interest at a rate per annum equal to 215 basis points above the
Reserve Adjusted LIBOR Rate (ranging from 7.84% to 7.86% as of June 30,
1997). The Company believes, based on current terms, that the carrying
value of its note payable at June 30, 1997, approximates fair value.
Interest costs (including amortization of loan costs) incurred for the
quarter and six months ended June 30, 1997, were $112,985 and $210,542,
respectively, all of which were capitalized as part of the cost of
buildings under construction.
10
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30, 1997 and 1996
8. Stock Issuance Costs:
The Company has incurred certain expenses of its offerings of shares,
including commissions, marketing support and due diligence expense
reimbursement fees, filing fees, legal, accounting, printing and escrow
fees, which have been deducted from the gross proceeds of the offering.
Preliminary costs incurred prior to raising capital were advanced by an
affiliate of the Company, CNL Fund Advisors, Inc. (the "Advisor").
The Advisor has agreed to pay all offering expenses (excluding
commissions and marketing support and due diligence expense
reimbursement fees) which exceed three percent of the gross offering
proceeds received from the sale of shares of the Company.
During the six months ended June 30, 1997 and the year ended December
31, 1996, the Company incurred $9,285,646 and $9,216,102, respectively,
in stock issuance costs, including $6,767,682 and $8,063,439,
respectively, in commissions and marketing support and due diligence
expense reimbursement fees (see Note 10). The stock issuance costs have
been charged to stockholders' equity subject to the three percent cap
described above.
9. Distributions:
For the six months ended June 30, 1997 and 1996, approximately 92 and 85
percent, respectively, of the distributions paid to stockholders were
considered ordinary income and approximately eight and 15 percent,
respectively, were considered a return of capital to stockholders for
federal income tax purposes. No amounts distributed to the stockholders
for the six months ended June 30, 1997 and 1996, are required to be or
have been treated by the Company as a return of capital for purposes of
calculating the stockholders' return on their invested capital. The
characterization for tax purposes of distributions declared for the six
months ended June 30, 1997, may not be indicative of the results that
may be expected for the year ending December 31, 1997.
10. Related Party Transactions:
During the six months ended June 30, 1997, the Company incurred
$6,344,702 in selling commissions due to CNL Securities Corp. for
services in connection with the offering of shares. A substantial
portion of this amount ($5,848,410) was or will be paid by CNL
Securities Corp. as commissions to other broker-dealers.
11
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30, 1997 and 1996
10. Related Party Transactions - Continued
In addition, CNL Securities Corp. is entitled to receive a marketing
support and due diligence expense reimbursement fee equal to 0.5% of the
total amount raised from the sale of shares, a portion of which may be
re-allowed to other broker-dealers. During the six months ended June
30, 1997, the Company incurred $422,980 of such fees, the majority of
which were reallowed to other broker-dealers and from which all bona
fide due diligence expenses were paid.
The Advisor is entitled to receive acquisition fees for services in
identifying the Properties and structuring the terms of the acquisition
and leases of the Properties and structuring the terms of the Mortgage
Loans equal to 4.5% of the total amount raised from the sale of shares.
During the six months ended June 30, 1997, the Company incurred
$3,806,821 of such fees. Such fees are included in land and buildings
on operating leases, net investment in direct financing leases, mortgage
notes receivable and other assets.
In connection with the acquisition of Properties that are being or have
been constructed or renovated by affiliates, subject to approval by the
Company's Board of Directors, the Company may incur
development/construction management fees payable to affiliates of the
Company. Such fees are included in the purchase price of the
Properties and are therefore included in the basis on which the Company
charges rent on the Properties. During the six months ended June 30,
1997, the Company incurred $178,879 of such amounts relating to three
Properties. No such amounts were incurred for the six months ended June
30, 1996.
For negotiating Secured Equipment Leases and supervising the Secured
Equipment Lease program, the Advisor is entitled to receive a one-time
secured equipment lease servicing fee of two percent of the purchase
price of the Equipment that is the subject of a Secured Equipment Lease.
During the six months ended June 30, 1997 and 1996, the Company incurred
$54,598 and $10,776, respectively, in secured equipment lease servicing
fees.
The Company and the Advisor have entered into an advisory agreement
pursuant to which the Advisor will receive a monthly asset and mortgage
management fee of one-twelfth of 0.60% of the Company's real estate
asset value (generally, the total amount invested in the Properties as
of the end of the preceding month, exclusive of acquisition fees and
acquisition expenses), plus one-twelfth of 0.60% of the Company's
total
12
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30, 1997 and 1996
10. Related Party Transactions - Continued
principal amount of the Mortgage Loans as of the end of the preceding
month. The management fee, which will not exceed fees which are
competitive for similar services in the same geographic area, may or may
not be taken, in whole or in part as to any year, in the sole discretion
of the Advisor. All or any portion of the management fee not taken as
to any fiscal year shall be deferred without interest and may be taken
in such other fiscal year as the Advisor shall determine. During the
six months ended June 30, 1997 and 1996, the Company incurred $300,656
and $100,526, respectively, of such fees, $41,400 and $2,853,
respectively, of which was capitalized as part of the cost of building
for Properties under construction.
The Advisor and its affiliates provide accounting and administrative
services to the Company (including accounting and administrative
services in connection with the offerings of shares) on a day-to-day
basis. For the six months ended June 30, 1997 and 1996, the expenses
incurred for these services were classified as follows:
<TABLE>
<CAPTION>
1997 1996
---------- ---------
<S> <C>
Stock issuance costs $ 757,096 $ 379,090
General operating and
administrative expenses 269,208 154,018
---------- ---------
$1,026,304 $ 533,108
========== =========
</TABLE>
During each of the six months ended June 30, 1997 and 1996, the Company
acquired two Properties for approximately $1,773,300 and $1,798,000,
respectively, from affiliates of the Company. The affiliates had
purchased and temporarily held title to the Properties in order to
facilitate the acquisition of the Properties by the Company. The
Properties were acquired at a cost no greater than the lesser of the
cost of each Property to the affiliate (including carrying costs) or the
Property's appraised value.
13
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30, 1997 and 1996
10. Related Party Transactions - Continued
The due to related parties consisted of the following at:
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
---------- -----------
<S> <C>
Due to the Advisor:
Expenditures incurred
on behalf of the
Company and accounting
and administrative
services $333,177 $199,068
Acquisition fees 178,715 383,210
-------- --------
511,892 582,278
-------- --------
Due to CNL Securities Corp:
Commissions 258,474 372,227
Marketing support and due
diligence expense reim-
bursement fees 19,857 42,579
-------- --------
278,331 414,806
-------- --------
$790,223 $997,084
======== ========
11. Concentration of Credit Risk:
The following schedule presents total rental, earned, and interest
income from individual lessees, or affiliated groups of lessees, each
representing more than ten percent of the Company's total rental,
earned, and interest income from its Properties, Mortgage Loans and
Secured Equipment Leases for at least one of the quarters ended June 30:
1997 1996
--------- ----------
Castle Hill Holdings V,
L.L.C. and Castle Hill
Holdings VI, L.L.C.
("Castle Hill") $ 690,375 $ 441,085
Foodmaker, Inc. 419,259 52,833
Golden Corral Corporation 203,070 142,178
</TABLE>
14
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30, 1997 and 1996
11. Concentration of Credit Risk - Continued:
In addition, the following schedule presents total rental, earned, and
interest income from individual restaurant chains, each representing
more than ten percent of the Company's rental, earned, and interest
income for at least one of the quarters ended June 30:
<TABLE>
<CAPTION>
1997 1996
----------- ----------
<S> <C>
Pizza Hut 690,375 441,085
Golden Corral Family
Steakhouse Restaurants 664,687 313,694
Jack in the Box 419,259 52,833
Boston Market 378,590 85,918
</TABLE>
Although the Company's Properties are geographically diverse and the
Company's lessees and borrowers operate a variety of restaurant
concepts, failure of any one of these restaurant chains or any lessee or
borrower that contributes more than ten percent of the Company's rental,
earned and interest income could significantly impact the results of
operations of the Company. However, management believes that the risk
of such a default is reduced due to the essential or important nature of
these Properties for the on-going operations of the lessees and
borrowers.
12. Commitments:
The Company has entered into various development agreements with tenants
which provide terms and specifications for the construction of buildings
the tenants have agreed to lease. The agreements provide a maximum
amount of development costs (including the purchase price of the land
and closing costs) to be paid by the Company. The aggregate maximum
development costs the Company has agreed to pay is approximately
$37,343,000 of which approximately $29,936,300 in land and other costs
had been incurred as of June 30, 1997. The buildings currently under
construction are expected to be operational by December 1997. In
connection with the purchase of each Property, the Company, as lessor,
entered into a long-term lease agreement.
15
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30, 1997 and 1996
13. Subsequent Events:
During the period July 1, 1997 through August 5, 1997, the Company
received subscription proceeds for an additional 2,009,403 shares
($20,094,034) of common stock.
On July 1, 1997, the Company declared distributions of $1,403,244 or
$.0625 per share of common stock, payable in September 1997 to
stockholders of record on July 1, 1997.
During the period July 1, 1997 through August 5, 1997, the Company
acquired 20 Properties (four on which restaurants are being constructed
and five on which a restaurant is being renovated) for cash at a total
cost of approximately $20,377,100. In connection with the purchase of
each Property, the Company, as lessor, entered into a long-term lease
agreement. The buildings under construction are expected to be
operational by August 1998.
On August 5, 1997, the Company obtained a commitment (the "Commitment")
from a bank to amend and restate its Loan described in Note 7. The
Commitment provides that the Company will be able to receive advances on
a revolving $35,000,000 unsecured line of credit (the "Line of Credit")
to purchase and develop Properties and to fund Mortgage Loans and
Secured Equipment Leases. The advances will bear interest at a rate of
LIBOR plus 1.65% or the bank's prime rate, whichever the Company selects
at the time of borrowing. Interest only will be repayable monthly until
June 30, 1999, at which time all remaining interest and principal shall
be due. The Line of Credit will provide for two one-year renewal
options. The Commitment will expire unless it is closed on or before
August 29, 1997.
16
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Introduction
The Company is a Maryland corporation that was organized on May 2, 1994,
to acquire Properties, directly or indirectly through joint venture or co-
tenancy arrangements, to be leased on a long-term, "triple-net" basis to
operators of certain national and regional fast-food, family-style and casual
dining restaurant chains. In addition, the Company may provide financing
generally for the purchase of buildings by borrowers that lease the underlying
land from the Company. To a lesser extent, the Company may offer Secured
Equipment Leases to operators of restaurant chains.
As of June 30, 1997, the Company owned 174 Properties (including one
Property through a joint venture arrangement, and 33 Properties which were
under construction at June 30, 1997).
Liquidity and Capital Resources
In April 1995, the Company commenced an offering of its shares of common
stock (the "Initial Offering"). During the period January 1, 1997 through
February 6, 1997, the Company received subscription proceeds of $11,344,616
(1,134,462 shares) from its Initial Offering, thereby completing such
offering. As of the completion of its Initial Offering, the Company had
received subscription proceeds of $150,591,765 (15,059,177 shares), including
$591,765 (59,177 shares) pursuant to the Company's reinvestment plan.
Following the completion of its Initial Offering on February 6, 1997, the
Company commenced an offering of up to 27,500,000 shares of common stock (the
"Subsequent Offering). As of June 30, 1997, the Company had received
subscription proceeds of $73,251,412 (7,325,141 shares) from the Subsequent
Offering, including $643,293 (64,329 shares) pursuant to the reinvestment
plan. Net proceeds to the Company from the Initial Offering and the
Subsequent Offering, after deduction of offering expenses, totalled
$75,310,383 for the six months ended June 30, 1997.
At the Company's annual meeting of stockholders held on April 4, 1997,
the stockholders approved amendments to the Company's Amended and Restated
Articles of Incorporation increasing the number of authorized shares of
capital stock from 46,000,000 shares to 156,000,000 shares (consisting of
75,000,000 common shares, 3,000,000 preferred shares and 78,000,000 excess
shares).
During the six months ended June 30, 1997, approximately $92,000,000 was
used to invest, or committed for investment, in 80 Properties (33 Properties
on which a restaurant was being constructed as of June 30, 1997), in providing
mortgage financing of $4,200,000 and to pay acquisition fees to the Advisor
totalling $3,806,821 and certain acquisition expenses. The Company acquired
two of the 80 Properties from affiliates for purchase prices totalling
approximately $1,773,300. The affiliates had purchased and temporarily
held title to these Properties in order
17
<PAGE>
Liquidity and Capital Resources - Continued
to facilitate the acquisition of the Properties by the Company. Each Property
was acquired at a cost no greater than the lesser of the cost of the Property
to the affiliate (including carrying costs) or the Property's appraised value.
In connection with the 33 Properties under construction at June 30,
1997, the Company has entered into various development agreements with tenants
which provide terms and specifications for the construction of buildings the
tenants have agreed to lease. The agreements provide a maximum amount of
development costs (including the purchase price of the land and closing costs)
to be paid by the Company. The aggregate maximum development costs the
Company has agreed to pay are approximately $37,343,000, of which
approximately $29,936,300 had been incurred as of June 30, 1997. The
buildings under construction as of June 30, 1997, are expected to be
operational by December 1997. In connection with the purchase of each
Property, the Company, as lessor, entered into a long-term lease agreement.
In May 1997, the Company sold four of its Properties and the equipment
relating to two secured Equipment Leases to the tenant. The Company received
net proceeds of approximately $6,216,400 which was equal to the carrying value
of the Properties and the equipment at the time of the sale. As a result, no
gain or loss was recognized for financial reporting purposes.
During the six months ended June 30, 1997, the Company also received
advances totalling $2,888,163 under the Loan. Such amounts were used to fund
Secured Equipment Leases. During the six months ended June 30, 1997, the
Company repaid $1,653,321 under the Loan, a portion of which was received from
the sales proceeds of the two Secured Equipment Leases described above. The
Company expects to obtain additional advances under the Loan to fund the
remaining amounts due for Secured Equipment Leases and any Secured Equipment
Leases entered into in the future.
During the period July 1, 1997 through August 5, 1997, the Company
acquired 20 additional Properties (four on which restaurants are being
constructed and five on which a restaurant is being renovated) for cash at a
total cost of approximately $20,377,100. The buildings under construction are
expected to be operational by August 1998.
The Company presently is negotiating to acquire additional Properties,
but as of August 5, 1997, had not acquired any such Properties.
As of August 5, 1997, the Company had received aggregate subscription
proceeds of $243,937,211 (24,393,721 shares) from its Initial Offering and
Subsequent Offering, including $1,235,058 (123,506 shares) through its
reinvestment plan. As of August 5, 1997, the Company had invested or
committed for investment approximately $207,931,000 of aggregate net proceeds
from the Initial Offering and the Subsequent Offering in 194 Properties, in
18
<PAGE>
Liquidity and Capital Resources - Continued
providing mortgage financing to the tenants of 44 Properties consisting of
land only through Mortgage Loans and in paying acquisition fees and certain
acquisition expenses, leaving approximately $10,709,000 in aggregate net
offering proceeds available for investment in Properties and Mortgage Loans.
The Company expects to use uninvested net offering proceeds, plus any
net offering proceeds from the sale of additional shares, to purchase
additional Properties, to fund construction costs relating to the Properties
under construction and to make Mortgage Loans. The Company expects to use the
proceeds of the Loan to fund the Secured Equipment Lease program. The number
of Properties to be acquired and Mortgage Loans to be entered into will depend
upon the amount of net offering proceeds available to the Company, although
the Company is expected to have a total portfolio of 400 to 450 Properties if
the maximum number of shares are sold in the Subsequent Offering. The Company
intends to limit the amount of Secured Equipment Leases it enters into to ten
percent of gross offering proceeds from its offerings.
On August 5, 1997, the Company obtained a commitment (the "Commitment")
from a bank to amend and restate its Loan described in Note 7. The Commitment
provides that the Company will be able to receive advances on a revolving
$35,000,000 unsecured line of credit (the "Line of Credit") to purchase and
develop Properties and to fund Mortgage Loans and Secured Equipment Leases.
The advances will bear interest at a rate of LIBOR plus 1.65% or the bank's
prime rate, whichever the Company selects at the time of borrowing. Interest
only will be repayable monthly until June 30, 1999, at which time all
remaining interest and principal shall be due. The Line of Credit will
provide for two one-year renewal options. The Commitment will expire unless
it is closed on or before August 29, 1997.
The Line of Credit will provide short-term financing which the Company
anticipates will be repaid using additional offering proceeds and payments
received from Secured Equipment Leases, or refinanced on a long-term basis.
The Company will not encumber Properties in connection with the Line of
Credit. Management believes that during the offering period the Line of
Credit will allow the Company to make investments in Properties that the
Company otherwise would be forced to delay until it raised a sufficient amount
of proceeds from the sale of Shares to allow the Company to make the
investments. By eliminating this delay the Company will also eliminate the
risk that these investments will no longer be available, or the terms of the
investment will be less favorable, when the Company has raised sufficient
offering proceeds. Alternatively, Affiliates of the Advisor could make such
investments, pending receipt by the Company of sufficient offering proceeds,
in order to preserve the investment opportunities for the Company. However,
Properties acquired by the Company in this manner would be subject to closing
costs both on the original purchase by the Affiliate and on the subsequent
purchase by the Company, which would increase the amount of expenses
associated
19
<PAGE>
Liquidity and Capital Resources - Continued
with the acquisition of Properties and reduce the amount of offering proceeds
available for investment in income-producing assets. Management believes that
the use of Line of Credit by the Company will enable the Company to reduce or
eliminate the instances in which the Company will be required to pay duplicate
closing costs.
Properties are and will be leased on a triple-net basis, meaning that
tenants are generally required to pay all repairs and maintenance, property
taxes, insurance and utilities. Rental payments under the leases are expected
to exceed the Company's operating expenses. For these reasons, no short-term
or long-term liquidity problems currently are anticipated by management.
Until Properties are acquired, or Mortgage Loans are entered into, net
offering proceeds are held in short-term, highly liquid investments which
management believes to have appropriate safety of principal. This investment
strategy provides high liquidity in order to facilitate the Company's use of
these funds to acquire Properties or to fund Mortgage Loans at such time as
Properties suitable for acquisition and investments in Mortgage Notes are
identified. At June 30, 1997, the Company had $31,097,346 invested in such
short-term investments, as compared to $42,450,088 at December 31, 1996.
These funds will be used primarily to purchase and develop or renovate
Properties (directly or indirectly through joint venture arrangements), to
make Mortgage Loans, to pay offering and acquisition costs, to pay
distributions to stockholders, to meet Company expenses and, in management's
discretion, to create cash reserves. The decrease in the amount invested in
short-term investments is primarily attributable to the acquisition of
additional Properties, as described above, during the six months ended June
30, 1997.
During the six months ended June 30, 1997 and 1996, affiliates of the
Company incurred on behalf of the Company $1,361,009 and $495,800,
respectively, for certain offering expenses, $329,237 and $107,383,
respectively, for certain acquisition expenses, and $236,639 and $149,802,
respectively, for certain operating expenses. As of June 30, 1997, the
Company owed the Advisor $790,223 for such amounts, unpaid fees and accounting
and administrative expenses. As of August 5, 1997, the Company had reimbursed
all such amounts. The Advisor has agreed to pay or reimburse to the Company
all offering expenses in excess of three percent of gross offering proceeds.
During the six months ended June 30, 1997 and 1996, the Company
generated cash from operations (which includes cash received from tenants and
interest and other income received, less cash paid for operating expenses) of
$6,314,003 and $1,573,575, respectively. Based on current and anticipated
future cash from operations the Company declared distributions to the
stockholders of $6,282,470 and $1,868,487, respectively, during the six months
ended June 30, 1997 and 1996. In addition, on July 1, 1997, the
20
<PAGE>
Liquidity and Capital Resources - Continued
Company declared distributions to its stockholders totalling $1,403,244,
payable in September 1997. For the six months ended June 30, 1997 and 1996,
approximately 92 and 85 percent, respectively, of the distributions received
by stockholders were considered to be ordinary income and approximately eight
and 15 percent, respectively, were considered a return of capital for federal
income tax purposes. However, no amounts distributed or to be distributed to
the stockholders as of August 5, 1997, are required to be or have been treated
by the Company as a return of capital for purposes of calculating the
stockholders' return on their invested capital.
Management believes that the Properties are adequately covered by
insurance. In addition, the Advisor obtained contingent liability and
property coverage for the Company. This insurance policy is intended to
reduce the Company's exposure in the unlikely event a tenant's insurance
policy lapses or is insufficient to cover a claim relating to the Property.
The Company's investment strategy of acquiring Properties for cash and leasing
them under triple-net leases to operators who meet specified financial
standards is expected to minimize the Company's operating expenses.
Due to the fact that the Properties are leased on a long-term, triple-
net basis, management does not believe that working capital reserves are
necessary at this time. Management has the right to cause the Company to
maintain reserves if, in their discretion, they determine such reserves are
required to meet the Company's working capital needs.
Management expects that the cash generated from operations will be
adequate to pay operating expenses.
Results of Operations
As of June 30, 1997, the Company and its consolidated joint venture,
CNL/Corral South Joint Venture (hereinafter, collectively referred to as the
Company) had purchased and entered into long-term, triple-net leases for 178
Properties (including four Properties in each of Marlboro, and Hazlet, New
Jersey and Hamden and Orange, Connecticut, which were sold in May 1997). The
leases provide for minimum base annual rental payments (payable in monthly
installments) ranging from approximately $34,800 to $467,500. In addition,
certain leases provide for percentage rent based on sales in excess of a
specified amount. The majority of the leases also provide that, commencing in
generally the sixth lease year, the annual base rent required under the terms
of the leases will increase. In connection therewith, during the six months
ended June 30, 1997 and 1996, the Company earned $4,965,297 and $1,704,185,
respectively, in rental income from operating leases and earned income from
direct financing lease from 143 Properties and 16 Secured Equipment Leases in
1997 (including two Secured Equipment Leases in Marlboro and Hazlet, New
Jersey, which were sold in May 1997) and from 41 Properties in 1996
($2,875,512 and
21
<PAGE>
Results of Operations - Continued
$905,104 of which was earned during the quarters ended June 30, 1997 and 1996,
respectively). Because the Company has not yet acquired all of its
Properties, revenues for the six months ended June 30, 1997 and 1996,
represent only a portion of revenues which the Company is expected to earn in
future periods in which the Company's Properties are operational.
As of June 30, 1997, the Company had also entered into Mortgage Loans in
the principal sum of $17,047,000, collateralized by mortgages on the buildings
relating to 44 Pizza Hut Properties and two additional Pizza Hut buildings.
The Mortgage Loans bear interest at rates ranging from 10.5% to 10.75% per
annum and are being collected in 240 equal monthly installments in the
aggregate amount of $167,455. In connection therewith, the Company earned
$815,192 and $465,498 in interest income relating to such Mortgage Loans
during the six months ended June 30, 1997 and 1996, respectively, $439,835 and
$280,549 of which was earned during the quarters ended June 30, 1997 and 1996,
respectively.
During the six months ended June 30, 1997, two affiliated group of
lessees and borrowers, Castle Hill and Foodmaker, Inc., each represented more
than ten percent of the Company's total rental, earned and interest income
from its Properties, Mortgage Loans and Secured Equipment Leases. Castle
Hill is the lessee under leases relating to 44 restaurants and is the borrower
on Mortgage Loans relating to the buildings on such Properties and Foodmaker,
Inc. is the lessee under leases relating to 17 restaurants. In addition,
during the six months ended June 30, 1997, four restaurant chains, Golden
Corral Family Steakhouse, Pizza Hut, Jack in the Box, and Boston Market, each
accounted for more than ten percent of the Company's total rental, earned and
interest income relating to its Properties, Mortgage Loans and Secured
Equipment Leases. Because the Company has not completed its investment in
Properties and Mortgage Loans, it is not possible to determine which lessees,
borrowers or restaurant chains will contribute more than ten percent of the
Company's rental, earned and interest income during the remainder of 1997 and
subsequent years. In the event that certain lessees, borrowers or restaurant
chains contribute more than ten percent of the Company's rental and interest
income in the current and future years, any failure of such lessees, borrowers
or restaurants chains could materially affect the Company's income.
During the six months ended June 30, 1997 and 1996, the Company also
earned $934,745 and $211,789, respectively, in interest income from
investments in money market accounts or other short-term, highly liquid
investments and other income $460,329 and $135,940 of which was earned during
the quarters ended June 30, 1997 and 1996, respectively. As net offering
proceeds are invested in Properties and used to make Mortgage Loans, interest
income from investments in money market accounts or other short-term, highly
liquid investments is expected to decrease.
22
<PAGE>
Results of Operations - Continued
Operating expenses, including depreciation and amortization expense,
were $1,472,413 and $670,107 for the six months ended June 30, 1997 and 1996,
respectively, of which $792,590 and $369,568 were incurred for the
quarters ended June 30, 1997 and 1996, respectively. Operating expenses
increased primarily as a result of the Company having invested in additional
Properties and Mortgage Loans during the quarter and six months ended June 30,
1997, as compared to the quarter and six months ended June 30, 1996. General
and administrative expenses as a percentage of total revenues is expected to
decrease as the Company acquires additional Properties, invests in Mortgage
Loans and the Properties under construction become operational. However,
asset and mortgage management fees and depreciation and amortization expense
are expected to increase as the Company invests in additional Properties and
Mortgage Loans.
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standard No. 128, "Earnings Per Share." The
Statement, which is effective for fiscal years ending after December 15,
1997, provides for a revised computation of earnings per share. The
Company will adopt this Standard in 1997 and does not expect compliance with
such Standard to have a material effect, if any, on the Company's earnings per
share.
This information contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Although the Company believes that the expectations
reflected in such forward-looking statements are based upon reasonable
assumptions, the Company's actual results could differ materially from those
set forth in the forward-looking statements. Certain factors that might cause
such a difference include the following: changes in general economic
conditions, changes in local real estate conditions, continued availability of
proceeds from the Company's offering, the ability of the Company to locate
suitable tenants for its Properties and borrowers for its Mortgage Loans, and
the ability of tenants and borrowers to make payments under their respective
leases or Mortgage Loans.
23
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings. Inapplicable.
Item 2. Changes in Securities. Inapplicable.
Item 3. Defaults upon Senior Securities. Inapplicable.
Item 4. Submission of Matters to a Vote of Security Holders.
Inapplicable.
Item 5. Other Information. Inapplicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
3.3 CNL American Properties Fund, Inc. Articles
of Amendment dated May 8, 1997 (Included as
Exhibit 3.3 to Registration Statement
No 333-15411 on Form S-11 and incorporated
herein by reference).
4.5 CNL American Properties Fund, Inc. Articles
of Amendment dated May 8, 1997 (Included as
Exhibit 4.5 to Registration Statement
No 333-15411 on Form S-11 and incorporated
herein by reference).
(b) The Company filed three reports on Form 8-K on April 17,
1997, May 28, 1997, and June 25, 1997, reporting property
acquisitions, and one report on Form 8-K/A filed on June 19,
1997, amending a previous report filed reporting property
acquisitions.
24
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
DATED this 13th day of August, 1997.
CNL AMERICAN PROPERTIES FUND, INC.
By: /s/ James M. Seneff, Jr.
JAMES M. SENEFF, JR.
Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)
By: /s/Steven D. Shackelford
STEVEN D. SHACKELFORD
Chief Financial Officer
(Principal Financial Officer)
25
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the balance
sheet of CNL American Properties Fund, Inc. at June 30, 1997, and its statement
of income for the six months then ended and is qualified in its entirety by
reference to the Form 10-Q of CNL American Properties Fund, Inc. for the six
months ended June 30, 1997.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 31,097,346
<SECURITIES> 0
<RECEIVABLES> 497,307
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 142,168,801
<DEPRECIATION> 1,185,404
<TOTAL-ASSETS> 214,941,742
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> 224,043
<OTHER-SE> 196,898,393
<TOTAL-LIABILITY-AND-EQUITY> 214,941,742
<SALES> 0
<TOTAL-REVENUES> 6,715,234
<CGS> 0
<TOTAL-COSTS> 1,472,413
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 5,227,095
<INCOME-TAX> 0
<INCOME-CONTINUING> 5,227,095
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,227,095
<EPS-PRIMARY> .29
<EPS-DILUTED> 0
<FN>
<F1>Due to the nature of its industry, CNL American Properties Fund, Inc. has an
unclassified balance sheet; therefore, no values are shown above for current
assets and current liabilities.
</FN>
</TABLE>
