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): March 18, 1997
CNL AMERICAN PROPERTIES FUND, INC.
(Exact Name of Registrant as Specified in Charter)
Florida 33-78790 59-3239115
(State or other jurisdiction (Commission File Number) (IRS Employer
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
Pursuant to a registration statement on Form S-11 under the
Securities Act of 1933, as amended, effective March 29, 1995, CNL American
Properties Fund, Inc. (the "Company") registered for sale an aggregate of
$165,000,000 of shares of common stock (the "Shares") (16,500,000 Shares at
$10 per Share). The Company completed its offering (the "Initial Offering")
on February 6, 1997, upon receiving aggregate subscription proceeds of
$150,591,765 (15,059,177 Shares) from 7,724 stockholders, including $591,765
(59,177 Shares) issued pursuant to the Company's reinvestment plan. Following
the completion of its Initial Offering, the Company commenced an offering of
up to 27,500,000 Shares (the "Subsequent Offering"). As of April 2, 1997, the
Company had received aggregate subscription proceeds of $27,535,682 (2,753,568
Shares) including $269,388 (26,939 Shares) issued pursuant to the Reinvestment
Plan, from 1,253 stockholders in connection with the Subsequent Offering.
As stated in the registration statement of the Company, including the
Prospectus which constitutes a part thereof, as amended, the proceeds of the
Initial and Subsequent Offerings 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 March 7, 1997 and April 2, 1997, the Company acquired 19
Properties, including seven Properties consisting of land and building, four
Properties consisting of building only and eight Properties consisting of land
only, with the proceeds of the Initial Offering. These Properties are two
Jack in the Box Properties (one in each of Houston, Texas, and Oxnard,
California), four Black-eyed Pea Properties (one in each of Bedford, Dallas
and Fort Worth, Texas; and Oklahoma City, Oklahoma), one Bennigan's Property
(in Arvada, Colorado), three Boston Market Properties (one in each of Cedar
Park, Texas; Collinsville, Illinois; and Taylorsville, Utah) one Burger King
Property (in Ooltewah, Tennessee) and eight Pizza Hut Properties (one in each
of Wellsburg, West Virginia; Bolivar, Carrollton, Millersburg, Steubenville
and Uhrichsville, Ohio; and two in New Philadelphia, Ohio) (hereinafter
referred to as the "Eight Pizza Hut Properties").
In connection with the purchase of the two Jack in the Box
Properties, the Bennigan's Property, the three Boston Market Properties and
the Burger King Property, which are land and building, 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, the Company has entered into development and indemnification and
put agreements with the lessees.
In connection with the Black-eyed Pea Properties in Bedford, Dallas
and Fort Worth, Texas; and Oklahoma City, Oklahoma, which are building only,
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. In
addition, the Company has entered into landlord estoppel agreements with the
landlords of the land and collateral
-1-
assignments of the ground leases with the lessees in order to provide the
Company with certain rights with respect to the land on which the buildings
are located.
The purchase price for the Burger King Property in Ooltewah,
Tennessee, includes a development fee of $100,000 to an affiliate of the
advisor for services provided in connection with the development of the
Property. The Company considers development fees, to the extent that they are
paid to affiliates, to be acquisition fees. Such development fees must be
approved by a majority of the Directors (including a majority of the
Independent Directors) not otherwise interested in such transactions, subject
to a determination that such transactions are fair and reasonable to the
Company and on terms and conditions not less favorable to the Company than
those available from unaffiliated third parties and not less favorable than
those available from the advisor or its affiliates in transactions with
unaffiliated third parties.
In connection with the Eight Pizza Hut Properties, which are land
only, the Company acquired the land and is leasing these eight parcels to the
lessee, Castle Hill Holdings VII, L.L.C. ("Castle Hill"), pursuant to a master
lease agreement (the "Master Lease Agreement"). Castle Hill has subleased the
Eight Pizza Hut Properties to one of its affiliates, Midland Food Services
III, L.L.C., which is the operator of the restaurants. The Master Lease
Agreement is 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 and sales and use taxes. If
the lessee does not exercise its option to purchase the Properties upon
termination of the Master Lease Agreement, the sublessee and lessee will
surrender possession of the Properties to the Company, together with any
improvements on such Properties. The lessee owns the buildings located on the
Eight Pizza Hut Properties. In addition, the Company provided mortgage
financing of $4,200,000 to the lessee of the Eight Pizza Hut Properties
pursuant to a mortgage loan evidenced by a master mortgage note (the "Master
Mortgage Note") which is collateralized by the building improvements on the
Eight Pizza Hut Properties and three additional properties. The Master
Mortgage Note bears interest at a rate of 10.50% per annum and principal and
interest are due in equal monthly installments over 20 years starting May 1,
1997. The Master Mortgage Note equals approximately 88 percent of the
appraised value of the related buildings. Management believes that, due to
the fact that the Company owns the underlying land relating to the Eight Pizza
Hut Properties and due to other underwriting criteria, the Company has
sufficient collateral for the Master Mortgage Note.
The following table sets forth the location of the 19 Properties,
including seven Properties consisting of land and building, four Properties
consisting of building only and eight Properties consisting of land only,
acquired by the Company, from March 7, 1997 through April 2, 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 March 7, 1997 through April 2, 1997
<CAPTION>
Lease Expira-
Property Location and Purchase Date tion and Minimum Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ----------- -------- --------------- --------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
JACK IN THE BOX (11) $905,945 03/18/97 03/2015; four $92,859 (6); for each lease at any time
(the "Houston #4 Property") (3)(6) five-year increases by 8% year, (i) 5% of after the
Restaurant to be renewal options after the fifth annual gross seventh
constructed lease year and sales minus lease year
after every (ii) the
The Houston #4 Property is five years minimum annual
located on the southeast thereafter rent for such
corner of Hempstead Highway during the lease year (5)
and 34th Street, in lease term
Houston, Harris County,
Texas, in an area of mixed
commercial and residential
development.
BLACK-EYED PEA (7)(10) $620,336 03/26/97 06/2013 $79,560; None at any time
(the "Bedford Property") increases to after the
Existing restaurant $81,950 during fifth lease
the eleventh year
The Bedford Property is through
located within the sixteenth lease
northeast quadrant of State years
Highway 121 and Parkwood
Drive, in Bedford, Tarrant
County, Texas, in an area
of mixed retail,
commercial, and residential
development. Other fast-
food and family-style
restaurants located in
proximity to the Bedford
Property include several
local restaurants.
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<CAPTION>
Lease Expira-
Property Location and Purchase Date tion and Minimum Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ----------- -------- --------------- --------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
BLACK-EYED PEA (7)(10) $620,320 03/26/97 05/2016 $75,182; None at any time
(the "Dallas Property") increases to after the
Existing restaurant $78,294 during fifth lease
the eleventh year
The Dallas Property is through
located on the south side nineteenth
of West Northwest Highway lease years
between Loop 12 and
Interstate Highway 35E, in
Dallas, Dallas County,
Texas, in an area of mixed
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located
in proximity to the Dallas
Property include an Olive
Garden, a Red Lobster, a
Chili's, a Tony Roma's, and
several local restaurants.
BLACK-EYED PEA (7)(10) $620,323 03/26/97 04/2011 $84,305; None at any time
(the "Forth Worth increases to after the
Property") $86,048 during fifth lease
Existing restaurant the eleventh year
through
The Fort Worth Property is fourteenth
located on the south side lease years
of Camp Bowie Boulevard
between Hillsdale Road and
Bernie Anderson Avenue, in
Fort Worth, Tarrant County,
Texas, in an area of mixed
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located
in proximity to the Fort
Worth Property include a
McDonald's, a Boston
Market, and several local
restaurants.
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<CAPTION>
Lease Expira-
Property Location and Purchase Date tion and Minimum Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ----------- -------- --------------- --------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
BLACK-EYED PEA (7) $617,022 03/26/97 04/2012 $81,660; None at any time
(the "Oklahoma City increases to after the
Property") $83,680 during fifth lease
Existing restaurant the eleventh year
through
The Oklahoma City Property fifteenth lease
is located on the south years
side of Interstate Highway
240, east of South
Pennsylvania Avenue, in
Oklahoma City, Oklahoma
County, Oklahoma, in an
area of mixed retail,
commercial, and residential
development. Other fast-
food and family-style
restaurants located in
proximity to the Oklahoma
City Property include a
Hardee's, a Denny's, a
Ryan's Family Steak House,
a Wendy's, a Western
Sizzlin, a Golden Corral,
and several local
restaurants.
EIGHT PIZZA HUT PROPERTIES $1,575,622 03/27/97 03/2017; two $165,440; None at any time
- - Land only - (8)(9) ten-year increases by after the
located in Bolivar, Ohio renewal options 10% after the seventh
(the "Bolivar Property"), fifth and tenth lease year
Carrollton, Ohio (the lease years and
"Carrollton Property"), 12% after the
Millersburg, Ohio (the fifteenth lease
"Millersburg Property"), year
New Philadelphia, Ohio (the
"New Philadelphia #1
Property"), New
Philadelphia, Ohio (the
"New Philadelphia #2
Property"), Steubenville,
Ohio (the "Steubenville
Property"), Uhrichsville,
Ohio (the "Uhrichsville
Property") and Wellsburg,
West Virginia (the
"Wellsburg Property")
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<CAPTION>
Lease Expira-
Property Location and Purchase Date tion and Minimum Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ----------- -------- --------------- --------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
The Bolivar Property is
located on the north side
of Edgebrook Boulevard just
west of State Road 212 and
east of Wilkshire
Boulevard, in Bolivar,
Tuscarawas County, Ohio, in
an area of mixed retail,
commercial, and residential
development. Other fast-
food and family-style
restaurants located in
proximity to the Bolivar
Property include a
McDonald's, a Wendy's, and
several local restaurants.
The Carrollton Property is
located on the east side of
Canton Road Northwest, in
Carrollton, Carroll County,
Ohio, in an area of mixed
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located
in proximity to the
Carrollton Property include
a Dairy Queen, a
McDonald's, a Subway
Sandwich Shop, and several
local restaurants.
The Millersburg Property is
located on the east side of
State Road 83 just south of
Country Road 58, in
Millersburg, Holmes County,
Ohio, in an area of mixed
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located
in proximity to the
Millersburg Property
include a McDonald's, a
Subway Sandwich Shop, and
several local restaurants.
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<CAPTION>
Lease Expira-
Property Location and Purchase Date tion and Minimum Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ----------- -------- --------------- --------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
The New Philadelphia #1
Property is located on the
north side of West High
Avenue east of its
intersection with 12th
Street, in New
Philadelphia, Tuscarawas
County, Ohio, in an area of
mixed retail, commercial,
and residential
development. Other fast-
food and family-style
restaurants located in
proximity to the New
Philadelphia #1 Property
include a Burger King, a
Long John Silver's, a Taco
Bell, a Denny's, an Elby's
Big Boy, a Hardee's,
McDonald's, and several
local restaurants.
The New Philadelphia #2
Property is located on the
east side of Fourth Street
Northwest, in New
Philadelphia, Tuscarawas
County, Ohio, in an area of
mixed retail, commercial,
and residential
development. Other fast-
food and family-style
restaurants located in
proximity to the New
Philadelphia Property
include a Burger King, a
McDonald's, an Arby's, a
Wendy's, and a Papa John's.
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<CAPTION>
Lease Expira-
Property Location and Purchase Date tion and Minimum Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ----------- -------- --------------- --------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
The Steubenville Property
is located on the north
side of Sunset Boulevard,
west of U.S. 22, in
Steubenville, Jefferson
County, Ohio, in an area of
mixed retail, commercial,
and residential
development. Other fast-
food and family-style
restaurants located in
proximity to the
Steubenville Property
include a McDonald's, a
Burger King, a Taco Bell,
and a Bob Evans.
The Uhrichsville Property
is located on the west side
of Commerce Drive, and also
has frontage along the
easterly right-of-way of
U.S. 250, in Uhrichsville,
Tuscarawas County, Ohio, in
an area of mixed retail,
commercial, and residential
development. Other fast-
food and family- style
restaurants located in
proximity to the
Uhrichsville Property
include an Arby's, a KFC, a
McDonald's, and several
local restaurants.
The Wellsburg Property is
located on the west side of
Commerce Street, in
Wellsburg, Brooke County,
West Virginia, in an area
of mixed retail,
commercial, and residential
development. Other fast-
food and family-style
restaurants located in
proximity to the Wellsburg
Property include a Dairy
Queen and a Wendy's.
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<CAPTION>
Lease Expira-
Property Location and Purchase Date tion and Minimum Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ----------- -------- --------------- --------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
JACK IN THE BOX (11) $1,245,340 04/01/97 03/2015; four $127,647 (6); for each lease at any time
(the "Oxnard Property") (3)(6) five-year increases by 8% year, (i) 5% of after the
Restaurant to be renewal options after the fifth annual gross seventh
constructed lease year and sales minus lease year
after every (ii) the
The Oxnard Property is five years minimum annual
located at the southeast thereafter rent for such
quadrant of the during the lease year (5)
intersection of Victoria lease term
Avenue and Fifth Street, in
Oxnard, Ventura County,
California, in an area of
mixed retail, commercial,
and residential
development. Other fast-
food and family-style
restaurants located in
proximity to the Oxnard
Property include several
local restaurants.
BENNIGAN'S $1,909,167 04/01/97 03/2012; three $198,076; for each lease at any time
(the "Arvada #1 Property") five-year increases by year, (i) 6% of after the
Existing restaurant renewal options 10% after the annual gross fifth lease
fifth lease sales minus year
The Arvada Property is year and after (ii) the
located on the east side of every five minimum annual
Wadsworth Bypass on the years rent for such
northeast quadrant of 53rd thereafter lease year
Avenue and Wadsworth during the
Bypass, in Arvada, lease term
Jefferson County, Colorado,
in an area of mixed retail,
commercial, and residential
development. Other fast-
food and family-style
restaurants located in
proximity to the Arvada
Property include an
Applebee's, a Ruby Tuesday,
an IHOP, a Fazoli's, and
several local restaurants.
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<CAPTION>
Lease Expira-
Property Location and Purchase Date tion and Minimum Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ----------- -------- --------------- --------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
BOSTON MARKET $558,127 04/02/97 04/2012; five 10.38% of Total for each lease at any time
(the "Cedar Park Property") (excluding five-year Cost (4); year after the after the
Restaurant to be development renewal options increases by fifth lease fifth lease
constructed costs) (3) 10% after the year (i) 4% of year
fifth lease annual gross
The Cedar Park Property is year and after sales minus
located within the every five (ii) the
northwest corner of the years minimum annual
intersection of FM 1431 and thereafter rent for such
U.S. Highway 183, in Cedar during the lease year
Park, Williamson County, lease term
Texas, in an area of mixed
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located
in proximity to the Cedar
Park Property include a
McDonald's, a Taco Bell, a
KFC, a Pizza Hut, a Mr.
Gatti's, a Wendy's, and a
Burger King.
BOSTON MARKET $474,700 04/02/97 04/2012; five 10.38% of Total for each lease at any time
(the "Collinsville (excluding five-year Cost (4); year after the after the
Property") development renewal options increases by fifth lease fifth lease
Restaurant to be costs) (3) 10% after the year (i) 5% of year
constructed fifth lease annual gross
year and after sales minus
The Collinsville Property every five (ii) the
is located on the southeast years minimum annual
corner of Collinsport Drive thereafter rent for such
and State Highway 157, in during the lease year
Collinsville, Madison lease term
County, Illinois, in an
area of mixed retail,
commercial, and residential
development. Other fast-
food and family-style
restaurants located in
proximity to the
Collinsville Property
include a Steak n Shake, a
Dairy Queen, a Burger King,
a Bob Evans, a Shoney's, an
Arby's, a White Castle, a
Ponderosa, a McDonald's, a
Waffle House, a Denny's, a
Wendy's, a Long John
Silver's, a Hardee's, a
Pizza Hut and several local
restaurants.
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<CAPTION>
Lease Expira-
Property Location and Purchase Date tion and Minimum Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Percentage Rent To Purchase
- --------------------- ----------- -------- --------------- --------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
BOSTON MARKET $861,015 04/02/97 04/2012; five 10.38% of Total for each lease at any time
(the "Taylorsville (excluding five-year Cost (4); year after the after the
Property") development renewal options increases by fifth lease fifth lease
Restaurant to be costs) (3) 10% after the year (i) 5% of year
constructed fifth lease annual gross
year and after sales minus
The Taylorsville Property every five (ii) the
is located on the east side years minimum annual
of South Redwood Road thereafter rent for such
within the Walmart shopping during the lease year
center, in Taylorsville, lease term
Salt Lake County, Utah, in
an area of mixed retail,
commercial, and residential
development. Other fast-
food and family-style
restaurants located in
proximity to the
Taylorsville Property
include a McDonald's, an
Arby's, a Fuddruckers, an
Applebee's, a Burger King,
a Kenny Rogers Roasters,
and several local
restaurants.
BURGER KING $652,350 04/02/97 04/2017; two 11% of Total for each lease None
(the "Ooltewah Property") (excluding five-year Cost (4) year, (i) 8.5%
Restaurant to be development renewal options of annual gross
constructed costs) (3) sales minus
(ii) the
The Ooltewah Property is minimum annual
located at the southwest rent for such
quadrant of Lee Highway and lease
Collegedale-Ooltewah
Connector Road, in
Ooltewah, Hamilton County,
Tennessee, in an area of
mixed retail, commercial,
and residential
development. Other fast-
food and family-style
restaurants located in
proximity to the Ooltewah
Property include a Wendy's,
a Subway Sandwich Shop, a
Little Caesar's, a Taco
Bell, a McDonald's, an
Arby's, a Hardee's, and a
Waffle House.
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</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:
Property Federal Tax Basis
-------- -----------------
Houston #4 Property $ 539,000
Bedford Property 653,000
Dallas Property 652,000
Fort Worth Property 653,000
Oklahoma City Property 649,000
Oxnard Property 633,000
Arvada #1 Property 1,298,000
Cedar Park Property 323,000
Collinsville Property 372,000
Taylorsville Property 508,000
Ooltewah Property 727,000
(2) Minimum annual rent for each of the Properties became payable on the
effective date of the lease, except as indicated below. For the Cedar
Park, Collinsville and Taylorsville Properties, minimum annual rent will
become due and payable on the date the tenant receives from the landlord
its final funding of the construction costs. For the Ooltewah Property,
minimum annual rent will become due and payable on the possession date,
which is July 31, 1997 (the "Possession Date"). During the period
commencing with the effective date of the lease to the date minimum
annual rent becomes payable for the Cedar Park, Collinsville and
Taylorsville Properties, as described above, the tenant shall pay
monthly "interim rent" equal to 10.38% per annum of the amount funded by
the Company in connection with the purchase and construction of the
Properties.
(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
-------- ---------------------- ---------------
Houston #4 Property $ 905,945 September 14, 1997
Oxnard Property 1,245,340 September 28, 1997
Cedar Park Property 829,172 September 29, 1997
Collinsville Property 795,476 September 29, 1997
Taylorsville Property 1,309,574 September 29, 1997
Ooltewah Property 1,253,115 July 31, 1997
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(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 costs in advance at closing;
therefore, minimum annual rent was determined on the date acquired and
is not expected to change.
(7) The Company owns the building only for this Property. The Company does
not own the underlying land; although, the Company entered into a
landlord estoppel agreement with the landlord of the land and a
collateral assignment of the ground lease with the lessee in order to
provide the Company with certain rights with respect to the land on
which the building is located.
(8) The lease relating to this Property is a land lease only. The Company
entered into a Mortgage Loan evidenced by a Master Mortgage Note for
$4,200,000 collateralized by building improvements. The Master Mortgage
Note bears interest at a rate of 10.50% per annum and principal and
interest will be collected in equal monthly installments over 20 years
beginning in May 1997.
(9) The Company entered into a Master Lease Agreement for the Bolivar,
Carrollton, Millersburg, New Philadelphia #1, New Philadelphia #2,
Steubenville and Uhrichsville, Ohio, and Wellsburg, West Virginia
Properties.
(10) The lessee of the Bedford, Dallas, and Forth Worth Properties is the
same unaffiliated lessee.
(11) The lessee of the Houston #4 and the Oxnard Properties is the same
unaffiliated lessee.
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<TABLE>
PRO FORMA ESTIMATE OF TAXABLE INCOME BEFORE DIVIDENDS PAID DEDUCTION OF
CNL AMERICAN PROPERTIES FUND, INC.
GENERATED FROM THE OPERATIONS OF PROPERTIES ACQUIRED FROM MARCH 7, 1997
THROUGH APRIL 2, 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 March 7, 1997 through April 2, 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.
<CAPTION>
Jack in the Box Black-eyed Pea Black-eyed Pea
Houston #4, TX (7)(8) Bedford, TX (9) Dallas, TX (9)
--------------------- --------------- --------------
<S> <C> <C> <C>
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction:
Base Rent (1) $ 92,859 $ 79,560 $ 75,182
Interest Income (2) - - -
-------- -------- --------
Total Revenues 92,859 79,560 75,182
-------- -------- --------
Asset Management Fees (3) (5,430) (3,716) (3,716)
Mortgage Management Fee (4) - - -
General and Administrative
Expenses (5) (5,757) (4,933) (4,661)
-------- -------- --------
Total Operating Expenses (11,187) (8,649) (8,377)
-------- -------- --------
Estimated Cash Available from
Operations 81,672 70,911 66,805
Depreciation and Amortization
Expense (6) (13,833) (16,731) (16,731)
-------- -------- --------
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction of the Company $ 67,839 $ 54,180 $ 50,074
======== ======== ========
See Footnotes
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<CAPTION>
Black-eyed Pea Black-eyed Pea Eight Pizza Hut Jack in the Box
Fort Worth, TX (9) Oklahoma City, OK Properties Oxnard, CA (7)(8)
------------------ ----------------- --------------- -----------------
<S> <C> <C> <C> <C>
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction:
Base Rent (1) $ 84,305 $ 81,660 $165,440 $127,647
Interest Income (2) - - 437,918 -
-------- -------- -------- --------
Total Revenues 84,305 81,660 603,358 127,647
-------- -------- -------- --------
Asset Management Fees (3) (3,716) (3,696) (9,454) (7,466)
Mortgage Management Fee (4) - - (25,200) -
General and Administrative
Expenses (5) (5,227) (5,063) (37,408) (7,914)
-------- -------- -------- --------
Total Operating Expenses (8,943) (8,759) (72,062) (15,380)
-------- -------- -------- --------
Estimated Cash Available from
Operations 75,362 72,901 531,296 112,267
Depreciation and Amortization
Expense (6) (16,731) (16,642) (11,340) (16,227)
-------- -------- -------- --------
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction of the Company $ 58,631 $ 56,259 $519,956 $ 96,040
======== ======== ======== ========
See Footnotes
-15-
<CAPTION>
Bennigan's Boston Market Boston Market
Arvada #1, CO Cedar Park, TX(7) Collinsville, IL (7)
------------- ----------------- --------------------
<S> <C> <C> <C>
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction:
Base Rent (1) $ 198,076 $ 86,068 $ 82,570
Interest Income (2) - - -
--------- ---------- ---------
Total Revenues 198,076 86,068 82,570
--------- ---------- ---------
Asset Management Fees (3) (11,442) (4,922) (4,722)
Mortgage Management Fee (4) - - -
General and Administrative
Expenses (5) (12,281) (5,336) (5,119)
--------- ---------- ---------
Total Operating Expenses (23,723) (10,258) (9,841)
--------- ---------- ---------
Estimated Cash Available from
Operations 174,353 75,810 72,729
Depreciation and Amortization
Expense (6) (33,275) (8,277) (9,537)
--------- ---------- ---------
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction of the Company $ 141,078 $ 67,533 $ 63,192
========= ========== =========
See Footnotes
-16-
<CAPTION>
Boston Market Burger King
Taylorsville, UT (7) Ooltewah, TN (7) Total
-------------------- ---------------- ---------
<S> <C> <C> <C>
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction:
Base Rent (1) $ 135,934 $ 132,541 $1,341,842
Interest Income (2) - - 437,918
---------- ---------- ----------
Total Revenues 135,934 132,541 1,779,760
---------- ---------- ----------
Asset Management Fees (3) (7,780) (7,205) (73,265)
Mortgage Management Fee (4) - - (25,200)
General and Administrative
Expenses (5) (8,428) (8,218) (110,345)
---------- ---------- ----------
Total Operating Expenses (16,208) (15,423) (208,810)
---------- ---------- ----------
Estimated Cash Available from
Operations 119,726 117,118 1,570,950
Depreciation and Amortization
Expense (6) (13,026) (18,642) (190,992)
---------- ---------- ----------
Pro Forma Estimate of Taxable
Income Before Dividends Paid
Deduction of the Company $ 106,700 $ 98,476 $1,379,958
========== ========== ==========
See Footnotes
-17-
</TABLE>
FOOTNOTES:
(1) Base rent does not include percentage rents which become due if
specified levels of gross receipts are achieved.
(2) The Company entered into a Master Mortgage Note agreement for
$4,200,000, collateralized by building improvements located on the Eight
Pizza Hut Properties, the Pizza Hut property in Dover, Ohio, and two
additional Pizza Hut Properties in Wintersville, Ohio, and Weirton, West
Virginia. The Master Mortgage Note bears interest at a rate of 10.50%
per annum and principal and interest will be collected in equal monthly
installments over 20 years beginning in May 1997. Amount does not
include $21,000 of loan commitment fees and $21,000 in loan origination
fees collected by the Company at closing from the borrower.
(3) 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.
(4) For managing the mortgage loans, the Advisor will be entitled to receive
a monthly mortgage management fee of one-twelfth of .60% of the total
principal amount of the mortgage loans as of the end of the preceding
month.
(5) Estimated at 6.2% of gross rental and interest 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.
(6) 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. In connection with the Eight Pizza Hut
Properties, the Pizza Hut property in Dover, Ohio, and the two
additional Pizza Hut Properties in Wintersville, Ohio, and Weirton, West
Virginia, acquisition fees allocated to the Master Mortgage Note have
been amortized on a straight-line basis over the life of the agreement
(20 years).
(7) 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
-------- -------------------------------
Houston #4 Property September 14, 1997
Oxnard Property September 28, 1997
Cedar Park Property September 29, 1997
Collinsville Property September 29, 1997
Taylorsville Property September 29, 1997
Ooltewah Property July 31, 1997
(8) The lessee of the Houston #4 and Oxnard Properties is the same
unaffiliated lessee.
(9) The lessee of the Bedford, Dallas, and Forth Worth Properties is the
same unaffiliated lessee.
-18-
ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Not applicable.
ITEM 5. OTHER EVENTS.
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 common 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).
ITEM 6. RESIGNATION OF REGISTRANT'S DIRECTORS.
Not applicable.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
-19-
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 December 31, 1996 22
Pro Forma Consolidated Statement of Earnings for the year
ended December 31, 1996 23
Notes to Pro Forma Consolidated Financial Statements for the
years ended December 31, 1996 24
-20-
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
December 31, 1996, including the receipt of $139,247,149 in gross offering
proceeds from the sale of 13,924,715 shares of common stock pursuant to a Form
S-11 under the Securities Act of 1933, as amended, effective March 29, 1995,
and the application of such proceeds to purchase 94 properties (including 51
properties which consist of land and building, one property through a joint
venture arrangement which consists of land and building, seven properties
which consist of building only and 35 properties consisting of land only),
nine of which were under construction at December 31, 1996, to provide
mortgage financing to the lessees of the 35 properties consisting of land
only, and to pay organizational and offering expenses, acquisition fees and
miscellaneous acquisition expenses, (ii) the receipt of $38,880,298 in gross
offering proceeds from the sale of 3,888,030 additional shares of common stock
during the period January 1, 1997 through April 2, 1997, and (iii) the
application of such funds and $10,084,063 of cash and cash equivalents at
December 31, 1996, to purchase 35 additional properties acquired during the
period January 1, 1997 through April 2, 1997 (20 of which are under
construction and consist of land and building, three properties which consist
of land and building, eight properties which consist of land only and four
properties which consist of building only), to provide mortgage financing to
the lessee of the eight properties consisting of land only, to pay additional
costs for the nine properties under construction at December 31, 1996, 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 December 31,
1996, includes the transactions described in (i) above from its historical
consolidated balance sheet, adjusted to give effect to the transactions in
(ii) and (iii) above, as if they had occurred on December 31, 1996.
The Pro Forma Consolidated Statement of Earnings for the year ended
December 31, 1996, includes the historical operating results of the properties
described in (i) above from the dates of their acquisitions plus operating
results for the four of the properties that were acquired by the Company
during the period January 1, 1996 through April 2, 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 April 2, 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.
-21-
<TABLE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1996
<CAPTION>
Pro Forma
ASSETS Historical Adjustments Pro Forma
------------ ---------------- ------------
<S> <C> <C> <C>
Land and buildings on operating
leases, less accumulated
depreciation $ 60,243,146 $ 27,446,275 (a) $ 87,689,421
Net investment in direct
financing leases (d) 15,186,686 7,264,427 (a) 22,451,113
Cash and cash equivalents 42,450,088 (10,084,063)(a) 32,366,025
Receivables 160,675 160,675
Mortgage notes receivable 13,389,607 4,200,000 (a)
(19,400)(a)
226,800 (c) 17,797,007
Organization costs, less
accumulated amortization 13,682 13,682
Loan costs, less accumulated
amortization 32,499 32,499
Accrued rental income 422,076 422,076
Other assets 2,926,589 (15,338)(a)
(466,405)(b)
(226,800)(c) 2,218,046
------------ ------------ ------------
$134,825,048 $ 28,325,496 $163,150,544
============ ============ ============
LIABILITIES AND
STOCKHOLDERS' EQUITY
Liabilities:
Note payable $ 3,521,816 $ 3,521,816
Accrued interest payable 13,164 13,164
Accrued construction costs
payable 6,587,573 $ (6,587,573)(a) -
Accounts payable and other
accrued expenses 79,817 79,817
Due to related parties 997,084 997,084
Rents paid in advance 118,900 118,900
Deferred rental income 335,849 7,018 (a) 342,867
Other payables 15,117 15,117
------------ ------------ ------------
Total liabilities 11,669,320 (6,580,555) 5,088,765
------------ ------------ ------------
Minority interest 288,301 288,301
------------ ------------ ------------
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 13,944,715
shares; issued and out-
standing, as adjusted,
17,832,745 shares 139,447 38,880 (a) 178,327
Capital in excess of par
value 123,687,929 35,333,576 (a)
(466,405)(b) 158,555,100
Accumulated distributions in
excess of net earnings (959,949) (959,949)
------------ ------------ ------------
122,867,427 34,906,051 157,773,478
------------ ------------ ------------
$134,825,048 $ 28,325,496 $163,150,544
============ ============ ============
See accompanying notes to unaudited
pro forma consolidated financial statements.
-22-
</TABLE>
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 $ 60,938 (1) $3,778,824
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 (24,348)(3) 755,689
---------- ---------- ----------
6,206,684 70,872 6,277,556
---------- ---------- ----------
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 5,444 (4) 256,644
State and other taxes 56,184 1,218 (5) 57,402
Depreciation and amortization 521,871 6,537 (6) 528,408
---------- ---------- ----------
1,430,795 13,199 1,443,994
---------- ---------- ----------
Earnings Before Minority
Interest in Income of
Consolidated Joint Venture 4,775,889 57,673 4,833,562
Minority Interest in Income of
Consolidated Joint Venture (29,927) (29,927)
---------- ---------- ----------
Net Earnings $4,745,962 $ 57,673 $4,803,635
========== ========== ==========
Earnings Per Share of
Common Stock (7) $ .59 $ 0.60
========== ==========
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.
-23-
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1996
Pro Forma Consolidated Balance Sheet:
(a) Represents gross proceeds of $38,880,298 from the issuance of 3,888,030
shares of common stock during the period January 1, 1997 through April
2, 1997, the receipt of $7,018 of rental income during construction
(capitalized as deferred rental income), the receipt of $19,400 of
deferred financing income (loan origination and commitment fees, net of
legal fees) from the $4,200,000 mortgage financing described below, and
$10,084,063 of cash and cash equivalents used (i) to acquire 35
properties for $28,966,712, of which four properties consist of building
only, eight properties consist of land only and 23 properties consist of
land and building, (ii) to fund estimated construction costs of
$10,566,612 ($6,587,573 of which was accrued as construction costs
payable at December 31, 1996) relating to nine wholly-owned properties
under construction at December 31, 1996, (iii) to pay acquisition fees
of $1,749,613 and reclassify from other assets $15,338 of acquisition
fees previously incurred relating to the acquired properties, (iv) to
pay selling commissions and offering expenses (stock issuance costs) of
$3,507,842, which have been netted against capital in excess of par
value and (v) to provide mortgage financing in the amount of $4,200,000
to the lessee of the eight properties consisting of land only.
The pro forma adjustments to land and buildings on operating leases and
net investment in direct financing leases as a result of the above
transactions were as follows:
<TABLE>
<CAPTION>
Estimated
purchase price
(including con-
struction and Acquisition
closing costs) fees
and additional allocated
construction costs to property Total
------------------ ----------- -----------
<S> <C> <C> <C>
Jack in the Box in Las Vegas, NV $ 1,247,333 $ 66,822 $ 1,314,155
Jack in the Box in Los Angeles, CA 1,396,771 74,827 1,471,598
Jack in the Box in Moscow, ID 909,814 48,740 958,554
Jack in the Box in Kent, WA 1,258,871 67,439 1,326,310
Jack in the Box in Hollister, CA 1,060,819 56,830 1,117,649
Jack in the Box in Kingsburg, CA 1,000,073 53,575 1,053,648
Shoney's in Indian Harbour Beach, FL 642,870 34,440 677,310
Jack in the Box in Murietta, CA 951,485 50,973 1,002,458
Jack in the Box in Humble, TX 882,362 47,270 929,632
Golden Corral in Winchester, KY 1,150,645 61,640 1,212,285
Burger King in Kent, OH 872,861 46,761 919,622
Burger King in Chattanooga, TN 1,110,330 59,482 1,169,812
Denny's in Tampa, FL 1,033,787 55,381 1,089,168
Jack in the Box in Palmdale, CA 1,124,244 60,228 1,184,472
Jack in the Box in Houston, TX 860,735 46,110 906,845
Golden Corral in Hopkinsville, KY 1,252,931 67,121 1,320,052
Jack in the Box in Houston, TX 904,945 48,479 953,424
Black-eyed Pea in Bedford, TX 619,336 33,179 652,515
Black-eyed Pea in Dallas, TX 619,320 33,178 652,498
Black-eyed Pea in Ft. Worth, TX 619,323 33,178 652,501
Black-eyed Pea in Oklahoma City, OK 616,022 33,001 649,023
Eight Pizza Huts (land only) in Ohio
and West Virginia 1,575,622 84,408 1,660,030
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
Nine wholly owned properties under
construction at December 31, 1996 3,979,039 213,163 4,192,202
----------- ----------- -----------
$32,945,751 $ 1,764,951 $34,710,702
=========== =========== ===========
Adjustment classified as follows:
Land and buildings on operating leases $27,446,275
Net investment in direct financing leases 7,264,427
-----------
$34,710,702
===========
-24-
</TABLE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
STATEMENTS - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 1996
Pro Forma Consolidated Balance Sheet - Continued:
(b) Represents reclassification of deferred stock issuance costs totalling
$466,405 at December 31, 1996, to stock issuance costs which have been
netted against capital in excess of par value.
(c) Represents reclassification of acquisition fees totalling $226,800 from
other assets to mortgage notes receivable relating to the $4,200,000
mortgage financing transaction described in (a) above.
(d) 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 four of the properties acquired during the
period January 1, 1996 through April 2, 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
four 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
-------------- ---------------
Denny'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
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
-25-
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
STATEMENTS - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 1996
Pro Forma Consolidated Statement of Earnings - Continued:
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.
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 that the previous owners held the properties,
no pro forma adjustment was made for percentage rental income for the
year ended December 31, 1996.
(2) See Note (d) 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 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
$2,723,000 for the Pro Forma Properties for the year ended December 31,
1996), 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 year
ended December 31, 1996.
-26-
ITEM 8. CHANGE IN FISCAL YEAR.
Not applicable.
EXHIBITS
None.
-27-
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: April 16, 1997 By: /s/ Robert A. Bourne
---------------------------
ROBERT A. BOURNE, President
