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): September 5, 1997
CNL AMERICAN PROPERTIES FUND, INC.
(Exact Name of Registrant as Specified in Charter)
Florida 333-15411 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
<PAGE>
ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
Not applicable.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
STATUS OF THE OFFERING
On February 6, 1997, the Company commenced an offering (the "Offering")
of up to 27,500,000 shares of common stock (the "Shares"). As of October 3,
1997, the Company had received subscription proceeds of $141,214,029 (14,121,403
Shares) including $1,183,289 (118,329 Shares) issued pursuant to the
Reinvestment Plan, from 6,506 stockholders in connection with the Offering. The
proceeds of the Offering will be used primarily to acquire properties (the
"Properties") located across the United States to be leased on a long-term,
triple-net basis to 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 August 22, 1997 and October 3, 1997, the Company acquired 17
Properties, including 6 Properties consisting of land and building and 11
Properties consisting of building only. These Properties are one Boston Market
Property (in Hoover, Alabama), three Golden Corral Properties (one in each of
Palatka, Florida; Mobile, Alabama; and Olathe, Kansas), one T.G.I Friday's
Property (in Superstition Springs, Arizona) and 12 Black-eyed Pea Properties
(one in each of Mesa and Tucson, Arizona; Dallas, Houston, and Waco, Texas;
Forestville, Maryland; Wichita, Kansas; two in Albuquerque, New Mexico; and
three in Phoenix, Arizona).
In connection with the purchase of the Boston Market Property, the three
Golden Corral Properties and the T.G.I. Friday's 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 or renovated, the Company has entered
into development and indemnification and put agreements with the lessees.
In connection with the Black-eyed Pea Properties, one of which is located
in each of Dallas, Houston, and Waco, Texas; Forestville, Maryland; and Wichita,
Kansas; and two of which are located in Albuquerque, New Mexico; which are
building only, the Company, as lessor, entered into long-term lease agreements
with an unaffiliated lessee. In connection with these acquisitions, the Company
has also entered into tri-party agreements with the lessee and the owner of the
land. The tri-party agreements provide that the ground lessee is responsible
for all obligations under the ground leases and provide certain rights to the
Company relating to the maintenance of its interest in the buildings in the
event of a default by the lessee under the terms of the ground leases.
In connection with the Black-eyed Pea Properties, one of which is located
in Tucson, Arizona, and three of which are located in Phoenix, Arizona, which
are building only, the Company, as lessor, entered into long-term lease
agreements with an unaffiliated lessee. In addition, the Company has entered
into landlord estoppel agreements with the landlord of the land and collateral
assignments of the ground leases with the lessee in order to provide the Company
with certain rights with respect to the land on which the buildings are located.
<PAGE>
The following table sets forth the location of the 17 Properties,
including 6 Properties consisting of land and building and 11 Properties
consisting of building only, acquired by the Company from August 22, 1997
through October 3, 1997, a description of the competition, and a summary of the
principal terms of the acquisition and lease of each Property.
<PAGE>
PROPERTY ACQUISITIONS
From August 22, 1997 through October 3, 1997
<TABLE>
<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>
BOSTON MARKET (6) $1,062,327 09/05/97 09/2012; $110,270; for each lease at any time
(the "Hoover Property") five five- increases by year after the after the
Existing restaurant year renewal 10% after the fifth lease fifth lease
options fifth lease year, (i) 4% of year
The Hoover Property is located year and after annual gross
on the southeast quadrant of every five sales minus
U.S. Highway 31 and Lorna years (ii) the
Road, in Hoover, Jefferson thereafter minimum annual
County, Alabama, in an area of during the rent for such
mixed retail, commercial, and lease term lease year
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Hoover
Property include a Taco Bell,
a McDonald's, a Wendy's, and a
Pizza Hut.
T.G.I. FRIDAY'S $872,422 09/05/97 09/2017; 10.75% of Total for each lease at any time
(the "Superstition Springs (excluding four five- Cost (4); year, (i) 6% of after the
Property") development year renewal increases by annual gross seventh
Restaurant to be constructed costs)(3) options 10% after the sales minus lease year
fifth lease (ii) the
The Superstition Springs year and after minimum annual
Property is located on the every five rent for such
northwest corner of the years lease year
intersection of Superstition thereafter
Springs Boulevard and South during the
Power Road, in Superstition lease term
Springs, Maricopa County,
Arizona, in an area of mixed
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Superstition
Springs Property include a
Burger King, an Outback
Stachyose, a Jack in the Box,
a Dance, a McDonald's, a
Wendy's, a Chili's, and
several local restaurants.
</TABLE>
<PAGE>
<TABLE>
<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>
GOLDEN CORRAL (7) $417,329 09/17/97 03/2013; 10.75% of Total for each lease during the
(the "Mobile Property") (excluding four five- Cost (4) year, 5% of the first
Restaurant to be constructed development year renewal amount by which through
costs)(3) options annual gross seventh
The Mobile Property is located sales exceed lease years
on the southeast side of Halls $2,502,407 (5) and the
Mill Road, south of Range Line tenth
Road, in Mobile, Mobile through
County, Alabama, in an area of fifteenth
mixed retail, commercial, and lease years
residential development. only
Other fast-food and family-
style restaurants located in
proximity to the Mobile
Property include a KC, a
McDonald's, an Orbs, a Popeye,
a Checkers, a Waffle House, a
Chances Family Steak House, a
Chains, a Pizza Inn, a Taco
Bell, a Burger King, a Pizza
Hut, a Godfather's Pizza, and
several local restaurants.
GOLDEN CORRAL (7) $319,140 09/17/97 03/2013; 10.75% of Total for each lease during the
(the "Palatka Property") (excluding four five- Cost (4) year, 5% of the first
Restaurant to be constructed development year renewal amount by which through
costs)(3) options annual gross seventh
The Palatka Property is sales exceed lease years
located on the southeast side $2,191,973 (5) and the
of Highway 19, south of U.S. tenth
17, in Palatka, Putnam County, through
Florida, in an area of mixed fifteenth
retail, commercial, and lease years
residential development. only
Other fast-food and family-
style restaurants located in
proximity to the Palatka
Property include an In and Out
Burgers, a Pizza Hut, and
several local restaurants.
</TABLE>
<PAGE>
<TABLE>
<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>
BLACK-EYED PEA (9) $1,600,000 09/30/97 09/2017; two $168,000; for each lease during the
(the "Mesa Property") five-year increases by year, 6% of the eighth,
Existing restaurant renewal 11% after the amount by which tenth, and
options fifth lease annual gross twelfth
The Mesa Property is located year and after sales exceed lease years
on the northeast corner of the every five $2,200,000 only
intersection of South Alma years
School Road and West Holmes thereafter
Road, in Mesa, Maricopa during the
County, Arizona, in an area of lease term
mixed retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Mesa Property
include a Chevy's, a
McDonald's, a Dance, an
Applebee's, an American Grill,
an Olive Garden, a Bennigan's,
a Red Lobster, and several
local restaurants.
BLACK-EYED PEA (8) (9) $641,254 09/30/97 11/2006 $109,225 None at any time
(the "Phoenix #1 Property") after the
Existing restaurant fifth lease
year
The Phoenix #1 Property is
located on the southeast
quadrant of Peoria Avenue and
35th Avenue, in Phoenix,
Maricopa County, Arizona, in
an area of mixed retail,
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Phoenix #1 Property include a
McDonald's, a Jack in the Box,
a Taco Bell, a Wendy's, a
Sizzler, a Whataburger, a
Bennigan's, and several local
restaurants.
</TABLE>
<PAGE>
<TABLE>
<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>
BLACK-EYED PEA (8) (9) $641,371 09/30/97 06/2008 $100,195; None at any time
(the "Phoenix #2 Property") increases to after the
Existing restaurant $100,583 after fifth lease
the tenth lease year
The Phoenix #2 Property is year
located on the southeast
quadrant of North 75th Avenue
and Thomas Road, in Phoenix,
Maricopa County, Arizona, in
an area of mixed retail,
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Phoenix #2 Property include a
Wendy's, a Fazoli's, a
McDonald's, an Olive Garden, a
Denny's, a Whataburger, a Taco
Bell, and several local
restaurants.
BLACK-EYED PEA (8) (9) $645,471 09/30/97 08/2009 $95,149; None at any time
(the "Phoenix #3 Property") increases to after the
Existing restaurant $96,112 after fifth lease
the tenth lease year
The Phoenix #3 Property is year
located on the southeast
quadrant of Cactus Road and
48th Street, in Phoenix,
Maricopa County, Arizona, in
an area of mixed retail,
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Phoenix #3 Property include a
Red Lobster, an Olive Garden,
a Don Pablo's, an Outback
Steakhouse, a Denny's, an
IHOP, a McDonald's, and
several local restaurants.
</TABLE>
<PAGE>
<TABLE>
<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>
BLACK-EYED PEA (8) (9) $641,871 09/30/97 08/2010 $91,251; None at any time
(the "Tucson Property") increases to after the
Existing restaurant $92,576 after fifth lease
the tenth lease year
The Tucson Property is located year
on the southwest quadrant of
West River Road and Stone
Road, in Tucson, Pima County,
Arizona, in an area of mixed
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Tucson
Property include a Chili's, an
On The Border, and several
local restaurants.
BLACK-EYED PEA (6) (10) $667,290 10/01/97 09/2013 $86,087; None at any time
(the "Albuquerque #1 increases to after the
Property") $88,584 after seventh
Existing restaurant the tenth lease lease year
year
The Albuquerque #1 Property is
located on the northwest
corner of San Mateo Boulevard
Northeast and Lumber Avenue
Northeast, in Albuquerque,
Bernalillo County, New Mexico,
in an area of mixed retail,
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Albuquerque #1 Property
include a Sweet Tomatoes, a
Hooters, a Pizza Hut, a
Grady's, a Chili's, an
Austin's, an Applebee's, an
Olive Garden, and a local
restaurant.
</TABLE>
<PAGE>
<TABLE>
<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>
BLACK-EYED PEA (6) (10) $666,355 10/01/97 07/2011 $91,517; None at any time
(the "Albuquerque #2 increases to after the
Property") $93,270 after seventh
Existing restaurant the tenth lease lease year
year
The Albuquerque #2 Property is
located on the northwest
quadrant of Interstate 40 and
Juan Tabo Boulevard Northeast,
in Albuquerque, Bernalillo
County, New Mexico, in an area
of mixed retail, commercial,
and residential development.
Other fast-food and family-
style restaurants located in
proximity to the Albuquerque
#2 Property include an Olive
Garden, a Village Inn, a
Grandy's, and several local
restaurants.
BLACK-EYED PEA (6) (10) $660,748 10/01/97 09/2011 $90,265; None at any time
(the "Dallas #2 Property") increases to after the
Existing restaurant $92,064 after seventh
the tenth lease lease year
The Dallas #2 Property is year
located on the south side of
Beltline Road, 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 #2 Property include a
Chili's, an On The Border, an
Olive Garden, a Grady's, a
Macaroni Grill, and several
local restaurants.
</TABLE>
<PAGE>
<TABLE>
<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>
BLACK-EYED PEA (6) (10) $643,925 10/01/97 06/2004 $133,563 None at any time
(the "Forestville Property") after the
Existing restaurant seventh
lease year
The Forestville Property is
located on the northeast
quadrant of the intersection
of Silver Hill Road and
Pennsylvania Avenue, in
Forestville, Prince Georges
County, Maryland, in an area
of mixed retail, commercial,
and residential development.
Other fast-food and family-
style restaurants located in
proximity to the Forestville
Property include a Subway
Sandwich Shop, a Pizza Hut,
and several local restaurants.
BLACK-EYED PEA (6) (10) $648,598 10/01/97 08/2008 $99,659; None at any time
(the "Houston Property") increases to after the
Existing restaurant $100,213 after seventh
the tenth lease lease year
The Houston Property is year
located on the corner of
Northwest Freeway and
Deauville Plaza Drive, in
Houston, Harris County, Texas,
in an area of mixed retail,
commercial, and residential
development. Other fast-food
and family-style restaurants
located in proximity to the
Houston Property include a
Ryan's Steakhouse, a Denny's,
an Olive Garden, a Bennigan's,
a Chili's, a Kettle's, and
several local restaurants.
</TABLE>
<PAGE>
<TABLE>
<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>
BLACK-EYED PEA (6) (10) $661,682 10/01/97 03/2012 $89,029; None at any time
(the "Waco Property") increases to after the
Existing restaurant $91,002 after seventh
the tenth lease lease year
The Waco Property is located year
on the north side of Bosque
Road within the Lake Air Mall,
in Waco, McLennan County,
Texas, in an area of mixed
retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Waco Property
include a Piccadilly
Cafeteria, a Chili's, a
Fuddrucker's, and several
local restaurants.
BLACK-EYED PEA (6) (10) $660,748 10/01/97 12/2011 $89,571; None at any time
(the "Wichita Property") increases to after the
Existing restaurant $91,456 after seventh
the tenth lease lease year
The Wichita Property is year
located on the south side of
East Central Avenue within
Dillow's Superstore Shopping
Center, in Wichita, Sedgwick
County, Kansas, in an area of
mixed retail, commercial, and
residential development.
Other fast-food and family-
style restaurants located in
proximity to the Wichita
Property include a Chili's,
and an Olive Garden.
</TABLE>
<PAGE>
<TABLE>
<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>
GOLDEN CORRAL (7) $529,105 10/02/97 03/2012; 10.75% of Total for each lease during the
(the "Olathe Property") (excluding four five- Cost (4) year, 5% of the first
Restaurant to be constructed development year renewal amount by which through
costs)(3) options annual gross seventh
The Olathe Property is located sales exceed lease years
on the west side of Blackbob $2,886,067 (5) and the
Road, north of U.S. 169, in tenth
Olathe, Johnson County, through
Kansas, in an area of mixed fifteenth
retail, commercial, and lease years
residential development. only
Other fast-food and family-
style restaurants located in
proximity to the Olathe
Property include a Dairy
Queen, a Fazoli's, a KFC, a
Taco Bell, and an Applebee's.
</TABLE>
<PAGE>
- --------------------------------------------------
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
-------- -----------------
Hoover Property 618,000
Superstition Springs Property 1,269,000
Mobile Property 988,000
Palatka Property 932,000
Mesa Property 910,000
Phoenix #1 Property 675,000
Phoenix #2 Property 675,000
Phoenix #3 Property 680,000
Tucson Property 676,000
Albuquerque #1 Property 703,000
Albuquerque #2 Property 702,000
Dallas #2 Property 696,000
Forestville Property 678,000
Houston Property 683,000
Waco Property 697,000
Wichita Property 696,000
Olathe Property 1,097,000
(2) Minimum annual rent for each of the Properties became payable on the
effective date of the lease, except as indicated below. For the Mobile,
Palatka and Olathe Properties, minimum annual rent will become due and
payable on the earlier of (i) 180 days after execution of the lease, (ii)
the date the certificate of occupancy for the restaurant is issued, or
(iii) the date the restaurant opens for business to the public. For the
Superstition Springs Property minimum annual rent will become due and
payable on the earlier of (i) 180 days after execution of the lease, (ii)
the date the certificate of occupancy for the restaurant is issued, (iii)
the date the restaurant opens for business to the public, or (iv) the date
t h e tenant receives from the landlord its final funding of the
construction costs. During the period commencing with the effective date
of the lease to the date minimum annual rent becomes payable for the
Mobile, Palatka and Olathe Properties, as described above, interim rent
equal to ten percent per annum of the amount funded by the Company in
connection with the purchase and construction of the Properties shall
accrue and be payable in a single lump sum at the time of final funding of
the construction costs. During the period commencing with the effective
date of the lease to the date minimum annual rent becomes payable for the
Superstition Springs Property, as described above, the tenant shall pay
monthly "interim rent" equal to a specified rate per annum (ranging from
10.75% to 11%) 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, provides 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, development costs, and
closing and acquisition costs) is not expected to, but may, exceed the
amount set forth below:
<PAGE>
<TABLE>
<CAPTION>
Property Estimated Maximum Cost Estimated Final Completion Date
------------------ ------------ -------------------------------
<S> <C>
Superstition Springs Property $2,044,922 March 4, 1998
Mobile Property 1,463,204 March 16, 1998
Palatka Property 1,289,938 March 16, 1998
Olathe Property 1,677,340 March 31, 1998
</TABLE>
(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 owns the building only for this Property. The Company does
not own the underlying land; although, the Company entered into a tri-
party agreement with the lessee and the landlord of the land in order to
provide the Company with certain rights with respect to the land on which
the building is located.
(7) The lessee of the Mobile, Palatka and Olathe Properties is the same
unaffiliated lessee.
(8) 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.
(9) The lessee of the Mesa, Phoenix #1, Phoenix #2, Phoenix #3 and Tucson
Properties is the same unaffiliated lessee.
(10) The lessee of the Albuquerque #1, Albuquerque #2, Dallas #2, Forestville,
Houston, Waco and Wichita Properties is the same unaffiliated lessee.
<PAGE>
STATEMENT OF ESTIMATED TAXABLE OPERATING RESULTS
BEFORE DIVIDENDS PAID DEDUCTION
CNL AMERICAN PROPERTIES FUND, INC.
PROPERTIES ACQUIRED FROM AUGUST 22, 1997
THROUGH OCTOBER 3, 1997
FOR THE YEAR ENDED DECEMBER 31, 1996 (UNAUDITED)
The following schedule presents unaudited estimated taxable operating
results of each Property acquired by the Company from August 22, 1997 through
October 3, 1997. The statement presents estimated operating results for each
Property that was operational as if the Property had been acquired and
operational on January 1, 1996 through December 31, 1996. The schedule should be
read in light of the accompanying footnotes.
These estimates do not purport to present actual or expected operations of
the Company for any period in the future. These estimates were prepared on the
basis described in the accompanying notes which should be read in conjunction
herewith. No single lessee or group of affiliated lessees lease Properties or
has borrowed funds from the Company with an aggregate purchase price in excess
of 20% of the expected total net offering proceeds of the Company.
<TABLE>
<CAPTION>
Boston Market T.G.I. Friday's Golden Corral Golden Corral
Hoover, AL (7) Superstition Springs, AZ Mobile, AL (11) Palatka, FL (11)
-------------- ------------------------ --------------- ----------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends Paid
Deduction:
Base Rent (1) $110,270 (5) (5) (5)
Asset Management Fees (2) (6,316) (5) (5) (5)
General and Administrative
Expenses (3) (6,837) (5) (5) (5)
--------
Estimated Cash Available from
Operations 97,117 (5) (5) (5)
Depreciation and Amortization
Expense (4) (15,840) (5) (5) (5)
--------
Estimated Taxable Operating
Results Before Dividends Paid
Deduction: $ 81,277 (5) (5) (5)
========
</TABLE>
See Footnotes
<PAGE>
<TABLE>
<CAPTION>
Black-eyed Pea Black-eyed Pea Black-eyed Pea Black-eyed Pea
Mesa, AZ (12) Phoenix #1, AZ (12) Phoenix #2, AZ (12) Phoenix #3, AZ (12)
-------------- ------------------- ------------------- -------------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends Paid
Deduction:
Base Rent (1) $168,000 $109,225 $100,195 $ 95,149
Asset Management Fees (2) (9,597) (3,845) (3,845) (3,870)
General and Administrative
Expenses (3) (10,416) (6,772) (6,212) (5,899)
-------- -------- -------- --------
Estimated Cash Available from
Operations 147,987 98,608 90,138 85,380
Depreciation and Amortization
Expense (4) (23,333) (17,310) (17,313) (17,424)
-------- -------- -------- --------
Estimated Taxable Operating
Results Before Dividends Paid
Deduction: $124,654 $ 81,298 $ 72,825 $ 67,956
======== ======== ======== ========
</TABLE>
See Footnotes
<PAGE>
<TABLE>
<CAPTION>
Black-eyed Pea Black-eyed Pea Black-eyed Pea Black-eyed Pea
Tucson, AZ (12) Albuquerque #1, NM (13) Albuquerque #2, NM (13) Dallas #2, TX (13)
--------------- ----------------------- ----------------------- ------------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends Paid
Deduction:
Base Rent (1) $ 91,248 $ 86,087 $ 91,517 $ 90,265
Asset Management Fees (2) (3,848) (4,004) (3,998) (3,964)
General and Administrative
Expenses (3) (5,657) (5,337) (5,674) (5,596)
-------- -------- -------- --------
Estimated Cash Available from
Operations 81,743 76,746 81,845 80,705
Depreciation and Amortization
Expense (4) (17,326) (18,027) (18,001) (17,850)
-------- -------- -------- --------
Estimated Taxable Operating
Results Before Dividends Paid
Deduction: $ 64,417 $ 58,719 $ 63,844 $ 62,855
======== ======== ======== ========
</TABLE>
See Footnotes
<PAGE>
<TABLE>
<CAPTION>
Black-eyed Pea Black-eyed Pea Black-eyed Pea Black-eyed Pea
Forestville, MD (13) Houston, TX (13) Waco, TX (13) Wichita, KS (13)
-------------------- ---------------- -------------- ----------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends Paid
Deduction:
Base Rent (1) $133,563 $ 99,657 $ 89,029 $ 89,571
Asset Management Fees (2) (3,864) (3,892) (3,970) (3,964)
General and Administrative
Expenses (3) (8,281) (6,179) (5,520) (5,553)
-------- -------- -------- --------
Estimated Cash Available from
Operations 121,418 89,586 79,539 80,054
Depreciation and Amortization
Expense (4) (17,395) (17,522) (17,875) (17,850)
-------- -------- -------- --------
Estimated Taxable Operating
Results Before Dividends Paid
Deduction: $104,023 $ 72,064 $ 61,664 $ 62,204
======== ======== ======== ========
</TABLE>
See Footnotes
<PAGE>
Golden Corral
Olathe, KS (11) Total
--------------- -----
Estimated Taxable Operating
Results Before Dividends Paid
Deduction:
Base Rent (1) (5) $1,353,776
Asset Management Fees (2) (5) (58,977)
General and Administrative
Expenses (3) (5) (83,933)
---------
Estimated Cash Available from
Operations (5)
1,210,866
Depreciation and Amortization
Expense (4) (5) (233,066)
---------
Estimated Taxable Operating
Results Before Dividends Paid
Deduction: (5) $ 977,800
==========
- --------------------------------------
FOOTNOTES:
(1) Base rent does not include percentage rents which become due if specified
levels of gross receipts are achieved.
(2) The Properties will be managed pursuant to an advisory agreement between
the Company and CNL Fund Advisors, Inc. (the "Advisor"), pursuant to which
the Advisor will receive monthly asset management fees in an amount equal
to one-twelfth of .60% of the Company's Real Estate Asset Value as of the
end of the preceding month as defined in such agreement.
(3) Estimated at 6.2% of gross rental income based on the previous experience
of Affiliates of the Advisor with 17 public limited partnerships which own
properties similar to those owned by the Company. Amount does not include
soliciting dealer servicing fee due to the fact that such fee will not be
incurred until December 31 of the year following the year in which the
offering terminates.
(4) The estimated federal tax basis of the depreciable portion (the building
portion) of each Property has been depreciated on the straight-line method
over 39 years.
(5) The Property is either under construction or renovation or was under
construction or renovation during, or subsequent to, the period presented,
and therefore was not operational for the period presented. The
development agreements for the Properties which are to be constructed or
renovated, provide that construction or renovation must be completed no
later than the dates set forth below:
Property Estimated Final Completion Date
-------- -------------------------------
Superstition Springs Property March 4, 1998
Mobile Property March 16, 1998
Palatka Property March 16, 1998
Olathe Property March 31, 1998
<PAGE>
(6) The lessee of the Mobile, Palatka and Olathe Properties is the same
unaffiliated lessee.
(7) The lessee of the Mesa, Phoenix #1, Phoenix #2, Phoenix #3 and Tucson
Properties is the same unaffiliated lessee.
(8) The lessee of the Albuquerque #1, Albuquerque #2, Dallas #2, Forestville,
Houston, Waco and Wichita Properties is the same unaffiliated lessee.
<PAGE>
ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Not applicable.
ITEM 5. OTHER EVENTS.
On October 10, 1997, the Company filed a Registration Statement on Form
S-11 in connection with the proposed offering of up to 34,500,000 shares of
common stock at a price of $10 per share. The offering is expected to commence
upon the completion of the current offering of 27,500,000 shares.
ITEM 6. RESIGNATION OF REGISTRANT'S DIRECTORS.
Not applicable.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
<PAGE>
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 June 30, 1997 23
Pro Forma Consolidated Statement of Earnings for the six 24
months ended June 30, 1997
Pro Forma Consolidated Statement of Earnings for the year 25
ended December 31, 1996
Notes to Pro Forma Consolidated Financial Statements for 26
the six months ended June 30, 1997 and the year ended
December 31, 1996
<PAGE>
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 June 30,
1997, including the receipt of $223,843,177 in gross offering proceeds from the
sale of 22,384,318 shares of common stock and the application of such proceeds
to purchase 174 properties (including 121 properties which consist of land and
building, one property through a joint venture arrangement which consists of
land and building, eight properties which consist of building only and 44
properties which consist of land only), 33 of which were under construction at
June 30, 1997, to provide mortgage financing to the lessees of the 44 properties
consisting of land only, and to pay organizational and offering expenses,
acquisition fees and miscellaneous acquisition expenses, (ii) the receipt of
net sales proceeds in the amount of $1,035,153 relating to the sale of a
property consisting of land and building which had been sold during the period
July 1, 1997 through October 3, 1997, (iii) the receipt of $67,962,617 in gross
offering proceeds from the sale of 6,796,262 additional shares of common stock
during the period July 1, 1997 through October 3, 1997, (iv) the application of
such funds and $8,009,833 of cash and cash equivalents at June 30, 1997, to
purchase 47 additional properties acquired during the period July 1, 1997
through October 3, 1997 (16 of which are under construction and consist of land
and building, one property which is under construction and consists of building,
11 properties which consist of building only, and 19 properties which consist of
land and building), to pay additional costs for the 33 properties under
construction at June 30, 1997, and to pay offering expenses, acquisition fees
and miscellaneous acquisition expenses, all as reflected in the pro forma
adjustments described in the related notes. The Pro Forma Consolidated Balance
Sheet as of June 30, 1997, includes the transactions described in (i) above from
the historical consolidated balance sheet, adjusted to give effect to the
transactions in (ii), (iii), and (iv) above, as if they had occurred on June 30,
1997.
The Pro Forma Consolidated Statements of Earnings for the six months ended
June 30, 1997 and the year ended December 31, 1996, include the historical
operating results of the properties described in (i) above from the dates of
their acquisitions plus operating results for six of the properties that were
acquired by the Company during the period January 1, 1996 through October 3,
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
October 3, 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.
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
JUNE 30, 1997
Pro Forma
ASSETS Historical Adjustments Pro Forma
---------- ----------- ---------
Land and buildings on operating
leases, less accumulated
depreciation $140,983,397 $ 33,734,922 (a)
(1,025,712)(b) $173,692,607
Net investment in direct
financing leases (c) 22,703,193 24,391,282 (a) 47,094,475
Cash and cash equivalents 31,097,346 (8,009,833)(a)
1,035,153 (b) 24,122,666
Receivables 497,307 497,307
Mortgage notes receivable 17,737,107 17,737,107
Organization costs, less
accumulated amortization 11,682 11,682
Loan costs, less accumulated
amortization 23,954 23,954
Accrued rental income 861,703 861,703
Other assets 1,026,053
154,904 (a) 1,180,957
------------ ------------ ------------
$214,941,742 $ 50,280,716 $265,222,458
============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Note payable $ 4,756,658 $ 4,756,658
Accrued interest payable 26,751 26,751
Accrued construction costs
payable 10,524,476 $(10,524,476)(a) -
Accounts payable and other
accrued expenses 113,317 113,317
Due to related parties 790,223 790,223
Rents paid in advance 305,524 305,524
Deferred rental income 1,005,050 26,353 (a) 1,031,403
Other payables 10,315 10,315
------------ ------------ ------------
Total liabilities 17,532,314 (10,498,123) 7,034,191
------------ ------------ ------------
Minority interest 286,992 286,992
------------ ------------ ------------
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 shares; issued and
outstanding, as adjusted,
29,200,580 shares 224,043 67,963 (a) 292,006
Capital in excess of par value 198,913,717 60,701,435 (a) 259,615,152
Accumulated distributions in
excess of net earnings (2,015,324) 10,463 (b)
(1,022)(b) 2,005,883
------------ ------------ ------------
197,122,436 60,778,839 257,901,275
------------ ------------ ------------
$214,941,742 $ 50,280,716 $265,222,458
============ ============ ============
See accompanying notes to unaudited pro forma consolidated financial statements.
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
SIX MONTHS ENDED JUNE 30, 1997
Pro Forma
Historical Adjustments Pro Forma
---------- ----------- ---------
Revenues:
Rental income from
operating leases $4,006,805 $ 8,188 (1) $4,014,993
Earned income from
direct financing leases (2) 958,492 958,492
Interest income from
mortgage notes receivable 815,192 815,192
Other interest and income 934,745 (3,359)(3) 931,386
---------- ---------- ----------
6,715,234 4,829 6,720,063
---------- ---------- ----------
Expenses:
General operating and
administrative 481,211 481,211
Professional services 44,679 44,679
Asset and mortgage management
fees to related party 259,256 873 (4) 260,129
State and other taxes 107,863 107,863
Depreciation and amortization 579,404 2,142 (6) 581,546
---------- ---------- ----------
1,472,413 3,015 1,475,428
---------- ---------- ----------
Earnings Before Minority
Interest in Income of
Consolidated Joint Venture 5,242,821 1,814 5,244,635
Minority Interest in Income of
Consolidated Joint Venture (15,726) (15,726)
---------- ---------- ----------
Net Earnings $5,227,095 $ 1,814 $5,228,909
========== ========== ==========
Earnings Per Share of
Common Stock (7) $ 0.29 $ 0.29
========== ==========
Weighted Average Number of
Shares of Common Stock
Outstanding (7) 17,826,025 17,826,025
========== ==========
See accompanying notes to unaudited pro forma consolidated financial statements.
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
YEAR ENDED DECEMBER 31, 1996
Pro Forma
Historical Adjustments Pro Forma
---------- ------------ ----------
Revenues:
Rental income from
operating leases $3,717,886 $ 62,167 (1) $3,780,053
Earned income from
direct financing leases (2) 625,492 34,282 (1) 659,774
Contingent rental income 13,920 13,920
Interest income from
mortgage notes receivable 1,069,349 1,069,349
Other interest and income 780,037 (24,826)(3) 755,211
---------- ------------ ----------
6,206,684 71,623 6,278,307
---------- ------------ ----------
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 5,435 (4) 256,635
State and other taxes 56,184 1,218 (5) 57,402
Depreciation and amortization 521,871 6,852 (6) 528,723
---------- ------------ ----------
1,430,795 13,505 1,444,300
---------- ------------ ----------
Earnings Before Minority
Interest in Income of
Consolidated Joint Venture 4,775,889 58,118 4,834,007
Minority Interest in Income of
Consolidated Joint Venture (29,927) (29,927)
---------- ------------ ----------
Net Earnings $4,745,962 $ 58,118 $4,804,080
========== ============ ==========
Earnings Per Share of
Common Stock (7) $ 0.59 $ 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.
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND THE YEAR ENDED DECEMBER 31, 1996
Pro Forma Consolidated Balance Sheet:
(a) Represents gross proceeds of $67,962,617 from the issuance of 6,796,262
shares of common stock during the period July 1, 1997 through October 3,
1997, the receipt of $26,353 of rental income during construction
(capitalized as deferred rental income), and $8,009,833 of cash and cash
equivalents used (i) to acquire 47 properties for $48,490,648 of which 12
properties consists of building only and 35 properties consist of land and
building, (ii) to fund estimated construction costs of $17,256,618
($10,524,476 of which was accrued as construction costs payable at June
30, 1997) relating to 33 wholly-owned properties under construction at
June 30, 1997, (iii) to pay acquisition fees of $3,058,318 ($2,903,414 of
which was allocated to properties and $154,904 of which was classified as
other assets and will be allocated to future properties) and (iv) to pay
selling commissions and offering expenses (stock issuance costs) of
$7,193,219, which have been netted against capital in excess of par value.
The pro forma adjustments to land and buildings on operating leases and
net investment in direct financing leases as a result of the above
transactions were as follows:
<TABLE>
<CAPTION>
Estimated purchase
price (including
construction and
closing costs) Acquisition fees
and additional allocated to
construction costs property Total
------------------ ---------------- -----------
<S> <C>
Boston Market in Southlake, TX $ 1,025,712 $ - $ 1,025,712
Boston Market in Stafford, TX 1,068,222 57,226 1,125,448
Jack in the Box in Channelview, TX 1,007,970 53,998 1,061,968
Jack in the Box in Garland, TX 935,120 50,096 985,216
KFC in Putnam, CT 794,700 42,573 837,273
Arby's in Lexington, NC 741,536 39,725 781,261
Boston Market in Newport News, VA 1,002,216 53,690 1,055,906
IHOP in Houston, TX 1,419,809 76,061 1,495,870
IHOP in Stockbridge, GA 1,392,627 74,605 1,467,232
Jack in the Box in Woodland, CA 962,592 51,568 1,014,160
Jack in the Box in West Sacramento, CA 1,072,031 57,430 1,129,461
Tumbleweed Southwest Mesquite
Grill & Bar in Cookeville, TN 1,456,843 78,045 1,534,888
Tumbleweed Southwest Mesquite
Grill & Bar in Hendersonville, TN 739,655 39,624 779,279
Tumbleweed Southwest Mesquite
Grill & Bar in Lawrence, KS 1,433,474 76,794 1,510,268
Tumbleweed Southwest Mesquite
Grill & Bar in Nashville, TN 1,294,917 69,371 1,364,288
Arby's in Greensboro, NC 726,273 38,908 765,181
Arby's in Greenville, NC 726,273 38,907 765,180
Arby's in Jonesville, NC 726,273 38,907 765,180
Arby's in Kernersville, NC 649,000 34,768 683,768
Arby's in Kinston, NC 712,636 38,177 750,813
Tumbleweed Southwest Mesquite
Grill & Bar in Murfreesboro, TN 1,410,322 75,553 1,485,875
Boston Market in Edgewater, CO 896,187 48,010 944,197
Golden Corral in Fort Walton Beach, FL 1,490,657 79,857 1,570,514
Golden Corral in Duncan, OK 1,036,607 55,532 1,092,139
Ruby Tuesday's in London, KY 1,119,970 59,999 1,179,969
IHOP in Elk Grove, CA 1,535,840 82,278 1,618,118
IHOP in Lake Jackson, TX 1,192,497 63,884 1,256,381
IHOP in Loveland, CO 1,372,745 73,540 1,446,285
IHOP in Victoria, TX 1,070,000 57,321 1,127,321
Shoney's in Las Vegas, NV 1,519,984 81,428 1,601,412
Boston Market in Hoover, AL 1,052,658 56,392 1,109,050
TGI Friday's in Superstition Springs, AZ 2,038,893 109,227 2,148,120
Golden Corral in Mobile, AL 1,343,204 71,957 1,415,161
Golden Corral in Palatka, FL 1,189,051 63,699 1,252,750
Black-eyed Pea in Mesa, AZ 1,599,500 85,688 1,685,188
Black-eyed Pea in Phoenix, AZ (#1) 640,754 34,326 675,080
Black-eyed Pea in Phoenix, AZ (#2) 640,871 34,332 675,203
Black-eyed Pea in Phoenix, AZ (#3) 644,971 34,552 679,523
Black-eyed Pea in Tucson, AZ 641,371 34,359 675,730
</TABLE>
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
STATEMENTS - CONTINUED
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND THE YEAR ENDED DECEMBER 31, 1996
Pro Forma Consolidated Balance Sheet - Continued:
<TABLE>
<CAPTION>
Estimated purchase
price (including
construction and
closing costs) Acquisition fees
and additional allocated to
construction costs property Total
------------------ ---------------- -----
<S> <C>
Black-eyed Pea in Albuquerque, NM (#1) 667,290 35,748 703,038
Black-eyed Pea in Albuquerque, NM (#2) 666,355 35,698 702,053
Black-eyed Pea in Dallas, TX 660,748 35,397 696,145
Black-eyed Pea in Forestville, MD 643,925 34,496 678,421
Black-eyed Pea in Houston, TX 648,599 34,745 683,344
Black-eyed Pea in Waco, TX 661,682 35,447 697,129
Black-eyed Pea in Wichita, KS 660,748 35,397 696,145
Golden Corral in Olathe, KS 1,557,340 83,429 1,640,769
33 wholly owned properties under
construction at June 30, 1997 6,732,142 360,650 7,092,792
----------- ----------- -----------
$55,222,790 $ 2,903,414 $58,126,204
=========== =========== ===========
Adjustment classified as follows:
Land and buildings on operating leases $33,734,922
Net investment in direct financing leases 24,391,282
----------
$58,126,204
===========
</TABLE>
(b) Represents net sales proceeds in the amount of $1,035,153 received in
conjunction with the sale of a property consisting of land and building,
purchased and sold during the period July 1, 1997 through October 3, 1997,
of which $1,022 had been depreciated through the date of sale and was sold
at a gain of $10,463.
(c) In accordance with generally accepted accounting principles, leases in
which the present value of future minimum lease payments equals or exceeds
90 percent of the value of the related properties are treated as direct
financing leases rather than as land and buildings. The categorization of
the leases has no effect on rental revenues received.
Pro Forma Consolidated Statement of Earnings:
(1) Represents rental income from operating leases and earned income from
direct financing leases for six of the properties acquired during the
period January 1, 1996 through October 3, 1997, which had a previous
rental history prior to the acquisition of the property by the Company
(the "Pro Forma Properties"), for the period commencing (A) the later of
(i) the date the Pro Forma Property became operational as a rental
property by the previous owner or (ii) January 1, 1996, to (B) the earlier
of (i) the date the Pro Forma Property was acquired by the Company or (ii)
the end of the pro forma period presented. Each of the six Pro Forma
P r operties 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.
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
STATEMENTS - CONTINUED
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND THE YEAR ENDED DECEMBER 31, 1996
Pro Forma Consolidated Statement of Earnings - Continued:
Date Pro Forma
Date Placed Property Became
in Service Operational as
By the Company Rental Property
-------------- ----------------
Mr. Fable's in Grand
Rapids, MI March 1996 January 1996
Denny's in McKinney, TX June 1996 January 1996
Boston Market in Merced, CA October 1996 July 1996
Boston Market in
St. Joseph, MO December 1996 June 1996
Burger King in Kent, OH February 1997 December 1996
Golden Corral in
Hopkinsville, KY February 19, 1997 February 18, 1997
In accordance with generally accepted accounting principles, lease revenue
from leases accounted for under the operating method is recognized over
the terms of the leases. For operating leases providing escalating
guaranteed minimum rents, income is reported on a straight-line basis
over the terms of the leases. For leases accounted for as direct
financing leases, future minimum lease payments are recorded as a
receivable. The difference between the receivable and the estimated
residual values less the cost of the properties is recorded as unearned
income. The unearned income is amortized over the lease terms to provide
a constant rate of return. Accordingly, pro forma rental income from
operating leases and earned income from direct financing leases does not
necessarily represent rental payments that would have been received if the
properties had been operational for the full pro forma period.
Generally, the leases provide for the payment of percentage rent in
addition to base rental income. However, due to the fact that no
percentage rent was due under the leases for the Pro Forma Properties
during the portion of 1996 and 1997 that the previous owners held the
properties, no pro forma adjustment was made for percentage rental income
for the six months ended June 30, 1997 and the year ended December 31,
1996.
(2) See Note (c) 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 six months ended June 30, 1997 and the year ended
December 31, 1996.
(4) Represents incremental increase in asset management fees relating to the
Pro Forma Properties for the period commencing (A) on the later of (i) the
date the Pro Forma Properties became operational as rental properties by
the previous owners or (ii) January 1, 1996 through (B) the earlier of (i)
the date the Pro Forma Properties were acquired by the Company or (ii) the
end of the pro forma period presented, as described in Note (1) above.
Asset management fees are equal to 0.60% of the Company's Real Estate
Asset Value (estimated to be approximately $873,000 and $3,509,000 for the
Pro Forma Properties for the six months ended June 30, 1997 and the year
ended December 31, 1996, respectively), as defined in the Company's
prospectus.
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
STATEMENTS - CONTINUED
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND THE YEAR ENDED DECEMBER 31, 1996
Pro Forma Consolidated Statement of Earnings - Continued:
(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 six months
ended June 30, 1997 and the year ended December 31, 1996.
<PAGE>
ITEM 8. CHANGE IN FISCAL YEAR.
Not applicable.
EXHIBITS
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be filed on its behalf by
the undersigned thereunto duly authorized.
CNL AMERICAN PROPERTIES FUND, INC.
Dated: October 17, 1997 By: /s/ Robert A. Bourne
---------------------------
ROBERT A. BOURNE, President
