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): January 20, 1998
CNL AMERICAN PROPERTIES FUND, INC.
(Exact Name of Registrant as Specified in Charter)
Florida 0-28380 59-3239115
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
400 East South Street 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.
The following information is provided in connection with the
registration statement on Form S-11 (No. 333-15411) of CNL American Properties
Fund, Inc. (the "Company") and its undertaking to provide information regarding
the investment of net offering proceeds.
Status of the Offering
The Company completed an offering of up to 27,500,000 shares of
common stock (including 2,500,000 shares available only to stockholders who
elected to participate in the Company's reinvestment plan) on March 2, 1998,
upon receiving aggregate subscription proceeds of $251,872,648 (25,187,265
Shares) from 11,304 stockholders, including 187,265 Shares ($1,872,648) issued
pursuant to the reinvestment plan. As of May 15, 1998, the Company had invested
or committed for investment approximately $163,600,000 of net proceeds from the
offering (along with approximately $134,000,000 of net proceeds from the Initial
Offering) in 260 Properties, in providing mortgage financing through Mortgage
Loans, and in paying acquisition fees and certain acquisition expenses, leaving
approximately $63,500,000 in net offering proceeds available for investment for
investment in Properties and Mortgage Loans.
Acquisition of Properties
Between January 1, 1998 and May 15, 1998, the Company acquired 21
Properties consisting of land and building. In connection with the purchase of
these 21 Properties, the Company, as lessor, entered into long-term lease
agreements with unaffiliated lessees. The leases are on a triple-net basis, with
the lessee responsible for all repairs and maintenance, property taxes,
insurance and utilities. The lessee also is required to pay for special
assessments, sales and use taxes, and the cost of any renovations permitted
under the lease. For the Properties that are to be constructed, the Company has
entered into development and indemnification and put agreements with the
lessees.
The purchase price for the Shoney's Property in Phoenix, Arizona,
includes a construction fee of $37,500 to an affiliate of the Company's advisor
for services provided in connection with the construction of the Property. The
Company considers construction fees, to the extent that they are paid to
affiliates, to be acquisition fees. Such construction 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.
The following table sets forth the location of the 21 Properties,
consisting of land and building, acquired by the Company from January 1, 1998
through May 15, 1998, a description of the competition, and a summary of the
principal terms of the acquisition and lease of each Property.
- 1 -
<PAGE>
PROPERTY ACQUISITIONS
From January 1, 1998 through May 15, 1998
<TABLE>
<CAPTION>
Lease Expira-
Property Location and Purchase Date tion and Minimum Percentage Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Rent To Purchase
- ----------- ------------ -------- --------------- --------------- -------------- -----------
<S> <C>
Golden Corral (6) $520,186 01/20/98 07/2013; four 10.75% of Total for each lease during the
(the "Dubuque #2 (excluding five-year Cost (4) year, 5% of first through
Property") development renewal options the amount by seventh
Restaurant to be costs) (3) which annual lease years
constructed gross sales and the
exceed tenth
The Dubuque #2 $2,833,105 (5) through
Property is located on fifteenth
the northeast corner of lease years
the intersection of only
Northwest Arterial and
Chavenelle Road, in
Dubuque, Dubuque
County, Iowa, in an
area of mixed retail,
commercial, and
residential
development.
- 2 -
<PAGE>
Golden Corral (6) $546,484 01/20/98 07/2013; four 10.75% of Total for each lease during the
(the "Edmond (excluding five-year Cost (4) year, 5% of first through
Property") development renewal options the amount by seventh
Restaurant to be costs) (3) which annual lease years
constructed gross sales and the
exceed tenth
The Edmond Property $2,776,470 (5) through
is located on the fifteenth
northwest corner of lease years
Broadway Extension only
and Comfort Drive, in
Edmond, 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 Edmond Property include
an Applebee's, a Chili's,
an Outback Steak House, a
Perkins, a Chick-Fil-A, a
Taco Bell, a McDonald's, a
Burger King, a Hardee's,
and several local restaurants.
- 3 -
<PAGE>
Lease Expira-
Property Location and Purchase Date tion and Minimum Percentage Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Rent To Purchase
- ----------- ------------ -------- --------------- --------------- ---------- -----------
Tumbleweed $565,440 02/10/98 02/2018; two 11% of Total Cost for each lease at any time
Southwest Mesquite (excluding five-year (4); increases by year, (i) 5% of after the
Grill & Bar (7) development renewal options 10% after the fifth annual gross seventh
(the "Clarksville costs) (3) lease year and after sales minus lease year
Property") every five years (ii) the
Restaurant to be thereafter during the minimum
constructed lease term annual rent for
such lease year
The Clarksville Property
is located on the
northwest corner of
Wilma-Rudolph Boulevard
and SR 374, in
Clarksville, Montgomery
County, Tennessee, in an
area of mixed retail,
commercial, and
residential development.
Tumbleweed $511,103 02/10/98 02/2018; two 11% of Total Cost for each lease at any time
Southwest Mesquite (excluding five-year (4); increases by year, (i) 5% of after the
Grill & Bar (7) development renewal options 10% after the fifth annual gross seventh
(the "Hermitage costs) (3) lease year and after sales minus (ii) lease year
Property") every five years the minimum
Restaurant to be thereafter during the annual rent for
constructed lease term such lease year
The Hermitage Property
is located on the east
side of Old Hickory
Boulevard, in Hermitage,
Davidson County,
Tennessee, in an area
of mixed retail,
commercial, and
residential development.
Other fast-food and
family-style restaurants
located in proximity to
the Hermitage Property
include an Applebee's
and a Schlotzsky's Deli.
- 4 -
<PAGE>
Lease Expira-
Property Location and Purchase Date tion and Minimum Percentage Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Rent To Purchase
- --------------------- ------------ -------- --------------- --------------- ---------- -----------
Arby's (8) $424,738 02/20/98 02/2018; two (9) None at any time
(the "Jacksonville #3 (excluding five-year after the
Property") development renewal options seventh
Restaurant to be costs) (3) lease year
constructed
The Jacksonville
Property is located on
the northwest corner of
DeBarry Avenue and Wells
Road, in Jacksonville,
Clay County, Florida, in
an area of mixed retail,
commercial, and
residential development.
Other fast-food and family-
style restaurants located
in proximity to the
Jacksonville Property
include a Steak-n-Shake,
a Chili's, an Outback
Steak House, a Burger
King, a Ruby Tuesday,
a Tony Roma's, and several
local restaurants.
- 5 -
<PAGE>
Jack in the Box (10) $1,380,250 02/23/98 02/2016; four $134,574 (11); None at any time
(the "Los Angeles #4 (3) (11) five-year increases by 8% after the
Property") renewal options after the fifth lease seventh
Restaurant to be year and after every lease year
constructed five years thereafter
during the lease
The Los Angeles #4 term
Property is located on
the southeast corner of
Pico Boulevard and
Hoover Street, in Los
Angeles, Los Angeles
County, California, in
an area of mixed retail,
commercial, and
residential development.
Other fast-food and
family-style restaurants
located in proximity to
the Los Angeles #4
Property include a
Wendy's, a Domino's
Pizza and several local
restaurants.
- 6 -
<PAGE>
Lease Expira-
Property Location and Purchase Date tion and Minimum Percentage Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Rent To Purchase
- --------------------- ------------ -------- --------------- --------------- ---------- -----------
Ruby Tuesday's $586,120 03/2013; two 11% of Total Cost for each lease at any
(the "Somerset (excluding 03/03/98 five-year (4); increases by year, (i) 5% of time after
Property") development renewal options 10% after the fifth annual gross the
Restaurant to be costs) (3) lease year and after sales minus (ii) seventh
constructed every five years the minimum lease year
thereafter during the annual rent for
The Somerset Property lease term such lease year
is located on the west
side of U.S. 27, west
of S.R. 1577, in
Somerset, Pulaski
County, Kentucky, in
an area of mixed retail,
commercial, and
residential development.
Other fast-food, family-
style, and casual dining
restaurants located in
proximity to the Somerset
Property include a Sonic
Drive-In.
Jack in the Box (10) $1,299,700 03/2016; four $126,721 (11); None at any
(the "Pflugerville (3) (11) 03/04/98 five-year increases by 8% time after
Property") renewal options after the fifth lease the
Restaurant to be year and after every seventh
constructed five years thereafter lease year
during the lease
The Pflugerville term
Property is located on
the northwest quadrant
of F.M. 1825 and
Wells Branch Parkway,
in Pflugerville, Travis
County, Texas, in an
area of mixed retail,
commercial, and
residential development.
Other fast-food, family-
style, and casual dining
restaurants located in
proximity to the
Pflugerville Property
include a local restaurant.
- 7 -
<PAGE>
Lease Expira-
Property Location and Purchase Date tion and Minimum Percentage Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Rent To Purchase
- --------------------- ------------ -------- --------------- --------------- ---------- -----------
Jack in the Box (10) $973,022 03/2016; four $94,870 (11); None at any time
(the "Waxahachie (3) (11) 03/13/98 five-year increases by 8% after the
Property") renewal options after the fifth lease seventh
Restaurant to be year and after every lease year
constructed five years thereafter
during the lease
The Waxahachie term
Property is located on
the southeast quadrant
of U.S. Highway 287
Bypass and U.S.
Highway 77, in
Waxahachie, Ellis
County, Texas, in an
area of mixed retail,
commercial, and
residential
development. Other
fast-food, family-style,
and casual dining
restaurants located in
proximity to the
Waxahachie Property
include a KFC, a
McDonald's, a
Whataburger, a Taco
Bell, a Golden Corral,
a Schlotzsky's Deli,
and several local
restaurants.
- 8 -
<PAGE>
Jack in the Box (10) $895,688 03/2016; four $87,330 (11); None at any time
(the "Hutchins (3) (11) 03/16/98 five-year increases by 8% after the
Property") renewal options after the fifth lease seventh
Restaurant to be year and after every lease year
constructed five years thereafter
during the lease
The Hutchins Property term
is located on the
southwest quadrant of
East Palestine Road
and South Interstate
Highway 45, in
Hutchins, Dallas
County, Texas, in an
area of mixed retail,
commercial, and
residential
development. Other
fast-food, family-style,
and casual dining
restaurants located in
proximity to the
Hutchins Property
include a Dairy Queen,
and a local restaurant.
- 9 -
<PAGE>
Lease Expira-
Property Location and Purchase Date tion and Minimum Percentage Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Rent To Purchase
- --------------------- ------------ -------- --------------- --------------- ---------- -----------
Shoney's $507,605 03/2018; two 10.50% of Total for each lease at any time
(the "Phoenix #4 (excluding 03/24/98 five-year Cost (4); increases year, (i) 6% of after the
Property") development renewal options by 2% after the annual gross seventh
Restaurant to be costs) (3) second lease year sales minus (ii) lease year
constructed and after every two the minimum
years thereafter annual rent for
The Phoenix #4 during the lease such lease year
Property is located on term
the northeast quadrant
of West McDowell Road
and North 51st Avenue,
in Phoenix, Maricopa
County, Arizona, in an
area of mixed retail,
commercial, and
residential development.
Other fast-food, family-
style, and casual dining
restaurants located in
proximity to the Phoenix
#4 Property include a
Burger King, a McDonald's,
a Sonic Drive-In, a Waffle
House, a Taco Bell, an
IHOP, and several local
restaurants.
- 10 -
<PAGE>
Arby's (8) $411,487 04/2018; two (9) None at any time
(the "Columbus #2 (excluding 04/06/98 five-year after the
Property") development renewal options seventh
Restaurant to be costs) (3) lease year
constructed
The Columbus #2
Property is located
on the southeast
quadrant of Rosehill
Road and East Broad
Street, in Columbus,
Franklin County, Ohio,
in an area of mixed
retail, commercial,
and residential
development. Other
fast-food, family-
style, and casual
dining restaurants
located in proximity
to the Columbus #2
Property include a
Taco Bell, a Wendy's,
a McDonald's, a Subway
Sandwich Shop, and a
local restaurant.
- 11 -
<PAGE>
Lease Expira-
Property Location and Purchase Date tion and Minimum Percentage Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Rent To Purchase
- --------------------- ------------ -------- --------------- --------------- ---------- -----------
Arby's (8) $643,757 04/2018; two (9) None at any time
(the "Atlanta #2 (excluding 04/07/98 five-year after the
Property") development renewal options seventh
Restaurant to be costs) (3) lease year
constructed
The Atlanta #2 Property
is located on the east
side of Georgia Highway
141, north of McGinnis
Ferry Road, in Atlanta,
Forsyth County, Georgia,
in an area of mixed
retail, commercial, and
residential development.
Other fast-food, family-
style, and casual dining
restaurants located in
proximity to the Atlanta
#2 Property include a
Chick-Fil-A, a McDonald's,
and a Wendy's.
- 12 -
<PAGE>
Jack in the Box (10) $811,891 04/2016; four $79,159 (11); None at any time
(the "Gun Barrel City (3) (11) 04/13/98 five-year increases by 8% after the
Property") renewal options after the fifth lease seventh
Restaurant to be year and after every lease year
constructed five years thereafter
during the lease
The Gun Barrel City term
Property is located on
the north side of State
Highway 334, west of
the intersection of
Pleasureland Road, in
Gun Barrel City,
Henderson County,
Texas, in an area of
mixed retail,
commercial, and
residential
development. Other
fast-food, family-style,
and casual dining
restaurants located in
proximity to the Gun
Barrel City Property
include a Schlotzsky's
Deli, a Subway
Sandwich Shop, a
Taco Bell, a Burger
King, a Pizza Hut, a
Dairy Queen, a
McDonald's, a
Whataburger, and
several local
restaurants.
- 13 -
<PAGE>
Lease Expira-
Property Location and Purchase Date tion and Minimum Percentage Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Rent To Purchase
- --------------------- ------------ -------- --------------- --------------- ---------- -----------
Jack in the Box (10) $999,670 04/2016; four $97,468 (11); None at any time
(the "Nacogdoches (3) (11) 04/13/98 five-year increases by 8% after the
Property") renewal options after the fifth lease seventh
Restaurant to be year and after every lease year
constructed five years thereafter
during the lease
The Nacogdoches term
Property is located on
the west side of U.S.
Highway 59, south of
College Street, in
Nacogdoches, Nacogdoches
County, Texas, in an
area of mixed retail,
commercial, and
residential development.
Other fast-food, family-
style, and casual dining
restaurants located in
proximity to the
Nacogdoches Property
include a Taco Bell, a
Wendy's, a McDonald's,
a Long John Silver's,
a Schlotzsky's Deli, a
Little Caesar's Pizza, a
Golden Corral, and several
local restaurants.
- 14 -
<PAGE>
Boston Market (12) $950,361 05/2015; two $102,164; increases for each lease at any time
(13) 04/14/98 five-year by 12% in 05/2002 year, (i) 5% of after
(the "Glendale renewal options and after every annual gross 05/2002
Property") seven years sales minus (ii)
Existing restaurant thereafter during the the minimum
lease term annual rent for
The Glendale Property such lease year
is located on the south (5)
side of West Peoria
Avenue, east of 59th
Avenue, in Glendale,
Maricopa County, Arizona,
in an area of mixed
retail, commercial, and
residential development.
Other fast-food, family-
style, and casual dining
restaurants located in
proximity to the Glendale
Property include a Taco
Bell, a KFC, a Popeye's,
a Burger King, an
Applebee's, an Arby's,
a Jack in the Box, a Long
John Silver's, a Wendy's,
a McDonald's, and several
local restaurants.
- 15 -
<PAGE>
Lease Expira-
Property Location and Purchase Date tion and Minimum Percentage Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Rent To Purchase
- --------------------- ------------ -------- --------------- --------------- ---------- -----------
Boston Market (12) $837,656 09/2010; three $90,048; increases for each lease at any time
(13) 04/14/98 five-year by 10% in 09/2000 year, (i) 4% of after
(the "Warwick renewal options and after every five annual gross 09/2000
Property") years thereafter sales minus (ii)
Existing restaurant during the lease the minimum
term annual rent for
The Warwick Property such lease year
is located on the east
side of Bald Hill Road,
north of Route 117, in
Warwick, Kent County,
Rhode Island, in an area
of mixed retail,
commercial, and residential
development. Other fast-
food, family-style, and
casual dining restaurants
located in proximity to the
Warwick Property include a
TGI Friday's, an Olive Garden,
a Red Lobster, a Lone Star
Steakhouse & Saloon, a
McDonald's, a Burger King, a
Taco Bell, an Applebee's, a
Wendy's, and an East Side
Mario's.
- 16 -
<PAGE>
Jack in the Box (10) $1,150,008 04/2016; four $112,126 (11); None at any time
(the "St. Louis (3) (11) 04/14/98 five-year increases by 8% after the
Property") renewal options after the fifth lease seventh
Restaurant to be year and after every lease year
constructed five years thereafter
during the lease
The St. Louis Property term
is located on the
northeast quadrant of
Lusher Road and Redman
Road, in St. Louis, St.
Louis County, Missouri,
in an area of mixed
retail, commercial, and
residential development.
Other fast-food, family-
style, and casual dining
restaurants located in
proximity to the St. Louis
Property include a Subway
Sandwich Shop, a McDonald's,
and an Arby's.
- 17 -
<PAGE>
Lease Expira-
Property Location and Purchase Date tion and Minimum Percentage Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Rent To Purchase
- --------------------- ------------ -------- --------------- --------------- ---------- -----------
Jack in the Box (10) $1,175,298 04/2016; four $114,952 (11); None at any time
(the "Avondale (3) (11) 04/30/98 five-year increases by 8% after the
Property") renewal options after the fifth lease seventh
Restaurant to be year and after every lease year
constructed five years thereafter
during the lease
The Avondale Property term
is located on the
northeast corner of
Rancho Santa Fe
Boulevard and Dysart
Road, in Avondale,
Maricopa County,
Arizona, in an area
of mixed retail,
commercial, and
residential development.
Other fast-food, family-
style, and casual dining
restaurants located in
proximity to the Avondale
Property include a
McDonald's, a Waffle
House, a Whataburger,
and a KFC.
- 18 -
<PAGE>
Boston Market (12) $969,159 10/2010; three $104,185; increases for each lease at any time
(13) 05/08/98 five-year by 10% in 10/2000 year, (i) 4% of after
(the "Columbus #3 renewal options and after every five annual gross 10/2000
Property") years thereafter sales minus (ii)
Existing restaurant during the lease the minimum
term annual rent for
The Columbus #3 such lease year
Property is located on (5)
the northwest quadrant
of the intersection of
Bethel Road and Olentangy
River Road, in Columbus,
Franklin County, Ohio,
in an area of mixed retail,
commercial, and residential
development. Other fast-
food, family-style, and
casual dining restaurants
located in proximity to the
Columbus #3 Property include
a Bob Evans, a McDonald's,
a Wendy's, and a KFC.
- 19 -
<PAGE>
Lease Expira-
Property Location and Purchase Date tion and Minimum Percentage Option
Competition Price (1) Acquired Renewal Options Annual Rent (2) Rent To Purchase
- --------------------- ----------- -------- --------------- --------------- ---------- -----------
Chevy's Fresh Mex $2,200,000 05/2013; two $209,000; increases for each lease at any time
(the "Naperville 05/15/98 ten-year renewal by 10% after the year, (i) 5% of during the
Property") options fifth lease year and annual gross lease term
Existing restaurant after every five sales minus (ii)
years thereafter the minimum
The Naperville during the lease annual rent for
Property is located on term such lease year
the southwest corner of
North Naper Boulevard
and Lincoln Road, in
Naperville, DuPage
County, Illinois, in an
area of mixed retail,
commercial, and
residential
development. Other
fast-food, family-style,
and casual dining
restaurants located in
proximity to the
Naperville Property
include a TGI Friday's,
a Pizza Hut, an
Applebee's, a Bob
Evans, and several
local restaurants.
</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
-------- -----------------
Dubuque #2 Property $1,074,000
Edmond Property 1,012,000
Clarksville Property 926,000
Hermitage Property 926,000
Jacksonville #3 Property 599,000
Los Angeles #4 Property 620,000
Somerset Property 609,000
Pflugerville Property 668,000
Waxahachie Property 558,000
Hutchins Property 680,000
Phoenix #4 Property 371,000
Columbus #2 Property 601,000
- 20 -
<PAGE>
Property Federal Tax Basis
-------- -----------------
Atlanta #2 Property 646,000
Gun Barrel City Property 576,000
Nacogdoches Property 674,000
Glendale Property 494,000
Warwick Property 699,000
St. Louis Property 761,000
Avondale Property 639,000
Columbus #3 Property 730,000
Naperville Property 1,360,000
(2) Minimum annual rent for each of the Properties became payable on the
effective date of the lease, except as indicated below. For the Dubuque
#2 and Edmond 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 Clarksville, Hermitage, Jacksonville #3, Somerset,
Phoenix #4, Columbus #2 and Atlanta #2 Properties, minimum annual rent
will become due and payable on the earlier of (i) a specific number of
days (ranging from 120 to 180) after execution of the lease, (ii) the
date the certificate of occupancy for the restaurant is issued, (iii)
the date the restaurant opens for business to the public or (iv) the
date the tenant receives from the landlord its final funding of the
construction costs. During the period commencing with the effective
date of the lease to the date minimum annual rent becomes payable for
the Clarksville, Hermitage, Somerset and Phoenix #4 Properties, as
described above, the tenant shall pay monthly interim rent equal to a
specified rate per annum (ranging from 10.50% to 11%) of the amount
funded by the Company in connection with the purchase and construction
of the Properties. During the period commencing with the effective date
of the lease to the date minimum annual rent becomes payable for the
Dubuque #2 and Edmond 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 Jacksonville #3, Columbus #2 and Atlanta #2 Properties,
as described above, the tenant shall pay monthly interim rent equal to
the product of 325 basis points over the "Applicable Treasury Rate" (US
Treasuries with a maturity date of 20 years) multiplied by the amounts
funded by the Company in connection with the purchase and construction
of the Properties.
(3) The development agreements or lease addendums 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
amounts set forth below:
<TABLE>
<CAPTION>
Property Estimated Maximum Cost Estimated Final Completion Date
-------- ---------------------- -------------------------------
<S> <C>
Dubuque #2 Property $1,647,329 July 19, 1998
Edmond Property 1,616,169 July 19, 1998
Clarksville Property 1,488,802 August 9, 1998
Hermitage Property 1,432,291 August 9, 1998
Jacksonville #3 Property 1,025,168 August 19, 1998
Los Angeles #4 Property 1,380,250 August 22, 1998
Somerset Property 1,129,565 July 1, 1998
Pflugerville Property 1,299,700 August 31, 1998
- 21 -
<PAGE>
Property Estimated Maximum Cost Estimated Final Completion Date
-------- ---------------------- -------------------------------
Waxahachie Property $ 973,022 September 9, 1998
Hutchins Property 895,688 September 12, 1998
Phoenix #4 Property 822,519 September 20, 1998
Columbus #2 Property 1,013,726 October 3, 1998
Atlanta #2 Property 1,244,240 October 4, 1998
Gun Barrel City Property 811,891 October 10, 1998
Nacogdoches Property 999,670 October 10, 1998
St. Louis Property 1,150,008 October 11, 1998
Avondale Property 1,175,298 October 27, 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 or lease addendum.
(5) Percentage rent shall be calculated on a calendar year basis (January 1
to December 31).
(6) The lessee of the Dubuque #2 and Edmond Properties is the same
unaffiliated lessee.
(7) The lessee of the Clarksville and Hermitage Properties is the same
unaffiliated lessee.
(8) The lessee of the Jacksonville #3, Columbus #2 and Atlanta #2 Properties
is the same unaffiliated lessee.
(9) Initial minimum annual rent shall equal the lease rate which is in effect
15 business days prior to the commencement of the annual rent (2),
multiplied by the amount funded by the Company in connection with the
purchase and construction of the Property. Minimum annual rent shall be
adjusted upward at the end of every three years after the Company's
closing on the Property by the lower of (i) 4.14 of the minimum annual
rent or (ii) an amount equal to the product obtained by multiplying the
Consumer Price Index by three.
(10) The lessee of the Los Angeles #4, Pflugerville, Waxahachie, Hutchins, Gun
Barrel City, Nacogdoches, St. Louis and Avondale Properties is the same
unaffiliated lessee.
(11) 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.
(12) The lessee of the Glendale, Warwick and Columbus #3 Properties if the
same unaffiliated lessee.
- 22 -
<PAGE>
(13) The tenant of this Property exercised its option under the terms of its
lease agreement to substitute an existing Property with this replacement
Property. The replacement Property will continue under the terms of the
lease of the original Property.
- 23 -
<PAGE>
STATEMENT OF ESTIMATED TAXABLE OPERATING RESULTS
BEFORE DIVIDENDS PAID DEDUCTION
CNL AMERICAN PROPERTIES FUND, INC.
PROPERTIES ACQUIRED FROM JANUARY 1, 1998
THROUGH MAY 15, 1998
For the Year Ended December 31, 1997 (Unaudited)
The following schedule presents unaudited estimated taxable operating
results before dividends paid deduction of each Property acquired by the Company
from January 1, 1998 through May 15, 1998, and the total of all properties for
which the Company had initial commitments as of May 15, 1998. The statement
presents unaudited estimated taxable operating results for each acquired
Property that was operational (or in the case of pending investments, the total
of all properties that were operational), as if the Property had been acquired
and operational on January 1, 1997 through December 31, 1997. 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.
COMPLETED INVESTMENTS:
<TABLE>
<CAPTION>
Tumbleweed Southwest Tumbleweed Southwest
Golden Corral Golden Corral Mesquite Grill & Bar Mesquite Grill & Bar
Dubuque #2, IA (7) Edmond, OK (7) Clarkesville, TN (8) Hermitage, TN (8)
------------------ -------------- -------------------- --------------------
<S> <C>
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Rental Income (1) (6) (6) (6) (6)
Earned Income (2) (6) (6) (6) (6)
Asset Management Fees (3) (6) (6) (6) (6)
General and Administrative
Expenses (4) (6) (6) (6) (6)
Estimated Cash Available from
Operations (6) (6) (6) (6)
Depreciation and Amortization
Expense (2)(5) (6) (6) (6) (6)
Estimated Taxable Operating
Results Before Dividends
Paid Deduction (6) (6) (6) (6)
See Footnotes
- 24 -
<PAGE>
Arby's Jack in the Box Ruby Tuesday Jack in the Box
Jacksonville #3, FL (9) Los Angeles #4, CA (10) Somerset, KY Pflugerville, TX (10)
----------------------- ----------------------- ------------ ---------------------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Rental income (1) (6) (6) (6) (6)
Earned income (2) (6) (6) (6) (6)
Asset Management Fees (3) (6) (6) (6) (6)
General and Administrative
Expenses (4) (6) (6) (6) (6)
Estimated Cash Available from
Operations (6) (6) (6) (6)
Depreciation and Amortization
Expense (2)(5) (6) (6) (6) (6)
Estimated Taxable Operating
Results Before Dividends
Paid Deduction (6) (6) (6) (6)
See Footnotes
- 25 -
<PAGE>
Jack in the Box Jack in the Box Shoney's Arby's
Waxahachie, TX (10) Hutchins, TX (10) Phoenix #4, AZ Columbus #2, OH (9)
------------------- ----------------- -------------- -------------------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Rental income (1) (6) (6) (6) (6)
Earned income (2) (6) (6) (6) (6)
Asset Management Fees (3) (6) (6) (6) (6)
General and Administrative
Expenses (4) (6) (6) (6) (6)
Estimated Cash Available from
Operations (6) (6) (6) (6)
Depreciation and Amortization
Expense (2)(5) (6) (6) (6) (6)
Estimated Taxable Operating
Results Before Dividends
Paid Deduction (6) (6) (6) (6)
See Footnotes
- 26 -
<PAGE>
Arby's Jack in the Box Jack in the Box Boston Market
Atlanta #2, GA (9) Gun Barrel City, TX (10) Nacogdoches, TX (10) Glendale, AZ (11)
------------------ ------------------------ -------------------- -----------------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Rental income (1) (6) (6) (6) $102,164
Earned income (2) (6) (6) (6) -
Asset Management Fees (3) (6) (6) (6) (5,741)
General and Administrative
Expenses (4) (6) (6) (6) (6,334)
--------
Estimated Cash Available from
Operations (6) (6) (6) 90,089
Depreciation and Amortization
Expense (2)(5) (6) (6) (6) (12,667)
--------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction (6) (6) (6) $ 77,422
========
See Footnotes
- 27 -
<PAGE>
Boston Market Jack in the Box Jack in the Box Boston Market
Warwick, RI (11) St. Louis, MO (10) Avondale, AZ (10) Columbus #3, OH (11)
---------------- ------------------ ----------------- --------------------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Rental income (1) $90,048 (6) (6) $104,185
Earned income (2) - (6) (6) -
Asset Management Fees (3) (5,058) (6) (6) (5,852)
General and Administrative
Expenses (4) (5,583) (6) (6) (6,459)
------- --------
Estimated Cash Available from
Operations 79,407 (6) (6) 91,874
Depreciation and Amortization
Expense (2)(5) (17,921) (6) (6) (18,725)
------- --------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction $61,486 (6) (6) $ 73,149
======= ========
See Footnotes
- 28 -
<PAGE>
Chevy's Fresh Mex Completed Investments Pending Investments
Naperville, IL Total Total (12) Grand Total
----------------- -------------------- ------------------- -----------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction:
Rental income (1) $209,000 $505,397 $1,180,268 $1,685,665
Earned income (2) - - 5,782,528 5,782,528
Asset Management Fees (3) (13,200) (29,851) (390,207) (420,058)
General and Administrative
Expenses (4) (12,958) (31,334) (431,695) (463,029)
-------- -------- ---------- ----------
Estimated Cash Available from
Operations 182,842 444,212 6,140,894 6,585,106
Depreciation and Amortization
Expense (2)(5)(13) (18,725) (34,884) (189,806) (274,003)
-------- -------- ---------- ----------
Estimated Taxable Operating
Results Before Dividends
Paid Deduction $ 73,149 $147,958 $5,951,088 $6,311,103
======== ======== ========== ==========
</TABLE>
- -----------------------
FOOTNOTES:
(1) Base rent does not include percentage rents which become due if
specified levels of gross receipts are achieved.
(2) For pending investments, the Company anticipates that certain
properties will be accounted for as capital leases for federal tax
purposes; therefore, the Company will not be entitled to depreciation
expense on such properties. For leases accounted for as capital 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.
(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. See "Management Compensation."
(4) Estimated at 6.2% of gross rental income or in the case of pending
investments, estimated gross rental income, based on the previous
experience of the Company and of Affiliates of the Advisor with 18
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.
(5) 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.
- 29 -
<PAGE>
(6) The Property is under construction for the period presented. The
development agreements or lease addendums 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
-------- -------------------------------
Dubuque #2 Property July 19, 1998
Edmond Property July 19, 1998
Clarksville Property August 9, 1998
Hermitage Property August 9, 1998
Jacksonville #3 Property August 19, 1998
Los Angeles #4 Property August 22, 1998
Somerset Property July 1, 1998
Pflugerville Property August 31, 1998
Waxahachie Property September 9, 1998
Hutchins Property September 12, 1998
Phoenix #4 Property September 20, 1998
Columbus #2 Property October 3, 1998
Atlanta #2 Property October 4, 1998
Gun Barrel City Property October 10, 1998
Nacogdoches Property October 10, 1998
St. Louis Property October 11, 1998
Avondale Property October 27, 1998
The Company anticipates the pending investments that are construction
properties will be operational within 180 days after acquisition.
(7) The lessee of the Dubuque #2 and Edmond Properties is the same
unaffiliated lessee.
(8) The lessee of the Clarksville and Hermitage Properties is the same
unaffiliated lessee.
(9) The lessee of the Jacksonville #3, Columbus #2 and Atlanta #2
Properties is the same unaffiliated lessee.
(10) The lessee of the Los Angeles #4, Pflugerville, Waxahachie, Hutchins,
Gun Barrel City, Nacogdoches, St. Louis and Avondale Properties is the
same unaffiliated lessee.
(11) The lessee of the Glendale, Warwick and Columbus #3 Properties is the
same unaffiliated lessee.
(12) Information relating to pending investments is based on estimated
purchase prices for each of the 48 properties, except for three
properties that will be under construction once they are acquired. The
estimated aggregate purchase price of the 45 properties is $71 million.
(13) For pending investments that will be accounted for as operating leases,
for purposes of calculating depreciation, the allocation of the
estimated cost of the property between land and building is based upon
the average allocation of the actual cost of properties (consisting of
both land and building) acquired by the Company as of December 31,
1997.
- 30 -
<PAGE>
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 May 4,
1998, the stockholders approved amendments to the Company's Amended and Restated
Articles of Incorporation increasing the number of authorized shares of capital
stock from 156,000,000 shares (consisting of 75,000,000 shares of common stock,
3,000,000 shares of preferred stock and 78,000,000 excess shares) to 206,000,000
shares (consisting of 125,000,000 shares of common stock, 3,000,000 shares of
preferred stock 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.
- 31 -
<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 March 31, 1998
Pro Forma Consolidated Statement of Earnings for the quarter
ended March 31, 1998
Pro Forma Consolidated Statement of Earnings for the year
ended December 31, 1997
Notes to Pro Forma Consolidated Financial Statements for the
quarter ended March 31, 1998 and the year ended December
31, 1997
- 32 -
<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 March 31,
1998, including the receipt of $427,504,460 in gross offering proceeds from the
sale of 42,750,446 shares of common stock and the application of such proceeds
to purchase 255 properties (including 190 properties which consist of land and
building, one property through a joint venture arrangement which consists of
land and building, 20 properties which consist of building only and 44
properties which consist of land only), 17 of which were under construction at
March 31, 1998, 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 $41,943,749 in gross offering proceeds from the sale of 4,194,375
additional shares of common stock during the period April 1, 1998 through May
15, 1998, (iii) the receipt of net sales proceeds in the amount of $1,233,479
relating to the sale of two properties (both on which a restaurant was being
developed) during the period April 1, 1998 through May 15, 1998 (iv) the
application of such funds to purchase seven additional properties acquired
during the period April 1, 1998 through May 15, 1998 (six of which are under
construction and consist of land and building and one which consists of land and
building), to pay additional costs for the 17 properties under construction at
March 31, 1998, to pay offering expenses, acquisition fees and miscellaneous
acquisition expenses, and (v) the application of such funds to purchase 48
properties, including 46 properties consisting of land and building and two
properties consisting of building only, for which the Company has made initial
commitments to acquire as of May 15, 1998, all as reflected in the pro forma
adjustments described in the related notes. The Pro Forma Consolidated Balance
Sheet as of March 31, 1998, includes the transactions described in (i) above
from the historical consolidated balance sheet, adjusted to give effect to the
transactions in (ii), (iii), (iv) and (v) above, as if they had occurred on
March 31, 1998.
The Pro Forma Consolidated Statements of Earnings for the quarter ended
March 31, 1998 and the year ended December 31, 1997, include the historical
operating results of the properties described in (i) above from the dates of
their acquisitions plus operating results for three of the properties that were
acquired by the Company during the period January 1, 1997 through May 15, 1998,
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, 1997, 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 Statements of Earnings for the remaining properties
acquired by the Company during the period January 1, 1997 through May 15, 1998,
or the properties for which the Company has made initial commitments to acquire
as of May 15, 1998, 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.
- 33 -
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
MARCH 31, 1998
<TABLE>
<CAPTION>
Pro Forma
ASSETS Historical Adjustments Pro Forma
---------- ----------- ---------
<S> <C>
Land and buildings on operating
leases, less accumulated
depreciation $214,371,528 $ 14,940,251 (a)
13,327,679 (b)
(1,233,479)(c) $241,405,979
Net investment in direct
financing leases (d) 50,282,444 61,491,575 (b) 111,774,019
Cash and cash equivalents 89,666,093 13,502,689 (a)
(71,014,885)(b)
1,233,479 (c) 33,387,376
Certificates of deposit 2,008,304 2,008,304
Receivables, less allowance for
doubtful accounts of $51,835
and $99,964 respectively 499,194 499,194
Mortgage notes receivable 17,537,978 17,537,978
Equipment notes receivable 13,005,058 13,005,058
Accrued rental income 2,410,494 2,410,494
Other assets 4,976,883 1,127,795 (a)
(3,804,369)(b) 2,300,309
------------ ------------ ------------
$394,757,976 $ 29,570,735 $424,328,711
============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Line of credit $ 2,699,029 $ 2,699,029
Accrued construction costs
payable 7,759,202 $ (7,759,202)(a) -
Accounts payable and other
accrued expenses 319,573 319,573
Due to related parties 2,047,740 2,047,740
Rents paid in advance 871,957 871,957
Deferred rental income 776,016 776,016
Other payables 42,359 42,359
------------- ------------ ----------
Total liabilities 14,515,876 (7,759,202) 6,756,674
------------- ------------ ----------
Minority interest 284,092 284,092
------------- ------------ ----------
Stockholders' equity:
Preferred stock, without par
value. Authorized and unissued
3,000,000 shares - -
Excess shares, $0.01 par value per
share. Authorized and unissued
78,000,000 shares - -
Common stock, $0.01 par value per
share. Authorized 75,000,000
shares; issued and outstanding
42,770,446 shares; issued and
outstanding, as adjusted,
46,964,821 shares 427,704 41,944 (a) 469,648
Capital in excess of par value 382,541,408 37,287,993 (a) 419,829,401
Accumulated distributions in
excess of net earnings (3,011,104) (3,011,104)
------------ ------------ ------------
379,958,008 37,329,937 417,287,945
------------ ------------ ------------
$394,757,976 $ 29,570,735 $424,328,711
============ ============ ============
See accompanying notes to unaudited pro forma consolidated financial statements.
- 34 -
</TABLE>
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
QUARTER ENDED MARCH 31, 1998
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
---------- ----------- ---------
<S> <C>
Revenues:
Rental income from
operating leases $ 5,316,026 $ - $ 5,316,026
Earned income from
direct financing leases (6) 1,362,672 1,362,672
Interest income from
mortgage notes receivable 433,077 433,077
Other interest income 1,205,687 1,205,687
Other income 10,342 10,342
----------- ---------- -----------
8,327,804 - 8,327,804
----------- ---------- -----------
Expenses:
General operating and
administrative 499,388 499,388
Professional services 52,939 52,939
Asset management fees
to related party 362,659 362,659
State taxes 105,523 105,523
Depreciation and amortization 779,498 779,498
----------- ---------- -----------
1,800,007 - 1,800,007
----------- ---------- -----------
Earnings Before Minority
Interest in Income of
Consolidated Joint Venture 6,527,797 6,527,797
Minority Interest in Income of
Consolidated Joint Venture (7,768) (7,768)
----------- ---------- -----------
Net Earnings $ 6,520,029 $ - $ 6,520,029
=========== ========== ===========
Earnings Per Share of
Common Stock (Basic
and Diluted) (5) $ 0.17 $ 0.17
=========== ===========
Weighted Average Number of
Shares of Common Stock
Outstanding (5) 39,240,871 39,240,871
=========== ===========
</TABLE>
See accompanying notes to unaudited pro forma consolidated
financial statements.
- 35 -
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
---------- ----------- ---------
<S> <C>
Revenues:
Rental income from
operating leases $12,457,200 $ 20,249 (1) $12,477,449
Earned income from
direct financing leases (6) 3,033,415 3,033,415
Interest income from
mortgage notes receivable 1,687,456 1,687,456
Other interest income 2,254,375 (9,189)(2) 2,245,186
Other income 25,487 25,487
----------- --------- -----------
19,457,933 11,060 19,468,993
----------- ---------- -----------
Expenses:
General operating and
administrative 944,763 944,763
Professional services 65,962 65,962
Asset and mortgage management
fees to related party 804,879 1,506 (3) 806,385
State taxes 251,358 251,358
Depreciation and amortization 1,795,062 4,321 (4) 1,799,383
----------- --------- -----------
3,862,024 5,827 3,867,851
----------- --------- -----------
Earnings Before Minority
Interest in Income of
Consolidated Joint Venture 15,595,909 5,233 15,601,142
Minority Interest in Income of
Consolidated Joint Venture (31,453) (31,453)
----------- --------- -----------
Net Earnings $15,564,456 $ 5,233 $15,569,689
=========== ========= ===========
Earnings Per Share of
Common Stock (Basic
and Diluted) (5) $ 0.66 $ 0.66
=========== ===========
Weighted Average Number of
Shares of Common Stock
Outstanding (5) 23,423,868 23,423,868
=========== ===========
</TABLE>
See accompanying notes to unaudited pro forma consolidated
financial statements.
- 36 -
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
FOR THE QUARTER ENDED MARCH 31, 1998
AND THE YEAR ENDED DECEMBER 31, 1997
Pro Forma Consolidated Balance Sheet:
(a) Represents gross proceeds of $41,943,749 from the issuance of 4,194,375
shares of common stock during the period April 1, 1998 through May 15,
1998 used (i) to acquire seven properties (six of which are under
construction and consist of land and building and one which consists of
land and building) for $8,534,581, (ii) to fund estimated construction
costs of $13,405,198 ($7,759,202 of which was accrued as construction
costs payable at March 31, 1998) relating to 17 wholly owned properties
under construction at March 31, 1998, (iii) to pay acquisition fees of
$1,887,469 ($759,674 of which was allocated to properties acquired
through May 15, 1998 and $1,127,795 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
$4,613,812, which have been netted against capital in excess of par
value, leaving $13,502,689 in cash and cash equivalents for future
investment.
The pro forma adjustment to land and buildings on operating 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>
Arby's in Columbus, OH $ 973,987 $ 52,178 $ 1,026,165
Arby's in Atlanta, GA 1,225,727 65,664 1,291,391
Jack in the Box in Nacogdoches, TX 999,170 53,527 1,052,697
Jack in the Box in Gun Barrel City, TX 811,391 43,467 854,858
Jack in the Box in St. Louis, MO 1,149,508 61,581 1,211,089
Jack in the Box in Avondale, AZ 1,174,798 62,936 1,237,734
Chevy's Fresh Mex in Naperville, IL 2,200,000 117,857 2,317,857
17 wholly owned properties under
construction at March 31, 1998 5,645,996 302,464 5,948,460
----------- ----------- -----------
$14,180,577 $ 759,674 $14,940,251
=========== =========== ===========
</TABLE>
(b) Represents the use of the Company's net offering proceeds to acquire 48
properties (including 46 properties consisting of land and building and
two properties consisting of building only) for which the Company had
made initial commitments to purchase as of May 15, 1998, for an
estimated cost of $71,014,885, and the allocation of $3,804,369 of
acquisition fees to these 48 properties. See "Business - Pending
Investments" for a detailed description of these initial commitments.
The pro forma adjustment to land and buildings and net investment in
direct financing leases as a result of the above commitments 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>
Initial commitments to acquire 48
properties as of May 15, 1998 $71,014,885 $ 3,804,369 $74,819,254
=========== =========== ===========
Adjustment classified as follows:
Land and buildings on operating leases $13,327,679
Net investment in direct financing leases 61,491,575
-----------
$74,819,254
===========
</TABLE>
(c) Represents net sales proceeds in the amount of $1,233,479 received in
conjunction with the sale of two properties (both on which a restaurant
was being developed), which were sold at approximately net carrying
value.
- 37 -
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
STATEMENTS - CONTINUED
FOR QUARTER ENDED MARCH 31, 1998 AND
THE YEAR ENDED DECEMBER 31, 1997
Pro Forma Consolidated Balance Sheet - Continued:
(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 payments received.
Pro Forma Consolidated Statements of Earnings:
(1) Represents rental income from operating leases and earned income from
direct financing leases for three of the properties acquired during the
period January 1, 1997 through May 15, 1998, 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, 1997, 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
three 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
-------------- ---------------
Burger King in Kent, OH February 1997 December 1996
Golden Corral in
Hopkinsville, KY February 1997 February 1997
Jack in the Box in
Folsom, CA October 1997 September 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 1997 and 1998 that the previous owners held the
properties, no pro forma adjustment was made for percentage rental
income for the quarter ended March 31, 1998 and year ended December 31,
1997.
- 38 -
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARY
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
STATEMENTS - CONTINUED
FOR THE QUARTER ENDED MARCH 31, 1998 AND
THE YEAR ENDED DECEMBER 31, 1997
Pro Forma Consolidated Statements of Earnings - Continued:
(2) 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) the later of (i) the dates the Pro
Forma Properties became operational as rental properties by the
previous owners or (ii) January 1, 1997, through (B) the earlier of (i)
the actual dates of acquisition by the Company or (ii) 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 from interest bearing accounts was earned at a rate of
approximately four percent per annum by the Company during the quarter
ended March 31, 1998 and year ended December 31, 1997.
(3) Represents incremental increase in asset management fees relating to
the Pro Forma Properties for the period commencing (A) the later of (i)
the date the Pro Forma Properties became operational as rental
properties by the previous owners or (ii) January 1, 1997, 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
$3,392,000 for the Pro Forma Properties for the quarter ended March 31,
1998 and the year ended December 31, 1997), as defined in the Company's
prospectus.
(4) 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.
(5) Historical earnings per share were calculated based upon the weighted
average number of shares of common stock outstanding during the quarter
ended March 31, 1998 and the year ended December 31, 1997.
(6) See Note (d) under "Pro Forma Consolidated Balance Sheet" for a
description of direct financing leases.
- 39 -
<PAGE>
Item 8. Change in Fiscal Year.
Not applicable.
EXHIBITS
None.
- 40 -
<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: June 10, 1998 By: /s/ Robert A. Bourne
-----------------------------
ROBERT A. BOURNE, President
<PAGE>
