FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT of 1934
For the quarterly period ended March 31, 2000
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OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT of 1934
For the transition period from ______________________ to ______________________
Commission file number
001-15581
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CNL American Properties Fund, Inc.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Maryland 59-3239115
- ---------------------------------------- ---------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
450 South Orange Avenue
Orlando, Florida 32801
- ---------------------------------------- ---------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number
(including area code) (407) 540-2000
---------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No _________
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
43,495,919 shares of common stock, $.01 par value, outstanding as of May 11,
2000.
<PAGE>
CONTENTS
Part I Page
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets
Condensed Consolidated Statements of Operations
Condensed Consolidated Statements of
Stockholders' Equity and Comprehensive
Income/(Loss)
Condensed Consolidated Statements of Cash Flows
Notes to Condensed Consolidated Financial
Statements
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About
Market Risk
Part II
Other Information
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
----------------- -----------------
<S> <C>
ASSETS
Land, buildings and equipment on operating leases, less accumulated
depreciation of $16,575,754 and $14,742,596, respectively and
allowance for loss of $4,680,104 and $4,656,707, respectively $ 686,316,914 $ 681,210,344
Net investment in direct financing leases, less allowance for loss
of $3,734,022 157,602,607 145,743,195
Mortgage loans held for sale 107,987,134 63,466,474
Equipment and other notes receivable 43,540,142 42,748,420
Other investments 76,824,990 75,806,738
Cash and cash equivalents 20,503,935 46,011,592
Receivables, less allowance for doubtful accounts
of $3,686,788 and $2,660,069, respectively 3,354,774 3,329,557
Accrued rental income 9,304,911 8,116,794
Due from related parties 2,696,152 1,315,721
Other assets 30,238,447 25,430,402
Goodwill, net of accumulated amortization of $571,882 and $689,516,
respectively 44,441,674 45,013,556
----------------- -----------------
$ 1,182,811,680 $1,138,192,793
================= =================
LIABILITIES AND STOCKHOLDERS' EQUITY
Line of credit $ 258,000,000 $ 248,000,000
Note payable 147,000,000 140,504,000
Mortgage warehouse facility 77,972,581 30,749,540
Accrued construction costs payable 13,660,686 17,566,758
Accounts payable and accrued expenses 4,109,798 8,833,695
Due to related parties 9,080,012 10,626,929
Other payables 8,737,303 8,700,414
----------------- -----------------
Total liabilities 518,560,380 464,981,336
----------------- -----------------
Minority interests 996,350 997,353
----------------- -----------------
Commitments and Contingencies (Note 5)
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 62,500,000
shares, issued 43,533,221 shares, outstanding 43,495,919 434,958 434,958
shares
Capital in excess of par value 791,418,955 791,418,955
Accumulated other comprehensive income/(loss) 66,625 (177,119 )
Accumulated distributions in excess of net earnings (128,665,588 ) (119,462,690 )
----------------- -----------------
Total stockholders' equity 663,254,950 672,214,104
----------------- -----------------
$ 1,182,811,680 $1,138,192,793
================= =================
See accompanying notes to condensed consolidated financial statements.
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Quarter Ended
March 31,
2000 1999
---------------- --------------
Revenues:
Rental income from operating leases $ 16,492,001 $ 9,754,802
Earned income from direct financing leases 3,459,483 2,429,206
Interest income from mortgage, equipment and other notes receivable 2,747,177 854,536
Investment and interest income 2,572,906 1,357,347
Other income 1,240,439 2,880
---------------- --------------
26,512,006 14,398,771
---------------- --------------
Expenses:
General operating and administrative 4,585,928 1,605,319
Interest expense 8,691,535 --
Property expenses 462,399 140,645
State and other taxes 292,985 281,877
Depreciation and amortization 4,454,614 1,556,181
Transaction costs 895,021 125,926
---------------- --------------
19,382,482 3,709,948
---------------- --------------
Earnings Before Minority Interest in Income of Consolidated Joint Ventures,
Equity in Earnings of Unconsolidated Joint Venture, Gain on Sale of Assets
and Provision for Losses on Assets 7,129,524 10,688,823
Minority Interest in Income of Consolidated Joint Ventures (29,837 ) (7,763 )
Equity in Earnings of Unconsolidated Joint Venture 24,210 25,034
Gain on Sale of Assets 279,004 --
Provision for Losses on Assets (23,397 ) (215,797 )
---------------- --------------
Net Earnings $ 7,379,504 $ 10,490,297
================ ==============
Earnings Per Share of Common Stock (Basic and Diluted) $ 0.17 $ 0.28
================ ==============
Weighted Average Number of Shares of Common Stock Outstanding 43,495,919 37,347,401
================ ==============
See accompanying notes to condensed consolidated financial statements.
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND
COMPREHENSIVE INCOME/(LOSS)
Quarter Ended March 31, 2000 and Year Ended December 31, 1999
Accumulated
distributions Accumulated
Common stock Capital in in excess Other
Number Par excess of of net Comprehensive Comprehensive
of shares value par value earnings Income/(Loss) Tota Income/(Loss)
------------ ---------- ------------- --------------- ---------------- ------------- ----------------
Balance at
December 31, 1998 37,337,927 $ 373,379 $669,983,438 $ (9,546,531 ) $ -- $660,810,286 $ --
Subscriptions received for
common stock through
public offerings 10,537 105 210,631 -- -- 210,736 --
Stock issuance costs -- -- (1,662,749 ) -- -- (1,662,749 ) --
Common stock issued
through merger 6,150,000 61,500 122,938,500 -- -- 123,000,000 --
Net loss -- -- -- (49,837,334 ) -- (49,837,334 ) (49,837,334 )
Other comprehensive loss,
market revaluation on
available for sale
securities -- -- -- -- (177,119 ) (177,119 ) (177,119 )
----------------
Comprehensive income -- -- -- -- -- -- $ (50,014,453 )
----------------
Retirement of common stock (2,545 ) (26 ) (50,865 ) -- -- (50,891 ) --
Distributions declared and
paid ($1.52 per share) -- -- -- (60,078,825 ) -- (60,078,825 ) --
------------ ---------- ------------- --------------- ---------------- -------------
Balance at
December 31, 1999 43,495,919 434,958 791,418,955 (119,462,690 ) (177,119 ) 672,214,104 --
Net earnings -- -- -- 7,379,504 -- 7,379,504 7,379,504
Other comprehensive
income, market
revaluation on
available
for sale securities -- -- -- -- 243,744 243,744 243,744
----------------
Comprehensive income -- -- -- -- -- $ 7,623,248
================
Distributions declared and
paid ($0.38 per share) -- -- -- (16,582,402 ) -- (16,582,402 ) --
------------ ---------- ------------- --------------- ---------------- -------------
Balance at March 31,
2000 43,495,919 $ 434,958 $791,418,955 $ (128,665,588 ) $ 66,625 $663,254,950 --
============ ========== ============= =============== ================ =============
See accompanying notes to condensed consolidated financial statements.
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Quarter Ended
March 31,
2000 1999
------------------ -----------------
Increase (Decrease) in Cash and Cash Equivalents
Net Cash Provided by (Used in) Operating Activities $ (42,974,269 ) $ 13,605,256
------------------ -----------------
Cash Flows from Investing Activities:
Additions to land and buildings on operating leases (13,817,746 ) (77,028,830 )
Investment in direct financing leases (15,091,074 ) (29,608,346 )
Proceeds from sale of assets 2,462,269 --
Investment in joint ventures -- (117,662 )
Investment in mortgage notes receivable -- (1,388,463 )
Collections on mortgage notes receivable -- 75,010
Investment in equipment and other notes receivable (850,000 ) (1,087,483 )
Collections on equipment and other notes receivable 355,981 239,596
Increase in other assets (684,751 ) --
------------------ -----------------
Net cash used in investing activities (27,625,321 ) (108,916,178 )
------------------ -----------------
Cash Flows from Financing Activities:
Reimbursement of acquisition and stock issuance costs
paid by related parties on behalf of the Company (1,567,055 ) (1,142,237 )
Proceeds from borrowing on line of credit and note payable
16,496,000 36,587,245
Payment on line of credit -- (12,580,289 )
Proceeds from borrowing on mortgage warehouse
facility 47,348,672 --
Payments on mortgage warehouse facility (125,631 ) --
Payment of loan costs (446,811 ) (200,234 )
Subscriptions received from stockholders -- 210,735
Distributions to minority interests (30,840 ) (8,610 )
Distributions to stockholders (16,582,402 ) (14,237,405 )
Payment of stock issuance costs -- (722,001 )
------------------ -----------------
Net cash provided by financing activities 45,091,933 7,907,204
------------------ -----------------
Net Decrease in Cash and Cash Equivalents (25,507,657 ) (87,403,718 )
Cash and Cash Equivalents at Beginning of Quarter 46,011,592 123,199,837
------------------ -----------------
Cash and Cash Equivalents at End of Quarter $ 20,503,935 $ 35,796,119
================== =================
See accompanying notes to condensed consolidated financial statements.
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
Quarter Ended
March 31,
2000 1999
----------------- -----------------
Supplemental Schedule of Non-Cash
Investing and Financing Activities:
Related parties paid certain acquisition
and stock issuance costs on
behalf of the Company as follows:
Acquisition costs $ -- $ 237,843
Stock issuance cost -- 118,075
----------------- -----------------
$ -- $ 355,918
================= =================
Contribution of properties in exchange for investment in a
non-controlled subsidiary $ 5,388,050 $ --
================= =================
Acquisition of buildings in exchange for cancellation of
mortgages $ 4,297,977 $ --
================= =================
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Quarters Ended March 31, 2000 and 1999
1. Organization and Nature of Business:
CNL American Properties Fund, Inc. was organized in Maryland on May 2,
1994 and is a self-administered real estate investment trust ("REIT").
The term "Company" includes, unless the context otherwise requires, CNL
American Properties Fund, Inc. and its direct and indirect
subsidiaries. These subsidiaries include CNL APF Partners, LP, a
Delaware limited partnership formed in May 1998, and CNL APF GP Corp.
and CNL APF LP Corp., the general and limited partner, respectively, of
CNL APF Partners, LP. The Company's subsidiaries also include CNL Fund
Advisors, Inc., CNL Financial GP Holding Corp., CNL Financial LP
Holding, LP, CNL Financial Services GP Corp. and CNL Financial
Services, LP. The Company offers financial, development, advisory and
other real estate services to operators of selected national and
regional fast food, family-style and casual dining restaurant chains.
2. Basis of Presentation:
The accompanying unaudited condensed financial statements have been
prepared in accordance with the instructions to Form 10-Q and do not
include all of the information and note disclosures required by
generally accepted accounting principles. The financial statements
reflect all adjustments, consisting of normal recurring adjustments,
which are, in the opinion of management, necessary to a fair statement
of the results for the interim periods presented. Operating results for
the quarter ended March 31, 2000 may not be indicative of the results
that may be expected for the year ending December 31, 2000. Amounts as
of December 31, 1999, included in the financial statements, have been
derived from audited financial statements as of that date.
These unaudited financial statements should be read in conjunction with
the financial statements and notes thereto included in the Company's
Form 10-K for the year ended December 31, 1999.
Certain items in the prior year's financial statements have been
reclassified to conform with the 2000 presentation. These
reclassifications had no effect on stockholders' equity or net
earnings.
3. Contribution to Non-Controlled Subsidiary:
In January 2000, the Company created a 95% owned, taxable
non-controlled subsidiary to operate its build-to-suit development
operations. The Company contributed approximately $5.4 million of
restaurant properties to the subsidiary in exchange for 7,000 shares of
non-voting common stock.
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Quarters Ended March 31, 2000 and 1999
4. Stockholders Equity:
As consideration in its acquisition on September 1, 1999 of CNL Fund
Advisors, Inc. ("Advisor") and CNL Financial Services, Inc. and CNL
Financial Corporation and Subsidiaries (collectively "CNL Restaurant
Financial Services Group,") the Company paid 6.15 million shares. Of
the 6.15 million shares issued, 1.0 million were being held in escrow.
The shares held in escrow will be released to the former stockholders
of the Advisor and the CNL Restaurant Financial Services Group based on
the value of the restaurant properties acquired, mortgage loans made
and development projects completed by the Company during the "escrow
term". The "escrow term" began on September 1, 1999. As of March 31,
2000, approximately 386,439 shares were released from escrow, with
613,561 shares remaining.
5. Commitments and Contingencies:
On May 11, 1999, four limited partners in several CNL Income Funds
served a lawsuit against the general partners of the CNL Income Funds
and the Company in connection with the proposed merger with the CNL
Income Funds. On June 22, 1999, a limited partner in certain of the CNL
Income Funds served a lawsuit against the Company, the Advisor, certain
of its affiliates and the general partners of the CNL Income Funds in
connection with the proposed merger with the CNL Income Funds.
On July 8, 1999, the plaintiffs in the lawsuit served on May 11, 1999
filed an amended complaint, naming three additional plaintiffs and
adding allegations of aiding and abetting and conspiring to breach
fiduciary duties and seeking additional equitable relief.
On September 23, 1999, the judge assigned to the two cases entered an
order consolidating the two cases. Pursuant to this order the
plaintiffs filed a consolidated and amended complaint on November 8,
1999. The various defendants, including the Company, filed motions to
dismiss the consolidated complaint on December 22, 1999 and December
28, 1999. On March 1, 2000, all of the defendants filed a Joint Notice
of Filing Form 8-K Report and Suggestion of Mootness.
On April 25, 2000, a Stipulated Final Order of Dismissal of
Consolidated Action was issued, dismissing the action without
prejudice, with each party responsible for their own costs and
attorneys' fees.
<PAGE>
CNL AMERICAN PROPERTIES FUND, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Quarters Ended March 31, 2000 and 1999
6. Terminated Mergers:
On February 23, 2000, the Company and each of the 16 CNL Income Funds
mutually agreed to terminate the Agreement and Plan of Merger entered
into in March 1999.
7. Subsequent Events:
On April 7, 2000, the Company terminated its swap agreement relating to
its line of credit, with a notional principal balance of $75,000,000
and purchased an interest rate cap relating to its line of credit, on a
$200,000,000 notional principal balance.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following information, including, without limitation, the
Quantitative and Qualitative Disclosures About Market Risk, that are not
historical facts, may be forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These statements generally are characterized by the use of
terms such as "believe," "expect" and "may." Although the company believes that
the expectations reflected in such forward-looking statements are based upon
reasonable assumptions, the company's actual results could differ materially
from those set forth in the forward-looking statements. Factors that might cause
such a difference include: changes in general economic conditions, changes in
real estate conditions, availability of capital from borrowings under the
company's credit facilities, the availability of other debt and equity financing
alternatives, increases in interest rates under the company's credit facility,
mortgage warehouse facility, secured credit facility and under any additional
variable rate debt arrangements that the company may enter into the future, the
ability of the company to refinance amounts outstanding under its credit
facility at maturity on terms favorable to the company, the ability of the
company to locate suitable tenants for its restaurant properties and borrowers
for its mortgage loans, the ability of tenants and borrowers to make payments
under their respective leases, secured equipment leases or mortgage loans, the
ability of the company to re-lease properties that are currently vacant or that
become vacant and the ability of the company to securitize mortgage loans on a
favorable and timely basis. Given these uncertainties, readers are cautioned not
to place undue reliance on such statements.
The Company
CNL American Properties Fund, Inc. is a real estate investment trust,
or REIT. The term "Company" includes, unless the context otherwise requires, CNL
American Properties Fund, Inc. and its direct and indirect subsidiaries. These
subsidiaries include CNL APF Partners, LP, a Delaware limited partnership formed
in May 1998, and CNL APF GP Corp. and CNL APF LP Corp., the general and limited
partner, respectively, of CNL APF Partners, LP. Subsidiaries also include CNL
Fund Advisors, Inc. (the "Advisor"), CNL Financial GP Holding Corp., CNL
Financial LP Holding, LP, CNL Financial Services GP Corp. and CNL Financial
Services, LP.
The Company provides a complete range of financial, development and
other real estate services to operators of national and regional restaurant
chains. The Company's ability to offer complete "turn-key," build-to-suit
development services, from site selection to construction management, together
with its ability to provide its customers with financing options, such as
triple-net leasing, mortgage loans and secured equipment financing (the "Secured
Equipment Leases"), makes the Company a preferred provider for all of the real
estate related business needs of operators of national and regional restaurant
chains.
As of March 31, 2000, the Company had total assets of over $1.1 billion
and a portfolio consisting of investments in 1560 restaurant properties.
Generally, the real estate (the "Properties") owned by the Company consists of
land and buildings subject to triple-net leases. Triple-net leases generally
provide that the tenants bear responsibility for all of the costs and expenses
associated with the ongoing maintenance and operations of the leased restaurant
properties, including utilities, property taxes, insurance and structural
repairs. Mortgage financing (the "Mortgage Loans") involves lending money at a
specified interest rate to owners of restaurant properties and securing that
loan with a mortgage lien on the restaurant property. Securitizing mortgages
involves bundling a group of mortgages into an investment entity, usually a
trust, and selling securities of that entity to the public.
Liquidity and Capital Resources
Debt Financing
Line of Credit
In June 1999, the Company obtained a new unsecured revolving credit
facility in an amount up to $300,000,000 (the "Credit Facility"). Interest on
advances under the Credit Facility is determined according to (i) a tiered rate
structure up to a maximum rate of 200 basis points above 30-day LIBOR (based
upon the Company's overall leverage ratio) or (ii) the lenders' prime rate plus
0.25%, whichever the Company selects at the time of each advance. As of March
31, 2000, the weighted average interest rate under the Credit Facility was
7.91%. The weighted average interest rate for interest paid during the quarter
was 7.83%. The principal balance, together with all unpaid interest, is due in
full upon termination of the facility on June 9, 2002. The terms of the
agreement for the amended Credit Facility include financial covenants which
provide for the maintenance of certain financial ratios. The Company was in
compliance with all such covenants as of March 31, 2000.
In June 1999, in connection with the amended Credit Facility, the
Company entered into an interest rate swap agreement. The purpose of the
interest rate swap agreement is to reduce the impact of changes in interest
rates on its floating rate Credit Facility. The agreement effectively changes
the Company's interest rate on $75,000,000 of the outstanding floating rate
Credit Facility to a fixed rate of 6.17% plus the spread above 30-day LIBOR on
related debt per annum, as of March 31, 2000. The Company is exposed to credit
loss in the event of nonperformance by the other party to the interest rate swap
agreement; however, the Company does not anticipate nonperformance by the
counterparty because they maintain long-term credit ratings of "A" or better, as
rated by Moody's and Standard & Poors.
The effective interest rate for the outstanding balance of $258,000,000
relating to the amended Credit Facility, as of March 31, 2000, as a result of
the impact of the interest rate swap in the amount of $75,000,000 was 7.93% per
annum.
Management does not believe the impact of any payments of a termination
penalty, in the event the Company determines to terminate the swap agreements
prior to the end of their respective terms, would be material to the Company's
financial position or results of operations.
On April 7, 2000, the Company terminated its swap agreement relating to
its line of credit, with a notional principal balance of $75,000,000 and
purchased an interest rate cap relating to its line of credit, on a $200,000,000
notional principal balance (the "Cap"). Should interest rates go above the
agreed upon level of 7.50% during the period from April 5, 2000 to April 1,
2002, the Company will receive interest payments. The amount paid to the Company
is equal to $200,000,000 multiplied by LIBOR for the periods outlined above. The
combination of the Cap and the Company's obligation result in the Company paying
interest at a variable rate on up to $200,000,000 of the outstanding line of
credit balance for periods when LIBOR is below 7.50% and 7.50% plus the spread
above LIBOR when LIBOR reaches 7.50%.
Note Payable
In October 1999, the Company entered into a secured credit facility
(the "Secured Credit Facility") in the amount of $147,000,000 which will expire
in October 2002. The proceeds of the Secured Credit Facility are intended to be
used for property acquisitions. Borrowings under the Secured Credit Facility
bear interest at the rate of commercial paper plus 56 basis points per annum. As
of March 31, 2000, the interest rate was 6.15%. The Secured Credit Facility is
collateralized by mortgages on 132 Properties and an assignment of rents. Under
the terms of the Secured Credit Facility, the Company is required to maintain
certain financial ratios and other financial covenants. The Company was in
compliance with all such covenants as of March 31, 2000.
The Company has initiated several interest rate swap agreements with
which it hedges the majority of the outstanding balance at March 31, 2000
against fluctuations in interest rates. The Company believes that its interest
rate risk related to the Secured Credit Facility has been mitigated by the use
of interest rate swaps.
The effective interest rate for the outstanding balance relating to the
Note Payable as of March 31, 2000, as a result of the impact of the various
interest rate swaps was 6.37% per annum.
Management does not believe the impact of any payments of a termination
penalty, in the event the Company determines to terminate the swap agreements
prior to the end of their respective terms, would be material to the Company's
financial position or results of operations.
Mortgage Warehouse Facility
At December 31, 1999, the Company had a one year $300 million mortgage
warehouse facility ("Warehouse Facility"). The Warehouse Facility provides the
Company the ability to provide mortgage financing to restaurant franchisees and
periodically securitize the loans through the securitization market. The
facility bears an interest rate of LIBOR plus 95 basis points per annum. As of
March 31, 2000 the interest rate was 7.08%. As of March 31, 2000, the Company
had approximately $78 million outstanding under this Warehouse Facility. The
Company believes, based on current terms, that the carrying value at March 31,
2000 approximates fair value.
The Company has initiated several interest rate swap agreements with
which it hedges the majority of the outstanding balance at March 31, 2000
against fluctuations in interest rates. The Company believes that its interest
rate risk related to the Warehouse Facility has been mitigated by the use of
interest rate swaps.
The effective interest rate for the outstanding balance relating to the
Warehouse Facility as of March 31, 2000, as a result of the impact of the
various interest rate swaps was 7.7% per annum.
Management does not believe the impact of any payments of a termination
penalty, in the event the Company determines to terminate the swap agreements
prior to the end of the respective terms, would be material to the Company's
financial position or results of operations.
For the quarters ended March 31, 2000 and 1999, the Company incurred
interest costs (including amortization of loan costs) of $9,889,506 and
$210,376, respectively, $1,197,971 and $210,376, respectively, of which were
capitalized as part of the cost of buildings under construction. For the
quarters ended March 31, 2000 and 1999, the company paid interest of $6,739,032
and $244,744, respectively.
Dispositions
During the quarter ended March 31, 2000, the Company sold two
properties and received total net sale proceeds of $2,462,269, resulting in a
total gain of $279,004 for financial reporting purposes. No properties were sold
during the quarter ended March 31, 1999.
Capital Commitments
In connection with the acquisition of the 27 Properties under
construction or renovation at March 31, 2000, the Company entered into
development agreements with tenants which provide terms and specifications for
the construction or renovation of buildings the tenants have agreed to lease or
equipment financing the Company has agreed to provide. The agreements provide a
maximum amount of development costs (including the purchase price of the land
and closing costs) to be paid by the Company. In addition, the Company, as a
result of the acquisition of the Advisor, has unfunded letters of commitment to
develop Properties for specific tenants. The aggregate maximum development costs
and unfunded letters of commitment the Company had agreed to pay as of March 31,
2000 were approximately $122,110,000, of which approximately $38,750,000 had
been incurred as of March 31, 2000.
In the ordinary course of business, the Company has outstanding
commitments to qualified borrowers that are not reflected in the accompanying
consolidated financial statements. These commitments, if accepted by the
potential borrowers, obligate the Company to provide funding. The accepted and
unfunded commitment totaled approximately $70,789,000 at March 31, 2000. The
source of funding includes both the Warehouse Facility and the loan sale
facility.
Cash and Cash Equivalents
At March 31, 2000 and December 31, 1999, the Company had $20,503,935
and $46,011,592, respectively, invested in short-term highly-liquid investments
such as demand deposits at commercial banks and money markets with less than a
30-day maturity date. The decrease in the amount invested in short-term
investments is primarily attributable to the Company investing in Properties and
Mortgage Loans during the quarter ended March 31, 2000.
Liquidity Requirements
The Company expects to meet its short-term liquidity requirements,
other than for acquisition and development of Properties and investment in
Mortgage Loans and Secured Equipment Leases, primarily through cash flow
provided by operating activities. These short-term liquidity requirements
consist of normal recurring operating expenses, regular debt service
requirements and distributions to stockholders. To the extent that the Company's
cash flow provided by operating activities is not sufficient to meet such
short-term liquidity requirements, the Company will use borrowings under its
Credit Facility.
Due to the fact that the Company leases its Properties on a triple-net
basis, meaning that tenants are generally required to pay all repairs and
maintenance, property taxes, insurance and utilities, management does not
believe that working capital reserves are necessary at this time. Management
believes that the Properties are adequately covered by insurance. The Company
has obtained contingent liability and property coverage. This insurance policy
is intended to reduce the Company's exposure in the unlikely event a tenant's
insurance policy lapses or is insufficient to cover a claim relating to a
Property.
The Company expects to meet its other short-term liquidity
requirements, including Property acquisition and development and investment in
Secured Equipment Leases, with additional advances under its Credit Facility and
Secured Credit Facility. The Company also intends to meet short-term liquidity
requirements through using its Warehouse Facility to fund the acquisition of
Mortgage Loans and use the proceeds from the subsequent securitization of these
Mortgage Loans to repay the Warehouse Facility.
The Company expects to meet its long-term liquidity requirements
through short or long-term, unsecured or secured debt financing or equity
financing. As of May 11, 2000, the Company's long-term liquidity requirements
include the maturities of its Mortgage Warehouse Facility in 2000, Credit
Facility in June 2002 and the Secured Credit Facility in October 2002. The
Company will continue to evaluate an eventual listing of the Company's stock on
the New York Stock Exchange which could permit the Company access to additional
debt and equity capital.
In addition, the management of the Company has been in discussions with
Bank of America regarding a potential strategic alliance. Assuming an agreement
can be reached, management of the Company believes that this strategic alliance
will provide the Company with an additional source of capital on favorable
terms. It is management's goal to increase the Company's ability to make
triple-net lease and mortgage financings and to expand the financial services
offered to the restaurant industry.
Distributions
During the quarter ended March 31, 2000, the Company used cash from
operations (which includes cash received from tenants and interest and other
income received, less cash paid for operating expenses and funds used for
investment in mortgage loans) of $42,974,269 and during the quarter ended March
31, 1999, the Company generated cash from operations of $13,605,256. As a result
of the merger with CNL Financial Services, Inc. and CNL Financial Corporation
and subsidiaries, (collectively, "CNL Restaurant Financial Services Group"),
Generally Accepted Accounting Principals require that the Company's investment
in Mortgage Loans be classified as an operating activity for financial reporting
purposes. The Company declared and paid distributions to its stockholders of
$16,582,402 and $14,237,405 during the quarters ended March 31, 2000 and 1999,
respectively. In addition, on each of April 1, 2000 and May 1, 2000, the Company
declared distributions to its stockholders of $5,527,461, payable in June 2000.
For the quarters ended March 31, 2000 and 1999, approximately 94 percent and 82
percent, respectively, of the distributions received by stockholders were
considered to be ordinary income and approximately six percent and 18 percent,
respectively, were considered a return of capital for federal income tax
purposes. Of the 94 percent of distributions considered to be ordinary income as
of March 31, 2000, two percent represents taxes on capital gain relating to the
gain on the sale of a property in the first quarter of 2000. No amounts
distributed or to be distributed to the stockholders as of May 11, 2000, are
required to be or have been treated by the Company as a return of capital for
purposes of calculating the stockholders' return on their invested capital. The
Company intends to continue to make distributions on a quarterly basis to its
stockholders.
Commitments and Contingencies:
On May 11, 1999, four limited partners in several CNL Income Funds
served a lawsuit against the general partners of the CNL Income Funds and the
Company in connection with the proposed merger with the CNL Income Funds. On
June 22, 1999, a limited partner in certain of the CNL Income Funds served a
lawsuit against the Company, the Advisor, certain of its affiliates and the
general partners of the CNL Income Funds in connection with the proposed merger
with the CNL Income Funds.
On July 8, 1999, the plaintiffs in the lawsuit served on May 11, 1999
filed an amended complaint, naming three additional plaintiffs and adding
allegations of aiding and abetting and conspiring to breach fiduciary duties and
seeking additional equitable relief.
On September 23, 1999, the judge assigned to the two cases entered an
order consolidating the two cases. Pursuant to this order the plaintiffs filed a
consolidated and amended complaint on November 8, 1999. The various defendants,
including the Company, filed motions to dismiss the consolidated complaint on
December 22, 1999 and December 28, 1999.
On February 23,2000 the Company and each of the 16 CNL Income Funds
mutually agreed to terminate the Agreement and Plan of Merger entered into in
March 1999. On a going forward basis, management intends to list when market
conditions are favorable. On March 1, 2000, all of the defendants filed a Joint
Notice of Filing Form 8-K Report and Suggestion of Mootness.
On April 25, 2000, a Stipulated Final Order of Dismissal of
Consolidated Action was issued, dismissing the action without prejudice, with
each party responsible for their own costs and attorneys' fees.
Results of Operations
Revenues
The Company earned $19,951,484 in rental income from operating leases
and earned income from direct financing leases from 671 Properties and 67
Secured Equipment Leases structured as leases during the quarter ended March 31,
2000, and $12,184,008 from 513 Properties and 41 Secured Equipment Leases
structured as leases during the quarter ended March 31, 1999. The increase
during the quarter ended March 31, 2000, as compared to the quarter ended March
31, 1999, was attributable to the Company's investment in restaurant properties
increasing from approximately $599,058,000 at March 31,1999 to $843,920,000 at
March 31, 2000.
The Company also earned $2,747,177 and $854,536 in interest income from
Mortgage Loans and Secured Equipment Leases structured as loans during the
quarter ended March 31, 2000 and 1999, respectively. The increase in interest
income from Mortgage Loans and Secured Equipment Leases during the quarter ended
March 31, 2000, as compared to the quarter ended March 31, 1999, was
attributable to the Company's increase in outstanding loans of approximately
$151,527,000 at March 31, 2000 from $41,270,000 at March 31, 1999.
During the quarters ended March 31, 2000 and 1999, the Company earned
$2,572,906 and $1,357,347, respectively, in investment and interest income from
investments in franchise loan certificates, residual interests in loan sales,
money market accounts or other short-term, highly liquid investments. The
increase in investment and interest income for the quarter ended March 31, 2000,
as compared to the quarter ended March 31, 1999, was attributable to the
acquisition of certain investment securities resulting from the November 1999
securitization.
During the quarters ended March 31, 2000 and 1999, the Company earned
$1,240,439 and $2,880, respectively in other income. The increase in other
income for the quarter ended March 31, 2000, as compared to the quarter ended
March 31, 1999, was primarily attributable to servicing fees and origination
fees earned on the Company's expanded loan portfolio resulting from the merger
with CNL Restaurant Financial Services Group.
Expenses
Operating expenses, including depreciation and amortization expense,
were $19,382,482 and $3,709,948 for the quarters ended March 31, 2000 and 1999,
respectively. Total operating expenses increased primarily as a result of the
increase in the weighted average amounts outstanding relating to the line of
credit, note payable and mortgage warehouse facility of approximately
$440,746,000 and $11,198,000, respectively, during the quarters ended March 31,
2000 and 1999, which resulted in the Company incurring $9,889,506 in interest
expense. During the quarter ended March 31, 1999, all interest costs were
capitalized. The increase in operating expenses is also a result of the Company
investing in additional Properties, Mortgage Loans and Secured Equipment Leases
subsequent to March 31, 1999, which resulted in increased depreciation and
amortization expense. Depreciation and amortization expense are expected to
increase as the Company invests in additional Properties and Mortgage Loans. On
September 1, 1999, the Company acquired the Advisor and became internally
managed. Effective September 1, 1999, the advisory fee was replaced with the
actual personnel and other operating costs associated with being internally
managed. The increase in operating expenses for the quarter ended March 31, 2000
was also partially due to the fact that the Company incurred $895,021 in
transaction costs during the quarter ended March 31, 2000, related to the
terminated mergers as described above.
Dispositions
During the quarter ended March 31, 2000, the Company sold two
properties and received total net sale proceeds of $2,462,269, resulting in a
total gain of $279,004 for financial reporting purposes. No properties were sold
during the quarter ended March 31, 1999.
<PAGE>
Provisions for Losses on Assets
During the quarters ended March 31, 2000 and 1999, the Company recorded
provisions for losses on assets totaling $23,397 and $215,797, respectively, for
financial reporting purposes. The allowances represent the difference between
the carrying value of the Properties at March 31, 2000 and 1999 and the fair
market value for these Properties.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Information regarding the Company's market risk at December 31, 1999 is
included in its Annual Report on Form 10-K for the year ended December 31, 1999.
There have been no material changes in the Company's market risk.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
On May 11, 1999, four limited partners in several CNL Income Funds
served a derivative and purported class action lawsuit filed April
22, 1999 against the general partners of the CNL Income Funds and APF
in the Circuit Court of the Ninth Judicial Circuit of Orange County,
Florida, alleging that the general partners breached their fiduciary
duties and violated provisions of certain of the CNL Income Fund
partnership agreements in connection with the proposed merger with
the Income Funds. The plaintiffs are seeking unspecified damages and
equitable relief. On July 8, 1999, the plaintiffs filed an amended
complaint which, in addition to naming three additional plaintiffs,
includes allegations of aiding and abetting and conspiring to breach
fiduciary duties, negligence and breach of duty of good faith against
certain of the defendants and seeks additional equitable relief. As
amended, the caption of the case is Jon Hale, Mary J. Hewitt, Charles
A. Hewitt, Gretchen M. Hewitt, Bernard J. Schulte, Edward M. and
Margaret Berol Trust, and Vicky Berol v. James M. Seneff, Jr., Robert
A. Bourne, CNL Realty Corporation, and CNL American Properties Fund,
Inc., Case No. CIO-99-0003561.
On June 22, 1999, a limited partner of several CNL Income Funds
served a purported class action lawsuit filed April 29, 1999 against
the general partners and APF, Ira Gaines, individually and on behalf
of a class of persons similarly situated, v. CNL American Properties
Fund, Inc., James M. Seneff, Jr., Robert A. Bourne, CNL Realty
Corporation, CNL Fund Advisors, Inc., CNL Financial Corporation a/k/a
CNL Financial Corp., CNL Financial Services, Inc. and CNL Group,
Inc., Case No. CIO-99-3796, in the Circuit Court of the Ninth
Judicial Circuit of Orange County, Florida, alleging that the general
partners breached their fiduciary duties and that APF aided and
abetted their breach of fiduciary duties in connection with the
proposed merger with the Income Funds. The plaintiff is seeking
unspecified damages and equitable relief.
On September 23, 1999, Judge Lawrence Kirkwood entered an order
consolidating the two cases under the caption In re: CNL Income Funds
Litigation, Case No. 99-3561. Pursuant to this order, the plaintiffs
in these cases filed a consolidated and amended complaint on November
8, 1999. On December 22, 1999, the General Partners and CNL Group,
Inc. filed motions to dismiss and motions to strike. On December 28,
1999, APF and CNL Fund Advisors, Inc. filed motions to dismiss. On
March 1, 2000, all of the defendants filed a Joint Notice of Filing
Form 8-K Reports and Suggestion of Mootness. On April 25, 2000, Judge
Kirkwood issued a Stipulated Final Order of Dismissal of Consolidated
Action, dismissing the actions without prejudice, with each party to
bear its own costs and attorneys' fees.
Item 2. Changes in Securities. Inapplicable.
Item 3. Default upon Senior Securities. Inapplicable.
Item 4. Submission of Matters to a Vote of Security Holders. Inapplicable.
Item 5. Other Information. Inapplicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
2.1 Agreement and Plan of Merger, by and among the
Registrant, CFA Acquisition Corp., CNL Fund
Advisors, Inc. and CNL Group, Inc., dated March
11, 1999 (Included as Exhibit 10.38 to the
Registrant's Registration Statement No. 333-74329
on Form S-4 (the "Form S-4") as originally filed
and incorporated herein by reference.)
2.2 Agreement and Plan of Merger, by and among the
Registrant, CFC Acquisition Corp., CFS Acquisition
Corp., CNL Financial Corp., CNL Financial
Services, Inc., CNL Group, Inc., Five Arrows
Realty Securities L.L.C., Robert A. Bourne, Curtis
B. McWilliams and Brian Fluck, dated March 11,
1999 (Included as Exhibit 10.39 to the Form S-4 as
originally filed and incorporated herein by
reference.)
3.1 CNL American Properties Fund, Inc. Amended and
Restated Articles of Incorporation, as amended
(Included as Exhibit 3.1 to the Registrant's Form
10-Q for the quarter ended June 30, 1999 and
incorporated herein by reference.)
3.2 CNL American Properties Fund, Inc. Amended and
Restated Bylaws (Included as Exhibit 3.2 to the
Registrant's Registration Statement No. 333-37657
on Form S-11 and incorporated herein by
reference.)
4.1 Form of Stock Certificate (Included as Exhibit 4.5
to the Registrant's Registration Statement No.
33-78790 on Form S-11 and incorporated herein by
reference.)
10.1 Form of Indemnification Agreement dated as of
April 18, 1995, between CNL American Properties
Fund, Inc. and each of James M. Seneff, Jr.,
Robert A. Bourne, G. Richard Hostetter, J. Joseph
Kruse, Richard C. Huseman, John T. Walker, Jeanne
A. Wall, Lynn E. Rose and Edgar J. McDougall,
dated as of January 27, 1997 between CNL American
Properties Fund, Inc. and Steven D. Shackelford,
and dated as of February 18, 1998, between CNL
American Properties Fund, Inc. and Curtis B.
McWilliams (Included as Exhibit 10.9 to the
Registrant's Registration Statement No. 333-15411
on Form S-11 and incorporated herein by
reference.)
10.2 Amended and Restated Agreement of Limited
Partnership of CNL APF Partners, LP (Included as
Exhibit 10.50 to Amendment No. 2 to the Form S-4
and incorporated herein by reference.)
10.3 Amended and Restated Credit Agreement by and among
CNL APF Partners, LP, Registrant, First Union
National Bank, First Union Capital Markets Group,
Banc of America Securities LLC, NationsBank, N.A.,
The Chase Manhattan Bank and other financial
institutions, dated June 9, 1999 (Included as
Exhibit 10.51 to Amendment No. 1 to the Form S-4
and incorporated herein by reference.)
10.4 First Amendment to Amended and Restated Credit
Agreement dated as of December 31, 1999 between
CNL APF Partners, LP and First Union National
Bank, as Agent (Included as Exhibit 10.4 to the
Registrant's Form 10-K for the year ended December
31, 1999 (the "1999 10-K") and incorporated herein
by reference.)
10.5 Franchise Receivable Funding and servicing
Agreement dated as of October 14, 1999 between CNL
APF Partners, LP and Neptune Funding Corporation
(filed as Exhibit 10.5 to the 1999 10-K and
incorporated herein by reference.)
10.6 Interim Wholesale Mortgage Warehouse and Security
Agreement dated as of September 18, 1998, and
Amended Agreement dated as of August 30, 1999
between CNL APF Partners, LP and Prudential
Securities Credit Corporation (filed as Exhibit
10.6 to the 1999 10-K and incorporated herein by
reference.)
10.7 1999 Performance Incentive Plan (Included as
Exhibit 10.1 to Amendment No. 1 to the Form S-4
and incorporated herein by reference.)
10.8 Registration Rights Agreement by and among the
Registrant, Robert A. Bourne, Curtis B.
McWilliams, John T. Walker, Howard Singer, Steven
D. Shackelford and CNL Group, Inc., dated as of
March 11, 1999 (Included as Exhibit 10.40 to
Amendment No. 1 to the Form S-4 and incorporated
herein by reference.)
10.9 Registration Rights Agreement by and among the
Registrant, Five Arrows Realty Securities L.L.C.,
James M. Seneff, Jr., Robert A. Bourne, Curtis B.
McWilliams and CNL Group, Inc., dated as of March
11, 1999 (Included as Exhibit 10.41 to Amendment
No. 1 to the Form S-4 and incorporated herein by
reference.)
10.10 Employment Agreement by and between Curtis B.
McWilliams and the Registrant, dated September 15,
1999 (Included as Exhibit 10.42 to Amendment No. 2
to the Form S-4 and incorporated herein by
reference.)
10.11 Employment Agreement by and between Steven D.
Shackelford and the Registrant, dated September
15, 1999 (Included as Exhibit 10.43 to Amendment
No. 2 to the Form S-4 and incorporated herein by
reference.)
10.12 Employment Agreement by and between John T. Walker
and the Registrant, dated September 15, 1999
(Included as Exhibit 10.44 to Amendment No. 2 to
the Form S-4 and incorporated herein by
reference.)
10.13 Employment Agreement by and between Howard J.
Singer and the Registrant, dated September 15,
1999 (Included as Exhibit 10.45 to Amendment No. 2
to the Form S-4 and incorporated herein by
reference.)
10.14 Employment Agreement by and between Barry L. Goff
and the Registrant, dated September 15, 1999
(Included as Exhibit 10.46 to Amendment No. 2 to
the Form S-4 and incorporated herein by
reference.)
10.15 Employment Agreement by and between Robert W.
Chapin and the Registrant, dated September 15,
1999 (Included as Exhibit 10.47 to Amendment No. 2
to the Form S-4 and incorporated herein by
reference.)
10.16 Employment Agreement by and between Timothy J.
Neville and the Registrant, dated September 15,
1999 (Included as Exhibit 10.48 to Amendment No. 2
to the Form S-4 and incorporated herein by
reference.)
10.17 Holdback Agreement by and among the Registrant and
Stockholders, dated August 31, 1999 (Included as
Exhibit 10.56 to Amendment No. 2 to the Form S-4
and incorporated herein by reference.)
27 Financial Data Schedule (Filed herewith.)
(b) Reports on Form 8-K
A Current Report on Form 8-K dated February 23, 2000 was
filed on March 1, 2000 describing the termination of the
proposed Merger of the Company with CNL Income Fund, Ltd.,
and CNL Income Fund II, Ltd. through CNL Income Fund XVI,
Ltd.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
DATED this 15th day of May, 2000.
CNL AMERICAN PROPERTIES FUND, INC.
By: /s/ Curtis B. McWilliams
------------------------------------
CURTIS B. MCWILLIAMS
Chief Executive Officer
(Principal Executive Officer)
By: /s/ Steven D. Shackelford
------------------------------------
STEVEN D. SHACKELFORD
Chief Financial Officer
(Principal Financial and
Accounting Officer)
<PAGE>
EXHIBIT INDEX
Exhibit Number
2.1 Agreement and Plan of Merger, by and among the
Registrant, CFA Acquisition Corp., CNL Fund
Advisors, Inc. and CNL Group, Inc., dated March 11,
1999 (Included as Exhibit 10.38 to the Registrant's
Registration Statement No. 333-74329 on Form S-4
(the "Form S-4") as originally filed and
incorporated herein by reference.)
2.2 Agreement and Plan of Merger, by and among the
Registrant, CFC Acquisition Corp., CFS Acquisition
Corp., CNL Financial Corp., CNL Financial Services,
Inc., CNL Group, Inc., Five Arrows Realty
Securities L.L.C., Robert A. Bourne, Curtis B.
McWilliams and Brian Fluck, dated March 11, 1999
(Included as Exhibit 10.39 to the Form S-4 as
originally filed and incorporated herein by
reference.)
3.1 CNL American Properties Fund, Inc. Amended and
Restated Articles of Incorporation, as amended
(Included as Exhibit 3.1 to the Registrant's Form
10-Q for the quarter ended June 30, 1999 and
incorporated herein by reference.)
3.2 CNL American Properties Fund, Inc. Amended and
Restated Bylaws (Included as Exhibit 3.2 to the
Registrant's Registration Statement No. 333-37657
on Form S-11 and incorporated herein by reference.)
4.1 Form of Stock Certificate (Included as Exhibit 4.5
to the Registrant's Registration Statement No.
33-78790 on Form S-11 and incorporated herein by
reference.)
10.1 Form of Indemnification Agreement dated as of April
18, 1995, between CNL American Properties Fund,
Inc. and each of James M. Seneff, Jr., Robert A.
Bourne, G. Richard Hostetter, J. Joseph Kruse,
Richard C. Huseman, John T. Walker, Jeanne A. Wall,
Lynn E. Rose and Edgar J. McDougall, dated as of
January 27, 1997 between CNL American Properties
Fund, Inc. and Steven D. Shackelford, and dated as
of February 18, 1998, between CNL American
Properties Fund, Inc. and Curtis B. McWilliams
(Included as Exhibit 10.9 to the Registrant's
Registration Statement No. 333-15411 on Form S-11
and incorporated herein by reference.)
10.2 Amended and Restated Agreement of Limited
Partnership of CNL APF Partners, LP (Included as
Exhibit 10.50 to Amendment No. 2 to the Form S-4
and incorporated herein by reference.)
10.3 Amended and Restated Credit Agreement by and among
CNL APF Partners, LP, Registrant, First Union
National Bank, First Union Capital Markets Group,
Banc of America Securities LLC, NationsBank, N.A.,
The Chase Manhattan Bank and other financial
institutions, dated June 9, 1999 (Included as
Exhibit 10.51 to Amendment No. 1 to the Form S-4
and incorporated herein by reference.)
10.4 First Amendment to Amended and Restated Credit
Agreement dated as of December 31, 1999 between CNL
APF Partners, LP and First Union National Bank, as
Agent (Included as Exhibit 10.4 to the Registrant's
Form 10-K for the year ended December 31, 1999 (the
"1999 10-K") and incorporated herein by reference.)
10.5 Franchise Receivable Funding and servicing
Agreement dated as of October 14, 1999 between CNL
APF Partners, LP and Neptune Funding Corporation
(filed as Exhibit 10.5 to the 1999 10-K and
incorporated herein by reference.)
10.6 Interim Wholesale Mortgage Warehouse and Security
Agreement dated as of September 18, 1998, and
Amended Agreement dated as of August 30, 1999
between CNL APF Partners, LP and Prudential
Securities Credit Corporation (filed as Exhibit
10.6 to the 1999 10-K and incorporated herein by
reference.)
10.7 1999 Performance Incentive Plan (Included as
Exhibit 10.1 to Amendment No. 1 to the Form S-4 and
incorporated herein by reference.)
10.8 Registration Rights Agreement by and among the
Registrant, Robert A. Bourne, Curtis B. McWilliams,
John T. Walker, Howard Singer, Steven D.
Shackelford and CNL Group, Inc., dated as of March
11, 1999 (Included as Exhibit 10.40 to Amendment
No. 1 to the Form S-4 and incorporated herein by
reference.)
10.9 Registration Rights Agreement by and among the
Registrant, Five Arrows Realty Securities L.L.C.,
James M. Seneff, Jr., Robert A. Bourne, Curtis B.
McWilliams and CNL Group, Inc., dated as of March
11, 1999 (Included as Exhibit 10.41 to Amendment
No. 1 to the Form S-4 and incorporated herein by
reference.)
10.10 Employment Agreement by and between Curtis B.
McWilliams and the Registrant, dated September 15,
1999 (Included as Exhibit 10.42 to Amendment No. 2
to the Form S-4 and incorporated herein by
reference.)
10.11 Employment Agreement by and between Steven D.
Shackelford and the Registrant, dated September 15,
1999 (Included as Exhibit 10.43 to Amendment No. 2
to the Form S-4 and incorporated herein by
reference.)
10.12 Employment Agreement by and between John T. Walker
and the Registrant, dated September 15, 1999
(Included as Exhibit 10.44 to Amendment No. 2 to
the Form S-4 and incorporated herein by reference.)
10.13 Employment Agreement by and between Howard J.
Singer and the Registrant, dated September 15, 1999
(Included as Exhibit 10.45 to Amendment No. 2 to
the Form S-4 and incorporated herein by reference.)
10.14 Employment Agreement by and between Barry L. Goff
and the Registrant, dated September 15, 1999
(Included as Exhibit 10.46 to Amendment No. 2 to
the Form S-4 and incorporated herein by reference.)
10.15 Employment Agreement by and between Robert W.
Chapin and the Registrant, dated September 15, 1999
(Included as Exhibit 10.47 to Amendment No. 2 to
the Form S-4 and incorporated herein by reference.)
10.16 Employment Agreement by and between Timothy J.
Neville and the Registrant, dated September 15,
1999 (Included as Exhibit 10.48 to Amendment No. 2
to the Form S-4 and incorporated herein by
reference.)
10.17 Holdback Agreement by and among the Registrant and
Stockholders, dated August 31, 1999 (Included as
Exhibit 10.56 to Amendment No. 2 to the Form S-4
and incorporated herein by reference.)
27 Financial Data Schedule (Filed herewith.)
(b) Reports on Form 8-K
A Current Report on Form 8-K dated February 23, 2000 was
filed on March 1, 2000 describing the termination of the
proposed Merger of the Company with CNL Income Fund, Ltd.,
and CNL Income Fund II, Ltd. through CNL Income Fund XVI,
Ltd.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the balance
sheet of CNL American Properties Fund, Inc. and Subsidiaries at March 31, 2000,
and its statement of operations for the three months then ended and is qualified
in its entirety by reference to the Form 10-Q of CNL American Properties Fund,
Inc. and Subsidiaries for the three months ended March 31, 2000.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 20,503,935
<SECURITIES> 76,824,990
<RECEIVABLES> 7,041,562
<ALLOWANCES> 3,686,788
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 702,892,668
<DEPRECIATION> 16,575,754
<TOTAL-ASSETS> 1,182,811,680
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> 434,958
<OTHER-SE> 662,819,992
<TOTAL-LIABILITY-AND-EQUITY> 1,182,811,680
<SALES> 0
<TOTAL-REVENUES> 26,512,006
<CGS> 0
<TOTAL-COSTS> 10,690,947
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,691,535
<INCOME-PRETAX> 7,379,504
<INCOME-TAX> 0
<INCOME-CONTINUING> 7,379,504
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,379,504
<EPS-BASIC> 0.17
<EPS-DILUTED> 0.17
<FN>
<F1>Due to the nature of its industry, CNL American Properties Fund, Inc. and
Subsidiaries has an unclassified balance sheet; therefore, no values are shown
above for current assets and current liabilities.
</FN>
</TABLE>
