UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2003
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
CNL RESTAURANT PROPERTIES, INC.
(Exact name of registrant as specified in its charter)
Maryland 59-3239115
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
450 South Orange Avenue
Orlando, Florida 32801
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (407) 540-2000
Securities registered pursuant to Section
12 (b) of the Act:
Title of each class: Name of exchange on which registered:
None Not Applicable
Securities registered pursuant to section
12(g) of the Act:
Common Stock, $0.01 par value per share
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or 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 by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [x]
Indicate by checkmark if the registrant is an accelerated filer (as
defined in Exchange Act Rules 12b2). Yes X No
Aggregate market value of the voting stock held by nonaffiliates of the
registrant: The registrant has made three offerings of Shares of common stock
(the "Shares") on Form S-11 under the Securities Act of 1933, as amended. The
number of Shares held by non-affiliates as of June 30, 2003 was 38,479,891.
Since no established market for such Shares exists, there is no market value for
such Shares. Each Share was originally sold at $20 per Share.
The number of Shares of common stock outstanding as of March 10, 2004
was 45,248,670.
DOCUMENTS INCORPORATED BY REFERENCE:
Registrant incorporates by reference portions of the CNL Restaurant Properties,
Inc. Definitive Proxy Statement for the 2004 Annual Meeting of Stockholders
(Items 10, 11, 12, 13 and 14 of Part III) to be filed no later than April 30,
2004.
PART I
Item 1. Business
CNL Restaurant Properties, Inc. ("CNL Properties") formerly CNL American
Properties, Inc., a Maryland corporation (the "Company"), is the nations largest
self-advised real estate investment trust ("REIT") focused on the restaurant
industry. The Company operates as a holding company for two primary subsidiary
operating companies, CNL Restaurant Investments, Inc ("CNL-Investments")
formerly CNL Restaurant Properties, Inc. and CNL Restaurant Capital Corp.
("CNL-Capital Corp.") formerly CNL Franchise Network Corp. Please see note 14 of
the Company's Consolidated Financial Statements appearing in Item 8 of this
report for certain financial information about these two business segments. The
Company was founded in 1994 and at December 31, 2003, has financial interests in
approximately 1,000 properties diversified among more than 120 restaurant
concepts in 43 states. The Company's total real estate holdings subject to lease
includes over 640 properties, of which 90 properties are classified as held for
sale. At December 31, 2003, the servicing portfolio of net lease properties and
mortgages includes approximately 2,200 units, of which over 1,200 are serviced
on behalf of third parties.
In June 2000 the Company divided its operations into two business segments, real
estate and specialty finance, in order to distinguish between its real estate
segment, an entity with a strong capital base and stable cash flows, and a
specialty finance growth business partnered with a large financial institution
to provide an additional source of earnings and liquidity.
o The real estate segment, operated principally through the Company's wholly
owned subsidiary CNL- Investments and its subsidiaries, is charged with
overseeing and maximizing value on a portfolio of primarily long-term
triple-net lease properties. Those responsibilities include portfolio
management, property management and dispositions. In addition,
CNL-Investments manages approximately $525 million in affiliate portfolios
and earns management fees related thereto.
o The specialty finance segment, operated through the Company's wholly-owned
subsidiary CNL-Capital Corp. is partnered with a financial institution,
Bank of America ("the Bank"), in owning CNL Restaurant Capital, LP
("CNL-Capital") formerly known as CNL Franchise Network, LP. CNL Capital,
through its subsidiaries, delivers financial solutions principally in the
forms of financing, advisory and other services to national and larger
regional restaurant operators. It does this primarily by acquiring
restaurant real estate properties, which have been subject to a triple-net
lease, utilizing short-term debt and generally selling such properties at
a profit.
In June 2000, the Company formed CNL-Capital and contributed certain assets and
operations in exchange for an 84.39 percent interest. The Bank contributed its
franchise finance originations group in exchange for a 9.18 percent non-voting
redeemable interest in the Partnership. The Bank also served as lender at the
time of the alliance on a $500 million warehouse credit facility and a $43.75
million subordinated debt facility (the "Subordinated Debt Facility"). The
strategic alliance with the Bank reduced the Company's reliance on public
markets to raise capital by broadening the Company's financial products and
offerings and enhancing the Company's securitization platform. The Company also
issued a 6.43 percent limited partnership interest in CNL-Capital to CNL
Financial Group, Inc., ("CFG") an affiliate of a director of the Company, in
exchange for the operations of CNL Advisory Services, Inc. ("CAS"). CAS
specializes in providing merger, acquisition and other advisory services to
restaurant operators and expands the Company's services to the sector. Effective
January 1, 2003 CNL-Capital modified certain terms relating to the alliance with
the Bank that resulted in the Bank reducing its ownership interest in
CNL-Capital. In exchange for the reduction, the Bank agreed to assume certain
costs of its portfolio operations and decreased the referral fees paid by the
bank to CNL-Capital under the referral program between the Bank and CNL-Capital.
In addition, an affiliate of the Company's chairman agreed to reduce its
interest in CNL-Capital. As a result, the Company's effective interest in the
specialty finance operations increased from 84.39 percent to 96.26 percent on
January 1, 2003.
Effective January 1, 2001, CNL-Capital Corp elected to be treated as a taxable
REIT subsidiary ("TRS") pursuant to the provisions of the REIT Modernization
Act. As a TRS, CNL-Capital Corp. engages in activities that would previously
have caused income to the Company from CNL-Capital to be disqualified from being
eligible REIT income under the federal income tax rules. Now CNL-Capital
earnings are subject to tax, but management can control the timing of
distributions to the Company. CNL-Capital Corp. originates triple-net lease
properties for sale to third parties. CNL-Capital Corp. also performs net lease
and loan servicing on behalf of third parties. Also, certain activities of
CNL-Investments are conducted in a subsidiary that has made a similar TRS
election.
In January 2004, the Company amended the Subordinated Debt Facility agreement
while at the same time making a $10 million prepayment reducing the balance to
$33.75 million. The Subordinated Debt Facility has a conversion feature to allow
the Bank, subsequent to a specified conversion date, to have the outstanding
note converted into a 10.11 percent of additional limited partnership interests
in CNL-Capital. This conversion feature was reduced from 13.1 percent when the
agreement was amended in January 2004. The Bank's interest in the Partnership on
a fully diluted basis after a conversion of the fully committed Subordinated
Debt Facility would be 12.85 percent. As of December 31, 2003, the Bank had not
exercised its conversion option.
When the Company was created in 1994, the intent was to provide stockholders
liquidity by December 31, 2005 through either listing on a national exchange,
merging with another public company or liquidating its assets. The Company's
officers and directors continue to actively monitor the public markets for
opportunities to satisfy the liquidity objectives of the Company. The Company's
board does not intend to liquidate the Company. To comply with certain tax
guidelines governing the significance of taxable REIT subsidiaries, the Company
may pursue other alternatives relative to CNL-Capital Corp. that would provide
stockholder liquidity for all or a portion of the Company's investment.
Leases
As of December 31, 2003, the Company's real estate segment, CNL-Investments,
owns, either directly or indirectly through joint venture arrangements, 544
properties, which are generally subject to long-term, triple-net leases.
Although there are variations in the specific terms of the leases, the following
summarizes the general structure of the Company's leases. The leases of the
properties provide for initial terms generally ranging from 10 to 25 years and
expire between 2004 and 2024. The leases are on a triple-net basis which means
the lessee is responsible for all repairs and maintenance, property taxes,
insurance and utilities. The leases provide for minimum base annual rental
payments (payable in monthly installments) ranging from approximately $41,000 to
$369,000. The majority of the leases also provide that, commencing in specified
lease years (generally the sixth lease year), the annual base rent required
under the terms of the lease will increase. In addition, certain leases provide
for percentage rent based on sales in excess of a specified amount.
Generally, the leases provide for two to five five-year or ten-year renewal
options. Lessees of 439 of the 544 properties also have been granted options to
purchase the property at the property's then fair market value after a specified
portion of the lease term has elapsed. Fair market value will be determined
through an appraisal by an independent appraisal firm. The option purchase price
may equal the Company's original cost to purchase the property plus a specified
percentage from the date of the lease or a specified percentage of the Company's
purchase price, if that amount is greater than the property's fair market value
at the time the purchase option is exercised. The leases also generally provide
that, in the event the Company wishes to sell the property subject to that
lease, the Company first must offer the lessee the right to purchase the
property on the same terms and conditions, and for the same price, as any offer
which the Company has received for the sale of the property.
Major Tenants
During 2003, no single lessee, borrower (or affiliated groups of lessees or
borrowers) or restaurant chain contributed more than ten percent of the
Company's revenues relating to its properties, loans and secured equipment
leases. In the event that certain lessees, borrowers or restaurant chains
contribute more than ten percent of the Company's rental, earned and interest
income in future years, any failure of such lessees, borrowers or restaurant
chains could materially affect the Company's income. Additionally, as of
December 31, 2003, no single lessee or borrower, or group of affiliated lessees
or borrowers, leased properties or was the borrower under loans with an
aggregate carrying value in excess of 20 percent of total assets of the Company.
Real Estate and Restaurant Assets Held for Sale
The Company sells certain real estate properties to private investors as an
alternative to either retaining the properties as a long-term investment or
offering to sell net lease cash flows in the securitization marketplace. The
accounting for these properties differs from that of similar properties without
this designation as the Company does not record depreciation or accrued rent on
these properties. The properties held for sale are contemplated being sold
within the next year.
During 2002 the Company purchased the operations of certain restaurants. In
December 2003, the Company decided to dispose of these restaurant operations and
as of December 31, 2003, had classified the restaurant assets as held for sale.
From time to time, certain properties classified as long-term investments may be
subsequently re-designated to held for sale classification. The company has
re-designated 30 and 83 properties during 2003 and 2002, respectively.
Mortgage Loans Held for Sale
Mortgage loans held for sale are wholly or partially collateralized by first
mortgages on the land and/or buildings of franchised restaurant businesses and
consist of fixed-rate loans at December 31, 2003. The loans carry a weighted
average interest rate of 8.33 percent. The mortgage loans are due in monthly
installments with maturity dates ranging from 2004 to 2022. The fixed-rate
mortgage loans generally prohibit prepayment for certain periods or include
prepayment penalties.
Mortgage, Equipment and Other Notes Receivable
Mortgage, equipment and other notes receivable are wholly or partially
collateralized by first mortgages on the land and/or buildings, the equipment or
other assets of franchised restaurant businesses. The loans are due in monthly
installments with maturity dates ranging from 2004 to 2023.
Available Information
The Company makes available free of charge on or through its Internet website
(http://www.cnlonline.com) the Company's Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q, Current Reports on Form 8-K, and, if applicable,
amendments to those reports filed or furnished pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") as
soon as reasonably practicable after the Company electronically files such
material with, or furnishes it to, the Securities and Exchange Commission.
Competition
The fast-food, family-style and casual dining restaurant business is
characterized by intense competition. The operators of the restaurants located
on the Company's properties compete with independently owned restaurants,
restaurants which are part of local or regional chains and restaurants in other
well-known national chains, including those offering different types of food and
service.
Local competition may enhance a restaurant's success rather than detract from
it. Many successful fast-food, family-style and casual dining restaurants are
located in "eating islands", areas within which a variety of restaurants
operate. This variety allows diners an opportunity to diversify their eating
habits, giving them an incentive to return in the future. As a result, fast
food, family style and casual dining restaurants frequently experience better
operating results when there are other restaurants in the area.
The Company competes with other persons and entities in locating suitable
properties to acquire and in locating purchasers for properties held for sale.
The Company also competes with other financing sources such as banks, mortgage
lenders, real estate brokers and sale/leaseback companies for suitable tenants
for its properties and borrowers for its mortgage loans.
The recessionary economy and historically low interest rates at which mortgage
financing can be obtained contributed to a decline in net lease volume in 2003
while the low interest rates made debt financing more attractive. Management
believes that the Company's volume levels may increase in the future due to the
projected rebound in the economy as well as the opportunities afforded by the
continued consolidation in the financing arena and the Company's ability to
provide an array of financial products. Competition in the financing arena
continues to be significant despite the exit of numerous competitors. Remaining
competitors provide meaningful competition.
Employees
As of December 31, 2003, the Company had 117 associates.
Item 2. Properties
As of December 31, 2003, the Company's real estate segment, CNL-Investments,
owned, either directly or indirectly through joint venture arrangements, 544
properties, located in 40 states. Reference is made to the Schedule of Real
Estate and Accumulated Depreciation filed with this report for a listing of the
properties and their respective costs.
As of December 31, 2003, the Company owned 469 of the 544 properties in fee
simple and ten properties through joint venture arrangements. As of December 31,
2003, 36 properties consisted of land only.
As of December 31, 2003, 39 properties consisted of building only. The Company
does not own the underlying land. In connection with the acquisition of each of
these properties, the Company entered into either a tri-party agreement with the
tenant and the owner of the land or an assignment of interest in the ground
lease with the landlord, as described in Item 1. Business-Leases.
As of December 31, 2003, the Company had pledged 379 properties as collateral
related to bonds payable.
Description of Properties
Land. The Company's property lot sizes range from approximately 6,000 to 199,000
square feet depending upon building size and local demographic factors. Land
owned is zoned for commercial use which, prior to acquisition, were reviewed for
traffic patterns and volume.
The following table lists the properties owned as of December 31, 2003 by state.
More detailed information regarding the location of the properties is contained
in the Schedule of Real Estate and Accumulated Depreciation filed with this
report.
Total Number of
State Restaurant Properties
Alabama 13
Arizona 13
California 30
Colorado 13
Connecticut 1
Delaware 1
Florida 75
Georgia 21
Idaho 3
Illinois 24
Indiana 8
Iowa 7
Kansas 5
Kentucky 6
Louisiana 10
Maryland 5
Michigan 12
Minnesota 8
Mississippi 5
Missouri 26
Nebraska 3
Nevada 3
New Hampshire 2
New Jersey 6
New Mexico 2
New York 4
North Carolina 19
Ohio 47
Oklahoma 4
Oregon 7
Pennsylvania 10
Rhode Island 1
South Carolina 9
Tennessee 26
Texas 70
Utah 4
Virginia 15
Washington 13
West Virginia 10
Wisconsin 3
------
TOTAL PROPERTIES 544
======
Buildings. The buildings generally are rectangular and are constructed from
various combinations of stucco, steel, wood, brick and tile. Building sizes
range from approximately 1,000 to 12,700 square feet. Generally, buildings on
properties owned are freestanding and are surrounded by paved parking areas.
Buildings are suitable for conversion to various uses, although modifications
may be required prior to use for other than restaurant operations. Depreciation
expense is computed for buildings and improvements using the straight-line
method using a depreciable life of 39 years for federal income tax purposes. As
of December 31, 2003 the aggregate depreciated cost basis of the properties
owned (including properties owned through joint ventures) for federal income tax
purposes was $621.5 million.
The following table lists the properties owned as of December 31, 2003 by
restaurant chain.
Restaurant Chain Number of Properties
Jack in the Box 54
International House of Pancakes 46
Pizza Hut 44
Golden Corral 36
Arby's 35
Bennigan's 26
Burger King 24
Chevy's Inc. 18
Ruby Tuesday 18
Steak & Ale 18
Baker's Square 17
Denny's 15
Applebee's 15
Boston Market 13
Wendy's 12
Other 153
-----
TOTAL: 544
=====
Management considers the properties to be well maintained and sufficient for the
Company's operations and believes they are adequately covered by insurance. In
addition, the Company has obtained contingent liability and property coverage.
This insurance is intended to reduce the Company's exposure in the unlikely
event a tenant's insurance policy lapses or is insufficient to cover a claim
relating to the property.
Leases. The Company leases the properties to operators of selected national and
regional fast-food restaurant chains. The leases are generally on a long-term
"triple-net" basis, meaning that the tenant is responsible for repairs,
maintenance, property taxes, utilities and insurance. Generally, a lessee is
required, under the terms of its lease agreement, to make capital expenditures
to refurbish restaurant buildings, premises, signs and equipment so as to comply
with the lessee's obligations, if applicable, under the franchise agreement to
reflect the current commercial image of its restaurant chain. These capital
expenditures are required to be paid by the lessee during the term of the lease.
The terms of the leases of the properties owned by the Company are described in
Item 1. Business - Leases.
The following is a schedule of the average rent per property for the years ended
December 31:
2003 2002 2001 2000 1999
-------------- -------------- --------------- -------------- -------------
Rental Revenues (1) $ 72,753,603 $ 74,504,692 $84,775,244 $91,520,103 $61,907,812
Properties (2) 515 552 644 725 642
Average Rent Per Property $ 141,269 $ 134,972 $ 131,639 $ 126,235 $ 96,430
Occupancy 95% 95% 92% 95% 97%
(1) Rental income includes the Company's share of rental income from the
properties owned through joint venture arrangements. Rental revenues have
been adjusted, as applicable, for any amounts for which the Company has
established an allowance for doubtful accounts. Rental revenues for all
periods presented include rental revenues relating to discontinued
operations for properties that were either disposed of or that were
classified as held for sale during the year ended December 31, 2003.
(2) Excludes properties that were vacant at December 31 and that did not
generate rental revenues during the year.
The following table lists properties as of December 31, 2003 by tenant and
includes average age of buildings, annualized total rental revenue and percent
of total revenue. To calculate annualized total rental revenue, the monthly
rental revenue for each restaurant property owned and leased at December 31,
2003 was multiplied by 12 to present annualized rental revenues for a 12 month
period. Contingent rental income was excluded in the calculation of annualized
total rental revenue.
Total
Number of Average Age
Restaurant of Buildings Annualized Percent of
Properties (years) Total Rental Total Rental
Tenant (1) Revenue (2) Revenue
------------- -------------- -------------- --------------
S&A Properties Corporation 35 22.1 $ 6,019,849 9.31%
IHOP Properties, Inc. 46 6.4 5,426,195 8.39%
Golden Corral Corporation 30 5.1 4,989,411 7.72%
Jack in the Box, Inc. 26 5.2 3,224,498 4.99%
Jack in the Box Eastern Division, L.P. 29 5.1 3,024,450 4.68%
Vicorp Restaurant, Inc. 18 21.7 2,418,886 3.74%
Boston Market Corp. 13 6.8 1,628,959 2.52%
Pollo Operations, Inc. 10 8.9 1,446,120 2.24%
Woodland Group, Inc. 10 8.4 1,403,350 2.17%
Other 298 8.8 35,087,731 54.26%
------ ------------- ------------
Total 515 $64,669,449 100.00%
------ ------------- ------------
(1) Excludes properties that were vacant at December 31, 2003 and that did not
generate rental revenues during the year.
(2) The Company has straight-lined the contractual increases in rental income
over the life of each of the leases in order to calculate rental revenue in
accordance with generally accepted accounting principles.
The following table shows the aggregate number of leases which expire each
calendar year through the year 2018, as well as the number of leases which
expire after December 31, 2018. The table does not reflect the exercise of any
of the renewal options provided to the tenant under the terms of such leases.
Base Rent
--------------------------------------------
Year Number (1) Amount (2) Percent
------------------ ------------------ -------------------
2004 1 $ 100,935 0.16%
2005 4 427,799 0.66%
2006 3 311,337 0.48%
2007 1 109,811 0.17%
2008 1 117,297 0.18%
2009 1 84,059 0.13%
2010 12 1,224,173 1.89%
2011 16 2,210,272 3.42%
2012 26 4,033,945 6.24%
2013 22 3,272,302 5.06%
2014 69 9,320,587 14.41%
2015 34 4,528,935 7.00%
2016 61 4,357,442 6.74%
2017 51 6,561,902 10.15%
2018 117 15,923,362 24.62%
Thereafter 96 12,085,291 18.69%
--------- --------------- ----------
Total 515 64,669,449 100.00%
========= =============== ==========
(1) Excludes properties for which the leases have been terminated and excludes
properties leased on a month to month basis.
(2) The Company has straight-lined the contractual increases in rental income
over the life of each of the leases in order to calculate rental revenue in
accordance with generally accepted accounting principles.
Item 3. Legal Proceedings
As of December 31, 2003, neither the Company nor any of its properties was a
party to or the subject of any material pending legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
None.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
As of March 1, 2004, there were 32,378 stockholders of record of common stock.
There is no public trading market for the Company Shares, and even though the
Company intends to list the Company Shares on the New York Stock Exchange or
other national securities exchange or over-the-counter market no later than
December 31, 2005, there is no assurance that listing will occur. If listing
occurs, there is no assurance that a public market for the Company Shares will
develop. In October 1998, the Board of Directors elected to implement the
Company's redemption plan. Under the redemption plan, the Company elected to
redeem Company Shares, subject to certain conditions and limitations. During
1999, the Company terminated the redemption plan. As of December 31, 2003, the
estimated fair value per share is $17.20. (For Florida intangible tax purposes,
this is the equivalent of the Just Value per share.) The Company obtained this
valuation from a third party firm, which based its valuation on an analysis of
comparable publicly traded real estate investment trusts and a discounted cash
flow analysis. Because the Company Shares are not publicly traded, investors are
cautioned that the estimated fair value of the shares may not be realized upon
sale of the shares.
Stockholders of the Company sold and purchased shares of common stock subject to
negotiation by the purchaser and the selling stockholder. The following table
reflects the high, low and average sales prices for transfers of shares of
common stock for each calendar quarter during 2003 and 2002, other than pursuant
to the plan, net of commissions.
2003 (1) 2002 (1)
--------------------------------------- --------------------------------------
High Low Average High Low Average
---------- ---------- ---------- ---------- ---------- ----------
First Quarter $19.00 $10.24 $15.28 $20.00 $11.20 $14.15
Second Quarter 20.00 12.81 16.04 19.00 12.94 14.54
Third Quarter 20.00 10.00 16.18 19.00 11.88 15.00
Fourth Quarter 21.29 13.10 15.73 19.00 7.00 12.87
(1) A total of 207,184 and 239,692 shares were transferred for the years ended
December 31, 2003 and 2002, respectively.
The Company expects to make distributions to the stockholders pursuant to the
provisions of the Articles of Incorporation. For the years ended December 31,
2003 and 2002, the Company declared cash distributions of $69.0 million and
$68.0 million, respectively, to stockholders. For federal income tax purposes,
39 percent and 0 percent of distributions paid in 2003 and 2002, respectively,
were considered to be ordinary income and 61 percent and 100 percent,
respectively, were considered to be a return of capital.
The following table presents total distributions and distributions per Company
Share:
(In Thousands, except for per share data)
First Second Third Fourth Year
----------- ----------- ----------- ----------- -----------
2003 Quarter
------------
Total distributions
declared $17,251 $17,250 $ 17,251 $ 17,250 $69,002
Distributions per
share 0.38 0.38 0.38 0.38 1.52
2002 Quarter
------------
Total distributions
declared $16,803 $16,803 $ 17,134 $ 17,251 $67,991
Distributions per
share 0.38 0.38 0.38 0.38 1.52
In March 2004, the Company declared distributions to stockholders of $17.251
million ($0.38124 per Share) payable in March 2004.
The Company intends to continue to declare distributions of cash to the
stockholders.
Equity Compensation Plan Information
Number of securities
Number of securities remaining available for
to be issued upon future issuance under
exercise of Weighted-average equity compensation
outstanding options, exercise price of plans excluding
warrants and rights outstanding options, securities reflected in
Plan Category (a) warrants and rights column (a)
-------------------------- ----------------------- ------------------------ ------------------------
Equity compensation
plans approved by
security holders -- (1) $ 4,500,000 (2)
Equity compensation
plans not approved
by security holders (3) (3) (3)
----------------------- ------------------------
Total -- $ 4,500,000
======================= ========================
(1) During 1999, the stockholders approved a performance incentive plan (the
"Plan") which became effective as of February 23, 1999. As of December 31,
2003, the Company has not granted any awards under the Plan.
(2) The Plan authorizes the issuance of up to 4,500,000 shares of the Company's
common stock upon the exercise of stock options (both incentive and
nonqualified), stock appreciation rights and the award of restricted stock
("Stock Award") provided that the aggregate number of shares of Common
Stock that may be issued pursuant to Options, stock appreciation rights
("SARs"), and Stock Awards granted under the Plan increases automatically
to 9,000,000 shares and 12,000,000 shares, respectively, when the Company
has issued and outstanding 150,000,000 shares and 200,000,000 shares,
respectively, of common stock. The Plan terminates on February 23, 2009.
Key employees, officers, directors and persons performing consulting or
advisory services for the Company or its affiliates, as defined in the
Plan, who are designated by the committee administering the Plan, are
eligible to receive awards under the Plan. Awards may be made in the form
of stock options, stock awards, SARs, Phantom Stock Awards, Performance
Awards and Leveraged Stock Purchase Awards as defined further in the Plan.
As of December 31, 2003, the Company had not made any awards related to the
Plan.
(3) As of December 31, 2003, the Company does not maintain any equity
compensation plans not approved by security holders.
Item 6. Selected Financial Data
(In Thousands, except for share and per share data)
Year Ended Year Ended Year Ended Year Ended Year Ended
December 31, December 31, December 31, December 31, December 31,
2003 2002 2001 2000 1999
---------------- -------------- -------------- --------------- ----------------
Continuing Operations:
Revenues (1) $ 114,337 $ 336,163 $ 274,413 $ 113,413 $ 70,764
================ ============== ============== =============== ================
Earnings/(loss) from
continuing operations, net (1) $ 8,176 $ 27,407 $ (15,739 ) $ (6,409 ) $ (52,571 )
Discontinued Operations:
Earnings/(loss) and gains from
discontinued operations,
net (1) 34,264 8,183 (4,872 ) 9,336 2,734
---------------- -------------- -------------- --------------- ----------------
Earnings/(loss) before
cumulative effect if
accounting change 42,440 35,590 (20,611 ) 2,927 (49,837 )
Cumulative effect of accounting
change -- -- (3,841 ) -- --
---------------- -------------- -------------- --------------- ----------------
Net income/(loss) $ 42,440 $ 35,590 $ (24,452 ) $ 2,927 $ (49,837 )
================ ============== ============== =============== ================
Earnings/(loss) per share (1):
Continuing operations (1) $ 0.18 $ 0.61 $ (0.36 ) $ (0.15 ) $ (1.33 )
Discontinued operations (1) 0.76 0.19 (0.11 ) 0.22 0.07
Cumulative effect of
accounting change -- -- (0.09 ) -- --
---------------- -------------- -------------- --------------- ----------------
Net income/(loss) per share $ 0.94 $ 0.80 $ (0.56 ) $ 0.07 $ (1.26 )
================ ============== ============== =============== ================
Funds from operations (2) $ 49,504 $ 44,710 $ (6,029 ) $ 16,007 $ 35,956
================ ============== ============== =============== ================
Cash distributions declared $ 69,002 $ 67,991 $ 66,466 $ 66,329 $ 60,079
================ ============== ============== =============== ================
Cash distributions declared
per share $ 1.52 $ 1.52 $ 1.52 $ 1.52 $ 1.52
================ ============== ============== =============== ================
Weighted average shares
outstanding:
Basic 45,248,670 44,620,235 43,589,985 43,495,919 39,402,941
================ ============== ============== =============== ================
Diluted 45,248,670 44,620,235 43,589,985 43,495,919 39,402,941
================ ============== ============== =============== ================
At December 31:
Total assets $ 1,298,116 $ 1,383,450 $ 1,560,117 $ 1,605,944 $ 1,138,193
================ ============== ============== =============== ================
Long-term obligations $ 656,321 $ 671,465 $ 484,815 $ 398,100 $ 140,504
================ ============== ============== =============== ================
Total stockholders' equity $ 479,886 $ 494,151 $ 526,182 $ 607,738 $ 672,214
(3) ================ ============== ============== =============== ================
For a discussion of material events affecting the comparability of the
information reflected in the selected financial data, refer to the section
captioned "Management's Discussion and Analysis of Financial Condition and
Results of Operations" in Item 7.
(1) The results of operations relating to properties that were either disposed
of or that were classified as held for sale during the year ended December
31, 2003 are reported as discontinued operations for all periods presented.
(2) Funds from operations ("FFO"), based on the revised definition adopted by
the Board of Governors of the National Association of Real Estate
Investment Trusts ("NAREIT") and as used herein, except for the add back of
the advisor acquisition expense of $76.3 million during 1999, means net
income/(loss) determined in accordance with Generally Accepted Accounting
Principles ("GAAP"), excluding gains (losses) from sales of depreciable
operating property, excluding extraordinary items (as defined by GAAP),
including depreciation and amortization of real estate assets and after
adjusting for unconsolidated partnerships and joint venture. As a result of
the restatement, FFO does not include add backs for impairment provisions
or capital lease principal components. These amounts for the years ended
December 31, 2003, 2002, 2001, 2000 and 1999 (in thousands) were $11,542,
$13,335, $26,018, $2,576 and $0, respectively, for the impairment
provisions and $1,725, $1,852, $2,384, $2,242 and $1,629, respectively, for
capital lease principal components. Funds from operations are generally
considered by industry analysts to be the most appropriate measure of
performance. FFO (i) does not represent cash generated from operating
activities determined in accordance with GAAP (which, unlike FFO, generally
reflects all cash effects of transactions and other events that enter into
the determination of net earnings), (ii) is not necessarily indicative of
cash flow available to fund cash needs and (iii) should not be considered
as an alternative to net earnings determined in accordance with GAAP as an
indication of the Company's operating performance, or to cash flow from
operating activities determined in accordance with GAAP as a measure of
either liquidity or the Company's ability to make distributions.
Accordingly, the Company believes that in order to facilitate a clear
understanding of the consolidated historical operating results of the
Company, FFO should be considered in conjunction with the Company's net
earnings and cash flows as reported in the accompanying consolidated
financial statements and notes thereto. However, the Company's measure of
FFO may not be comparable to similarly titled measures of other REITS
because these REITS may not apply the definition of FFO in the same manner
as the Company.
(3) Includes subscriptions received of $0.2 million during 1999 and includes
$1.5 million of stock issuance costs during each of the years ended
December 31, 2003, 2002, 2001 and 2000 and $1.7 million during the year
ended December 31, 1999. Stock issuance costs consists of selling
commissions, marketing support and due diligence expense reimbursement fees
during 1999 and organizational and offering expenses. Stock issuance costs
for 2003, 2002, 2001 and 2000 consist of soliciting dealer servicing fees.
The following is a reconciliation of net earnings to FFO:
(In Thousands)
2003 2002 2001 2000 1999
------------- ------------- -------------- ------------- --------------
Net income/(loss) $ 42,440 $ 35,590 $ (24,452 ) $ 2,927 $ (49,837 )
Depreciation
Continuing operations 9,997 10,512 11,483 12,198 7,460
Discontinued operations 665 1,693 1,931 149 1,210
Loss/(Gain) on sale of property
Continuing operations 5 181 1,141 721 781
Discontinued operations (3,633 ) (3,295 ) -- -- --
Amortization of joint venture costs 30 29 27 12 9
Advisor acquisition expense -- -- -- -- 76,333
Cumulative effect of accounting
change -- -- 3,841 -- --
------------- ------------- -------------- ------------- --------------
FFO (*) $ 49,504 $ 44,710 $ (6,029 ) $ 16,007 $ 35,956
============= ============= ============== ============= ==============
(*) - The Company restated FFO for the years ended December 31, 2002, 2001,
2000 and 1999 to conform to 2003 presentation that conforms to the NAREIT
definition of FFO, except for the add back by the Company of the advisor
acquisition expense of $76.3 million during 1999.
Item 7. 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, changes in interest rates under the Company's current credit
facilities and under any additional variable rate debt arrangements that the
Company may enter into in the future, the ability of the Company to refinance
amounts outstanding under its credit facilities 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 may become vacant and the ability
of the Company to securitize or sell mortgage loans or net lease properties on a
favorable and timely basis. Given these uncertainties, readers are cautioned not
to place undue reliance on such statements.
Organization and Business
CNL Restaurant Properties, Inc. ("CNL-Properties" or the "Company"), formerly
CNL American Properties Fund, Inc., is the nation's largest self-advised real
estate investment trust ("REIT") focused on the restaurant industry. The Company
has two primary subsidiary operating companies, CNL Restaurant Investments, Inc.
and CNL Restaurant Capital Corp. The Company was founded in 1994 and at December
31, 2003, has financial interests in approximately 1,000 properties diversified
among more than 120 restaurant concepts in 43 states. The Company's total real
estate holdings subject to lease include over 640 properties, of which 90
properties are classified as held for sale. At December 31, 2003, the servicing
portfolio of net lease properties and mortgages consists of approximately 2,200
units, of which over 1,200 are serviced on behalf of third parties.
The Company operates two business segments - real estate and specialty finance.
o The real estate segment, operated principally through the Company's wholly
owned subsidiary CNL Restaurant Investments, Inc. ("CNL-Investments"),
formerly known as CNL Restaurant Properties, Inc. (a name used by the
Company effective June 27, 2003), and its subsidiaries, manage a portfolio
of primarily long-term triple-net lease properties. Those responsibilities
include portfolio management, property management, dispositions and the
opportunistic acquisition and profitable sale of real estate investments.
In addition, CNL-Investments services approximately $525 million in
affiliate real estate portfolios and earns management fees related
thereto. Revenues from the real estate segment represented approximately
75 percent, 26 percent and 32 percent of the Company's total revenues in
2003, 2002 and 2001, respectively. The increase in 2003 is the result of
adopting accounting rules that require a component of the specialty
finance revenues to be treated as discontinued operations, as described
below.
o The specialty finance segment, operated through the Company's wholly-owned
subsidiary CNL Restaurant Capital Corp. ("CNL-Capital Corp"), formerly
known as CNL Franchise Network Corp., is partnered with a financial
institution, Bank of America ("the Bank"), in owning CNL Restaurant
Capital, LP ("CNL-Capital"). CNL-Capital, through its subsidiaries,
delivers financial solutions principally in the forms of financing,
advisory and other services to national and larger regional restaurant
operators. It does this primarily by acquiring restaurant real estate
properties, which are subject to a triple-net lease, utilizing short-term
debt and generally selling such properties at a profit. Revenues from the
specialty finance segment represented approximately 25 percent, 74 percent
and 68 percent of the Company's total revenues in 2003, 2002 and 2002,
respectively. The decrease in 2003 was due to classifying components of
revenues into discontinued operations in accordance with new accounting
requirements.
When the Company was created in 1994, the intent was to provide stockholders
liquidity by December 31, 2005 through either listing on a national exchange,
merging with another public company or liquidating its assets. The Company's
officers and directors continue to actively monitor the public markets for
opportunities to satisfy the liquidity objectives of the Company. The Company's
board presently has no intention to liquidate the Company. To comply with
certain tax guidelines governing the significance of taxable REIT subsidiaries,
the Company may pursue other alternatives relative to CNL-Capital Corp that
would provide stockholder liquidity for all or a portion of the Company's
investment.
Liquidity and Capital Resources
General. Historically, the Company's demand for funds has been for payment of
operating expenses and dividends, for payment of principal and interest on its
outstanding indebtedness, and in the case of CNL-Capital, for acquisitions of
properties with the intent to sell. The Company's management expects to continue
meeting short-term and long-term liquidity requirements through distributions
from CNL-Investments, issuance of debt and sales of common or preferred stock.
To date, the Company has not received distributions from CNL-Capital because
this subsidiary has reinvested its earnings in ongoing operations. Management
expects that distributions from CNL-Capital will begin within the next two
years.
Contractual Obligations, Contingent Liabilities and Commitments. The following
table presents the Company's contractual cash obligations and related payment
periods as of December 31, 2003:
Payments due by period (In millions)
------------------------------------
Less
than one 2 to 3 4 to 5
Contractual cash obligations: year years years Thereafter Total
- ------------------------------------------- ---------- --------- ---------- ------------ ----------
Borrowings (1) $ 146.0 $ 175.5 $ 68.9 $ 361.4 $ 751.8
Leased office space (2) 1.1 2.4 2.4 8.0 13.9
---------- --------- ---------- ------------ ----------
Total contractual cash obligations $ 147.1 $ 177.9 $ 71.3 $ 369.4 $ 765.7
========== ========= ========== ============ ==========
The following table presents the Company's commitments, contingencies and
guarantees and related expiration periods as of December 31, 2003:
Estimated payments due by period (In millions)
----------------------------------------------
Less
Commitments, contingencies than one 2 to 3 4 to 5
and guarantees year years years Thereafter Total
- ---------------------------------------- ---------- ----------- ----------- ------------ ---------
Guaranty of unsecured promissory
note (2) $ 1.3 $ -- $ -- $ -- $ 1.3
Purchase commitments 82.0 -- -- -- 82.0
---------- ----------- ----------- ------------ ---------
Total commitments, contingencies
and guarantees $ 83.3 $ -- $ -- $ -- $83.3
========== =========== =========== ============ =========
(1) The maturities on outstanding indebtedness assumes that loan repayments are
made on the mortgage warehouse facilities in accordance with the
contractual obligation and that bonds payable amortize in accordance with
estimated payment amounts. In the event the mortgage warehouse lenders
continue to renew the facilities as expected, $146 million of the 2004
amounts would likely mature in a later year. In January 2004, the Company
renegotiated the Subordinated Debt Facility. Under the renegotiated terms,
the Company will make a mandatory repayment of $11.875 million by December
31, 2004. This repayment of $11.875 million was reflected in the
"Thereafter" column in this table as of December 31, 2003.
(2) In May 2002, the Company purchased a combined five percent partnership
interest in CNL Plaza, Ltd. and CNL Plaza Venture, Ltd. (the "Plaza") for
$0.2 million. Affiliates of James M. Seneff, Jr. and Robert A. Bourne, each
of which is a director of the Company, own the remaining partnership
interests. The Company has severally guaranteed 8.33 percent or $1.3
million of a $15.5 million unsecured promissory note on behalf of the
Plaza. The guaranty continues through the loan maturity in November 2004.
Since November 1999, the Company has leased its office space from CNL
Plaza, Ltd., an affiliate of a member of the Company's board of directors.
The Company's lease expires in 2014 and provides for scheduled rent
increases over the term of the lease. Rental and other expenses in
connection with the lease for the years ended December 31, 2003, 2002 and
2001 totaled $1.4 million, $1.5 million and $1.2 million, respectively.
Dividends. The Company's ability to internally fund capital needs is limited
since it must distribute at least 90 percent of its net taxable income
(excluding net capital gains) to stockholders to qualify as a REIT. The Company
is a self-advised real estate investment trust that reflects the earnings of its
two primary segment subsidiaries, CNL-Investments and CNL-Capital Corp. The
Company has continued to declare and pay distributions to its stockholders.
These distributions have been primarily funded by CNL-Investments' activities
because the Company has elected to reinvest the earnings of CNL-Capital, its
specialty finance business, to date as contemplated by the agreement with the
partners of CNL-Capital. The Company will continue to reinvest earnings into
this subsidiary if the subsidiary is able to generate acceptable returns. The
remainder of the distributions to date has been funded by sales of the Company's
common stock to the Company's Chairman through a private company affiliate, CNL
Financial Group, Inc. ("CFG"), and loans from CFG.
The Company has elected to distribute amounts in excess of that necessary to
qualify as a REIT. During the years ended December 31, 2003, 2002 and 2001, the
Company distributed $69.0 million, $68.0 million and $66.5 million,
respectively, or $1.52 per share each year, to its stockholders. During 2003,
2002 and 2001, approximately 39 percent, 0 percent and 21 percent, respectively,
of the distributions received by stockholders were considered to be ordinary
income and approximately 61 percent, 100 percent and 79 percent, respectively,
were considered a return of capital for federal income tax purposes. The REIT's
taxable income in 2003, 2002 and 2001 has not included any of CNL-Capital's
earnings since inception. The Company's cash from operations for the years ended
December 31, 2003, 2002 and 2001 were $108.4 million, $111.6 million and $48.7
million. Management believes that a better indicator of cash from operations
would exclude the changes in the held for sale loans and real estate portfolio
and proceeds from the sale of loans. Net cash provided by operating activities
excluding changes in mortgage loans and inventories of real estate held for sale
is $71.2 million, $50.0 million and $59.4 million in the years ended December
31, 2003, 2002 and 2001.
In order to ensure that the Company maintained its historical level of
distributions to its stockholders, the Company's Chairman, through CFG, made
advances to the Company in the amount of $18.7 million, $11.75 million and $8.7
million during the years ended December 31, 2003, 2002 and 2001, respectively,
in the form of demand balloon promissory notes. The notes are
non-collateralized, bear interest at LIBOR plus 2.5 percent or at the base rate,
as defined in the agreement, with interest payments and outstanding principal
due upon demand. The principal amount including accrued interest at December 31,
2003 was $23.5 million. In addition, during 2002 and 2001, the Chairman, through
CFG, received 1,173,354 shares and 579,722 shares, respectively, of the
Company's stock in exchange for $20.1 million and $9.7 million, respectively, in
cash, including the conversion of amounts previously treated as advances. This
provided capital that allowed the Company to reinvest the earnings generated by
the specialty finance business. The number of shares was determined using an
estimated fair value per share of $16.78 and $17.13 during 2001 and 2002,
respectively. The value per share for 2001 and 2002 was determined by a third
party firm, which based its valuation on an analysis of comparable publicly
traded real estate investment trusts and a discounted cash flow analysis. The
Company's Chairman is under no obligation to purchase additional shares or make
advances to the Company. Should the Company's Chairman determine not to purchase
additional shares or loan additional funds to the Company, and the Company does
not generate adequate cash flow from other sources, the Company may have to
reduce its distribution rate.
In connection with maintaining its historical distribution level, the Company
may sell additional shares of its common stock to CNL Financial Group or to
third party purchasers. The Company's Chairman is under no obligation to
purchase additional shares of the Company's common stock or loan additional
funds to the Company in order to guarantee that the Company maintains its
historical distribution level to stockholders. Selling additional shares of the
Company's stock may dilute a shareholder's investment and may reduce the value a
shareholder would receive in a future liquidity event. However, selling stock to
enable CNL-Capital to reinvest earnings may be accretive to the extent that the
value of the specialty finance segment increases.
The Company is currently exploring interest in an offering of the Company's
preferred stock. The proceeds of any sale of preferred stock would be used for
general corporate purposes, meeting existing payment demands and potentially, to
retire existing debt.
o Specialty Finance Segment (CNL-Capital).
CNL-Capital current demand for funds include (i) payment of operating expenses,
(ii) funds necessary for net lease originations to be sold in its Investment
Property Sales Program (as defined below) and (iii) payment of principal and
interest on its outstanding indebtedness. Demands for funds diminished at
CNL-Capital during 2003 due to a decline in new originations of real estate
properties and a decrease in interest expense, and due to CNL-Capital not
distributing to the Company any cash resulting from the "net spread" earned and
not distributing any of the gains realized from the sale of properties under the
Investment Property Sales Program, as described below.
During the years ended December 31, 2003, 2002 and 2001, CNL-Capital Corp
derived its primary cash flows from lease and interest income earned in excess
of interest expense paid ("net spread"), net gains from the Investment Property
Sales Program, advisory services and servicing revenues. Significant cash
outflows consist of operating expenses, real property purchases and capital
enhancements in the loan portfolio (excess of investment over related
borrowings). CNL-Capital had cash and cash equivalents of $31.9 million, $10.4
million and $10.8 million at December 31, 2003, 2002 and 2001, respectively.
CNL-Capital's longer-term liquidity requirements (beyond one year) are expected
to be met through successful renewal of its warehouse credit facilities and
gains from the Company's Investment Property Sales Program. In addition,
management believes CNL-Capital's longer term liquidity requirements will be
satisfied in part by operating cash flows provided by servicing and advisory
services. CNL-Capital may also seek additional debt or equity financing. Any
decision to pursue additional debt or equity capital will depend on a number of
factors, such as compliance with the terms of existing credit agreements, the
Company's financial performance, industry or market trends and the general
availability of attractive financing transactions.
Investment Property Sales Program
As described above, the improvement in liquidity has been primarily due to
Investment Property Sales, further described below, outpacing new originations.
The Company's Investment Property Sales Program came into being as a reaction to
uncertainty in the franchise asset-backed securitization market. CNL-Capital was
formed in June of 2000 through an alliance between the Company and the Bank. The
original vision of CNL-Capital was centered on securitization. This business
model was predicated upon the origination of pools of loans or triple-net leases
and the subsequent issuance of bonds collateralized by real estate and other
restaurant assets underlying the loan or lease. The securitization market
experienced considerable volatility in late 2000 that continued through 2003
virtually shutting down that securitization financing channel for the franchise
asset class. Rising delinquencies in securitized loan pools, falling treasury
rates, macroeconomic uncertainties combined with the sluggish restaurant sales
within certain concepts all contributed to the volatility. Investors required
higher interest rates on securities issued in securitizations while ratings
agencies downgraded the quality of the loans underlying the securities. While
many of the Company's competitors experienced downgrades or ratings actions on
bonds previously issued, the Company's prior loan or lease securitizations to
date have not been subject to any such ratings action.
In 2001, CNL-Capital changed its business focus to the private market sales
channels to either refinance or sell existing mortgage loans, and halted the
origination of new loans. In October 2001, the Company renegotiated certain
terms of its alliance with the Bank. Over the course of 2001 through 2003, the
Company sold or refinanced the loans described above over a longer term.
The uncertainty in the franchise asset-backed securitization market led
management to focus the originations effort toward new long-term, triple-net
leases on real estate with the intent of selling these properties to third
parties. In 2001, CNL-Capital began selling investment properties to third
parties (the "Investment Property Sales Program") adding diversity to its
original securitization model. These leased properties may qualify the buyer for
special tax treatment under Section 1031 of the Internal Revenue Code (a
"Section 1031 Exchange"). Generally, Section 1031 Exchanges allow an investor
who realizes a gain from selling appreciated real estate to defer paying taxes
on such gain by reinvesting the sales proceeds in like-kind real estate. The
success of this program is dependent upon achieving an optimal balance of cash
flows from lease income earned in excess of holding costs versus a maximum gain
on the sale. The chart below illustrates cash flows from Investment Property
Sales proceeds and purchases of properties in the years ended December 31:
(In thousands)
2003 2002 2001
------------- ------------- --------------
Proceeds from Investment Property Sales program sales $ 193,850 $ 287,622 $ 128,480
============= ============= ==============
Purchases of properties to be sold under the Investment
Property Sales program $ 168,965 $ 263,019 $ 118,372
============= ============= ==============
For properties acquired subsequent to December 31, 2001, generally accepted
accounting principles require that the sale of these investment properties be
designated as discontinued operations. A significant element of the ongoing
activities of the specialty finance segment is the Investment Property Sales
Program that consists of the origination of new triple-net lease financing on
properties and the subsequent disposition of those properties. The following
table shows the combined results of the Investment Property Sales Program and
the rest of the operations of the specialty finance segment (without treating
the Investment Property Sales Program as discontinued operations) for each of
the three years ended December 31:
(In thousands)
2003 2002 2001
------------- -------------- -------------
Revenues:
Sale of real estate $ 193,850 $ 287,622 $ 128,480
Rental income 9,983 13,165 16,212
Other revenue items 32,020 35,116 46,271
------------- -------------- -------------
235,853 335,903 190,963
------------- -------------- -------------
Expenses:
Cost of real estate sold 168,965 263,019 118,372
Interest expense 25,920 29,608 32,176
Depreciation and amortization 1,216 1,243 5,519
Other expenses 31,220 29,466 30,653
------------- -------------- -------------
227,321 323,336 186,720
------------- -------------- -------------
Income tax benefit 6,346 -- --
Cumulative effect of accounting change -- -- (3,841 )
------------- -------------- -------------
Net income $ 14,878 $ 12,567 $ 402
============= ============== =============
Management expects continued demand for Investment Property Sales Program
properties but continues to study other sales channels to market net lease
assets. The success of the Investment Property Sales business is dependent on
successfully originating new triple-net leases. For the years ended December 31,
2003, 2002 and 2001, CNL-Capital originated $137 million, $204 million and $182
million in net leases respectively. During 2002, originations included a
portfolio of $117 million in properties. CNL-Capital acquired this portfolio in
September 2002 by purchasing all of the limited and general partnership
interests of CNL Net Lease Investors, L.P., an affiliate of the Company's
Chairman of the Board and Vice Chairman of the Board, that until the
acquisition, was a client of CNL-Investment's property management group.
Management had contemplated stronger demand for its core triple-net lease
financing in 2003 and attributes the slow-down to two competitive factors:
o A number of identified leases have been lost to competitors offering
mortgage debt financing. With the low prevailing interest rates, large
national and regional banks have offered inexpensive mortgage financing
that many restaurant operators find more attractive than leases.
CNL-Capital does not currently originate debt financing due to the
volatility and high cost of capital currently associated with the
securitization market. CNL-Capital instead earns a fee for the referral of
such opportunities to the Bank, its financial institution partner,
pursuant to the terms of that alliance. While debt financing represents a
threat to the net lease finance product and, as a result, the success of
the Investment Property Sales program, management believes that a
securitized debt product is not currently in the best interest of
CNL-Capital. Management continues to monitor the potential reemergence of
a mortgage loan product, but does not expect this market to be viable in
the near term.
o CNL-Capital has lost a few transactions as new competitors have emerged
with a net lease program styled after CNL-Capital's Investment Property
Sales program. Competitors have met mixed success at offering this
product, and management believes it can recapture this piece of the market
through differentiating its Investment Property Sales program as a highly
efficient, turnkey program that brings value to our restaurant clients.
Management has responded to this slowdown by adjusting net lease rates,
identifying larger transactions like the September 2002 portfolio acquisition of
$117 million in properties and by identifying new areas to reduce costs. These
originations provide inventory necessary to execute the Investment Property
Sales Program and CNL-Capital typically profits from the leases while holding
them. At December 31, 2003, CNL-Capital is involved in several opportunities for
net lease originations with $82 million approved for funding and accepted by the
client, and an additional $30 million approved with client acceptance pending.
CNL-Capital's warehouse facilities provide advances for up to 97 percent of the
real estate purchase value. The Company is reinvesting its operating profits to
fund the amounts not advanced by the mortgage warehouse facilities.
Indebtedness.
During 2003, CNL-Capital used the "net spread" earned to pay operating expenses
and used borrowings on its warehouse facilities to fund new real estate
originations. CNL-Capital has continued to reduce its warehouse credit capacity
to align triple-net lease financing opportunities to its financing capacity
requirements and to reduce its overall financing costs. The Company reduced its
warehouse credit capacity from $385 million at December 31, 2002 to $260 million
at December 31, 2003 thereby realizing economies from the reduced capacity.
CNL-Capital may be subject to margin calls on its warehouse credit facilities.
The Bank and the other lenders monitor delinquency assumptions and may require
one or more margin calls to reduce the level of warehouse financing. During the
years ended December 31, 2003, 2002 and 2001, CNL-Capital made $10.1 million,
$16.8 million and $21.3 million in margin calls.
CNL-Capital has the following borrowing sources at December 31, 2003, with the
stated total capacity and interest rate:
In thousands
Amount used Capacity Maturity Interest rate (4)
----------------- ------------- --------------- -------------------
Note payable (medium term financing) (1) $ 181,955 $ 181,955 Jun 2007 2.53%
Mortgage warehouse facilities (1)(2) 93,513 260,000 Annual 2.53%
Subordinated note payable 43,750 43,750 June 2007 8.50%
Series 2001-4 bonds payable (3) 38,921 38,921 2009 - 2013 8.90%
----------------- -------------
$ 358,139 $ 524,626
================= =============
(1) Average rate excludes the impact of hedge transactions that bring the total
average rate to 6.13 percent on the medium term financing and 3.41 percent
on the warehouse facilities.
(2) In December 2003, CNL-Capital lowered the borrowing capacity on one of its
mortgage warehouse facilities from $260 million to $160 million because it
did not require the full capacity and extended the maturity date on this
facility to March 2004 pending further negotiations with the Bank. In March
2004, CNL-Capital renewed this facility through March 2005. The second
mortgage warehouse facility of $100 million matures in June 2004.
(3) Includes $4,983 in bonds held by CNL-Investments eliminated upon
consolidation in Company financial statements.
(4) Excludes debt issuance and other related costs.
Note Payable. In June 2002, in order to repay warehouse financing, CNL-Capital
entered into a five-year term $207 million financing collateralized with $225
million in mortgage loans re-designated to reflect the Company's intention to
hold them to maturity. The transaction provides CNL-Capital earnings on the
excess of interest income over interest expense. This five-year term financing
carries a variable interest rate tied to the weighted average rate of commercial
paper plus 1.25 percent with a portion of such interest fixed through the
initiation of a hedge transaction.
Mortgage Warehouse Facilities. CNL-Capital management maintains regular contact
with its mortgage warehouse facility lenders and believes that the relatively
low-cost, high-advance rate financing they provide has been integral to
CNL-Capital's success. As is typical of revolving debt facilities, these
facilities carry a 364-day maturity and accordingly CNL-Capital is vulnerable to
any changes in the terms of these facilities. The warehouse facilities currently
advance an average of 92.2 percent of the original real estate value.
Company warehouse borrowings were initially designed to provide interim
financing until periodic securitizations could occur. In forming the alliance
with the Bank in 2000, the Bank provided a warehouse credit facility (the
"Warehouse Credit Facility") with an initial capacity of $500 million. The
instability of the securitization markets led to renegotiated terms of the
relationship with the Bank in October 2001, including the need to remove certain
loans held as collateral on the Warehouse Credit Facility and the requirement
that CNL-Investments guarantee a portion of the repayments. As part of the
renegotiations, the Bank agreed to finance the remaining loans held as
collateral on the Warehouse Credit Facility until December 2003.
In December 2003, CNL-Capital removed the remaining loans on the Warehouse
Credit Facility by selling them to CNL-Investments, the real estate segment of
the Company. CNL-Investments combined these loans with loans it previously owned
and issued $24.9 million of notes collateralized by approximately $46.6 million
of mortgage loans. The Company re-designated the loans previously held in the
Warehouse Credit Facility to reflect the Company's intention to hold them to
maturity and terminated the swap hedging these loans. This financing carries a
variable interest rate of LIBOR plus 4.50 percent. This transaction enabled
CNL-Capital to repay the warehouse financing and eliminated a $2 million
guaranty previously provided by CNL-Investments on the mortgage loans. The
transaction also provides the Company ongoing earnings on the excess of interest
income over interest expense under the refinancing.
In mid December 2003, CNL-Capital renewed the December 2003 maturity date on the
Warehouse Credit Facility through March 2004, pending further negotiations with
the Bank. As part of the renewal, CNL-Capital reduced the $260 million capacity
to $160 million and agreed to a 15 basis point unused fee on this facility, and
the Bank agreed to finance the remaining loans until March 2004. In March 2004,
CNL-Capital renewed this facility through March 2005. The second mortgage
warehouse facility of $100 million with another lender matures in June 2004.
Management has and may continue to decrease the mortgage warehouse facility
capacity from its present level in order to economize on its cost, provided that
there continue to be costs associated with excess capacity. At December 31,
2003, CNL-Capital had approximately $94 million in capital supporting its loan
and lease portfolio.
Subordinated Note Payable. In forming the alliance with the Bank during 2000,
the Bank provided CNL-Capital with a $43.75 million subordinated debt facility
(the "Subordinated Debt Facility"). In late December 2003, CNL-Capital removed
the remaining loans on the Warehouse Credit Facility by selling them to
CNL-Investments. In January 2004, CNL-Capital used these proceeds along with
additional funds, to repay the Bank $10 million on the Subordinated Debt
Facility. As part of the repayment, CNL-Capital and the Bank modified the terms
of the Subordinated Debt Facility. CNL-Capital extended the maturity date on the
Subordinated Debt Facility from June 2007 to December 2008 and reduced the
interest rate from 8.50 percent to 7.00 percent per annum. Under the new terms,
CNL-Capital will make a mandatory repayment of $11.875 million on this facility
by December 31, 2004. CNL-Capital will then make quarterly payments of principal
and interest to the Bank using a five-year amortization schedule beginning March
2005 with a balloon payment due on December 31, 2008. As part of the
negotiations, the Bank eliminated a previous restriction on CNL-Capital to pay
down the Subordinated Debt Facility for every dollar distributed by CNL-Capital
to the Company. In addition, the Company agreed to provide a guaranty on the
entire amount outstanding under the Subordinated Debt Facility as part of the
renegotiations. Prior to the renegotiations, only CNL-Capital had provided a
guaranty on the Subordinated Debt Facility.
Bonds Payable. In May 2001, CNL-Capital issued bonds collateralized by a pool of
mortgages (the "Series 2001-4 Bonds). The proceeds of $42.1 million were applied
to pay down short-term debt. At December 31, 2003, 60 mortgage loans served as
collateral for the bonds which had a carrying value of approximately $45.8
million as of December 31, 2003. The offering resulted in an initial weighted
average life of approximately 7.8 years and a rate of interest of approximately
8.90 percent per annum. The bond indenture requires monthly principal and
interest payments received from borrowers to be applied to the bonds. The bond
indenture also provides for an optional redemption of the bonds at their
remaining principal balance when the remaining amounts due under the loans that
serve as collateral for the bonds are less than 10 percent of the aggregate
amounts due under the loans at the time of issuance.
Some sources of debt financing require that CNL-Capital maintain certain
standards of financial performance such as a fixed-charge coverage ratio, a
tangible net worth requirement and certain levels of available cash. Any failure
to comply with the terms of these covenants would constitute a default and may
create an immediate need to find alternate borrowing sources.
Liquidity Risks.
Tenants or borrowers that are experiencing financial difficulties could impact
CNL-Capital's ability to generate adequate amounts of cash to meet its needs. In
the event the financial difficulties persist, CNL-Capital's collection of
interest and principal payments could be interrupted. At present, most of these
borrowers continue to pay principal and interest substantially in accordance
with loan terms. However, CNL-Capital continues to monitor each borrower's
situation carefully and will take appropriate action to place CNL-Capital in a
position to maximize the value of its investment.
Liquidity risk also exists from the possibility of borrower delinquencies on the
mortgage loans held for sale or held to maturity. In the event of a borrower
delinquency, the Company could suffer not only shortfalls on scheduled payments
but also margin calls by the lenders that provide the warehouse facilities and
the five-year note, subjecting the Company to unanticipated cash outflows. The
Company is obligated under the provisions of its mortgage warehouse facilities
and its five-year note to pay down certain debt associated with borrower
delinquencies or defaults within a required time frame. Most properties acquired
on the mortgage warehouse facilities are required to be sold within a certain
time frame. Any delinquency, default or delay in the resale of properties
financed through one of these facilities would generally result in an immediate
pay-down of the related debt and may restrict the Company's ability to find
alternative financing for these specific assets. The Company's debt, excluding
bonds payable, generally provides for cross-default triggers. A default of a
mortgage warehouse facility, for example from a failure to make a margin call,
could result in other Company borrowings becoming immediately due and payable.
For those borrowers who have experienced financial difficulties or who have
defaulted under their loans, management has estimated the loss or impairment on
the related investments and included such charge in earnings through December
31, 2003. However, management acknowledges that the estimation process is
challenging due to the number of possible outcomes that may result from a
default situation. While management believes it has recorded appropriate
reserves at December 31, 2003 based on an assessment of specific borrowers'
financial difficulties, facts may develop in future periods that may suggest the
need for larger reserve charges.
As of March 12, 2004, CNL-Capital is under negotiations to provide temporary
debt service relief to a borrower/tenant who is experiencing liquidity
difficulties. CNL-Capital anticipates lowering the interest rate over the next
twelve months on eight mortgage loans to provide the necessary debt service
relief to the borrower/tenant. Repayment terms would go back to the original
terms starting with the thirteenth month. This temporary debt service relief
will have a $1.5 million negative impact to cash flows of CNL-Capital over the
next twelve months. Management does not believe that this temporary decline in
cash flows will have a material adverse effect on the overall liquidity of the
Company.
Additional liquidity risks include the possible occurrence of economic events
that could have a negative impact on the franchise securitization market and
affect the quality or perception of the loans or leases underlying CNL-Capital's
previous securitization transactions. The Company conducted its previous
securitizations using bankruptcy remote entities. These entities exist
independent from the Company and their assets are not available to satisfy the
claims of creditors of the Company, any subsidiary or its affiliates. To date,
the ratings on the loans underlying the securities issued in these transactions
have been affirmed unlike the ratings of many competitors' loan pools that have
been downgraded. Upon the occurrence of a significant amount of delinquencies
and/or defaults, one or more of the three rating agencies may choose to place a
specific transaction on ratings watch or even downgrade one or more classes of
securities to a lower rating. Should the loans underlying the securities
default, and the securities undergo a negative ratings action, CNL-Capital could
experience material adverse consequences impacting its ability to continue
earning income as servicer, and its ability to engage in future profitable
securitization transactions. CNL-Capital holds an interest in the following
securitizations (referred to as the 1998-1 and 1999-1 residual interests), the
assets and liabilities of which are not consolidated in the Company financial
statements:
December 31, 2003
-----------------------------------------
(In Thousands)
Mortgage loans in Bonds outstanding
pool at par at face value (1)
-----------------------------------------
Loans and debt supporting 1998-1 Certificates issued by CNL
Funding 1998-1, LP $ 192,801 $ 191,144
Loans and debt supporting 1999-1 Certificates issued by CNL
Funding 1999-1, LP $ 229,044 $ 229,044
-----------------------------------------
$ 421,845 $ 420,188
=========================================
(1) Certain bonds in both the 1998-1 and 1999-1 pools are owned by
CNL-Investments; the aggregate amount of these bonds of $27,563 appears as
investments in the consolidated financial statements of the Company.
Management believes that the Investment Property Sales Program will continue to
be successful, but not without risks. Management believes that the recent tax
law changes decreasing, but not eliminating capital gains taxes, are not
significant enough to dissuade demand created by property buyers seeking
continued tax deferrals. However any sweeping new proposal to eliminate the
capital gains tax could negatively impact demand. An increase in general levels
of interest rates could result in buyers requiring a higher yield. Neither the
rate of return on leased properties nor the rate of return required by a buyer
correlate directly with prevailing interest rates. Net lease properties acquired
in anticipation of sales through the Investment Property Sales program can
typically be leased to tenants at a rate that exceeds the rate a buyer is
willing to accept. CNL-Capital is at risk, however, that any interest rate
increases causing buyers to demand higher yields may not be matched with higher
yields from tenants. This risk could cause CNL-Capital to experience lower
average gains or even losses on the future sales of Investment Property Sales
properties.
o Real Estate Segment (CNL-Investments)
CNL-Investments' demand for funds are predominantly interest expense, operating
expenses, reinvestment of disposition proceeds and distributions to the Company.
CNL-Investments' cash flows primarily consist of rental income from tenants on
restaurant properties owned, interest income on mortgage loans, dispositions of
properties and income from holding interests in prior loan securitizations
including those originated by predecessor entities of CNL-Capital.
CNL-Investments had cash and cash equivalents of $4.4 million, $5.3 million and
$10.2 million at December 31, 2003, 2002 and 2001, respectively.
CNL-Investments' management believes the availability on its line of credit will
permit it to meet its short-term liquidity objectives. Long-term liquidity
requirements will be met through a combination of selectively disposing assets
and reinvesting the proceeds in high-yielding investments and cash from
operating activities.
Indebtedness
From time to time, CNL-Investments will borrow amounts available under its
Revolver to fund operating expenses. Borrowing resources at December 31, 2003
for CNL-Investments include:
(In thousands)
Amount Used Capacity Maturity Interest Rate (1)
-------------- -------------- --------------- ------------------
Revolver $ 2,000 $ 30,000 Oct 2004 3.62%
Note payable (2) 605 5,000 2005 4.40%
Series 2000-A bonds payable 252,477 252,477 2009-2017 7.94%
Series 2001 bonds payable 118,690 118,690 Oct 2006 1.70%
Series 2003 bonds payable 24,906 24,906 2005-2010 5.67%
-------------- --------------
$ 398,678 $ 431,073
============== ==============
(1) Excludes debt issuance and other related costs.
(2) CNL-Investments did not renew the remaining $4.4 million available under the
note payable when it matured in January 2004.
CNL-Investments provides a guaranty of up to ten percent of CNL-Capital's five
year term financing. CNL Investments also provides a 100 percent guaranty on
CNL-Capital's Subordinated Debt Facility.
CNL-Investments' short-term debt consists of a $30 million revolving line of
credit (the "Revolver") entered into in October 2001 with the Bank.
CNL-Investments utilizes the Revolver from time to time to manage the timing of
inflows and outflows of cash from operating activities. The Revolver matured in
October 2003, and at that time CNL-Investments exercised its one-year renewal
option.
In January 2003, a subsidiary of CNL-Investments, entered into a Master Credit
Facility Agreement ("the Note Payable") with CNL Bank, an affiliate. The Note
Payable had a total borrowing capacity of $5 million and was established for the
purpose of financing the acquisition and redevelopment of real estate
properties. At December 31, 2003, the Company had $0.6 million outstanding
relating to this Note Payable. Amounts outstanding are collateralized by
mortgages on certain real property, bear interest at LIBOR plus 325 basis points
per annum and require monthly interest only payments until maturity in 2005. The
unused portion of $4.4 million on the credit facility expired in January 2004
and management of CNL-Investment elected not to extend the available capacity.
CNL-Investments also has medium-term note and long-term bond financing, referred
to collectively as bonds payable, that was used to restructure the Company's
indebtedness. Rental income received on 379 properties and interest income
received on 34 mortgage loans and four equipment leases pledged as collateral on
medium and long-term financing is used to make scheduled reductions in bond
principal and interest.
Some sources of debt financing require that CNL-Investments maintain certain
standards of financial performance such as a fixed-charge coverage ratio, and
impose a limitation on the distributions from CNL-Investments to the Company
tied to funds from operations. Any failure to comply with the terms of these
covenants could constitute a default and may create an immediate need to find
alternate borrowing sources.
Liquidity Risks
Liquidity risks within the real estate business include the potential that a
tenant's financial condition could deteriorate, rendering it unable to make
lease payments. Generally, CNL-Investments uses a triple-net lease to lease its
properties to its tenants. The triple-net lease is a long-term lease that
requires the tenant to pay expenses on the property. The lease somewhat
insulates CNL-Investments from significant cash outflows for maintenance,
repair, real estate taxes or insurance. However, if the tenant experiences
financial problems, rental payments could be interrupted and in the event of
tenant bankruptcy, CNL-Investments may be required to fund certain expenses in
order to retain control or take possession of the property and its operations.
This could expose CNL-Investments to successor liabilities and further affect
liquidity.
Management is aware of multi-unit tenants that are also experiencing financial
difficulties. In the event the financial difficulties continue, CNL-Investments'
collection of rental payments could be interrupted. At present, most of these
tenants continue to pay rent substantially in accordance with lease terms.
However, CNL-Investments continues to monitor each tenant's situation carefully
and will take appropriate action to place CNL-Investments in a position to
maximize the value of its investment. For those tenants who have experienced
financial difficulties or have defaulted under their leases, management has
estimated the loss or impairment on the related properties and included such
charge in earnings through December 31, 2003. However, management acknowledges
that the estimation process is challenging due to the number of possible
outcomes that may result from a default situation. While management believes it
has recorded an appropriate impairment charge at December 31, 2003, based on its
assessment of the tenants' financial difficulties and its knowledge of the
properties, facts may develop in future periods that may suggest the need for a
larger impairment charge.
In October 2003, a tenant of CNL-Investments, Chevy's Holding, Inc. and numerous
operating subsidiaries, ("Chevy's") filed for voluntary bankruptcy under the
provisions of Chapter 11. Chevy's operates the Chevy's, Rio Bravo and Fuzio
concepts. CNL-Investment owns 22 Chevy's units, with a total investment of $56.6
million. As of December 31, 2003, Chevy's has rejected 16 of the 22 leases.
Management has recorded impairments relating to some of these sites and expects
these rejected sites to be re-leased or sold. Chevy's has paid rent on the six
remaining sites since filing bankruptcy in October 2003.
In February 2004, The Ground Round, Inc. ("Ground Round"), a tenant of
CNL-Investments, filed for voluntary bankruptcy under the provisions of Chapter
11. Ground Round operates the Ground Round and Tin Alley Grills concepts.
CNL-Investments owns 12 units, with a total investment of $12.9 million. Ground
Round had closed eight of these sites as of the bankruptcy filing.
CNL-Investments did not collect the February rents but anticipates collecting
the March rents in accordance with bankruptcy provisions. As of March 12, 2004,
Ground Round had neither affirmed nor rejected the 12 leases and CNL-Investments
had determined that no impairment provisions were deemed necessary. Management
will continue to monitor developments surrounding the bankruptcy, including the
potential rejection of some or all of these leases.
As of March 12, 2004, CNL-Investments is under negotiations to provide temporary
rent forbearance to a tenant who is experiencing liquidity difficulties.
CNL-Investments anticipates forbearing the collection of partial rents over the
next twelve months on ten sites to provide the necessary rent relief. Under the
proposed negotiations, the tenant will pay the amounts deferred under the
forbearance agreement over five years. This temporary forbearance on the rents
will have a $1.8 million negative impact to cash flows of CNL-Investments over
the next twelve months but will be collected between months 13 through 72.
CNL-Investments has experienced tenant bankruptcies and may commit further
resources in seeking resolution to these properties including funding restaurant
businesses directly or on behalf of successor tenants. For example, where the
value of the leased real estate is linked to the financial performance of the
tenant, CNL-Investments may allocate capital to invest in turnaround
opportunities. As of December 31, 2003 the Company owned, through an investment
of $1.8 million, the business restaurant operations of twelve Denny's
restaurants that represented a strategic move to preserve the Company's real
estate investment when the franchisee of the restaurants experienced severe
financial difficulties. CNL-Investment has since successfully disposed of the
real estate and plans to sell its investment in the business by the end of 2004.
This activity is not a core operation or competency of the Company and is only
undertaken in situations where management believes the course of action best
preserves the Company's position in the real estate or loan investment.
Certain net lease properties are pledged as collateral for the Series 2000-A and
Series 2001 triple-net lease mortgage bonds payable. In the event of a tenant
default relating to pledged properties, the Company may elect to contribute
additional properties or substitute properties into these securitized pools from
properties it owns not otherwise pledged as collateral. These pools contain
properties potentially impacted by the recent bankruptcy filing of Chevy's and
the financial difficulties of other restaurant operators. Management is
evaluating the impact to the pools, including any need to identify substitute
properties. In the event that CNL-Investments has no suitable substitute
property, the adverse performance of the pool might inhibit the Company's future
capital raising efforts, including the ability to refinance the Series 2001
bonds maturing in 2006. The Series 2000-A and Series 2001 financings include
certain triggers relating to delinquency percentages or debt service coverage.
If certain ratios are exceeded or not maintained, then principal pay down on the
outstanding bonds is accelerated.
Off-Balance Sheet Transactions
The Company is not dependent on the use of any off-balance sheet financing
arrangements for liquidity. The Company holds a residual interest in
approximately $422 million in loans transferred to unconsolidated trusts that
serve as collateral for the long-term bonds discussed in "Liquidity and Capital
Resources - Specialty Finance Segment (CNL-Capital). Recent accounting
pronouncements have not required the consolidation of these trusts.
Interest Rate Risk
Floating interest rates on variable rate debt expose the Company to interest
rate risk. The Company invests in assets with a fixed return by sometimes
financing a portion of them with variable rate debt. As of December 31, 2003,
the Company's variable rate debt includes the following:
o $2 million on its Revolver;
o $94 million on its mortgage warehouse facilities;
o $182 million on the June 2002 five-year financing;
o $119 million outstanding on the Series 2001 bonds; and
o $25 million outstanding on the Series 2003 bonds.
Generally, the Company uses derivative financial instruments (primarily interest
rate swap contracts) to hedge against fluctuations in interest rates from the
time it originates fixed-rate mortgage loans and leases until the time they are
sold. The Company generally terminates certain of these contracts upon the sale
of the loans or properties, and both the gain or loss on the sale of the loans
and the additional gain or loss on the termination of the interest rate swap
contracts is recognized in the consolidated statement of operations.
Additionally, the Company uses interest rate swaps and caps to hedge against
fluctuations in variable cash flows on a portion of its floating rate debt.
Under interest rate swaps, the Company agrees with other parties to exchange, at
specified intervals, the difference between fixed-rate and floating-rate
interest amounts calculated by reference to an agreed upon notional principal
amount. Under a cap purchase, a third party agrees to assume any interest costs
above a stated rate. Changes in the values of the Company's current interest
rate swaps and caps are reflected in other comprehensive income.
The Company also invests in financial instruments that are subject to various
forms of market risk such as interest rate fluctuations, credit risk and
prepayment risk. The value of its mortgage loans held for sale and its
investments change as a result of fluctuating interest rates, credit risk,
market sentiment and other external forces, which could materially adversely
affect liquidity and capital resources.
The Company has entered into the following cash flow hedges and interest rate
caps that are outstanding as of December 31, 2003. The net value associated with
these hedges is reflected on the Company's Consolidated Balance Sheets:
Estimated
Value
(Liability)
(in
thousands)
Notional Cap Strike at
Amount (In Price or Trade Maturity December
Type of Hedge Thousands) Swap Rate Date Date 31, 2003
----------------------------- -------------- ------------- ---------- ---------- -----------
Pay Fixed Rate - Receive
Floating Rate Swap $ 144,418 6.590% 6/14/02 3/15/22 $ (10,772 )
Interest Rate Cap 132,000 4.500% 9/28/01 12/25/06 730
Interest Rate Cap 30,000 3.500% 12/17/03 2/1/11 953
Management estimates that a one-percentage point increase in short-term interest
rates for the year ended December 31, 2003 would have resulted in additional
interest costs of approximately $2.7 million. This sensitivity analysis contains
certain simplifying assumptions (for example, it does not consider the impact of
changes in prepayment risk or credit spread risk). Therefore, although it gives
an indication of the Company's exposure to interest rate change, it is not
intended to predict future results and the Company's actual results will likely
vary.
Management believes inflation has not significantly affected the Company's
earnings because the inflation rate has remained low. During inflationary
periods, which generally are accompanied by rising interest rates, the Company's
ability to grow may be adversely affected because the yield on new investments
may increase at a slower rate than new borrowing costs. However, sustained low
inflation could lead to net lease pricing pressure as tenants request decreasing
rates for longer maturities.
Critical Accounting Policies
The Company accounts for many asset categories that require management to
exercise extensive judgment and make estimates. Listed below are the more
significant accounting policies that require management judgment and estimates
or are otherwise significant to the results of operations:
o The Company records the acquisition of land, buildings and equipment at
cost, including acquisition, closing and construction period interest
costs. Land and buildings are leased to restaurant operators generally on
a triple-net basis, which means that the tenant is responsible for all
operating expenses relating to the property, including property taxes,
insurance, maintenance and repairs. The property and secured equipment
leases held for investment are accounted for using either the direct
financing or the operating method unless the Company has classified these
properties pursuant to their intent to sell. Management estimates residual
values and collectable rents in determining whether a lease is accounted
for as either direct financing or operating.
o The Company's real estate accounting differs for assets held by its two
operating segments based upon management's intention with respect to such
asset's disposition.
o Real estate held within the real estate segment is generally acquired
with an intention to hold long-term. It is depreciated over its
estimated useful life and rent is recorded giving consideration to
contractual rent increases over the life of the lease. Some real estate
held by this segment may be designated so as to reflect management's
intention to dispose of the asset. In such case all operating income
and expense, including depreciation and accrued rent associated with
future contractual increases, is reflected as a component of
discontinued operations for all periods presented, even for periods
prior to management having stated its intention to sell.
o Real estate held within the specialty finance segment is generally
acquired with an intention to sell within one year. It is therefore not
depreciated, and future contractual rent increases do not impact
earnings. Because of a transition rule, the specialty finance
properties are accounted for differently depending on acquisition date.
All such properties acquired after December 31, 2001 are treated as
discontinued operations, and operating income and expense is reflected
as a component of discontinued operations.
o "Mortgage loans held for sale" were loans originated that the Company
intended to sell or securitize. They were recorded at fair market value
which was estimated using quoted prices, the present value of the expected
cash flows and the estimated impact of any defaults, and may have been
recorded at an amount greater than cost. In December 2003, the Company
re-designated the majority of these loans to reflect the Company's
intention to hold them to maturity and terminated the related derivative
instrument hedging these loans.
o "Mortgage notes receivable" differ from "mortgage loans held for sale"
primarily because of management's intention to hold the mortgage to its
maturity. These financial assets are recorded at the lower of cost or
market. Certain assets have been reclassified from "mortgage loans held
for sale" into the "mortgage notes receivable" category when, in lieu of
selling the mortgages, the Company elects to refinance such mortgages
using longer-term debt. In the case of such reclassified mortgages, the
Company records these at the value on the refinance date. The value at
such date may differ from the par value of the loan with any such
difference being amortized to earnings over the remaining life of the
mortgage loans as a yield adjustment.
o Certain loans originated by the Company were sold to independent trusts
that, in turn, issued securities to investors backed by these assets. The
Company retains the servicing rights and participates in certain cash
flows from the trusts. The present value of expected excess of net cash
flows, after payment of principal and interest to bond or other
certificate holders, over the estimated cost of servicing is recorded at
the time of sale as a retained interest. Retained interests in securitized
assets are included in other investments. Accounting for the retained
interests requires that the Company estimate values using market trends
and historical experience, expected prepayments and defaults. This
information is considered, along with prevailing discount rates and the
terms of the bonds and certificates, to arrive at an initial value and to
periodically review the value for gains or losses. Permanent impairments,
representing the excess of carrying value over estimated current fair
value, are recorded as an expense.
o Management reviews, no less than annually, its long-lived assets for
impairment or potential loss as events or circumstances indicate that the
carrying amount of the assets may not be recoverable. Management compares
the estimated future undiscounted cash flows, including the residual value
of the property or collateral, with the carrying cost of the individual
asset. If impairment is indicated, the assets are adjusted to the
estimated fair value. In addition, management evaluates the carrying value
of goodwill on a periodic basis to determine if an impairment is deemed
necessary.
o The Company has also entered into certain derivative contracts in order to
hedge its exposure to fluctuations in interest rates on variable rate debt
qualifying for treatment as cash flow hedges. As long as this certain
criteria for hedge accounting are met the changes in fair value of these
contracts is reflected in other comprehensive income (loss) and as a
component of stockholders' equity. If the requirements are not met,
changes in the fair value of these contracts are reflected in earnings.
o Valuation of deferred tax assets. The Company accounts for federal and
state income taxes with respect to its TRS subsidiaries using the asset
and liability method. Deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between the
consolidated financial statements carrying amounts of existing assets and
liabilities and respective tax bases and operating losses and tax-credit
carry forwards. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled.
The effect on deferred tax assets and liabilities of a change in tax rates
is recognized in income in the period that includes the enactment date. In
the event that these assumptions change the deferred taxes may change.
Valuation allowances are established when necessary to reduce deferred tax
assets to the amount expected to be realized. The valuation allowance is
based on the Company's estimates of future taxable income and ongoing
prudent and feasible tax planning strategies. Should the Company determine
it would not be likely to realize in full the deferred tax asset in the
future, the Company would record a valuation allowance to reduce the
deferred tax asset to an amount that is more likely than not to be
realized. An adjustment to the deferred tax asset would decrease income in
the period the determination was made.
In estimating future taxable income, the Company must estimate future
income using historical data, the expected growth rate of revenues and
expenses, the effect of capital expenditures, and future market and
economic conditions. Variability of these and other assumptions could
result in an inability to recover the carrying value of the deferred tax
assets.
New Accounting Pronouncements.
The implementation of certain accounting pronouncements have not had a material
impact on the Company's results of operations. In January 2003, the Financial
Accounting Standards Board (the "FASB") issued FAS Interpretation No. 46 ("FIN
46"), "Consolidation of Variable Interest Entities." FIN 46 requires that a
variable interest entity be consolidated by a company if that company is subject
to a majority risk of loss from the variable interest entity's activities or
entitled to receive a majority of the entity's residual returns or both. Prior
to FIN 46, a company generally included another entity in its consolidated
financial statements only if it controlled the entity through voting interests.
The consolidation requirements of FIN 46 apply immediately to variable interest
entities created after January 31, 2003, and to older entities no later than the
first fiscal year or interim period ending after December 15, 2003. Management
adopted this standard in 2003 which resulted in the consolidation of two of the
Company's previously unconsolidated subsidiaries. Adoption of this standard did
not change the Company's accounting for the Company's bankruptcy remote
securitization entities. The Company restated all prior periods presented to
conform with the 2003 presentation. The consolidation did not significantly
impact the Company's financial position or results of operations.
In December 2003, the FASB issued FIN 46R, "Consolidation of Variable Interest
Entities". This Interpretation requires existing unconsolidated variable
interest entities to be consolidated by their primary beneficiaries. The primary
beneficiary of a variable interest entity is the party that absorbs a majority
of the entity's expected losses, receives a majority of its expected residual
returns, or both, as a result of holding variable interests, which are the
ownership, contractual, or other pecuniary interests in an entity that change
with changes in the fair value of the entity's net assets excluding variable
interests. Prior to FIN 46R, a company generally included another entity in its
consolidated financial statements only if it controlled the entity through
voting interests. Application of FIN 46R is required in financial statements of
public entities that have interests in variable interest entities for periods
ending after March 15, 2004. The Company does not expect that the application of
this Interpretation will have a significant effect on its financial position or
results of operations.
In May 2003, the FASB issued Statement of Financial Accounting Standards No.
150, "Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity" ("FAS 150"). FAS 150 establishes standards for how an
issuer classifies and measures certain financial instruments with
characteristics of both liabilities and equity. FAS 150 will require issuers to
classify certain financial instruments as liabilities (or assets in some
circumstances) that previously were classified as equity. Some of the examples
of financial instruments covered by FAS 150 include shares that are mandatorily
redeemable, and other financial instruments that embody an obligation to
repurchase outstanding shares or a conditional obligation that requires
settlement by issuing a variable number of the entity's shares. FAS 150 also
requires that minority interests for majority owned finite lived entities be
classified as a liability and recorded at fair market value. FAS 150 initially
applied immediately to all financial instruments entered into or modified after
May 31, 2003, and otherwise was effective at the beginning of the first interim
period beginning after June 15, 2003. Effective October 29, 2003, the FAS
deferred implementation of FAS 150, as it applies to minority interests of
finite lived Partnerships. The deferral of these provisions is expected to
remain in effect while these interests are addressed in either Phase II of the
FASB's Liabilities and Equity project or Phase II of the FASB's Business
Combinations Project; therefore, no specific timing for the implementation of
these provisions has been stated. The implementation of the currently effective
aspects of FAS 150 did not have a material impact on the Company's results of
operations.
Results from Operations
The Company generated net income of $42.4 million and $35.6 million and
generated a loss of $24.5 million for the years ended December 31, 2003, 2002
and 2001, respectively. The 19 percent increase in net income in 2003 as
compared to 2002 was the result of a combination of factors including lower
general, operating and administrative expense and decreased losses in the
mortgage loans held for sale. The Company undertook an initiative to reduce
general operating expenses by transferring certain functions out of the Company
as described below. In addition, property expenses were lower in 2003 as
compared to 2002 due to resolutions of 2002 bankruptcies and selling vacant
properties that incurred property expenses during 2002. The Company also
benefited from a decrease in interest expense resulting from low interest rates
in the economy as well as having lower amounts outstanding under its credit
facilities than in 2002. The decrease in amounts outstanding under its credit
facilities was the result of paying down principal in accordance with loan
repayment terms, selling properties financed with debt under the Investment
Sales Program and not having to borrow as much due to low originations volume.
The loss during 2001 was primarily the result of the Company recording
provisions for loan losses and impairment provisions relating to several tenant
and borrowers who experienced financial difficulties or filed for bankruptcy.
Net earnings in 2003 and 2002 also benefited from creating the Investment
Property Sales Program that only had a partial year benefit in 2001.
The following discussion of results from operations is by segment. All segment
results are before eliminating adjustments and results of the holding company.
As a result, the sum of amounts applicable to each segment will not, in some
cases, equal the Company total amount reflected in the condensed consolidated
statement of operations. Company earnings by segment reflect restatements for
prior periods resulting from consolidating previously unconsolidated entities in
accordance with the implementation of new accounting pronouncements. Company
earnings are as follows for each of the years ended December 31:
(In Millions)
% of % of % of
Net income/(loss) by segment 2003 Total 2002 Total 2001 Total
---------- -------- ----------- ---------- --------- -------
Real estate segment $ 27.7 65% $ 23.2 65% $ (22.8 ) (93% )
Specialty finance segment 14.9 35 12.6 35 0.4 2
Other holding company results,
results for periods prior to
segment reporting and
consolidating eliminations (0.2) -- (0.2 ) -- (2.1 ) (9 )
---------- -------- ----------- ---------- --------- -------
Net income/(loss) $ 42.4 100% $ 35.6 100% $ (24.5 ) (100% )
========== ======== =========== ========== ========= =======
o The real estate segment posted a 19 percent increase in earnings in 2003.
The improved operating performance was due to incurring lower general,
operating and administrative expenses, interest expense and property
expenses in 2003 as compared to 2002. The real estate segment posted
earnings in 2002 as compared to a loss in 2001 that resulted when $28.2
million in loan reserves and $26.9 million in real estate impairments were
recorded in 2001 in connection with certain borrower and tenant
delinquencies. Exclusive of these charges in each year, the improved
performance of the real estate segment during the comparative years
reflects the 2002 initiative to sell vacant and under-performing properties
and use the proceeds to reduce debt. The sales resulted in a net gain of
$3.3 million and generated sales proceeds that were applied to reduce the
business segment's overall debt by $44.7 million during 2002.
o The specialty finance segment reported an 18 percent increase in earnings
in 2003 as compared to 2002 due to a one time benefit from income taxes of
approximately $6.5 million. The benefit resulted from the reversal of the
valuation allowance on deferred tax assets, as further described below.
Absent this one time benefit, operating results would have decreased by 33
percent to $8.4 million in 2003, as compared to $12.6 million in 2002.
Despite a decrease in interest expense, overall net income was lowered by
an increase in provisions for loan losses and a decrease in the net spread
between the segment's rental and interest income and its interest expense.
The decrease in the spread was primarily due to a decrease in rental income
from lower originations volume and less inventory levels available to earn
this spread income pending the sale of the properties under the Investment
Property Sales Program. Operating results of $12.6 million were higher in
2002 as compared to operating results of $0.4 million in 2001 due to the
expansion of the Investment Property Sales Program which sold $288 million
of real estate properties during 2002 as compared to $128 million in 2001,
representing an increase of 125 percent. Gains from these sales were $24.6
during 2002 as compared to $10.1 during 2001, representing an increase of
144 percent.
Revenues
For the year ended December 31,
Total revenues by segment (in % of % of % of
millions) 2003 Total 2002 Total 2001 Total
-------- ------ -------- ------- -------- ------
Real estate segment $ 85.2 75% $ 88.6 26% $ 88.7 32%
Specialty finance segment* 32.3 28 250.8 75 190.1 69
Other holding company results,
results for periods prior to
segment reporting and
consolidating eliminations (3.2) (3 ) (3.2 ) (1 ) (4.4) (1 )
-------- ------ -------- ------- -------- ------
Total revenues* $ 114.3 100% $ 336.2 100% $ 274.4 100%
======== ====== ======== ======= ======== ======
* See discussion below for accounting treatment of sales of restaurant
properties as discontinued operations.
Revenues are discussed based on the individual segment results beginning with
the results of the real estate segment through CNL-Investments:
For the year ended December 31,
Real estate segment revenues by % of % of % of
line item (in millions) 2003 Total 2002 Total 2001 Total
-------- ------- --------- ------- ------- ------
Rental income from operating
leases and earned income from
direct financing leases $72.1 85% $ 72.1 81% $ 73.3 82%
Interest income from mortgage
equipment and other notes
receivable 4.2 5 4.2 5 4.3 5
Investment and interest income 4.5 5 4.8 5 5.1 6
Other income 4.4 5 7.5 9 6.0 7
-------- ------- --------- ------- ------- ------
Total segment revenues $ 85.2 100% $ 88.6 100% $ 88.7 100%
======== ======= ========= ======= ======= ======
The rental revenue from vacant and other properties sold was classified as a
component of discontinued operations for all periods presented and was not
included in the segment revenues above. The combined amount of rental income
from operating leases and earned income from direct financing leases from
continuing operations for 2003, 2002 and 2001 did not change significantly for
each of the years presented.
Other income in the real estate segment decreased during 2003 as compared to
2002 as a result of decreased billings of direct costs to third parties using
CNL-Investments for property management services. During 2003, the Company
transferred certain functions to CFG, an affiliate, thereby reducing general and
operating expenses, as well as reducing the billings of these expenses collected
from third parties. Other income was higher in 2002 as compared to each of 2003
and 2001 due to the fact that during 2002, the Company earned disposition fees
and recorded as income the settlement proceeds collected from one of its tenants
who filed for bankruptcy. No such amounts were recorded during 2003 or 2001.
The revenues of the specialty finance segment through CNL-Capital are more
variable than those of the real estate segment. The following table provides
additional information relating to the revenues of this segment:
For the year ended December 31,
Specialty finance segment
revenues by line item (in % of % of % of
millions) 2003 Total 2002 Total 2001 Total
-------- ------- --------- ------- ------- ------
Sale of real estate $ -- --% $ 209.5 84% $ 128.5 68%
Rental income from operating
leases and earned income from
direct financing leases -- -- 7.7 3 15.4 8
Interest income from mortgage
equipment and other notes
receivable 25.6 79 30.4 12 36.6 19
Investment and interest income 0.8 2 1.4 -- 1.5 1
Net decrease in value of mortgage
loans held for sale, net of
related hedge (1.9) (5 ) (5.4 ) (2 ) (5.1) (3 )
Gain on sale of mortgage loans -- -- 4.1 2
Other income 7.8 24 7.2 3 9.1 5
-------- ------- --------- ------- ------- ------
$ 32.3 100% $ 250.8 100% $ 190.1 100%
======== ======= ========= ======= ======= ======
The comparability of the specialty finance segment revenues is significantly
impacted by the method of accounting for its sales of real estate that are
recorded pursuant to discontinued operations guidance. This program was not
started until 2001. The following information presents the Investment Property
Sales Program sales:
Specialty finance segment Investment Property Sales For the year ended December 31,
Program sales (in millions) 2003 2002 2001
------------ ------------- -----------
Sale of real estate, as reported $ -- $ 209.5 $ 128.5
Cost of real estate sold, as reported -- (193.2) (118.4 )
Gain on disposal of discontinued operations, net as
reported 24.9 8.3 --
------------ ------------ -----------
Total gains from Investment Property Sales
Program sales $ 24.9 $ 24.6 $ 10.1
============ ============ ===========
CNL-Capital sold 147, 182 and 90 properties under the Investment Property Sales
Program in 2003, 2002 and 2001, respectively. Additional information on actual
proceeds, purchases and related gains is located in "Liquidity and Capital
Resources - Specialty Finance Segment (CNL-Capital) - Investment Property Sales
Program."
Other matters impacting the comparability of the various components of revenues
during the three years ended December 31, 2003, 2002 and 2001 include:
o Rental income from operating leases reflects a decrease because in 2002 and
2001, rental revenues associated with properties acquired after December
31, 2001 were recorded as a component of income from discontinued
operations while properties acquired prior to January 1, 2002 were recorded
in rental income. Beginning January 1, 2003, however, these revenues are
recorded in discontinued operations regardless of the date of acquisition.
All properties owned by this segment are held with the intent to be sold.
o Interest income from mortgage, equipment and other notes receivable
decreased 16 percent and 17 percent during 2003 and 2002, each as compared
to the previous year, as a result of normal principal repayments as well as
foreclosure actions, the modification of terms and other impacts of
delinquent loans between years. The Company has not originated new mortgage
loans since May of 2001, focusing instead on the opportunity to refer
potential borrowers to CNL-Capital's financial institution partner.
o Despite a hedging strategy designed to address market volatility in the
value of loans held for sale, the loan valuation increases associated with
decreases in interest rates for mortgage loans held for sale, net of
related hedge, were more than offset by estimated potential default losses
and valuation decreases (liability increases) in hedge contracts. The
results improved in 2003 as compared to 2002 due to improvements in the
hedge valuations partially offset by increased potential default related
loan reserves. In addition, the decrease in 2003 resulted from
CNL-Capital's sale of its remaining loans to CNL-Investments in conjunction
with CNL-Investments issuing bonds on the new 2003 pool.
o Investment and interest income associated with retained interests in the
off balance sheet loan pools decreased by 43 percent in 2003 as a result of
certain pool defaults and prepayments in 2002 and 2003.
o During 2001, CNL-Capital sold a portfolio of approximately $127 million in
loans through private market sales channels resulting in a gain on sale of
mortgage loans of $4.1 million. No such sales occurred during 2002 and
2003.
o Other income reflects, among other items, fees from advisory services,
servicing income and referral fees for loans and other products from the
Bank. Other income was 21 percent lower during 2002 as compared to 2001 due
to a decrease of approximately $0.8 million in referral fees from the Bank
in 2002 as compared to 2001. Other income was higher in 2001 as compared to
each of 2003 and 2002 by approximately $1 million due to the Company
selling approximately $127 million in loans during 2001 using private
market sales channels. The sale of these loans triggered the recognition of
the remaining $1 million in deferred origination fees collected on these
loans when they were originated.
Expenses
Excluding costs of sales, expenses decreased during 2003 and 2002, each as
compared to the previous year. General operating and administrative expenses and
interest expense were lower during 2003 and 2002, each as compared to the
previous year, due to the Company's initiative of outsourcing some functions to
reduce expenses. Interest expense was lower for each period presented due to
declining interest rates and having lower amounts outstanding under its
borrowings.
Cost of real estate sold is associated with the Investment Property Sales
Program of the specialty finance segment and relates to properties held for sale
at the end of 2001 that were sold by December 31, 2002. In 2002, costs
associated with properties acquired after 2001 were required to be included as a
component of the gain on disposal of discontinued operations, while in 2003 this
treatment is required regardless of acquisition date. A table and related
discussion of the comparative results is reported above under the discussion of
related revenues.
General operating and administrative expenses consist primarily of
payroll-related and legal and other professional expenses. The following table
illustrates the comparative period expenses by segment:
For the year ended December 31,
General operating and admini-
strative expenses by segment (in % of % of % of
millions) 2003 Total 2002 Total 2001 Total
-------- ------ -------- ------- -------- ------
Real estate segment $ 9.0 36% $ 11.8 42% $ 8.8 30%
Specialty finance segment 18.6 74 19.0 67 22.6 76
Other holding company results,
results for periods prior to
segment reporting and
consolidating eliminations (2.4) (10 ) (2.4 ) (9 ) (1.8) (6 )
-------- ------ -------- ------- -------- ------
Total general operating and
administrative expenses $ 25.2 100% $ 28.4 100% $ 29.6 100%
======== ====== ======== ======= ======== ======
o CNL-Investments' general operating and administrative expenses decreased by
24 percent during 2003 as compared to 2002 as a result of transferring
certain financial and strategic functions, including transferring certain
employees relating to the management of the external portfolios, to a
subsidiary of CFG, an affiliate. General and administrative functions were
34 percent higher during 2002 as compared to 2001 because during 2002,
CNL-Investments increased its workout activity to deal with several tenant
defaults and bankruptcies that it did not experience during 2001. If
CNL-Investments had not transferred certain functions to a subsidiary of
CFG during 2003, general operating and administrative expenses would have
been comparable between 2002 and 2003.
o CNL-Capital's general operating and administrative expenses were fairly
constant between 2003 and 2002. General operating and administrative
expenses decreased by 16 percent during 2002 as compared to 2001 due to
CNL-Capital undertaking cost cutting initiatives in 2001 that included a
reduction of employees. CNL-Capital has continued to control personnel and
payroll related costs in this segment. In addition, general operating and
administrative expenses in 2001 included higher legal expenses incurred due
to resolution of troubled loans and were at levels higher than those
incurred during 2003 and 2002.
Interest expense constitutes one of the most significant operating expenses,
excluding cost of real estate sold by CNL-Capital, which is a component of the
gain from the disposal of discontinued operations for properties acquired after
2001. Certain interest expense is included in operating results from
discontinued operations. Components of interest expense from continuing
operations are as follows:
For the year ended December 31,
Interest expense by segment (in % of % of % of
millions) 2003 Total 2002 Total 2001 Total
-------- ------ -------- ------- -------- ------
Real estate segment $ 27.5 54% $ 30.6 52% $ 38.8 56%
Specialty finance segment 23.7 47 28.5 49 31.8 45
Other holding company results and
consolidating eliminations (0.6) (1 ) (0.7 ) (1 ) (0.8) (1 )
-------- ------ -------- ------- -------- ------
Total interest expense $ 50.6 100% $ 58.4 100% $ 69.8 100%
======== ====== ======== ======= ======== ======
o CNL-Investments decreased its level of debt throughout most of 2003 and
2002 through the sales of real estate. The segment realized a decrease of
10 percent and 21 percent in interest expense in 2003 and 2002,
respectively, each as compared to the previous year. The decrease in 2002
resulted from the repayment of the Note Payable with proceeds of the Series
2001 Bonds issued in October 2001, which carried a lower rate of interest.
Interest expense also decreased due a decline in weighted average balances
outstanding on its borrowings during 2003 as compared to 2002.
o CNL-Capital has reduced its interest-bearing debt, partly due to holding
lower inventory levels of properties held for sale. The reduction in
available inventory occurred because CNL-Capital generated $194 and $288
million in Investment Property Sales properties throughout 2003 and 2002,
respectively, while acquiring only $169 and $263 million, respectively, in
new properties. Declining interest rates also contributed to lower interest
expense in 2003 and 2002, each as compared to the previous year. The
weighted average interest charged by the mortgage warehouse facilities to
fund property acquisitions decreased from 5.13 percent to 4.07 percent to
3.41 percent in 2001, 2002 and 2003, respectively. The decrease in the
weighted average rates charged on borrowings from the mortgage warehouse
facilities was partially offset by the 5.87 percent weighted average rate
charged by the five-year financing of over $225 million entered into in
June 2002. By removing these assets from warehouse financing, CNL-Capital
complied with the terms of the warehouse facility and was able to preserve
net spread resulting from the excess of the interest income received over
the interest expense paid, despite the increased interest expense on the
five-year financing.
Property expenses typically occur when properties are defaulted in the real
estate segment. The Company recognized $0.9 million, $3.2 million and $2.0
million in property expenses during 2003, 2002 and 2001, respectively. Property
expenses were higher in 2002 and 2001 due to three major tenants declaring
bankruptcy and rejecting numerous leases that resulted in the Company incurring
real estate taxes, insurance, repairs and maintenance and legal fees related to
dealing with resolution of the assets within bankruptcies. Phoenix Restaurant
Group, Inc. and its subsidiaries, (collectively referred to as "PRG") filed for
bankruptcy in 2001 and Roadhouse Grill, Inc. ("Roadhouse Grill") and Houlihan's
Restaurant Group ("Houlihan's") filed for bankruptcy in 2002. In 2003, fewer
vacant properties were on hand incurring these expenses as opposed to 2002 and
2001. Some expenses formerly presented in this category associated with
properties treated as discontinued operations are incorporated in the income or
loss from discontinued operations for all years presented.
Depreciation and amortization expenses reflect the level of assets invested in
leased properties held by the real estate segment. Certain of these expenses
have been reflected as a component of discontinued operations. The specialty
finance segment does not depreciate its properties held for sale, but along with
CNL-Investments, CNL-Capital has recorded depreciation on office and computer
equipment during 2003, 2002 and 2001, respectively. Depreciation and
amortization expense during 2001 included goodwill amortization of $3.1 million.
As a result of new accounting rules, no amortization of goodwill was recorded in
2002 and 2003.
CNL-Capital recorded a loss on termination of cash flow hedge of $0.5 million
and $8.1 million in 2003 and 2001, respectively. Most of the loss in 2001
resulted when CNL-Capital focused on its Investment Property Sales Program
instead of on securitizations. This change in focus was the result of changes in
market conditions. The loss during 2003 relates to the prepayment of mortgage
loans by a borrower causing CNL-Capital to pay down a portion of the related
debt collateralized by these mortgage loans and to also unwind a portion of the
related swap.
Impairments and provisions on assets consist of bad debt expense relating to
receivables that management deemed uncollectible, provisions for loan losses
associated with non-performing loans, valuation allowances associated with
investments in the 1998-1 and 1999-1 residual interests and impairment
provisions on properties (excluding impairments on properties treated as
discontinued operations as described below). The following table illustrates the
comparative period expenses by segment:
For the year ended December 31,
Impairments and provisions on % of % of % of
assets (in millions) 2003 Total 2002 Total 2001 Total
-------- ------ -------- ------- -------- ------
Real estate segment $ 5.5 38% $ 4.5 47% $ 41.0 99%
Specialty finance segment 8.8 62 5.1 53 0.5 1
-------- ------ -------- ------- -------- ------
$ 14.3 100% $ 9.6 100% $ 41.5 100%
======== ====== ======== ======= ======== ======
CNL-Investments recorded provisions for loan losses of $0.8 million and $28.2
million during 2003 and 2001, respectively, associated with non-performing
loans. The provisions for loan losses during 2001 related primarily to loans
from PRG, which declared bankruptcy in 2001, based on questionable
collectibility of the loans. CNL-Investments recorded impairment provisions of
$4.7 million, $4.5 million and $12.8 million during 2003, 2002 and 2001,
respectively, excluding impairments on properties treated as discontinued
operations as described below. The impairments related to properties from
defaulted tenants, including properties previously leased to PRG, Roadhouse
Grill, Houlihan's and Chevy's, all of which declared bankruptcy during 2001 and
2002. The impairments represented the difference between the net carrying value
of the properties and the estimated fair value of the properties.
CNL-Capital recorded provisions for loan losses of $4.7 million and $3.2 million
in 2003 and 2002, respectively, associated with non-performing loans. Management
evaluates its loan portfolio and records a reserve as potential losses become
evident. CNL-Capital also recorded reserves or write-offs of $1.6 million, $1.9
million and $0.1 million during 2003, 2002 and 2001, respectively, relating to
its 1998-1 and 1999-1 residual interests. CNL-Capital recorded these amounts
based on its determination that a permanent impairment in value had occurred as
a result of certain borrower delinquencies within these securitized pools.
CNL-Capital also recorded bad debt expense of $2.5 million and $0.4 million
during 2003 and 2001, respectively, relating to receivables that management
elected to write-off.
Discontinued Operations
The Company accounts for certain of its revenues and expenses as originating
from discontinued operations pursuant to Statement of Financial Accounting
Standard No. 144 "Accounting for the Impairment or Disposal of Long-Lived
Assets" ("FAS 144"). FAS 144 requires that sales of real estate, or the
designation of a real estate asset as held for sale, be treated as discontinued
operations. Any gain or loss from such disposition, and any income or expenses
associated with these real estate assets, are included in the income statement
as discontinued operations. CNL-Capital's Investment Property Sales program, a
vital piece of its ongoing operating strategy, falls under the new guidance.
Therefore, gains from properties sold under the Investment Property Sales
program are included as discontinued operations, unless the gain was realized in
2002 for properties acquired before January 1, 2002. Income and expenses
associated with Investment Property Sales program assets are also included in
discontinued operations, except for 2002 income and expenses associated with
properties acquired before January 1, 2002 and sold by December 31, 2002. In
addition, CNL-Investments has designated certain real estate assets since
December 31, 2001 as held for sale and has included income and expenses
associated with the assets as well as the gain or loss from any dispositions of
these assets as discontinued operations for all periods presented.
During 2002, the Company purchased the operations of certain restaurants. In
December 2003, the Company decided to dispose of these restaurant operations.
All operating results relating to these restaurant operations have been recorded
as discontinued operations. The table below illustrates the treatment of
discontinued operations by segment for each of the years ended December 31:
Income from discontinued operations
by segment (in millions) 2003 2002 2001
------------- ------------ -----------
Real estate segment discontinued operations:
Operating loss $ (6.2 ) $ (6.6 ) $ (5.3 )
Gains on disposal 3.7 3.3 --
Specialty finance segment discontinued operations:
Operating income 5.9 3.2 0.4
Gains on disposal 24.6 8.3 --
Income tax benefit 6.3 -- --
------------- ------------ -----------
Total income (loss) from discontinued
operations $ 34.3 $ 8.2 $ (4.9 )
============= ============ ===========
The operating loss of the real estate segment includes impairment provisions of
$6.8 million, $8.9 million and $14.1 million during 2003, 2002 and 2001,
respectively. These impairments related primarily to properties from defaulted
tenants that were later designated as held for sale or sold through December 31,
2003. The operating income of the specialty finance segment includes impairment
provisions of $1.4 million and $0.7 million during 2003 and 2002, respectively,
that were related to properties designated as held for sale or sold through
December 31, 2003. The restaurant operations generated revenues of $13.7 million
and $2.4 million during 2003 and 2002, respectively, and generated related
expenses of $14.2 million and $2.8 million, respectively.
Income Tax Benefit
The Company is primarily treated as a REIT and generally records no tax expense.
However, effective January 1, 2001, the activities of CNL-Capital and certain
activities of CNL-Investments are taxable pursuant to rules governing TRSs. The
Company has not reflected an income tax expense to date through December 31,
2003. This is attributed to the following:
o At the time of the election, differences existed between the tax and
the financial reporting treatment of certain items such as loan loss
reserves and reserves for impairment and depreciation. In the
aggregate, these differences served to defer deductions and accelerate
income reported for tax purposes prior to the TRS election, with the
benefit of the reversal of such differences attributed to the TRS. This
benefit gave rise to a deferred tax asset. Management did not believe
that the realization of the deferred tax asset was more likely than
not. Therefore the deferred tax asset was completely offset by a
valuation allowance, and no benefit was recognized January 1, 2001.
o As the CNL-Capital TRS generated earnings subsequent to its initial
year, management reversed the extent of the valuation allowance, thus
recognizing some net deferred tax asset as adjusted by current changes.
This reversal created a net deferred tax asset that had generally
approximated the cumulative tax being paid. As of December 31, 2003,
CNL-Capital reversed the valuation allowance of $6.3 million previously
recorded by the CNL-Capital TRS against its deferred tax asset.
CNL-Capital determined that is was more likely than not that this
deferred tax asset will be realized based on historical earnings and
projected future income of CNL-Capital. As of December 31, 2003, the
CNL-Investments TRS had a deferred tax asset of $0.8 million. This TRS
has not yet generated any taxable income. Therefore, CNL-Investments
established a valuation allowance to completely offset the deferred tax
asset.
Item 7a. Quantitative and Qualitative Disclosures About Market Risk
This information is described above in Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations.
Item 8. Financial Statements and Supplementary Data
Report of Independent Certified Public Accountants
To the Board of Directors and Stockholders of
CNL Restaurant Properties, Inc.
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, of stockholders' equity and comprehensive
income/(loss), and of cash flows present fairly, in all material respects, the
financial position of CNL Restaurant Properties, Inc. and its subsidiaries at
December 31, 2003 and 2002, and the results of their operations and their cash
flows for each of the three years in the period ended December 31, 2003 in
conformity with accounting principles generally accepted in the United States of
America. In addition, in our opinion, the financial statement schedules listed
in the index appearing under item 15(a)(2) present fairly, in all material
respects, the information set forth therein when read in conjunction with the
related consolidated financial statements. These financial statements and
financial statement schedules are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements and financial statement schedules based on our audits. We conducted
our audits of these statements in accordance with auditing standards generally
accepted in the United States of America, which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
As discussed in Notes 1 and 8 to the consolidated financial statements, on
January 1, 2001 the Company changed its method of accounting for derivative
financial instruments and on January 1, 2002 the Company adopted Financial
Accounting Standards No. 142 "Goodwill and other Intangible Assets", and No. 144
"Accounting for the Impairment or Disposal of Long-Lived Assets."
/s/ PricewaterhouseCoopers LLP
Orlando, Florida
March 12, 2004
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands except for share data)
December 31,
2003 2002
---------------- ----------------
ASSETS
Real estate investment properties $ 542,972 $ 553,730
Net investment in direct financing leases 103,662 110,926
Real estate and restaurant assets held for sale 131,210 185,718
Mortgage loans held for sale 1,490 37,407
Mortgage, equipment and other notes receivable, net of
allowance of $13,964 and $12,062, respectively 320,900 334,499
Other investments 29,671 32,163
Cash and cash equivalents 36,955 16,579
Restricted cash 12,462 4,574
Receivables, less allowance for doubtful accounts
of $872 and $1,182, respectively 3,382 3,214
Accrued rental income 25,935 21,920
Goodwill 56,260 56,260
Other assets 33,217 26,460
------------------ ------------------
$ 1,298,116 $ 1,383,450
================== ==================
LIABILITIES AND STOCKHOLDERS' EQUITY
Revolver $ 2,000 $ 14,000
Note payable 182,560 203,207
Mortgage warehouse facilities 93,513 145,758
Subordinated note payable 43,750 43,750
Bonds payable 430,011 424,508
Due to related parties 25,038 5,702
Other payables 34,096 33,512
------------------ ------------------
Total liabilities 810,968 870,437
------------------ ------------------
Minority interests, including redeemable partnership interest 7,262 18,862
Commitments and contingencies (Note 15)
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 45,286,297 and 45,286,297
shares, respectively, outstanding 45,248,670 and
45,248,670 shares, respectively 452 452
Capital in excess of par value 826,627 816,745
Accumulated other comprehensive loss (14,447 ) (16,862 )
Accumulated distributions in excess of net earnings (332,746 ) (306,184 )
------------------ ------------------
Total stockholders' equity 479,886 494,151
------------------ ------------------
$ 1,298,116 $ 1,383,450
================== ==================
See accompanying notes to consolidated financial statements.
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except for share data and per share data)
Year Ended December 31,
2003 2002 2001
-------------- ------------- -------------
Revenues:
Sale of real estate $ -- $ 209,498 $ 128,480
Rental income from operating leases 61,293 67,939 74,558
Earned income from direct financing leases 10,890 11,892 12,387
Interest income from mortgage, equipment and other
notes receivables 29,807 34,555 40,831
Investment and interest income 4,586 5,344 5,845
Other income 9,614 12,303 13,262
Net decrease in value of mortgage loans
held for sale, net of related hedge (1,853 ) (5,368 ) (5,070 )
Gain on sale of mortgage loans -- -- 4,120
--------------- --------------- --------------
114,337 336,163 274,413
--------------- --------------- --------------
Expenses:
Cost of real estate sold -- 193,179 118,372
General operating and administrative 25,208 28,433 29,592
Interest expense 50,576 58,401 69,750
Property expenses 933 3,241 1,954
State and other taxes 209 88 931
Depreciation and amortization 12,521 13,133 17,715
Loss on termination of cash flow hedges 502 -- 8,060
Impairments and provisions on assets 14,250 9,626 41,488
--------------- --------------
---------------
104,199 306,101 287,862
--------------- --------------- --------------
Earnings/(loss) from continuing operations before minority
interest in income of consolidated joint ventures,
equity in earnings of unconsolidated joint ventures
and loss on sale of assets 10,138 30,062 (13,449 )
Minority interest in income of consolidated joint ventures (1,913 ) (2,409 ) (1,250 )
Equity in earnings of unconsolidated joint ventures 108 101 98
Loss on sale of assets (157 ) (347 ) (1,138 )
--------------- --------------- --------------
Earnings/(loss) from continuing operations, net 8,176 27,407 (15,739 )
Earnings/(loss) from discontinued operations, net of
income tax benefit 34,264 8,183 (4,872 )
--------------- --------------- --------------
Earnings/(loss) before cumulative effect of accounting
change 42,440 35,590 (20,611 )
--------------- --------------- --------------
Cumulative effect of accounting change -- -- (3,841 )
--------------- --------------- --------------
Net income/(loss) $ 42,440 $ 35,590 $ (24,452 )
=============== =============== ==============
See accompanying notes to consolidated financial statements.
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except for share data and per share data)
Year Ended December 31,
2003 2002 2001
--------------- --------------- --------------
Earnings/(loss) per share of common stock (basic and diluted):
From continuing operations $ 0.18 $ 0.61 $ (0.36 )
From discontinued operations 0.76 0.19 (0.11 )
--------------- --------------- --------------
Before cumulative effect of accounting change 0.94 0.80 (0.47 )
Cumulative effect of accounting change -- -- (0.09 )
--------------- --------------- --------------
Net income/(loss) $ 0.94 $ 0.80 $ (0.56 )
=============== =============== ==============
Weighted average number of shares
of common stock outstanding 45,248,670 44,620,235 43,589,985
=============== =============== ==============
See accompanying notes to consolidated financial statements.
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS'
EQUITY AND COMPREHENSIVE
INCOME/(LOSS) Years Ended
December 31, 2003, 2002 and 2001
(In thousands except for share data and per share data)
Accumulated Accumulated
Common stock distributions other Compre-
----------------------- Capital in in excess compre- hensive
Number Par excess of of net hensive income/
of shares value par value earnings income/(loss) Total (loss)
----------- ---------- -------------- ------------- ------------- ------------- ----------
Balance at December 31, 2000 43,495,919 $ 435 $ 789,926 $ (182,865 ) $ 242 $ 607,738 $
Shares issued 579,722 6 9,722 -- -- 9,728
Stock issuance costs -- -- (1,494 ) -- -- (1,494 )
Net loss -- -- -- (24,452 ) -- (24,452 ) (24,452 )
Other comprehensive income,
market revaluation on
available for sale
securities -- -- -- -- 839 839 839
Cumulative effect adjustment
to recognize fair value
of cash flow hedges -- -- -- -- (5,172 ) (5,172 ) (5,172 )
Reclassification of cash
flow hedge losses to
statement of operations -- -- -- -- 8,060 8,060 8,060
Current period adjustment to
recognize change in fair
value of cash flow hedges,
net of tax -- -- -- -- (2,599 ) (2,599 ) (2,599 )
----------
Total comprehensive loss -- -- -- -- -- -- $ (23,324 )
==========
Distributions declared and
paid ($1.52 per share) -- -- -- (66,466 ) -- (66,466 )
----------- ---------- -------------- ------------- ----------- -------------
Balance at December 31, 2001 44,075,641 $ 441 $ 798,154 $ (273,783 ) 1,370 526,182 $
Shares issued 1,173,354 11 20,088 -- -- 20,099
Retirement of common stock (325 ) -- (4 ) -- -- (4 )
Stock issuance costs -- -- (1,493 ) -- -- (1,493 )
Net income -- -- -- 35,590 -- 35,590 35,590
Other comprehensive loss,
market revaluation on
available for sale
securities -- -- -- -- (775 ) (775 ) (775 )
Current period adjustment to
recognize change in fair
value of cash flow hedges,
net of tax -- -- -- -- (17,457 ) (17,457 ) (17,457 )
-----------
Total comprehensive income -- -- -- -- -- -- $ 17,358
===========
Distributions declared and
paid ($1.52 per share) -- -- -- (67,991 ) -- (67,991 )
----------- ---------- -------------- ------------- ----------- -------------
Balance at December 31, 2002 45,248,670 $ 452 816,745 (306,184 ) (16,862 ) 494,151
=========== ========== ============== ============= =========== =============
See accompanying notes to consolidated financial statements.
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS'
EQUITY AND COMPREHENSIVE
INCOME/(LOSS) Years Ended
December 31, 2003, 2002 and 2001
(In thousands except for share data and per share data)
Accumulated Accumulated
Common stock distributions other Compre-
----------------------- Capital in in excess compre- hensive
Number Par excess of of net hensive income/
of shares value par value earnings income/(loss) Total (loss)
----------- ---------- -------------- ------------- ------------- ------------- ----------
Balance at December 31, 2002 45,248,670 $ 452 $ 816,745 $ (306,184) (16,862) 494,151 $
Acquisition of minority
interest -- -- 11,375 -- -- 11,375
Stock issuance costs -- -- (1,493 ) -- -- (1,493 )
Net income -- -- -- 42,440 -- 42,440 42,440
Reclassification of market
revaluation on available
for sale securities to
statement of operations -- -- -- -- (78 ) (78 ) (78 )
Reclassification of cash
flow hedge losses to
statement of operations -- -- -- -- 502 502 502
Current period adjustment to
recognize change in fair
value of cash flow hedges,
net of $1,750 in tax benefit -- -- -- -- 1,991 1,991 1,991
-----------
Total comprehensive income -- -- -- -- -- -- $ 44,855
===========
Distributions declared and
paid ($1.52 per share) -- -- -- (69,002 ) -- (69,002 )
----------- ---------- -------------- ------------- ----------- -----------
Balance at December 31, 2003 45,248,670 $ 452 $ 826,627 $ (332,746 ) $ (14,447 ) $ 479,886
=========== ========== ============== ============= =========== ===========
See accompanying notes to consolidated financial statements.
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Year Ended December 31,
2003 2002 2001
-------------- ------------- -------------
Cash flows from operating activities:
Net income/(loss) $ 42,440 $ 35,590 $ (24,452)
Adjustments to reconcile net income/(loss) to net cash
provided by operating activities:
Depreciation and amortization 13,466 14,826 19,646
Impairments and provisions on assets 22,405 19,165 55,595
(Gain)/loss on sales of assets (3,475 ) (2,947 ) 1,137
Gain on sale of mortgage loans -- -- (4,120 )
Income tax benefit (6,346 ) -- --
Cumulative effect of accounting change -- -- 3,841
Net decrease in value of mortgage loans held for sale,
net of related hedge 1,853 5,368 5,070
Proceeds from sale of loans -- -- 105,975
Investment in mortgage loans held for sale (112 ) (226 ) (94,520 )
Collection on mortgage loans held for sale 7,635 16,356 24,604
Changes in inventories of real estate held for sale 29,618 45,471 (46,704 )
Changes in other operating assets and liabilities 888 (22,016 ) 2,662
-------------- -------------- --------------
Net cash provided by operating activities 108,372 111,587 48,734
-------------- -------------- --------------
Cash flows from investing activities:
Additions to real estate investment properties -- (7,212 ) (26,052 )
Proceeds from sale of assets 25,312 67,085 12,659
Decrease/(increase) in restricted cash (7,888 ) 6,357 (9,055 )
Investment in joint venture -- (150 ) (10 )
Investment in mortgage, equipment and other notes receivable -- (6,607 ) (11,458 )
Collection on mortgage, equipment and other notes receivable 29,075 15,481 9,325
Proceeds from sale or maturities of securities 19 -- 982
-------------- -------------- --------------
Net cash provided by (used in) investing activities 46,518 74,954 (23,609 )
-------------- -------------- --------------
See accompanying notes to consolidated financial statements.
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
(In thousands)
Year Ended December 31,
2003 2002 2001
--------------- --------------- ---------------
Cash flows from financing activities:
Payment of stock issuance costs $ (1,493 ) $ (1,493 ) $ (1,493 )
Proceeds from borrowings on credit facility, note
payable and subordinated note payable 34,104 249,334 63,949
Payment on credit facility, note payable and
subordinated note payable (66,751 ) (90,874 ) (159,666 )
Proceeds from borrowings on mortgage warehouse facilities 124,127 189,901 325,264
Payments on mortgage warehouse facilities (176,372 ) (474,312 ) (358,860 )
Issuance of bonds 24,906 -- 177,223
Retirement of bonds payable (19,403 ) (16,436 ) (10,066 )
Payment of loan costs and bond issuance costs (2,231 ) (27 ) (9,634 )
Proceeds from sale of shares -- 9,750 3,692
Loan from stockholder 18,710 11,750 8,708
Retirement of shares of common stock -- (4 ) --
Distributions to minority interest (1,867 ) (1,484 ) (234 )
Distributions to stockholders (68,244 ) (67,991 ) (66,466 )
--------------- -------------- --------------
Net cash used in financing activities (134,514 ) (191,886 ) (27,583 )
--------------- -------------- --------------
Net increase (decrease) in cash and cash equivalents 20,376 (5,345 ) (2,458 )
Cash and cash equivalents at beginning of year 16,579 21,924 24,382
--------------- -------------- --------------
Cash and cash equivalents at end of year $ 36,955 $ 16,579 $ 21,924
=============== ============== ==============
Supplemental disclosures of cash flow information:
Interest paid $ 48,114 $ 52,704 $ 58,417
=============== ============== ==============
Interest capitalized $ 95 $ 113 $ 568
=============== ============== ==============
Income taxes paid $ 4,019 $ 193 $ 34
=============== ============== ==============
Supplemental disclosures of non-cash investing and financing activities:
Mortgage notes accepted in exchange for sale of
properties $ 1,394 $ -- $ --
=============== ============== ==============
Financing of computer software acquisition $ 1,788 $ -- $ --
=============== ============== ==============
Distributions declared and unpaid at December 31 $ 758 $ -- $ --
=============== ============== ==============
Conversion of related party advances into shares of $ -- $ 10,350 $ --
common stock =============== ============== ==============
Redemption of minority interest in lieu of payment on
accounts receivable $ 317 $ -- $ --
=============== ============== ==============
Acquisition of minority interest $ 11,375 $ -- $ --
=============== ============== ==============
See accompanying notes to consolidated financial statements.
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2003, 2002 and 2001
1. Significant Accounting Policies:
Organization - CNL Restaurant Properties, Inc. ("the Company") formerly CNL
American Properties Fund, Inc. was organized in Maryland in May of 1994, and
is a self-administered real estate investment trust ("REIT"). The term
"Company" includes, unless the context otherwise requires, CNL Restaurant
Properties, Inc. and its majority owned and controlled subsidiaries. These
subsidiaries include CNL Restaurant Investments, Inc. ("CNL-Investments")
formerly CNL Restaurant Properties, Inc. and CNL Restaurant Capital Corp.
("CNL-Capital Corp.") formerly CNL Franchise Network Corp. The Company's
operations are divided into two business segments, real estate and specialty
finance. The real estate segment, operated principally through the Company's
wholly owned subsidiary CNL-Investments and its subsidiaries, owns and
manages a portfolio of primarily long-term triple-net lease properties. Its
activities include portfolio management, property management and
dispositions. In addition, it services approximately $525 million in
affiliate portfolios and earns management fees related thereto. The specialty
finance segment, CNL Restaurant Capital, LP ("CNL-Capital"), and its
subsidiaries, is operated through the Company's wholly-owned subsidiary
CNL-Capital Corp., a partnership with Bank of America (the "Bank") and
CNL/CAS Corp., an affiliate of the Company's Chairman. CNL-Capital provides
financing, servicing, development and advisory services to national and
regional restaurant operators.
Effective January 1, 2003, CNL-Capital modified certain terms relating to the
alliance with the Bank that resulted in the Bank reducing its ownership
interest in CNL-Capital. The Bank's ownership interest in CNL-Capital is
redeemable at their option under certain conditions after a specified date
for a cash payment of $4.3 million. In conjunction with the ownership
reduction, the Bank agreed to assume certain costs of its portfolio
operations and decreased the referral fees paid by the Bank to CNL-Capital
under the referral program between the Bank and CNL-Capital. In addition, CNL
CAS/Corp. agreed to reduce its interest in CNL-Capital. As a result, the
Company's effective ownership interest in CNL-Capital increased from 84.39%
to 96.26%. The Company reduced the minority interest and increased
stockholders' equity by approximately $11.4 million to reflect this change in
ownership.
Principles of Consolidation - The consolidated financial statements of the
Company include its majority owned and controlled affiliates. All significant
intercompany balances and transactions among consolidated affiliates have
been eliminated. The equity method of accounting is applied to those
investments in joint ventures that are not subject to control by the Company
due to the significance of rights held by other parties.
Use of Estimates - Preparation of the financial statements in accordance with
generally accepted accounting principles requires management to make
estimates and assumptions relating to the reporting of assets and liabilities
and the disclosure of contingent assets and liabilities. Significant
estimates include provisions for impairment of real estate and loans,
valuation of loans held for sale, deferred tax assets, goodwill and long
lived assets. Actual results could differ from those estimates.
Real Estate and Lease Accounting - The Company records its properties
comprised of land, buildings and equipment at cost. Management reviews its
properties for impairment whenever events or changes in circumstances
indicate that their carrying amount may not be recoverable through operations
or sale. Management determines whether impairment in value has occurred by
comparing the estimated future undiscounted cash flows, including the
residual value of the property, with the carrying cost of the individual
property. If impairment is indicated, the assets are adjusted to estimated
fair value.
Properties leased to restaurant operators are generally on a triple-net
basis, which means the tenant is responsible for all operating expenses
relating to the property, including property taxes, insurance, maintenance
and repairs. The leases are accounted for using either the direct financing
or the operating method.
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2003, 2002 and 2001
1. Significant Accounting Policies - Continued:
Direct financing method - The leases accounted for using the direct
financing method are recorded at the net investment that, at the
inception of the lease, generally represents the cost of the asset.
Unearned income is deferred and amortized to income over the lease
terms so as to produce a constant periodic rate of return on net
investment in the leases.
Operating method - Land, building and secured equipment leases are
accounted for using the operating method. Revenue is recognized as
rentals are earned and depreciation is charged to operations on a
straight-line basis over the life of the related assets. Rental
income is recognized on a straight-line basis over the lease term.
Buildings and equipment are depreciated on the straight-line method
over their estimated useful lives of 30 and seven years,
respectively.
Properties acquired that the Company intends to sell or securitize within one
year of acquisition are recorded at cost. Rental income is recognized without
regard to potential future rent increases and the asset is not depreciated.
Revenue from sale of real estate is recognized at the time of closing when
collectibility of the sales price is reasonably assured and the earnings
process is substantially complete.
Loans - The Company has originated loans to restaurant operators that are
generally secured by real estate or equipment. The Company accounts for loans
depending on the following classification:
Mortgage loans held for sale - Loans originated that the Company
intends to sell or securitize generally within one year of
origination are recorded at cost and adjusted for changes in market
value under the Company's hedging strategy. Quoted prices for
similar loans and the present value of the expected cash flows net
of the estimated impact of any defaults are used to determine fair
value.
Mortgage, equipment and other notes receivable - Loans originated
that are expected to be held until maturity are recorded at cost and
are reduced for any estimated future loss. Whenever it appears that
future collection on specific notes appears doubtful, a valuation
allowance is established. The allowance represents the difference
between the carrying amount and the amount management expects to
receive. Increases and decreases in the allowance due to changes in
the measurement of the impaired loans are included in the provision
for loss on loans. Loans continue to be classified as impaired
unless they are brought fully current and the collection of
scheduled interest and principal is considered probable. When a loan
or portion of a loan, including an impaired loan, is determined to
be uncollectible, the portion deemed uncollectible is charged
against the allowance and subsequent recoveries, if any, are
credited to the allowance. Accrual of interest is discontinued when
management believes, after considering economic and business
conditions and collection efforts, that the borrowers' financial
condition is such that collection of interest is doubtful.
Subsequent interest is recorded as income.
Securitizations - Certain loans are originated and sold to entities that, in
turn, issue securities to investors backed by these assets. The Company
retains the servicing rights and participates in cash flows from the retained
equity positions and lower rated securities. The present value of the
expected cash flows for each retained security, after payment of principal
and interest to third-party bond or certificate holders, over the estimated
cost of servicing is recorded at the time of sale as a retained interest.
Retained interests in securitized assets are included in other investments.
Accounting for the retained interests requires the Company to estimate their
value using market trends and historical experience, expected prepayments and
defaults. This information is considered, along with prevailing discount
rates and the terms of the bonds and certificates, to arrive at current fair
value amounts and determine whether a permanent impairment in value has
occurred.
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2003, 2002 and 2001
1. Significant Accounting Policies - Continued:
Restricted Cash - Restricted cash relates to cash received in connection with
assets held as collateral for certain debt and is subject to restrictions
until released by the trustee.
Cash and Cash Equivalents - The Company considers all highly liquid
investments with a maturity of three months or less when purchased to be cash
equivalents. These amounts may exceed federally insured levels, however, the
Company has not experienced any losses in such accounts.
Derivative Financial Instruments - The Company utilizes derivative
instruments to partially offset the effect of fluctuating interest rates on
the value of its mortgage loans held for sale and the cash flows associated
with a portion of its variable-rate debt. The Company adopted Statement of
Financial Accounting Standards No. 133 ("FAS 133"), as amended, on January 1,
2001, which requires all derivative instruments to be recorded on the balance
sheet at fair value. Changes in the value of derivatives associated with
hedge transactions are recorded either in current earnings or in other
comprehensive income depending on the type.
Fair-value hedge transactions - When the Company hedges changes in
the fair value of an asset or liability, the effective changes in
the value of the derivative instrument are generally offset in the
income statement by changes in the value of the hedged item.
Cash-flow hedge transactions - When the Company hedges variability
of cash flows related to a variable-rate asset or liability or a
forecasted transaction, effective changes in the value of the
derivative instrument are reported in other comprehensive income and
subsequently recognized in operations in the periods in which
earnings are impacted by the variability of the cash flows of the
hedged item or forecasted transaction.
The ineffective portion of all hedges are reflected in earnings.
Effective January 1, 2001, the Company recorded a cumulative effect
adjustment loss of $21.2 million to recognize the value of all derivative
instruments that were designated as fair-value hedging instruments and an
offsetting cumulative effect adjustment of $17.4 million to recognize the
excess of the fair values of related hedged assets over the carrying value.
In addition, effective January 1, 2001 a cumulative effect adjustment through
stockholders' equity of $5.2 million was recorded to recognize at fair value
all derivative instruments that were designated as cash-flow hedging
instruments.
During 2003, the Company recorded a $0.5 million charge to results of
operations upon unwinding a portion of a cash flow hedge as a result of the
collection of a note receivable and repayment of the related debt. During
2001, the Company determined that a forecasted debt issuance would not occur
and also terminated a cash flow hedge upon repayment of the related debt. The
termination of the hedges and the hedge accounting for the related derivative
instruments resulted in an $8.1 million charge to the statement of
operations.
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2003, 2002 and 2001
1. Significant Accounting Policies - Continued:
Loan Costs - Loan costs incurred in connection with debt have been
capitalized and are being amortized over the term of the related debt using
the effective interest method. Loan costs are included in other assets in the
financial statements. As of December 31, 2003 and 2002, the Company had
capitalized loan costs of $25.6 million and $26.0 million, respectively and
recorded accumulated amortization of $6.9 million and $8.3 million,
respectively.
Equity Compensation Plan - During 1999, the stockholders approved a
performance incentive plan (the "Plan"), which became effective as of
February 23, 1999. The Plan authorized the issuance of up to 4,500,000 shares
of the Company's common stock upon the exercise of stock options (both
incentive and nonqualified), stock appreciation rights and the award of
restricted stock ("Stock Award") provided that the aggregate number of shares
of Common Stock that may be issued pursuant to Options, stock appreciation
rights ("SARs"), and Stock Awards granted under the Plan would increase
automatically to 9,000,000 shares and 12,000,000 shares, respectively, when
the Company had issued and outstanding 150,000,000 shares and 200,000,000
shares, respectively, of common stock. The Plan terminates on February 23,
2009. Key employees, officers, directors and persons performing consulting or
advisory services for the Company or its affiliates, as defined in the Plan,
who are designated by the committee administering the Plan, are eligible to
receive awards under the Plan. Awards may be made in the form of stock
options, stock awards, SARs, Phantom Stock Awards, Performance Awards and
Leveraged Stock Purchase Awards as defined further in the Plan. As of
December 31, 2003, the Company had not made any awards related to the Plan.
Income Taxes - The Company has made an election to be taxed as a REIT for
federal income tax purposes. The Company generally will not be subject to
federal corporate income taxes on amounts distributed to stockholders,
providing it distributes at least 90 percent of its taxable income and meets
certain other requirements for qualifying as a REIT. Earnings and profits,
which determine the taxability of dividends to stockholders, differ from
reported net income as a result of differing treatment of items for financial
reporting versus tax purposes, such as different lives and methods used to
depreciate investment properties. Notwithstanding qualification as a REIT for
tax purposes, the Company is subject to certain state taxes on its income and
property.
Effective January 1, 2001, the Company's subsidiary, CNL-Capital Corp.,
elected to be treated as a taxable REIT subsidiary ("TRS") pursuant to the
provisions of the REIT Modernization Act. As a TRS, its operating
Partnership, CNL-Capital, is able to engage in activities resulting in income
that previously would have been disqualified from being eligible REIT income
under the federal income tax regulations. Certain activities reside within
CNL-Capital Corp. that are therefore subject to federal income taxes. Also,
effective January 1, 2001, a subsidiary of CNL-Investments, elected to be
treated as a TRS. Operations commenced during 2002 and are subject to federal
income taxes.
Earnings Per Share - Basic earnings per share are calculated based upon net
earnings (income available to common stockholders) divided by the weighted
average number of shares of common stock outstanding during the reporting
period. The Company's subsidiary, CNL-Capital, has entered into a
subordinated note payable with a conversion feature that allows one of the
partners to convert the note into additional ownership of the subsidiary. For
the years ended December 31, 2003, 2002 and 2001 the impact of this
conversion feature was not dilutive.
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2003, 2002 and 2001
1. Significant Accounting Policies - Continued:
Consolidated Statement of Cash Flows - Supplemental Disclosure - During the
years ended December 31, 2003 and 2001, the Company re-designated
approximately $23.7 and $60.9 million, respectively, from mortgage loans held
for sale to held for investment. The loans serve as collateral for bonds
issued by the Company. In June 2002, the Company redesignated approximately
$225 million from mortgage loans held for sale to held for investment. The
loans serve as collateral for a five year borrowing facility.
During 2003 and 2002, the Company foreclosed on loans held for sale from
borrowers and accepted the underlying real estate collateral as settlement
for the mortgage loans. The collateral received during 2003 and 2002 had a
net realizable value of $4.6 and $3.7 million, respectively.
During the years ended December 31, 2002 and 2001, the Company converted
$10.3 million and $6.0 million, respectively, of outstanding loans payable
plus accrued interest payable under the loans into 604,177 shares and 359,722
shares, respectively, of Company stock (see Note 12).
During the year ended December 31, 2002, a tenant and borrower of the Company
assigned loans in the amount of $7.5 million to an affiliate. The Company
agreed to the assignment in exchange for an interest in a participating loan
from the affiliate (see Note 12).
From time to time, properties classified as long-term investments may be
subsequently re-designated to held for sale classification. The Company
identified 30 and 83 such properties with a net book value of $26.2 and $80.6
million during 2003 and 2002, respectively, as held for sale.
New Accounting Standards - In January 2003, the FASB issued FAS
Interpretation No. 46 ("FIN 46"), "Consolidation of Variable Interest
Entities." FIN 46 requires that a variable interest entity be consolidated by
a company if that company is subject to a majority risk of loss from the
variable interest entity's activities or entitled to receive a majority of
the entity's residual returns or both. Prior to FIN 46, a company generally
included another entity in its consolidated financial statements only if it
controlled the entity through voting interests. The consolidation
requirements of FIN 46 apply immediately to variable interest entities
created after January 31, 2003, and to older entities no later than the first
fiscal year or interim period ending after December 15, 2003. Management
adopted this standard in 2003 which resulted in the consolidation of two of
the Company's previously unconsolidated subsidiaries. Adoption of this
standard did not change the Company's accounting for the Company's bankruptcy
remote securitization entities. The Company restated all prior periods
presented to conform with the 2003 presentation. The consolidation did not
significantly impact the Company's financial position or results of
operations.
In December 2003, the FASB issued FIN 46R, "Consolidation of Variable
Interest Entities". This Interpretation requires existing unconsolidated
variable interest entities to be consolidated by their primary beneficiaries.
The primary beneficiary of a variable interest entity is the party that
absorbs a majority of the entity's expected losses, receives a majority of
its expected residual returns, or both, as a result of holding variable
interests, which are the ownership, contractual, or other pecuniary interests
in an entity that change with changes in the fair value of the entity's net
assets excluding variable interests. Prior to FIN 46R, a company generally
included another entity in its consolidated financial statements only if it
controlled the entity through voting interests. Application of FIN 46R is
required in financial statements of public entities that have interests in
variable interest entities for periods ending after March 15, 2004. The
Company does not expect that the application of this Interpretation will have
a significant effect on its financial position or results of operations.
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2003, 2002 and 2001
1. Significant Accounting Policies - Continued:
In May 2003, the Financial Accounting Standards Board (the "FASB") issued
Statement of Financial Accounting Standards No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity"
("FAS 150"). FAS 150 establishes standards for how an issuer classifies and
measures certain financial instruments with characteristics of both
liabilities and equity. FAS 150 will require issuers to classify certain
financial instruments as liabilities (or assets in some circumstances) that
previously were classified as equity. Some of the examples of financial
instruments covered by FAS 150 include shares that are mandatorily
redeemable, and other financial instruments that embody an obligation to
repurchase outstanding shares or a conditional obligation that requires
settlement by issuing a variable number of the entity's shares. FAS 150 also
requires that minority interests for majority owned finite lived entities be
classified as a liability and recorded at fair market value. FAS 150
initially applied immediately to all financial instruments entered into or
modified after May 31, 2003, and otherwise was effective at the beginning of
the first interim period beginning after June 15, 2003. Effective October 29,
2003, the FASB deferred implementation of FAS 150, as it applies to minority
interests of finite lived Partnerships. The deferral of these provisions is
expected to remain in effect while these interests are addressed in either
Phase II of the FASB's Liabilities and Equity project or Phase II of the
FASB's Business Combinations Project; therefore, no specific timing for the
implementation of these provisions has been stated. The implementation of the
currently effective aspects of FAS 150 did not have a material impact on the
Company's results of operations.
Reclassification - Certain items in the prior years' financial statements
have been reclassified to conform to the 2003 presentation. These
reclassifications had no effect on stockholders' equity or net income.
2. Real Estate Investment Properties:
Real estate investment properties consist of the following at December 31:
(In thousands)
2003 2002
------------------ -----------------
Land $ 281,400 $ 282,222
Buildings 311,197 308,586
Equipment 1,673 2,031
------------------ -----------------
594,270 592,839
Less accumulated depreciation (52,468 ) (41,898 )
------------------ -----------------
541,802 550,941
Construction in progress 1,170 2,789
------------------ -----------------
$ 542,972 $ 553,730
================== =================
During 2002 and 2001, the Company sold several properties and equipment that
were subject to operating leases and received net proceeds of $0.9 million
and $11.2 million, respectively, and recorded net losses of $0.3 million and
$1.1 million, respectively.
In 2003, 2002, and 2001 the Company recorded provisions for impairment of
$4.6 million, $3.6 million and $10.9 million, respectively. The tenants of
these properties experienced financial difficulties and/or ceased payment of
rents under the terms of their lease agreements. The provisions represent the
amount necessary to reduce the carrying value to the estimated fair value of
the properties.
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2003, 2002 and 2001
2. Real Estate Investment Properties - Continued:
For the years ended December 31, 2003, 2002, and 2001 tenants paid or are
expected to pay directly to real estate taxing authorities approximately
$10.3 million, $9.4 million and $10.8 million, respectively, in real estate
taxes in accordance with the terms of their triple-net leases.
Substantially all property leases have initial terms of 10 to 25 years (most
expiring between 2004 and 2024) and provide for scheduled rent increases, and
in some cases, contingent rent. The leases generally allow the tenant to
purchase the property at the greater of the Company's purchase price plus a
specified percentage or fair market value at specified times. Fixed and
determinable lease revenues are recognized on a straight-line basis over the
terms of the leases. For the years ended December 31, 2003, 2002 and 2001,
the Company recognized $6.2 million, $5.7 million and $6.7 million,
respectively, of such accrued rental income.
Future minimum contractual lease payments to be received under noncancellable
operating leases at December 31, 2003 are as follows:
(In thousands)
--------------------
2004 $ 54,267
2005 55,179
2006 55,187
2007 55,760
2008 56,878
Thereafter 461,535
--------------------
$ 738,806
====================
3. Net Investment in Direct Financing Leases:
The components of net investment in direct financing leases consisted of the
following at December 31:
(In thousands)
2003 2002
------------ -------------
Minimum lease payments
receivable $ 194,191 $ 217,448
Estimated residual values 25,779 26,674
Interest receivable from
secured equipment leases 6 15
Less unearned income (116,314 ) (133,211 )
------------ -------------
Net investment in direct financing
leases $ 103,662 $ 110,926
============ =============
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Years Ended December 31, 2003, 2002 and 2001
3. Net Investment in Direct Financing Leases - Continued:
The following is a schedule of future minimum lease payments to be received
on direct financing leases at December 31, 2003:
(In thousands)
----------------
2004 $ 12,631
2005 12,551
2006 12,548
2007 12,603
2008 12,660
Thereafter 131,198
----------------
$ 194,191
================
The Company's real estate segment recorded provisions for losses on direct
financing leases totaling $0.1 million, $0.9 million and $2.2 million during
the years ended December 31, 2003, 2002 and 2001, respectively. The tenants
of these properties experienced financial difficulties and ceased payment of
rents under the terms of their lease agreements. The provisions represent the
amount necessary to reduce the carrying values of the direct financing leases
to their estimated fair value.
4. Real Estate and Restaurant Assets Held for Sale:
Real estate and restaurant assets held for sale consist of the following at
December 31:
(In thousands)
2003 2002
-------------- ---------------
Land and buildings $ 129,597 $ 184,322
Restaurant assets 1,613 1,396
-------------- ---------------
$ 131,210 $ 185,718
============== ===============
The Company's specialty finance subsidiary CNL-Capital actively acquires real
estate assets subject to leases with the intent to sell. Assets acquired
after December 31, 2001 are subject to FAS 144, and the operating results and
gains or losses are recorded as discontinued operations.
The Company's real estate investment subsidiary, CNL-Investments, will divest
properties from time to time when it is strategic to the Company's
longer-term goals. When CNL-Investments establishes its intent to sell a
property, all operating results relating to the properties and the ultimate
gain or loss on disposition of the properties are treated as discontinued
operations for all periods presented. These financial statements reflect
reclassifications of rental related income, interest expense and other
categories so as to conform with the requirements of FAS 144. During 2002,
the Company purchased the operations of certain restaurants. In December
2003, the Company decided to dispose of these restaurant operations. All
operating results relating to these restaurant operations are recorded as
discontinued operations.
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Years Ended December 31, 2003, 2002 and 2001
4. Real Estate and Restaurant Assets Held for Sale - Continued:
The operating results of the discontinued operations were as follows for the
years ended December 31:
(In thousands)
2003 2002 2001
------------ ----------- ------------
Rental income $ 11,758 $ 12,081 $ 12,518
Food and beverage income 13,728 2,428 --
Interest expense (2,267 ) (2,348 ) (389 )
Other property related expense (1,620 ) (3,182 ) (1,931 )
Impairment provisions (8,155 ) (9,539 ) (14,106 )
Food and beverage expenses (13,856 ) (2,836 ) (964 )
------------ ----------- ------------
Loss from discontinued
operations, net (412 ) (3,396 ) (4,872 )
------------ ----------- ------------
Sales of real estate 226,250 148,875 --
Cost of real estate sold (197,920 ) (137,296 ) --
------------ ----------- ------------
Gain on disposal of discontinued
operations 28,330 11,579 --
------------ ----------- ------------
Income tax benefit 6,346 -- --
------------ ----------- ------------
Earnings/(loss)from discontinued
operations, net $ 34,264 $ 8,183 $ (4,872 )
============ =========== ============
5. Mortgage Loans Held for Sale:
Mortgage loans held for sale are wholly or partially collateralized by first
mortgages on land and/or buildings of franchised restaurant businesses and
consist of approximately $4.5 million in fixed-rate loans at December 31,
2003. The loans carry a weighted average interest rate of 8.33 percent.
Mortgage loans are due in monthly installments with maturity dates ranging
from 2004 to 2022 and generally prohibit prepayment for certain periods or
include prepayment penalties.
Mortgage loans held for sale consist of the following at December 31:
(In thousands)
2003 2002
------------- -------------
Outstanding principal $ 4,531 $ 45,462
Accrued interest income 45 890
Deferred financing income (22 ) (90 )
Valuation adjustment (3,064 ) (8,855 )
------------- -------------
$ 1,490 $ 37,407
============= =============
The valuation adjustment at December 31, 2003 and 2002 include a decline in
value associated with borrower delinquencies.
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Years Ended December 31, 2003, 2002 and 2001
6. Mortgage, Equipment and Other Notes Receivable:
Mortgage, equipment and other notes receivable consist of the following at
December 31:
(In thousands)
2003 2002
-------------- -------------
Outstanding principal $ 332,924 $ 343,832
Accrued interest income 3,377 3,696
Deferred financing income (1,530 ) (1,926 )
Unamortized deferred costs 93 959
Allowance for uncollectible notes (13,964 ) (12,062 )
-------------- -------------
$ 320,900 $ 334,499
============== =============
Approximately $308 million and $318 million of the outstanding principal
balance as of December 31, 2003 and 2002, respectively, is secured by
mortgages. The remaining principal is secured by franchised restaurant
equipment and other collateral. As of December 31, 2003 and 2002,
approximately $8 million and $14 million in notes receivable are considered
impaired and approximately $3 million and $5 million are non-accrual status
with regard to recognition of interest. The Company recognized $0.4 million
and $0.75 million of interest income as of December 31, 2003 and 2002,
respectively, on impaired loans.
Changes in the allowance for loan losses for 2003 and 2002 are summarized as
follows:
(In thousands)
2003 2002
-------------- ------------
Balance at beginning of year $ 12,062 $ 32,752
Provision for loan losses 5,463 3,099
Recoveries on loans previously charged off (944 ) --
Interest income reserves 964 600
Loans charged off (3,581 ) (24,389 )
-------------- ------------
Balance at end of year $ 13,964 $ 12,062
============== ============
Management believes the net carrying value of the notes approximates fair
value based on current rates at which similar loans would be made to
borrowers with similar credit and for similar maturities.
7. Other Investments:
The Company holds the following franchise loan investments arising from
securitization transactions which were either purchased from affiliates (the
1998 Series) or retained in connection with a transaction executed by the
Company (the 1999 Series). The carrying amounts of these investments,
including accrued interest, consist of the following at December 31:
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Years Ended December 31, 2003, 2002 and 2001
7. Other Investments - Continued:
(In Thousands)
2003 2002
------------- --------------
1998-1 Fixed Rate Certificates $ 9,605 $ 9,605
1998-1 Floating Rate Certificates 6,582 6,582
1998-1 Interest Only Certificate 249 346
1998-1 Residual Interest 1,980 4,358
1999-1 Fixed Rate Certificates 11,255 11,272
------------- --------------
$ 29,671 $ 32,163
============= ==============
The 1998-1 and 1999-1 Fixed Rate Certificates bear interest at pass through
rates of 8.40 percent and 8.5 percent, respectively. As of December 31, 2003
and 2002 the pass through rates on the 1998 Floating Rate Certificates were
3.37 percent and 3.67 percent, respectively.
The key assumptions used in calculating the value of these investments at the
time of securitization are based on normal market assumptions as follows:
o five percent prepayment penalty computed after taking into consideration
the period of time covered by yield maintenance and lockout prepayment
penalties;
o a cumulative default ratio (CDR) of zero; and
o prevailing market discount rates at the time of securitization
Subsequently, the values of the held to maturity retained securities are
measured using updated prepayment and CDR assumptions with adjustments to
prevailing market discount rates based on consultations with investment
bankers. If the resulting change in fair value is considered to be permanent
in nature, the carrying value of the investment is adjusted through earnings.
Securities designated as held for sale are recorded at fair market value,
with adjustments recorded through earnings.
During the years ended December 31, 2003, 2002 and 2001, the Company recorded
either reserves or write-offs amounting to $1.6 million, $2.0 million and
$0.1 million, respectively, relating to its 1999-1 and 1998-1 residual
interests. The Company recorded these amounts based on its determination that
a permanent impairment in value had occurred as a result of certain borrower
delinquencies.
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Years Ended December 31, 2003, 2002 and 2001
7. Other Investments - Continued:
The following table shows the effects on an individual key assumption
affecting the original fair value of the retained certificates under two
negative scenarios by altering the original assumptions at the time of
securitization. Reasonable prepayment assumptions would not have a further
material impact on these scenarios.
1998-1 1999-1
Certificates Certificates
($ in millions) ($ in millions)
----------------- -----------------
Fair value of retained certificates $ 18.4 $ 11.3
Residual cash flows discount rate (annual):
Impact on fair value of 100 bp adverse change $(0.54) $(0.61)
Impact on fair value of 200 bp adverse change $(1.05) $(1.20)
Expected Credit Losses (annual rate):
Impact on fair value of 2 percent adverse change $ 0.12 $ 0.45
Impact on fair value of 3 percent adverse change $ 0.10 $(0.92)
These sensitivities are hypothetical and should be used with caution. Changes
in fair value based on a percentage variation in assumptions generally cannot
be extrapolated because the relationship of the change in assumption to the
change in fair value may not be linear. Also, the effect of a variation in a
particular assumption on the original fair values of the retained
certificates is calculated without changing any other assumption; in reality,
changes in one factor may result in changes in another (for example,
increases in market interest rates may result in lower prepayments and
increased credit losses), which might magnify or counteract the
sensitivities.
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Years Ended December 31, 2003, 2002 and 2001
7. Other Investments - Continued:
The following table represents the securitized portfolio and all managed
loans as of December 31:
Principal Amount > 60
Days
Total Principal Amount Past Due
(In thousands) (In thousands)
--------------------------- --------------------------
2003 2002 2003 2002
------------ ------------ ------------ ------------
Mortgage loans $ 735,517 $ 809,756 $ 16,011 $ 35,226
Equipment and other loans 23,783 29,082 199 1,713
------------ ------------ ------------ ------------
Total loans managed or securitized 759,300 838,838 16,210 36,939
Less:
Loans securitized (421,845) (449,544) (3,599 ) (11,557 )
Loans held for sale or securitization (4,531) (45,462) (1,969 ) (10,271 )
------------ ------------ ------------ ------------
Loans held in portfolio (Note 6) $ 332,924 $ 343,832 $ 10,642 $ 15,111
============ ============ ============ ============
The Company had net charge-offs during the years ended December 31, 2003,
2002 and 2001 of $11.3 million, $24.9 million and $3.4 million, respectively.
The following table summarizes cash flows received from and paid to
securitization trusts for the years ended December 31:
(In thousands)
2003 2002 2001
------------ ----------- ------------
Servicing fees received $ 1,597 $ 1,625 $ 1,730
Other cash flows received on retained interests $ 4,332 $ 5,272 $ 6,978
Servicing advances paid $(4,128 ) $(6,253 ) $ (5,746 )
Collection of servicing advances $ 3,603 $ 5,115 $ 3,796
8. Goodwill:
In July 2001, the FASB issued Statement of Financial Accounting Standards No.
142, "Goodwill and Other Intangible Assets" ("FAS 142"). FAS 142 requires the
use of a nonamortization approach to account for purchased goodwill and
certain intangibles. Under a nonamortization approach, goodwill and certain
intangibles will not be amortized into results of operations, but instead are
reviewed for impairment and written down and charged to results of operations
only in the periods in which the recorded value is more than its fair value.
The Company adopted the provisions of this statement on January 1, 2002. The
Company's goodwill relates to its specialty finance segment. As a result of
the adoption of this standard, the Company stopped amortizing the goodwill
commencing January 1, 2002.
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Years Ended December 31, 2003, 2002 and 2001
8. Goodwill - Continued:
Goodwill represents the excess of the purchase price and related costs over
the fair value assigned to the net assets and liabilities of acquired
operations. On September 1, 1999, the Company acquired CNL Restaurant
Advisors, Inc., formerly CNL Fund Advisors, Inc. (the "Advisor"), CNL
Financial Corporation and CNL Financial Services, Inc. ("CNL Restaurant
Financial Services Group") by issuing 6.15 million shares. Prior to the
acquisition, the Advisor and CNL Restaurant Financial Services Group had been
affiliated with the Company. The acquisitions were accounted for under the
purchase method of accounting. The Company expensed the $76.3 million excess
of the purchase price of the Advisor over the fair value of the net acquired
assets. The Company recognized $45.7 million as goodwill, representing the
excess purchase price of CNL Restaurant Financial Services Group. In June
2000, the Company recorded goodwill related to the Bank's alliance and CNL
Financial Group, Inc.'s ("CFG's") advisory services operations that were
acquired as part of the formation of CNL-Capital. The Company evaluated its
goodwill balance of $56.3 million and did not record any impairments to
goodwill during the years ended December 31, 2003 or 2002. An independent
business valuation company determined the fair market value using a
discounted cash flow valuation approach and a capital market valuation
approach. The discounted cash flow approach values the Company based on the
present value of future forecasted cash flows that an investor in the Company
would anticipate receiving through continued operations. The capital market
approach values the company using an analysis of the multiples of market
values of comparable publicly traded companies.
The following table summarizes the effect of adopting FAS 142 during 2002 on
reported earnings before cumulative effect of accounting change and on net
earnings:
(In thousands)
2003 2002 2001
----------- ----------- ------------
Reported earnings/(loss) before cumulative
effect of accounting change $42,440 $35,590 $ (20,611)
Add back: Goodwill amortization -- -- 3,142
----------- ----------- ------------
Adjusted earnings/(loss) before cumulative
effect of accounting change $42,440 $35,590 $ (17,469)
=========== =========== ============
Reported net income/(loss) $42,440 $35,590 $ (24,452)
Add back: Goodwill amortization -- -- 3,142
----------- ----------- ------------
Adjusted net income/(loss) $42,440 $35,590 $ (21,310)
=========== =========== ============
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Years Ended December 31, 2003, 2002 and 2001
8. Goodwill - Continued:
The following table summarizes the effect of adopting FAS 142 during 2002 on
earnings/(loss) per share of common stock (basic and diluted):
2003 2002 2001
----------------- ---------- ------------
Reported earnings/(loss) before cumulative
effect of accounting change $ 0.94 $ 0.80 $ (0.47)
Add back: Goodwill amortization -- -- 0.07
----------------- ---------- ------------
Adjusted earnings/(loss) before cumulative
effect of accounting change $ 0.94 $ 0.80 $ (0.40)
================= ========== ============
Reported net income/(loss) $ 0.94 $ 0.80 $ (0.56)
Add back: Goodwill amortization -- -- 0.07
----------------- ---------- ------------
Adjusted net income/(loss) $ 0.94 $ 0.80 $ (0.49)
================= ========== ============
9. Borrowings:
Borrowings consist of the following at December 31:
2003 2002
------------------------------- ----------------------------
Amount Average Amount Average
(In thousands) Rate (In thousands) Rate
------------------------------- ----------------------------
Revolver $ 2,000 3.62% $ 14,000 3.92%
Note payable 182,560 6.13% 203,207 5.99%
Mortgage warehouse facilities 93,513 3.41% 145,758 4.07%
Subordinated note payable 43,750 8.50% 43,750 8.50%
Series 2000-A bonds payable 252,477 7.94% 261,369 7.94%
Series 2001-4 bonds payable 33,938 8.90% 38,441 8.90%
Series 2001 bonds payable 118,690 1.70% 124,698 2.28%
Series 2003 bonds payable 24,906 5.67% -- --
----------------- --------------
$ 751,834 $ 831,223
================= ==============
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Years Ended December 31, 2003, 2002 and 2001
9. Borrowings - Continued:
Borrowing resources at December 31, 2003 include:
(In thousands)
--------------- ------------- Expected
Balance Maturity/
Outstanding Capacity Retirement Date1
--------------- ------------- ----------------
Revolver $ 2,000 $ 30,000 October 2004
Note payable 182,560 186,955 (1)
Mortgage warehouse facilities 93,513 260,000 Annual
Subordinated note payable 43,750 43,750 June 2007
Series 2000-A bonds payable 252,477 252,477 2009-2017
Series 2001-4 bonds payable 33,938 33,938 2009-2013
Series 2001 bonds payable 118,690 118,690 October 2006
Series 2003 bonds payable 24,906 24,906 2005-2010
--------------- -------------
$ 751,834 $ 950,716
=============== =============
(1) $0.6 million matures in 2005 and $182 million matures in 2007. The
Company elected to not renew the remaining $4.4 million available
capacity that expired in January 2004.
The Revolver bears interest at a rate of LIBOR plus 225 basis points per
annum, which includes an unused fee of 25 basis points per annum, and
includes financial covenants that provide for the maintenance of certain
financial ratios. The Company was in compliance with all covenants as of
December 31, 2003.
The Company entered into a note payable (the "Note Payable") in 1999 in the
amount of $147.0 million. During 2001, the Company applied proceeds received
from the issuance of bonds to pay down the note. Borrowings under the note
bore initial interest at the rate of the lender's commercial paper plus 56
basis points per annum. During 2002, the Company used net sales proceeds from
the sales of properties and paid off the entire outstanding principal balance
relating to the Note Payable. In June 2002, the Company entered into a loan
and security agreement with Nieuw Amsterdam Receivables Corporation with an
initial borrowing amount of approximately $207 million that bears interest at
a rate of weighted average commercial paper plus 1.25 percent per annum (the
"Note Payable"). Collateral for the Note Payable consists of 172 mortgage
loans that had a carrying value of $209.8 million at December 31, 2003. The
Company used the proceeds from the new facility to refinance a pool of
franchise loans formerly held on its other mortgage warehouse facilities. The
loan has an initial term of five years with a renewal provision based on the
Company's request and the lender's consent.
In January 2003, the Company entered into a Master Credit Facility Agreement
("the Note Payable") with CNL Bank, an affiliate. The Note Payable had a
total borrowing capacity of $5 million and was established to finance real
estate properties. At December 31, 2003, the Company had $0.6 million
outstanding collateralized by mortgages which bears interest at LIBOR plus
325 basis points per annum and require monthly interest only payments until
maturity in 2005. The Company elected not to renew the remaining $4.4 million
available capacity that expired in January 2004.
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Years Ended December 31, 2003, 2002 and 2001
9. Borrowings - Continued:
CNL-Capital maintains mortgage warehouse facilities which have a total
borrowing capacity of $260.0 million at December 31, 2003 and bear interest
at a weighted average rate of 3.41 percent.
The $160 million warehouse credit facility has been extended until March 2005
and the $100 million mortgage warehouse facility matures in June 2004.
Management believes the lender will grant a one-year extension to the
Company.
The Company is obligated under the provisions of its mortgage warehouse
facilities and its Note Payable to pay down certain debt associated with
borrower delinquencies or defaults within a required time frame. Most
properties acquired on the mortgage warehouse facilities are required to be
sold within a certain time frame. Any delinquency, default or delay in the
resale of properties financed through one of these facilities would generally
result in an immediate pay-down of the related debt.
In June 2000, CNL-Capital entered into a $43.75 million senior subordinated
note payable with the Bank that bore interest at a rate of 8.50 percent per
annum. In January 2004, the Company amended the subordinated note payable
agreement while at the same time making a $10 million prepayment reducing the
balance to $33.75 million and reducing the Bank's ownership from the
conversion feature in CNL-Capital from 13.1 percent to 10.11 percent. As of
December 31, 2003, the Bank had not exercised its conversion option. In
addition, the Company agreed to make a mandatory prepayment of $11.875
million prior to or on December 31, 2004. The interest rate was reduced from
8.50 percent to 7.00 percent per annum. The subordinated note will amortize
over five years with a balloon payment due December 31, 2008.
Collateral for the Series 2000-A bonds consist of 258 commercial real estate
properties operated as restaurants leased to tenants, with a carrying value
of $330.0 million at December 31, 2003. The Series 2000-A bonds bear interest
at a weighted average fixed rate of 7.9 percent per annum. The bond indenture
provides for an optional redemption at their remaining principal balance when
remaining rents due under the leases that serve as collateral are less than
ten percent of the aggregate initial rents due under the leases.
Collateral for the Series 2001-4 bonds consists of 60 mortgage loans that had
a carrying value of approximately $45.8 million as of December 31, 2003. The
Series 2001-4 bonds bear interest at a rate of 8.90 percent per annum. The
bond indenture requires monthly principal and interest payments received from
borrowers to be applied to the bonds. The bond indenture also provides for an
optional redemption of the bonds at their remaining principal balance when
the remaining amounts due under the loans that serve as collateral for the
bonds are less than ten percent of the aggregate amounts due under the loans
at the time of issuance.
Collateral for the Series 2001 bonds consist of 121 commercial real estate
properties operated as restaurant units which have a carrying value of
approximately $183.6 million as of December 31, 2003. The bonds are scheduled
to amortize over a 15-year period, but mature in 2006. The 2001 bonds bear
interest at a rate of LIBOR plus 48 basis points per annum. The Company
entered into an interest rate cap agreement with a strike rate of 4.5 percent
to protect against future increases in LIBOR.
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Years Ended December 31, 2003, 2002 and 2001
9. Borrowings - Continued:
In December 2003, the Company issued notes collateralized by a pool of
mortgage loans, Series 2003. The proceeds of $25 million were applied to pay
down short-term and medium term debt. The Company applied 34 mortgage loans
and 4 equipment leases as collateral for the bonds, which had a carrying
value of approximately $46.6 million as of December 31, 2003. The offering
resulted in an initial weighted average maturity of approximately 3.8 years
and rate of interest of approximately 5.67 percent per annum. The bond
indenture requires monthly principal and interest payments received from
borrowers to be applied to the bonds. The Company entered into an interest
rate cap agreement with a strike rate of 3.5 percent to protect against
future increases in LIBOR.
The following schedule of maturities on outstanding indebtedness does not
reflect the annual extensions on the warehouse facilities but assumes that
bonds payable amortize in accordance with estimated payment amounts:
(In thousands)
-----------------
2004 $ 145,959
2005 36,621
2006 138,886
2007 32,780
2008 36,089
Thereafter 361,499
-----------------
$ 751,834
=================
Management believes that net carrying value of the debt approximates fair
value based on current rates at which similar loans would be made to the
Company at similar credit levels and similar maturities.
10.Income Tax:
The Company elected to be taxed as a REIT under the Internal Revenue Code. To
qualify as a REIT, the Company must meet a number of organizational and
operational requirements, including a current requirement that it distribute
at least 90 percent of its taxable income to its stockholders. As a REIT the
Company generally will not be subject to corporate level federal income tax
on net income it distributes to its stockholders, except taxes applicable to
its taxable REIT subsidiaries ("TRSs").
For income tax purposes the Company has two TRSs in which activities of the
specialty finance segment and select activities of the real estate segment
are conducted. Prior to January 1, 2001, Company subsidiaries were not
subject to federal income tax.
Loan valuation adjustments, loss reserves, loan fees, and depreciation, among
other items, are treated differently for tax than for financial reporting
purposes. In the aggregate, the Company's TRSs have an excess of available
future deductible items over future taxable items and as such may more fully
benefit from these items when the related subsidiaries produce a greater
level of taxable income. The CNL Investments TRS does not have sufficient
historical earnings on which to expect a full potential future benefit of
these future deductions. Therefore the Company has recorded a valuation
allowance of $0.8 million against the CNL-Investments TRS deferred tax asset
associated with the future deductible items.
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Years Ended December 31, 2003, 2002 and 2001
10.Income Tax - Continued:
The consolidated provision for federal income taxes differs from the amount
computed by applying the statutory federal income tax rate to the income from
continuing operations as follows for each of the three years ended December
31:
(In thousands)
2003 2002 2001
------------ ------------- -------------
Expected tax at U.S. statutory rate $ 2,761 $ 9,180 $ (5,351 )
REIT income not subject to U.S.
income tax (10,288 ) (9,004 ) 5,949
Goodwill amortization -- -- 902
Change in valuation allowance 7,527 (176 ) (1,500 )
------------ ------------- -------------
Provision for income taxes $ -- $ -- $ --
------------ ------------- -------------
As of December 31, 2003, the Company reversed the valuation allowance of
approximately $7 million previously recorded in the CNL-Capital TRS. The
Company determined that it is more likely than not that this deferred tax
asset will be realized based on historical earnings and projected future
income.
The components of the net deferred tax asset consists of the following at
December 31:
(In thousands)
2003 2002
---------- -----------
Deferred tax asset:
Cash flow hedge related difference $ 4,039 $ 5,789
Loan valuation and related hedge differences (155 ) 1,899
Loan origination fees 646 619
Real estate loss reserves 1,303 300
Reserve for investment losses 1,200 736
Net operating losses 1,092 250
Other 449 (19 )
---------- -----------
Total 8,574 9,574
Valuation allowance (842 ) (7,846 )
---------- -----------
Net recorded deferred tax asset $ 7,732 $ 1,728
========== ===========
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Years Ended December 31, 2003, 2002 and 2001
10.Income Tax - Continued:
The income tax provision (benefit) consists of the following components for
each of the years ended December 31:
(In thousands)
2003 2002 2001
------------ ----------- -------------
Current:
Federal $ 2,678 $ 1,487 $ --
State 458 241 --
------------ ----------- -------------
3,136 1,728 --
------------ ----------- -------------
Deferred:
Federal (8,466 ) (1,487 ) --
State (1,016 ) (241 ) --
------------ ----------- -------------
(9,482 ) (1,728 ) --
------------ ----------- -------------
Total provision/(benefit) $ (6,346 ) $ -- $ --
============ =========== =============
The income tax benefit has been allocated as follows:
(In thousands)
2003 2002 2001
------------ ----------- ------------
Continuing operations $ -- $ -- $ --
Discontinued operations (6,346) -- --
------------ ----------- ------------
Total income tax benefit $ (6,346) $ -- $ --
============ =========== ============
11.Distributions:
For the years ended December 31, 2003, 2002 and 2001, approximately 39
percent, 0 percent and 21 percent, respectively, of the distributions
received by stockholders were considered to be ordinary income and
approximately 61 percent, 100 percent and 79 percent, respectively, were
considered a return of capital for federal income tax purposes. The Company
has continued to declare and pay distributions to its stockholders that are
primarily funded by distributions from CNL-Investments. The Company elected
to reinvest the earnings of the specialty finance segment since 2001. The
remainder of the distributions were funded by sales of its common stock to
the Company's Chairman through a private company affiliate, CFG, and loans
from CFG.
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Years Ended December 31, 2003, 2002 and 2001
12.Related Party Transactions:
The following table and disclosures summarize related party transactions with
affiliated entities for the years ended December 31:
(In thousands)
---------------------------------------
Amounts received (paid): 2003 2002 2001
------------ ------------ ------------
Services purchased from affiliates (1) $ (3,094) $ (3,954) $ (4,564)
Rental and other expenses to affiliates
for office space (2) $ (1,445) $ (1,479) $ (1,237)
Servicing fees from affiliates (3) $ 4,612 $ 5,938 $ 6,771
Referral fees from the Bank $ 1,109 $ 734 $ 1,580
Sale of properties to an affiliate (4) $ -- $ 25,857 $ 13,430
Sale of equipment leases to an affiliate(5) $ -- $ -- $ 1,100
(1) Services purchased from affiliates include human resources, tax planning
and compliance, computer systems support, investor relations and other
services.
(2) In May 2002, the Company purchased a combined five percent partnership
interest in CNL Plaza, Ltd. and CNL Plaza Venture, Ltd. (the "Plaza") for
$0.2 million. Affiliates of James M. Seneff, Jr. and Robert A. Bourne,
each of which is a director of the Company, own the remaining partnership
interests. The Company has severally guaranteed 8.33 percent or $1.3
million of a $15.5 million unsecured promissory note on behalf of the
Plaza. The guaranty continues through the loan maturity in November 2004.
The Company received distributions of $0.07 million and $0.1 million
during the years ended December 31, 2003 and 2002, respectively, from the
Plaza. Since November 1999, the Company has leased its office space from
CNL Plaza, Ltd., an affiliate of a member of the Company's board of
directors. The Company's lease expires in 2014 and provides for scheduled
rent increases over the term of the lease. Rental and other expenses for
the years ended December 31, 2003, 2002 and 2001 include accrued rental
expense (the additional rent expense resulting from the straight-lining
of scheduled rent increases over the term of the lease) and executory
costs. Future commitments due under the office space operating lease are
as follows:
(In thousands)
-------------------
2004 $ 1,106
2005 1,139
2006 1,173
2007 1,209
2008 1,245
Thereafter 8,042
-------------------
$ 13,914
===================
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Years Ended December 31, 2003, 2002 and 2001
12.Related Party Transactions - Continued:
(3) Property management and other administrative services provided to
affiliates investing in restaurant net lease properties and loans.
(4) Proceeds received from affiliates from the sale of 22 properties and 11
properties during 2002 and 2001, respectively, for which the Company
recorded losses of $0.9 million and gains of $0.1 million, respectively.
(5) Proceeds received from an affiliate for the purchase of collection rights
of the current and future cash flows of three equipment leases, for which
no gain or loss was recognized.
During the year ended December 31, 2001, CFG, an affiliate, advanced $6.0
million to the Company in the form of a demand balloon promissory note. The
loan bore interest at a rate of LIBOR plus 2.5 percent or at the base rate as
defined in the agreement. During the year ended December 31, 2001, the
Company converted the outstanding principal balance plus accrued interest
under the advances into 359,722 shares of Company stock. During 2001, the
Company also issued 220,000 shares to CFG in exchange for $3.7 million paid
to the Company in cash. As of December 31, 2001, CFG had advanced an
additional $2.7 million under the same terms as the previous advances. During
2002, CFG advanced an additional $7.5 million to the Company under the same
terms of the previous advances. In June 2002, the Company converted the $10.3
million of outstanding principal plus accrued interest under the advances,
into 604,177 shares of stock. During September 2002 the Company also issued
569,177 additional shares to CFG in exchange for $9.75 million paid to the
Company in cash. During the years 2003 and 2002, CFG advanced an additional
$18.7 million and $4.25 million, respectively, to the Company under the same
terms as the previous advances. The balance outstanding as of December 31,
2003 was $23.5 million, which included accrued interest.
During the year ended December 2003, OrangeDen, LLC, a subsidiary of the
Company entered into a collateral contribution agreement (`the Agreement")
with two separate affiliates, CFG and Cherry Den, LLC, to provide collateral
for a letter of credit to an insurance company for worker's compensation and
general liability coverage relating to employees leased to the restaurant
operations within CNL-Investments. The collateral consists of certificates of
deposit with one-year terms amounting to $353,000 and are included in real
estate and restaurant assets held for sale at December 31, 2003 relating to
this Agreement.
During the year ended December 31, 2002 CNL-Capital acquired a portfolio of
109 real estate properties, which have been classified as held for sale, for
approximately $117 million by acquiring all of the limited partner and
general partners interests in CNL Net Lease Investors, LP, ("NLI"). Eight of
the properties acquired were vacant and the remaining 101 properties were
leased to restaurant operators under triple-net leases, which means the
tenant is responsible for all operating expenses relating to the property,
including property taxes, insurance, maintenance and repairs. The Chairman of
the Board and Vice Chairman of the Board of Directors of the Company, through
an affiliate, owned the 0.1 percent general partner interest in NLI prior to
the acquisition by CNL-Capital and agreed to waive their rights to benefit
from the transaction. Of the original 109 properties, 92 have been sold as of
December 31, 2003.
During the year ended December 31, 2002, a tenant and borrower of the Company
assigned loans in the amount of $7.5 million to Restaurants Acquisitions I,
LLC, an affiliate of the Company. The Company agreed to the assignment and
advanced an additional $3.6 million to the affiliate in exchange for an $11.1
million participating note. The note bears interest at a rate of ten percent
per annum and matures on May 1, 2014. The participating note entitles the
Company to receive a percentage of all cash flows generated by the borrower
on a quarterly basis until the note matures. The Company earned $1.1 million
and $0.7 million in interest income from the affiliate during 2003 and 2002,
respectively.
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Years Ended December 31, 2003, 2002 and 2001
12.Related Party Transactions - Continued:
During the year ended December 31, 2001, an affiliate advanced approximately
$5.8 million to Phoenix Restaurant Group, Inc. and its subsidiaries
(collectively referred to as "PRG"), a tenant and borrower of the Company.
PRG used these proceeds to pay outstanding obligations, including obligations
to the Company.
13.Concentration of Credit Risk:
No individual lessee or borrower (or affiliated groups of lessees or
borrowers) or restaurant chains represented more than ten percent of the
Company's revenues relating to its properties, loans and secured equipment
leases during the years ended December 31, 2003, 2002 or 2001.
Although the Company's properties are geographically diverse throughout the
United States and lessees and borrowers operate a variety of restaurant
concepts, 15 restaurant chains constitute 72 percent of the Company's
properties. Failure of any one of these restaurant chains or any significant
lessees or borrowers could significantly impact results of operations if the
Company is not able to timely protect its interest.
14.Segment Information:
The Company has established CNL-Investments and CNL-Capital Corp. as separate
legal entities to operate and measure the real estate and specialty finance
segments, respectively.
CNL-Investments is the parent company of CNL APF Partners LP, a real estate
company that acquires and holds real estate, mortgage and equipment loans
generally until maturity. CNL-Capital Corp. is the parent of CNL-Capital, a
specialty finance company that offers financing, servicing, advisory and
other services to restaurant operators. CNL-Capital acquires restaurant real
estate properties subject to triple-net leases, utilizing short-term debt,
and then sells them generally within one year.
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Years Ended December 31, 2003, 2002 and 2001
14.Segment Information - Continued:
The following tables summarize the results for the years 2003, 2002 and 2001
for CNL-Investments and CNL-Capital Corp. Consolidating eliminations and
other results of the parent of CNL-Investments and CNL-Capital Corp. are
reflected in the "other" column.
Year Ended December 31, 2003
(In thousands)
CNL- CNL-Capital Consolidated
Investments Corp. Other Totals
------------- -------------- ------------- ---------------
Revenues $ 85,263 $ 32,254 $ (3,180 ) $ 114,337
------------- -------------- ------------- ---------------
General operating and administrative 8,980 18,645 (2,417 ) 25,208
Interest expense 27,481 23,653 (558 ) 50,576
Property expenses, state and other taxes 1,145 (3 ) -- 1,142
Depreciation and amortization 11,587 934 -- 12,521
Loss on termination of cash flow hedges -- 502 -- 502
Impairments and provisions on assets 5,494 8,756 -- 14,250
Minority interest net of equity in
earnings 114 1,691 -- 1,805
Loss on sale of assets 148 9 -- 157
------------- -------------- ------------- ---------------
54,949 54,187 (2,975 ) 106,161
------------- -------------- ------------- ---------------
Discontinued operations:
Earnings/(loss) from discontinued
operations, net of income tax benefit (2,547 ) 36,811 -- 34,264
------------- -------------- ------------- ---------------
Net income $ 27,767 $ 14,878 $ (205 ) $ 42,440
============= ============== ============= ===============
Assets at December 31, 2003 $ 811,203 $ 491,923 $ (5,010 ) $ 1,298,116
============= ============== ============= ===============
Investments accounted for under the
equity method at December 31, 2003 $ 1,038 $ -- $ -- $ 1,038
============= ============== ============= ===============
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Years Ended December 31, 2003, 2002 and 2001
14.Segment Information - Continued:
Year Ended December 31, 2002
(In thousands)
CNL- CNL-Capital Consolidated
Investments Corp. Other Totals
-------------- -------------- ----------- ---------------
Revenues $ 88,600 $ 250,784 $ (3,221 ) $ 336,163
-------------- -------------- ----------- ---------------
Cost of real estate sold -- 193,179 -- 193,179
General operating and administrative 11,764 19,064 (2,395 ) 28,433
Interest expense 30,590 28,490 (679 ) 58,401
Property expenses, state and other taxes 2,939 390 -- 3,329
Depreciation and amortization 11,890 1,243 -- 13,133
Impairments and provisions on assets 4,476 5,150 -- 9,626
Minority interest net of equity in earnings 128 2,180 -- 2,308
Loss on sale of assets 330 17 -- 347
-------------- -------------- ----------- ---------------
62,117 249,713 (3,074 ) 308,756
-------------- -------------- ----------- ---------------
Discontinued operations:
Earnings/(loss) from discontinued
operations, net of income tax
benefit (3,313 ) 11,496 -- 8,183
-------------- -------------- ----------- ---------------
Net income $ 23,170 $ 12,567 $ (147 ) $ 35,590
============== ============== =========== ===============
Assets at December 31, 2002 $ 831,491 $ 555,971 $ (4,012 ) $ 1,383,450
============== ============== =========== ===============
Investments accounted for under the
equity method at December 31, 2002 $ 1,121 $ -- $ -- $ 1,121
============== ============== =========== ===============
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Years Ended December 31, 2003, 2002 and 2001
14.Segment Information - Continued:
Year Ended December 31, 2001
(In thousands)
CNL- CNL-Capital Consolidated
Investments Corp. Other Totals
------------- --------------- ----------- ---------------
Revenues $ 88,641 $ 190,123 $ (4,351 ) $ 274,413
------------- --------------- ----------- ---------------
Cost of real estate sold -- 118,372 -- 118,372
General operating and administrative 8,757 22,564 (1,729 ) 29,592
Interest expense 38,765 31,787 (802 ) 69,750
Property expenses, state and other taxes 2,528 143 214 2,885
Depreciation and amortization 12,196 5,519 -- 17,715
Loss on termination of cash flow hedges 1,643 6,417 -- 8,060
Impairments and provisions on assets 41,000 488 -- 41,488
Minority interest and equity in earnings 132 1,020 -- 1,152
Loss on sale of assets 1,116 22 -- 1,138
Cumulative effect of accounting change -- 3,841 -- 3,841
------------- --------------- ----------- ---------------
106,137 190,173 (2,317 ) 293,993
------------- --------------- ----------- ---------------
Discontinued operations:
Earnings/(loss) from discontinued
operations, net of income tax
benefit (5,324 ) 452 -- (4,872 )
------------- --------------- ----------- ---------------
Net income/(loss) $ (22,820 ) $ 402 $ (2,034 ) $ (24,452 )
============= =============== =========== ===============
Assets at December 31, 2001 $ 920,911 $ 643,154 $ (3,948 ) $ 1,560,117
============= =============== =========== ===============
Investments accounted for under the
equity method at December 31, 2001 $ 1,058 $ -- $ -- $ 1,058
============= =============== =========== ===============
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Years Ended December 31, 2003, 2002 and 2001
15.Commitments and Contingencies:
In the ordinary course of business, the Company has outstanding commitments
to qualified borrowers and tenants. These commitments, including development
agreements, if accepted by the potential borrowers, obligate the Company to
provide funding. At December 31, 2003, the Company had committed to fund $88
million to qualified tenants.
Certain operating leases provide that, in the event the Company sells the
leased property before the fifth lease year, the annual rent will increase to
the fifth year annual rent effective on the day of the sale, and that the
Company will compensate the tenant for such increase using a portion of the
proceeds from the sale of the property.
16.Selected Quarterly Financial Data:
The following table presents selected unaudited quarterly financial data for
each fiscal quarter during the years ended December 31, 2003 and 2002:
(In thousands except for share data)
2003 Quarter First Second Third Fourth Year
--------------------------------- ----------- ---------- ---------- ----------- -----------
Continuing operations:
Revenues (1) $ 26,915 $ 29,381 $30,121 $27,920 $ 114,337
=========== ========== ========== =========== ===========
Earnings/(loss) from continuing
operations, net (1) $ 718 $ 1,642 $ 5,947 $ (131 ) $ 8,176
Discontinued operations:
Earnings and gains
from discontinued
operations, net (1) 7,301 8,949 7,101 10,913 34,264
----------- ---------- ---------- ----------- -----------
Net Income $ 8,019 $ 10,591 $13,048 $10,782 $ 42,440
=========== ========== ========== =========== ===========
Earnings per share:
Continuing operations (1) $ 0.02 $ 0.04 $ 0.13 $ (0.01 ) $ 0.18
=========== ========== ========== =========== ===========
Discontinued operations (1) $ 0.16 $ 0.19 $ 0.16 $ 0.25 $ 0.76
=========== ========== ========== =========== ===========
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Years Ended December 31, 2003, 2002 and 2001
16.Selected Quarterly Financial Data - Continued:
(In thousands except for share data)
2002 Quarter First Second Third Fourth Year
--------------------------------- ---------- ----------- ---------- ---------- ------------
Continuing operations:
Revenues (1) $69,525 $ 137,498 $80,658 $48,482 $ 336,163
========== =========== ========== ========== ============
Earnings/(loss) from continuing
operations, net (1) 6,215 13,944 8,040 (792 ) 27,407
Discontinued operations:
Earnings and gains
from discontinued
operations, net (1) 217 1,098 3,203 3,665 8,183
---------- ----------- ---------- ---------- ------------
Net Income $6,432 $ 15,042 $11,243 $ 2,873 $ 35,590
========== =========== ========== ========== ============
Earnings/(loss) per share:
Continuing operations (1) $ 0.14 $ 0.32 $ 0.18 $ (0.03 ) $ 0.61
========== =========== ========== ========== ============
Discontinued operations (1) $ 0.01 $ 0.02 $ 0.07 $ 0.09 $ 0.19
========== =========== ========== ========== ============
(1) The results of operations relating to properties that were either
disposed of or that were classified as held for sale during the year
ended December 31, 2003 and 2002 are reported as discontinued operations.
In addition, management adopted FIN 46 in 2003 which resulted in the
consolidation of two of the Company's previously unconsolidated
subsidiaries. The Company restated all prior periods to conform with the
2003 presentation.
Item 9.Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
None.
Item 9A.Controls and Procedures
Quarterly Evaluation. Management carried out an evaluation as of December 31,
2003 of the effectiveness of the design and operation of the Company's
"disclosure controls and procedures," which management refers to as the
Company's disclosure controls. This evaluation was done under the supervision
and with the participation of management, including the Company's Chief
Executive Officer and Chief Financial Officer. Rules adopted by the Commission
require that management present the conclusions of the Chief Executive Officer
and Chief Financial Officer about the effectiveness of the Company's disclosure
controls as of the end of the period covered by this annual report.
CEO and CFO Certifications. Included as Exhibits 31.1 and 31.2 to this Annual
Report on Form 10-K are forms of "Certification" of the Company's Chief
Executive Officer and Chief Financial Officer. The forms of Certification are
required in accordance with Section 302 of the Sarbanes-Oxley Act of 2002. This
section of the Annual Report on Form 10-K which you are currently reading is the
information concerning the evaluation referred to in the Section 302
certifications. This information should be read in conjunction with the Section
302 certifications for a more complete understanding of the topics presented.
Disclosure Controls and Procedures and Internal Control over Financial
Reporting. Disclosure controls and procedures are designed with the objective of
ensuring that information required to be disclosed in the Company's reports
filed or submitted under the Exchange Act, such as this Annual Report on Form
10-K, is recorded, processed, summarized and reported within the time periods
specified in the Commission's rules and forms. Disclosure controls and
procedures are also designed with the objective of ensuring that such
information is accumulated and communicated to the Company's management,
including the Company's Chief Executive Officer and Chief Financial Officer, as
appropriate, to allow timely decisions regarding required disclosure.
Internal control over financial reporting is a process designed by, or under the
supervision of, the Company's Chief Executive Officer and Chief Financial
Officer, and effected by the Company's Board of Directors, management and other
personnel, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles and
includes those policies and procedures that:
o pertain to the maintenance of records that in reasonable detail
accurately and fairly reflect the transactions and dispositions of our
assets;
o provide reasonable assurance that transactions are recorded as necessary
to permit preparation of financial statements in accordance with
generally accepted accounting principles, and that the Company's receipts
and expenditures are being made only in accordance with authorizations of
management or the Company's Board; and
o provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the Company's assets that
could have a material adverse effect on the Company's financial
statements.
Limitations on the Effectiveness of Controls. Management, including the
Company's Chief Executive Officer and Chief Financial Officer, do not expect
that the Company's disclosure controls and procedures or the Company's internal
control over financial reporting will prevent all errors and all fraud. A
control system, no matter how well conceived and operated, can provide only
reasonable, not absolute, assurance that the objectives of the control system
are met. Further, the design of a control system must reflect the fact that
there are resource constraints, and the benefits of controls must be considered
relative to their costs. Because of the inherent limitations in all control
systems, no evaluation of controls can provide absolute assurance that all
control issues and instances of fraud, if any, within the company have been
detected. These inherent limitations include the realities that judgments in
decision-making can be faulty, and that breakdowns can occur because of simple
error or mistake. Additionally, controls can be circumvented by the individual
acts of some persons, by collusion of two or more people, or by management's
override of the control. The design of any system of controls also is based in
part upon certain assumptions about the likelihood of future events, and there
can be no assurance that any design will succeed in achieving its stated goals
under all potential future conditions; over time, controls may become inadequate
because of changes in conditions, or the degree of compliance with the policies
or procedures may deteriorate. Because of the inherent limitations in a
cost-effective control system, misstatements due to error or fraud may occur and
not be detected.
Conclusions. Based upon the evaluation, the Company's Chief Executive Officer
and Chief Financial Officer have concluded that, as of December 31, 2003 and
subject to the limitations noted above, the Company's disclosure controls and
procedures were effective at the reasonable assurance level to ensure that
material information relating to the Company and the Company's consolidated
subsidiaries is made known to management, including the Company's Chief
Executive Officer and Chief Financial Officer.
During the three months ended December 31, 2003, there were no significant
changes in the Company's internal control over financial reporting that has
materially affected, or are reasonably likely to materially affect, the
Company's internal control for financial reporting.
PART III
Item 10. Directors and Executive Officers of the Registrant
The information required by this Item is incorporated by reference to
the Company's Definitive Proxy Statement to be filed with the Commission no
later than April 30, 2004.
Item 11. Executive Compensation
The information required by this Item is incorporated by reference to
the Company's Definitive Proxy Statement to be filed with the Commission no
later than April 30, 2004.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The information required by this Item is incorporated by reference to
the Company's Definitive Proxy Statement to be filed with the Commission no
later than April 30, 2004.
Item 13. Certain Relationships and Related Transactions
The information required by this Item is incorporated by reference to
the Company's Definitive Proxy Statement to be filed with the Commission no
later than April 30, 2004.
Item 14. Principal Accountant Fees and Services
The information required by this Item is incorporated by reference to
the Company's Definitive Proxy Statement to be filed with the Commission no
later than April 30, 2004.
PART IV
Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) The following documents are filed as part of this report.
1. Consolidated Financial Statements
Report of Independent Certified Public Accountants.
Consolidated Balance Sheets at December 31, 2003 and 2002.
Consolidated Statements of Operations for the years ended December
31, 2003, 2002 and 2001.
Consolidated Statements of Stockholders' Equity and Comprehensive
Income/(Loss) for the years ended December 31, 2003, 2002 and 2001.
Consolidated Statements of Cash Flows for the years ended December
31, 2003, 2002 and 2001.
Notes to Consolidated Financial Statements.
2. Financial Statement Schedules
Schedule II - Valuation and Qualifying Accounts for the years ended
December 31, 2003, 2002 and 2001.
Schedule III - Real Estate and Accumulated Depreciation at December
31, 2003.
Notes to Schedule III - Real Estate and Accumulated Depreciation at
December 31, 2003.
Schedule IV - Mortgage Loans on Real Estate at December 31, 2003.
All other Schedules are omitted as the required information is
inapplicable or is presented in the financial statements or notes
thereto.
3. 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 Restaurant Properties, Inc. Second Amended and Restated
Articles of Incorporation (included as Exhibit 3.3 to the
Registrant's Form 10-Q for the quarter ended June 30, 2000
and incorporated herein by reference).
3.2 Articles of Amendment to Second Amended and Restated Articles
of Incorporation of CNL Restaurant Properties, Inc. (included
as Exhibit 3.4 to the Registrant's Form 10-Q for the quarter
ended June 30, 2002 and incorporated herein by reference).
3.3 Articles of Amendment to Second Amended and Restated Articles
of Incorporation of CNL American Properties Fund, Inc.
(included as Exhibit 3.5 to the Registrant's Form 10-Q for
the quarter ended June 30, 2003 and incorporated herein by
reference).
3.4 Second Amended and Restated Bylaws of CNL American Properties
Fund, Inc. (included as Exhibit 3.6 to the Registrant's Form
10-Q for the quarter ended September 30, 2003 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 the Registrant 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 the Registrant and Steven D. Shackelford, dated as of
February 18, 1998, between the Registrant and Curtis B.
McWilliams, and dated as of September 1, 1999, between the
Registrant and each of Howard J. Singer, John L. Farren,
Timothy J. Neville, Michael I. Wood and Barry L. Goff
(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 Franchise Receivable Funding and Servicing Agreement dated as
of October 14, 1999 between CNL APF Partners, LP and Neptune
Funding Corporation (included as Exhibit 10.5 to the
Registrant's Form 10-K for the year ended December 31, 1999
and incorporated herein by reference).
10.4 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 (included as Exhibit
10.6 to the Registrant's Form 10-K for the year ended
December 31, 1999 and incorporated herein by reference).
10.5 1999 Performance Incentive Plan (included as Exhibit 10.1 to
Amendment No. 1 to the Form S-4 and incorporated herein by
reference).
10.6 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).
10.7 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).
10.8 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).
10.9 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).
10.10 Employment Agreement by and between Michael Wood and the
Registrant, dated August 31, 1999 (included as Exhibit 10.19
to the Registrant's Form 10-Q for the quarter ended March 31,
2001 and incorporated herein by reference).
10.11 Employment Agreement by and between Brent Heaton and the
Registrant, dated September 29, 1999 (included as Exhibit
10.20 to the Registrant's Form 10-Q for the quarter ended
March 31, 2001 and incorporated herein by reference).
10.12 Addendum to Employment Agreement dated as of November 1,
1999, between the Registrant and Curtis McWilliams (included
as Exhibit 10.21 to the Registrant's Form 10-Q for the
quarter ended March 31, 2001 and incorporated herein by
reference). The following persons have signed a substantially
identical Addendum relating to their respective employment
agreements; Steve Shackelford (dated November 1, 1999), John
Walker (dated November 3, 1999), Barry Goff (dated November
1, 1999), and Brent Heaton (dated November 3, 1999).
10.13 Addendum to Employment Agreement dated as of November 1,
1999, between the Registrant and Robert Chapin (included as
Exhibit 10.22 to the Registrant's Form 10-Q for the quarter
ended March 31, 2001 and incorporated herein by reference).
The following persons have signed a substantially identical
Addendum relating to their respective employment agreements:
Howard Singer (dated November 1, 1999), Michael Wood (dated
November 8, 1999) and Timothy Neville (dated November 24,
1999).
10.14 Second Addendum to Employment Agreement dated as of June 16,
2000, between the Registrant and Curtis McWilliams (included
as Exhibit 10.23 to the Registrant's Form 10-Q for the
quarter ended March 31, 2001 and incorporated herein by
reference). The following persons have signed a substantially
identical Second Addendum relating to their respective
employment agreements: Howard Singer (dated June 19, 2000),
Robert Chapin (dated June 20, 2000) and Brent Heaton (dated
October 30, 2000).
10.15 Second Addendum to Employment Agreement dated as of August
20, 2000, between the Registrant and Barry Goff (included as
Exhibit 10.24 to the Registrant's Form 10-Q for the quarter
ended March 31, 2001 and incorporated herein by reference).
10.16 Second Addendum to Employment Agreement dated as of October
24, 2000, between the Registrant and Michael Wood (included
as Exhibit 10.27 to the Registrant's Form 10-Q for the
quarter ended March 31, 2001 and incorporated herein by
reference).
10.17 Amended and Restated Master Purchase Agreement dated as of
October 11, 2001, among Bank of America, N.A., CNL Financial
VII, LP and CNL Franchise Network, LP (included as Exhibit
10.29 to the Registrant's Form 10-K for the year ended
December 31, 2001 and incorporated herein by reference).
10.18 Third Amended and Restated Side Letter dated as of October
11, 2001, among Bank of America, N.A., CNL Financial VII, LP
and CNL Franchise Network, LP (included as Exhibit 10.30 to
the Registrant's Form 10-K for the year ended December 31,
2001 and incorporated herein by reference).
10.19 Loan and Security Agreement dated as of June 14, 2002 between
CNL Financial IX, LP and Nieuw Amsterdam Receivables
Corporation (included as Exhibit 10.31 to the Registrant's
Form 10-Q for the quarter ended June 30, 2002 and
incorporated herein by reference).
10.20 Letter Agreement dated December 15, 2003 between Bank of
America, N.A., CNL Financial VII, LP and CNL Restaurant
Capital, LP (filed herewith).
10.21 Employment Agreement dated as of May 5, 2003 by and between
CNL Franchise Network GP Corp. and Steven D. Shackelford
(filed herewith).
10.22 Employment Agreement dated as of May 5, 2003 by and between
CNL Franchise Network GP Corp. and Curtis B. McWilliams
(filed herewith).
21 Subsidiaries of the Registrant (filed herewith).
31.1 Certification of Chief Executive Officer Pursuant to Rule
13a-14(a) as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 (filed herewith).
31.2 Certification of Chief Financial Officer Pursuant to Rule
13a-14(a) as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 (filed herewith).
32.1 Certification of Chief Executive Officer pursuant to 18
U.S.C. Section 1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (filed herewith).
32.2 Certification of Chief Financial Officer pursuant to 18
U.S.C. Section 1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (filed herewith).
(b) The Registrant filed no reports on Form 8-K during the period October 1,
2003 through December 31, 2003.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on the 12th day of
March, 2004.
CNL RESTAURANT PROPERTIES, INC.
By:
/s/ CURTIS B. McWILLIAMS
----------------------------------
Curtis B. McWilliams
Chief Executive Officer
(Principal Executive Officer)
/s/ STEVEN D. SHACKELFORD
----------------------------------
Steven D. Shackelford
Chief Financial Officer
(Principal Financial and Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ CURTIS B. McWILLIAMS Chief Executive Officer March 12, 2004
- --------------------------------------------- (Principal Executive Officer)
Curtis B. McWilliams
/s/ STEVEN D. SHACKELFORD Chief Financial Officer March 12, 2004
- --------------------------------------------- (Principal Financial and Accounting
Steven D. Shackelford Officer)
/s/ JAMES M. SENEFF, JR. Director, Chairman of the Board March 12, 2004
- ---------------------------------------------
James M. Seneff, Jr.
/s/ ROBERT A. BOURNE Director March 12, 2004
- ---------------------------------------------
Robert A. Bourne
/s/ G. RICHARD HOSTETTER Director March 12, 2004
- ---------------------------------------------
G. Richard Hostetter
/s/ J. JOSEPH KRUSE Director March 12, 2004
- ---------------------------------------------
J. Joseph Kruse
/s/ RICHARD C. HUSEMAN Director March 12, 2004
- ---------------------------------------------
Richard C. Huseman
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 31, 2003, 2002 and 2001
(In thousands)
Additions Deductions
----------------------------- ------------------------------
Balance at Charged to Charged to Deemed Balance
Beginning Costs and Other Uncollec- Collected/ at End
Year Description of Year Expenses Accounts tible Recovered of Year
- --------- ----------------- ------------- ------------- -------------- ------------- ------------- ---------------
2001 Allowance for
doubtful
accounts (a) $ 9,968 $ 452 $ 1,101 (b) $ 2,557 (c) $ 4,119 $ 4,845
Deferred tax
asset
valuation
allowance 0 -- 7,703 -- -- 7,703
------------- ------------- -------------- ------------- ------------- ---------------
$ 9,968 $ 452 $ 8,804 $ 2,557 $ 4,119 $ 12,548
============= ============= ============== ============= ============= ===============
2002 Allowance for
doubtful
accounts (a) $ 4,845 $ 627 $ 2,695 (b) $ 4,408 (c) $ 1,206 $ 2,553
Deferred tax
asset
valuation
allowance 7,703 -- 1,871 -- 1,728 7,846
------------- ------------- -------------- ------------- ------------- ---------------
$ 12,548 $ 627 $ 4,566 $ 4,408 $ 2,934 $ 10,399
============= ============= ============== ============= ============= ===============
2003 Allowance for
doubtful
accounts (a) $ 2,553 $ 4,771 $ 532 (b) $ 4,181 (c) $ 399 $ 3,276
Deferred tax
asset
valuation
allowance 7,846 -- 842 -- 7,846 842
------------- ------------- -------------- ------------- ------------- ---------------
$ 10,399 $ 4,771 $ 1,374 $ 4,181 $ 8,245 $ 4,118
============= ============= ============== ============= ============= ===============
(a) Deducted from receivables and accrued rental income on the balance sheet.
(b) Reduction of rental, earned and other income.
(c) Amounts written off as uncollectible.
CNL RESTARAUNT PROPERTIES, INC. AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2003
(In thousands)
Costs Capitalized Gross Amount at Which
Initial Cost Subsequent to Acquisition Carried at Close of Period
Impair- Encum- Buildings and Improve- Carrying Building and
ment brances Land Improvements ments Costs Land Improvements Total
Properties the Company
has invested in Under
Operating Leases:
Applebee's Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Antioch, Tennessee - (i) 610 770 - - 610 770 1,380
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Clarksville, Tennessee - (i) 556 983 - - 556 983 1,539
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Columbia, Tennessee - (i) 626 936 - - 626 936 1,562
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Cookeville, Tennessee - (i) 490 1,004 - - 490 1,004 1,493
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Hendersonville, Tennessee - (i) 550 967 - - 550 967 1,516
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Hermitage, Tennessee - (i) 735 827 - - 735 827 1,563
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Hopkinsville, Kentucky - (i) 390 943 - - 390 943 1,333
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Lebanon, Tennessee - (i) 568 925 - - 568 925 1,493
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Madison, Tennessee - (i) 740 836 - - 740 836 1,576
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Montclair, California - 874- - 880 - 874 880 1,755
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Moscow, Idaho - 537- - 1,194 - 537 1,194 1,731
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Rockford, Illinois - (i) 604 - - - 604 - 604
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Salem, Oregon - 778- - 1,154 - 778 1,154 1,932
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
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Arby's Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Allen, Texas - (i) 509 - - - 509 - 509
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Arab, Alabama - (i) 231 456 - - 231 456 687
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Atlanta, Georgia - (i) 648 - 655 - 648 655 1,304
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Auburndale, Florida - (i) 327 391 - - 327 391 718
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Avon, Indiana - (i) 338 497 - - 338 497 836
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Bartow, Florida - (i) 226 414 - - 226 414 641
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Brooksville, Florida - (i) 267 422 - - 267 422 688
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Brooksville, Florida - (i) 248 369 - - 248 369 617
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Canton, Georgia - (i) 586 - 607 - 586 607 1,193
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Columbus, Ohio - (i) 442 - 594 - 442 594 1,036
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Columbus, Ohio - (i) 484 - 576 - 484 576 1,060
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Douglasville, Georgia - (i) 709 - 546 - 709 546 1,255
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Flower Mound, Texas - (i) 434 - 618 - 434 618 1,052
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Grand Rapids, Michigan - (i) 313 - - - 313 - 313
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Greensboro, North Carolina - (i) 363 405 - - 363 405 768
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Greenville, North Carolina - (i) 278 490 - - 278 490 768
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Hudson, Florida - (i) 271 489 - - 271 489 759
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Indianapolis, Indiana - (i) 440 - 677 - 440 677 1,117
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Jonesville, North Carolina - (i) 225 540 - - 225 540 765
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Kernersville, North Carolina - (i) 273 413 - - 273 413 686
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Kinston, North Carolina - (i) 269 485 - - 269 485 754
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Lakeland, Florida - (i) 236 452 - - 236 452 688
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Lexington, North Carolina - (i) 321 463 - - 321 463 784
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Myrtle Beach, South Carolina - (i) 421 - 633 - 421 633 1,055
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
New Port Richey, Florida - (i) 243 398 - - 243 398 641
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Orange Park, Florida - (i) 463 - 593 - 463 593 1,056
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Plant City, Florida - (i) 196 444 - - 196 444 640
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Redford , Michigan - (i) 413 - 673 - 413 673 1,086
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Tampa, Florida - (i) 322 372 - - 322 372 694
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
The Colony, Texas - (i) 504 - - - 504 - 504
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Vancouver, Washington - (i) 733 - 666 - 733 666 1,399
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Walker, Michigan - (i) 498 - 701 - 498 701 1,200
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Whitehall, Ohio - (i) 523 - 289 - 523 289 812
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
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Bakers Square Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Alsip, Illinois - (i) 449 728 - - 449 728 1,177
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Burbank, Illinois - (i) 680 1,041 - - 680 1,041 1,721
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Cherry Valley, Illinois - (i) 419 849 - - 419 849 1,268
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Coon Rapids, Minnesota - (i) 544 1,132 - - 544 1,132 1,676
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Deerfield, Illinois - (i) 573 468 - - 573 468 1,041
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Downers Grove, Illinois - (i) 538 778 - - 538 778 1,316
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Homewood, Illinois - (i) 601 760 - - 601 760 1,362
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
LaGrange, Illinois - (i) 591 770 - - 591 770 1,362
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Lansing, Illinois - (i) 648 870 - - 648 870 1,517
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Mankato, Minnesota - (i) 489 1,142 - - 489 1,142 1,631
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Matteson, Illinois - (i) 664 853 - - 664 853 1,517
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Merrillville, Indiana - (i) 567 1,177 - - 567 1,177 1,744
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Palatine, Illinois - (i) 687 675 - - 687 675 1,362
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Palos Heights, Illinois - (i) 375 734 - - 375 734 1,110
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Saint Charles, Illinois - (i) 615 631 - - 615 631 1,245
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Westmont, Illinois - (i) 518 591 - - 518 591 1,109
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Willowbrook, Illinois - (i) 586 718 - - 586 718 1,304
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Bandana's Bar-B-Q Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Arnold, Missouri (j) (i) 373 873 - - 373 873 1,247
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Collinsville, Illinois (j) (i) 347 829 - - 347 829 1,176
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Columbia, Missouri (j) (i) 502 - 920 - 502 920 1,422
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Crystal City, Missouri (j) 273- 903 - - 273 903 1,177
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Fenton, Missouri (j) 624- 1,028 - - 624 1,028 1,652
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Bennigan's Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Arvada, Colorado - (i) 714 1,303 - - 714 1,303 2,017
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Bedford, Texas - (i) 768 - - - 768 - 768
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Canton, Ohio - (i) 1,434 - 835 - 1,434 835 2,269
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Clearwater, Florida - (i) 900 - - - 900 - 900
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Colorado Springs, Colorado - (i) 794 - - - 794 - 794
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Copley, Ohio - (i) 1,434 - 835 - 1,434 835 2,269
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Englewood, Colorado - (i) 665 - - - 665 - 665
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Englewood, New Jersey - (i) 1,460 901 - - 1,460 901 2,361
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Florham Park, New Jersey - (i) 1,078 - - - 1,078 - 1,078
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Glenview, Illinois - (i) 1,019 - 1,790 - 1,019 1,790 2,809
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Grapevine, Texas - (i) 1,039 - 1,523 - 1,039 1,523 2,562
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Houston, Texas - (i) 909 - - - 909 - 909
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Jacksonville, Florida - (i) 833 - - - 833 - 833
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Jacksonville, Florida - (i) 779 - - - 779 - 779
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Lone Tree, Colorado - (i) 1,075 - 1,502 - 1,075 1,502 2,578
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Mount Laurel, New Jersey - (i) 1,306 1,031 - - 1,306 1,031 2,337
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
North Richland Hills, Texas - (i) 886 - - - 886 - 886
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Ocala, Florida - (i) 693 1,073 - - 693 1,073 1,766
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Oklahoma City, Oklahoma - 757- - - - 757 - 757
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Orlando, Florida - (i) 1,585 874 - - 1,585 874 2,460
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Pensacola, Florida - (i) 692 - - - 692 - 692
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Saint Louis Park, Minnesota - (i) 885 - - - 885 - 885
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Tampa, Florida - 741- - - - 741 - 741
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Woodridge, Illinois - (i) 790 - - - 790 - 790
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Black Angus Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Dublin, California - (i) 1,023 - 1,275 - 1,023 1,275 2,298
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Fort Worth, Texas (j) 679- - 1,029 - 679 1,029 1,708
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Glendale, Arizona (j) 745- - 1,083 - 745 1,083 1,828
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Grapevine, Texas (j) 412- - 1,804 - 412 1,804 2,216
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Hillsboro, Texas - 405- - - - 405 - 405
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Orem, Utah - (i) 799 - 1,233 - 799 1,233 2,032
- --------------------------------------------------------------------------------------------------------------------------------
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Boston Market Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Atlanta, Georgia - (i) 774 - 508 - 774 508 1,282
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Cary, North Carolina - 533- 801 - - 533 801 1,334
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Chandler, Arizona - 440- 476 - - 440 476 916
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Columbus, Ohio - (i) 354 606 - - 354 606 960
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Gambrills, Maryland - (i) 668 - 662 - 668 662 1,330
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Glendale, Arizona - (i) 567 404 - - 567 404 970
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Indianapolis, Indiana - (i) 886 - 649 - 886 649 1,534
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Lake Worth, Florida - 570- - 900 - 570 900 1,470
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Lansing, Michigan - (i) 516 - 573 - 516 573 1,089
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Riverdale, Maryland - (i) 526 504 - - 526 504 1,031
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Scottsdale, Arizona - 522- 410 - - 522 410 932
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Waldorf, Maryland - (i) 652 776 - - 652 776 1,428
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Warwick, Rhode Island - (i) 235 589 - - 235 589 824
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Burger King Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Burbank, Illinois - (i) 543 - 552 - 543 552 1,096
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Chadbourn, North Carolina - 217- - 859 - 217 859 1,076
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Chattanooga, Tennessee - (i) 680 - 527 - 680 527 1,207
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Chattanooga, Tennessee (j) (i) 770 377 - - 770 377 1,147
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Chicago, Illinois - (i) 918 - 713 - 918 713 1,631
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Clinton, North Carolina - 350- - 663 - 350 663 1,012
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Cut Off, Louisiana - 323- 1,219 - - 323 1,219 1,542
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Highland, Indiana - (i) 650 - 600 - 650 600 1,250
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Kent, Ohio - (i) 233 690 - - 233 690 923
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Lacey, Washington - 308- 754 - - 308 754 1,062
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Lake Charles, Louisiana - 360- 1,063 - - 360 1,063 1,423
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Lynnwood, Washington (j) 449- 627 - - 449 627 1,076
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Manchester, New Hampshire - 776- 459 - - 776 459 1,235
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Natchez, Mississippi - 273- 718 - - 273 718 992
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Oak Lawn, Illinois - (i) 1,211 - 741 - 1,211 741 1,953
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Olympia, Washington - -- 712 - - (h) 712 712
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Ooltewah, Tennessee - (i) 546 - 659 - 546 659 1,205
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Opelousas, Louisiana - 625- 959 - - 625 959 1,584
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Portland, Oregon - 500- - - - 500 - 500
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Shelton, Washington - 424- 822 - - 424 822 1,247
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Spanaway, Washington - 417- 762 - - 417 762 1,179
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Warren, Michigan - 376- 821 - - 376 821 1,197
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Wilmington, North Carolina - 349- - 702 - 349 702 1,050
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Chevy's Fresh Mex Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Altamonte Springs, Florida - (i) 1,260 1,623 - - 1,260 1,623 2,883
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Annapolis, Maryland - 1,372- - - - 1,372 - 1,372
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Arapahoe, Colorado - (i) 986 1,680 - - 986 1,680 2,667
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Atlanta, Georgia (j) (i) 1,464 1,874 - - 1,464 1,874 3,338
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Beaverton, Oregon - (i) 938 1,682 - - 938 1,682 2,620
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Bloomington, Minnesota - (i) 869 1,310 - - 869 1,310 2,179
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Brandon, Florida (j) (i) 844 1,426 - - 844 1,426 2,270
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Clearwater, Florida (j) (i) 984 1,104 - - 984 1,104 2,088
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Greenbelt, Maryland - (i) 945 1,475 - - 945 1,475 2,421
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Jacksonville, Florida (j) (i) 1,725 1,574 - - 1,725 1,574 3,300
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Kissimmee, Florida - (i) 571 1,536 - - 571 1,536 2,107
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Lake Mary, Florida (j) (i) 88 2,019 - - 88 2,019 2,107
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Lake Oswego, Oregon - (i) 963 1,506 - - 963 1,506 2,469
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Las Vegas, Nevada - (i) 1,157 1,188 - - 1,157 1,188 2,345
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Merriam, Kansas (j) (i) 1,032 1,075 - - 1,032 1,075 2,107
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Naperville, Illinois - (i) 961 1,366 - - 961 1,366 2,326
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Nashville, Tennessee - (i) 957 2,692 - - 957 2,692 3,649
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Orlando, Florida (j) (i) 1,496 1,675 - - 1,496 1,675 3,170
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Tampa, Florida - (i) 869 1,549 - - 869 1,549 2,418
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Tampa, Florida (j) (i) 878 1,449 - - 878 1,449 2,327
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Taylor, Michigan (j) (i) 845 1,712 - - 845 1,712 2,557
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Chick-Fil-A Restaurant:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Rockwall, Texas - (i) 528 - 340 - 528 340 868
- --------------------------------------------------------------------------------------------------------------------------------
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Chipotle Mexican Grill Restaurant:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Upland, California - (i) 788 - 209 - 788 209 998
- --------------------------------------------------------------------------------------------------------------------------------
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Culpepper Restaurant:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Bridgeton, Missouri (j) -- 596 - - (h) 596 596
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Darryl's Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Mobile, Alabama - 495- 937 - - 495 937 1,432
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Montgomery, Alabama (j) 346- 870 - - 346 870 1,216
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Orlando, Florida - 1,486- 773 - - 1,486 773 2,258
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- --------------------------------------------------------------------------------------------------------------------------------
Raleigh, North Carolina (j) 841- 465 - - 841 465 1,306
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Richmond, Virginia (j) 618- 698 - - 618 698 1,316
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Del Taco Restaurant:
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Mesa, Arizona - (i) 642 - 582 - 642 582 1,224
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Denny's Restaurants:
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Duncan, South Carolina - (i) 220 - - - 220 - 220
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- --------------------------------------------------------------------------------------------------------------------------------
Greensboro, North Carolina - (i) 361 572 - - 361 572 933
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- --------------------------------------------------------------------------------------------------------------------------------
Greenville, South Carolina - (i) 458 455 - - 458 455 912
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- --------------------------------------------------------------------------------------------------------------------------------
Houston, Texas - (i) 393 665 - - 393 665 1,058
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- --------------------------------------------------------------------------------------------------------------------------------
Kansas City, Missouri - 401- 901 - - 401 901 1,302
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Landrum, South Carolina - (i) 155 - - - 155 - 155
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Lee's Summit, Missouri (j) 540- 670 - - 540 670 1,210
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Merriam, Kansas (j) 645- 992 - - 645 992 1,637
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- --------------------------------------------------------------------------------------------------------------------------------
Mooresville, North Carolina - (i) 307 - - - 307 - 307
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
North Kansas City, Missouri (j) 450- 761 - - 450 761 1,211
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- --------------------------------------------------------------------------------------------------------------------------------
Pasadena, Texas - 467- 506 - - 467 506 973
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Sedalia, Missouri (j) 319- - 1,013 - 319 1,013 1,332
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- --------------------------------------------------------------------------------------------------------------------------------
Topeka, Kansas - (i) 415 - - - 415 - 415
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Winter Springs, Florida - (i) 555 - - - 555 - 555
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Einstein Brothers' Bagels Restaurants:
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- --------------------------------------------------------------------------------------------------------------------------------
Dearborn, Michigan - 465- 178 - - 465 178 643
- --------------------------------------------------------------------------------------------------------------------------------
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Springfield, Virginia - 634- - - - 634 - 634
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Fazoli's Restaurant:
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- --------------------------------------------------------------------------------------------------------------------------------
Southaven, Mississippi - (i) 485 - 587 - 485 587 1,072
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Golden Corral Family Steakhouse Restaurants:
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- --------------------------------------------------------------------------------------------------------------------------------
Bellevue, Nebraska - (i) 441 - 1,039 - 441 1,039 1,480
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Brunswick, Georgia - 457- - 1,171 - 457 1,171 1,627
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Carlsbad, New Mexico - 384- - 644 - 384 644 1,028
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- --------------------------------------------------------------------------------------------------------------------------------
Cleburne, Texas - 359- - 654 - 359 654 1,013
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- --------------------------------------------------------------------------------------------------------------------------------
Clovis, New Mexico - (i) 409 806 - - 409 806 1,214
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- --------------------------------------------------------------------------------------------------------------------------------
Columbia, Missouri - (i) 848 - 1,009 - 848 1,009 1,857
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- --------------------------------------------------------------------------------------------------------------------------------
Columbus, Ohio - 1,031- - 1,093 - 1,031 1,093 2,124
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- --------------------------------------------------------------------------------------------------------------------------------
Cookeville, Tennessee - 806- - 1,087 - 806 1,087 1,893
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- --------------------------------------------------------------------------------------------------------------------------------
Corpus Christi, Texas - 577- - 935 - 577 935 1,511
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- --------------------------------------------------------------------------------------------------------------------------------
Council Bluffs, Iowa - 546- - 993 - 546 993 1,539
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- --------------------------------------------------------------------------------------------------------------------------------
Davenport, Iowa - (i) 601 1,344 - - 601 1,344 1,945
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Dover, Delaware - 1,043- - 978 - 1,043 978 2,021
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- --------------------------------------------------------------------------------------------------------------------------------
Dubuque, Iowa - 564- - 1,056 - 564 1,056 1,621
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- --------------------------------------------------------------------------------------------------------------------------------
Duncan, Oklahoma - 161- - 1,029 - 161 1,029 1,190
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- --------------------------------------------------------------------------------------------------------------------------------
Evansville, Indiana - 601- - 1,195 - 601 1,195 1,796
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- --------------------------------------------------------------------------------------------------------------------------------
Evansville, Indiana - 588- - 1,393 - 588 1,393 1,981
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- --------------------------------------------------------------------------------------------------------------------------------
Flowood, Mississippi - (i) 596 - 1,094 - 596 1,094 1,690
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- --------------------------------------------------------------------------------------------------------------------------------
Fort Dodge, Iowa - 321- - 1,156 - 321 1,156 1,477
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- --------------------------------------------------------------------------------------------------------------------------------
Fort Walton Beach, Florida - 591- - 1,176 - 591 1,176 1,767
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- --------------------------------------------------------------------------------------------------------------------------------
Fort Wayne, Indiana - (i) 744 - 1,276 - 744 1,276 2,020
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- --------------------------------------------------------------------------------------------------------------------------------
Fort Worth, Texas - 640- 898 - - 640 898 1,538
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Henderson, Kentucky - (i) 377 - 1,117 - 377 1,117 1,494
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- --------------------------------------------------------------------------------------------------------------------------------
Jacksonville, Florida - 593- - 1,184 - 593 1,184 1,777
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- --------------------------------------------------------------------------------------------------------------------------------
Jacksonville, Florida - 541- - 1,174 - 541 1,174 1,715
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Jacksonville, Florida - 684- - 1,259 - 684 1,259 1,943
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Lufkin, Texas - 479- - 954 - 479 954 1,433
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- --------------------------------------------------------------------------------------------------------------------------------
Moberly, Missouri - 374- - 838 - 374 838 1,213
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Omaha, Nebraska - 570- - 1,272 - 570 1,272 1,842
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- --------------------------------------------------------------------------------------------------------------------------------
Orlando, Florida - 67- - - - 67 - 67
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Palatka, Florida - 322- - 987 - 322 987 1,310
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Pensacola, Florida - 658- - 1,347 - 658 1,347 2,005
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Port Richey, Florida - 627- - 1,131 - 627 1,131 1,758
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- --------------------------------------------------------------------------------------------------------------------------------
Rock Hill, South Carolina - (i) 718 - 1,202 - 718 1,202 1,920
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Tampa, Florida - 826- - 1,161 - 826 1,161 1,987
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- --------------------------------------------------------------------------------------------------------------------------------
Texarkana, Texas - 665- - 1,080 - 665 1,080 1,745
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Tulsa , Oklahoma - (i) 705 - 1,305 - 705 1,305 2,010
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Ground Round Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Allentown, Pennsylvania - (i) 406 885 - - 406 885 1,291
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Cincinnati, Ohio - (i) 282 535 - - 282 535 817
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Dubuque, Iowa - (i) 694 810 - - 694 810 1,504
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Ewing Township, New Jersey - (i) 371 686 - - 371 686 1,057
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- --------------------------------------------------------------------------------------------------------------------------------
Janesville, Wisconsin - (i) 451 548 - - 451 548 999
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Kalamazoo, Michigan - (i) 287 712 - - 287 712 999
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- --------------------------------------------------------------------------------------------------------------------------------
Parma, Ohio - (i) 389 793 - - 389 793 1,182
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Reading, Pennsylvania - (i) 729 793 - - 729 793 1,522
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- --------------------------------------------------------------------------------------------------------------------------------
Waterloo, Iowa - (i) 436 659 - - 436 659 1,096
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Wauwatosa, Wisconsin - (i) 628 804 - - 628 804 1,432
- --------------------------------------------------------------------------------------------------------------------------------
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Guthrie's Restaurant:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Hoover, Alabama - (i) 494 620 - - 494 620 1,113
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Houlihan's Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Bethel Park, Pennsylvania - 846- 596 - - 846 596 1,442
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Langhorne, Pennsylvania (j) 817- 649 - - 817 649 1,466
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Plymouth Meeting, Pennsylvania - 1,181- 909 - - 1,181 909 2,090
- --------------------------------------------------------------------------------------------------------------------------------
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International House Of Pancakes Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Auburn, Washington - (i) 633 1,135 - - 633 1,135 1,768
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Castle Rock, Colorado - (i) 541 - 1,196 - 541 1,196 1,737
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- --------------------------------------------------------------------------------------------------------------------------------
Clarksville, Tennessee - (i) 376 964 - - 376 964 1,340
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Corpus Christi, Texas - (i) 567 - - - 567 - 567
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Fort Worth, Texas - (i) 501 746 - - 501 746 1,248
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Fort Worth, Texas - (i) 566 924 - - 566 924 1,489
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Greeley, Colorado - (i) 416 - 868 - 416 868 1,284
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Greenville, South Carolina - (i) 477 962 - - 477 962 1,438
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Hollywood, California - (i) 1,407 - - - 1,407 - 1,407
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Homewood, Alabama - (i) 545 1,030 - - 545 1,030 1,575
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Houston, Texas - (i) 645 790 - - 645 790 1,436
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Kansas City, Missouri - (i) 512 831 - - 512 831 1,344
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Killeen, Texas - (i) 381 776 - - 381 776 1,156
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- --------------------------------------------------------------------------------------------------------------------------------
Lake Jackson, Texas - (i) 460 744 - - 460 744 1,204
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- --------------------------------------------------------------------------------------------------------------------------------
Leesburg, Virginia - (i) 665 581 - - 665 581 1,246
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- --------------------------------------------------------------------------------------------------------------------------------
Leon Valley, Texas - (i) 594 918 - - 594 918 1,512
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Loveland, Colorado - (i) 488 - - - 488 - 488
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Murfreesboro, Tennessee - (i) 647 871 - - 647 871 1,519
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- --------------------------------------------------------------------------------------------------------------------------------
Phoenix, Arizona - (i) 668 942 - - 668 942 1,610
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Port Arthur, Texas - (i) 383 958 - - 383 958 1,341
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Poughkeepsie, New York - (i) 505 807 - - 505 807 1,311
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Pueblo, Colorado - (i) 388 892 - - 388 892 1,280
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Roseville, Michigan - (i) 283 844 - - 283 844 1,127
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Southaven, Mississippi - (i) 579 1,176 - - 579 1,176 1,756
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Stockbridge, Georgia - (i) 766 653 - - 766 653 1,418
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Victoria, Texas - (i) 319 - - - 319 - 319
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
J. Gilbert's Restaurant:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
McLean, Virginia - 945- 689 - - 945 689 1,634
- --------------------------------------------------------------------------------------------------------------------------------
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Jack in the Box Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Allen, Texas - (i) 712 - 726 - 712 726 1,438
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Avondale, Arizona - (i) 605 - 623 - 605 623 1,228
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Bacliff, Texas - (i) 419 - 698 - 419 698 1,117
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Carson, California - (i) 458 - 709 - 458 709 1,166
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Chandler, Arizona - (i) 481 - 637 - 481 637 1,118
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Chandler, Arizona - (i) 605 - 601 - 605 601 1,205
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Channelview, Texas - 361- - 712 - 361 712 1,073
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Corinth, Texas - (i) 397 - 576 - 397 576 973
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Dallas, Texas - (i) 370 - 468 - 370 468 838
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Enumclaw, Washington - (i) 124 774 - - 124 774 898
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Florissant, Missouri - (i) 389 - 779 - 389 779 1,168
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Folsom, California - (i) 635 - 652 - 635 652 1,288
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Fort Worth, Texas - (i) 482 716 - - 482 716 1,199
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Fresno, California - (i) 287 - 607 - 287 607 893
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Georgetown, Texas - (i) 500 - 866 - 500 866 1,366
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Granbury, Texas - (i) 404 - 832 - 404 832 1,236
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- --------------------------------------------------------------------------------------------------------------------------------
Gun Barrel City, Texas - (i) 284 - 549 - 284 549 834
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Hillsboro, Oregon - (i) 700 - 865 - 700 865 1,565
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Hollister, California - (i) 537 - 593 - 537 593 1,130
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Houston, Texas - (i) 545 - 527 - 545 527 1,073
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Houston, Texas - (i) 376 - 643 - 376 643 1,019
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Houston, Texas - 403- - 611 - 403 611 1,014
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Houston, Texas - (i) 370 - 548 - 370 548 918
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Houston, Texas - (i) 421 - 543 - 421 543 964
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Humble, Texas - (i) 438 - 592 - 438 592 1,030
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Hutchins, Texas - (i) 273 - 654 - 273 654 927
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Irvine, California - (i) 900 - 734 - 900 734 1,634
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Kent, Washington - (i) 737 - 554 - 737 554 1,291
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Las Vegas, Nevada - (i) 731 - 547 - 731 547 1,278
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Los Angeles, California - (i) 741 - 678 - 741 678 1,419
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Los Angeles, California - (i) 912 - 531 - 912 531 1,443
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Los Angeles, California - (i) 854 - 602 - 854 602 1,456
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Lufkin, Texas - (i) 418 - 651 - 418 651 1,069
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Lufkin, Texas - (i) 364 - 777 - 364 777 1,141
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- --------------------------------------------------------------------------------------------------------------------------------
Moscow, Idaho - (i) 218 - 752 - 218 752 970
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Nacogdoches, Texas - (i) 384 - 643 - 384 643 1,027
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Ontario, California - (i) 771 - 793 - 771 793 1,564
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- --------------------------------------------------------------------------------------------------------------------------------
Orange, Texas - (i) 388 - 788 - 388 788 1,175
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Oxnard, California - (i) 682 - 643 - 682 643 1,325
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Palmdale, California - (i) 631 - 568 - 631 568 1,199
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- --------------------------------------------------------------------------------------------------------------------------------
Peoria, Arizona - (i) 497 - 722 - 497 722 1,218
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Pflugerville, Texas - (i) 717 - 658 - 717 658 1,375
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- --------------------------------------------------------------------------------------------------------------------------------
Saint Louis, Missouri - (i) 474 - 727 - 474 727 1,202
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- --------------------------------------------------------------------------------------------------------------------------------
Salem, Oregon - (i) 501 - 699 - 501 699 1,200
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
San Antonio, Texas - (i) 274 - 782 - 274 782 1,056
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
San Antonio, Texas - (i) 311 - 701 - 311 701 1,012
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Spring, Texas - (i) 476 - 719 - 476 719 1,195
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Tacoma, Washington - (i) 496 - 760 - 496 760 1,255
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- --------------------------------------------------------------------------------------------------------------------------------
Tigard, Oregon - (i) 353 - 905 - 353 905 1,258
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- --------------------------------------------------------------------------------------------------------------------------------
Tyler, Texas - (i) 289 - 700 - 289 700 989
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Waxahachie, Texas - (i) 478 - 538 - 478 538 1,016
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Weatherford, Texas - (i) 465 - 785 - 465 785 1,250
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- --------------------------------------------------------------------------------------------------------------------------------
West Sacramento, California - (i) 523 - 617 - 523 617 1,140
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Woodland, California - (i) 358 - 668 - 358 668 1,027
- --------------------------------------------------------------------------------------------------------------------------------
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Jack in the Box/Arco Gas Station-Convenience Stores:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Benicia, California - (i) 746 1,552 - - 746 1,552 2,297
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Coachella, California - (i) 371 1,407 - - 371 1,407 1,777
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Joe's Crab Shack Restaurant:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Lilburn, Georgia - (i) 1,089 932 - - 1,089 932 2,021
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Jose Pepper's Restaurant:
- --------------------------------------------------------------------------------------------------------------------------------
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Blue Springs, Missouri (j) 251- 738 - - 251 738 989
- --------------------------------------------------------------------------------------------------------------------------------
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KFC Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Baton Rouge, Louisiana - 181- - 463 - 181 463 645
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
New Orleans, Louisiana - 159- 492 - - 159 492 651
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
New Orleans, Louisiana - 311- 533 - - 311 533 843
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
New Orleans, Louisiana - 206- 564 - - 206 564 770
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
New Orleans, Louisiana - 315- 542 - - 315 542 857
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Putnam, Connecticut - 302- - - - 302 - 302
- --------------------------------------------------------------------------------------------------------------------------------
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Krystal Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Brandon, Mississippi - (i) 340 687 - - 340 687 1,028
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Chattanooga, Tennessee - (i) 445 595 - - 445 595 1,040
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Greenville, Alabama - (i) 190 614 - - 190 614 804
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Montgomery, Alabama - (i) 311 507 - - 311 507 818
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Scottsboro, Alabama - (i) 255 561 - - 255 561 817
- --------------------------------------------------------------------------------------------------------------------------------
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Leeann Chin Chinese Cuisine Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Chanhassen, Minnesota - (i) 377 640 - - 377 640 1,017
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Golden Valley, Minnesota - (i) 665 - 481 - 665 481 1,147
- --------------------------------------------------------------------------------------------------------------------------------
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Little Lake Bryan Land:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Orlando, Florida - 6,288- - - - 6,288 - 6,288
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Orlando, Florida - 361- - - - 361 - 361
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
McDonalds:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Palm Bay, Florida - 615- - - - 615 - 615
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
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Pizza Hut Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Adrian, Michigan - 242- - - - 242 - 242
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Beaver, West Virginia - 212- - - - 212 - 212
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Beckley, West Virginia - 209- - - - 209 - 209
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Bedford, Ohio - 175- - - - 175 - 175
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Bluefield, West Virginia - 120- - - - 120 - 120
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Bolivar, Ohio - 190- 410 - - 190 410 600
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Bowling Green, Ohio - 200- - - - 200 - 200
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Bowling Green, Ohio (j) 136- 192 - - 136 192 327
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Carrollton, Ohio - 187- 533 - - 187 533 721
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Cleveland, Ohio - 226- - - - 226 - 226
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Cleveland, Ohio - 117- - - - 117 - 117
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Cleveland, Ohio - 126- - - - 126 - 126
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Cooper City, Florida - (i) 268 128 - - 268 128 396
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Cross Lanes, West Virginia - 216- - - - 216 - 216
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Defiance, Ohio - 242- - - - 242 - 242
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
East Cleveland, Ohio - 194- - - - 194 - 194
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Euclid, Ohio - 202- - - - 202 - 202
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Huntington, West Virginia - 212- - - - 212 - 212
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Hurricane, West Virginia - 181- - - - 181 - 181
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Lambertville, Michigan - 99- - - - 99 - 99
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Marathon, Florida - (i) 161 235 - - 161 235 396
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Marietta, Ohio - 169- - - - 169 - 169
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Mayfield Heights, Ohio - 203- - - - 203 - 203
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Middleburg Heights, Ohio - 217- - - - 217 - 217
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Millersburg, Ohio - 213- 635 - - 213 635 848
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Milton, West Virginia - 100- - - - 100 - 100
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Monroe, Michigan - 152- - - - 152 - 152
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
New Philadelphia, Ohio - 224- 443 - - 224 443 667
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
New Philadelphia, Ohio - 149- 388 - - 149 388 538
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
North Olmsted, Ohio - 260- - - - 260 - 260
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Norwalk, Ohio - 262- - - - 262 - 262
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Rocky River, Ohio - 143- - - - 143 - 143
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Ronceverte, West Virginia - 100- - - - 100 - 100
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Sandusky, Ohio - 260- - - - 260 - 260
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Seven Hills, Ohio - 239- - - - 239 - 239
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Steubenville, Ohio - 228- 475 - - 228 475 704
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Strongsville, Ohio - 186- - - - 186 - 186
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Toledo, Ohio - 197- - - - 197 - 197
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Toledo, Ohio - 208- - - - 208 - 208
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Toledo, Ohio - 176- - - - 176 - 176
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Toledo, Ohio - 129- - - - 129 - 129
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Uhrichsville, Ohio - 280- 563 - - 280 563 842
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Weirton, West Virginia (j) -- 178 - - (h) 178 178
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Wellsburg, West Virginia - 167- 168 - - 167 168 336
- --------------------------------------------------------------------------------------------------------------------------------
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Pollo Tropical Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Coral Springs, Florida - (i) 853 1,108 - - 853 1,108 1,961
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Davie, Florida - (i) 713 873 - - 713 873 1,586
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Fort Lauderdale, Florida - (i) 398 924 - - 398 924 1,322
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Lake Worth, Florida - (i) 435 915 - - 435 915 1,351
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Miami, Florida - (i) 655 1,196 - - 655 1,196 1,851
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Miami, Florida - (i) 911 1,012 - - 911 1,012 1,923
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Miami, Florida - (i) 1,245 918 - - 1,245 918 2,163
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
North Miami, Florida - (i) 918 764 - - 918 764 1,682
- --------------------------------------------------------------------------------------------------------------------------------
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Ponderosa Restuarants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Appleton, Wisconsin - 181- 562 - - 181 562 743
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Blue Springs, Missouri - (i) 692 - 1,137 - 692 1,137 1,829
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Eureka, Missouri - 380- 604 - - 380 604 984
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Indiana, Pennsylvania - 715- - 1,317 - 715 1,317 2,032
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Johnstown, Pennsylvania - (i) 599 - 1,160 - 599 1,160 1,759
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Kissimmee, Florida - 638- 824 - - 638 824 1,462
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Massena, New York - 130- 659 - - 130 659 789
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Middletown, New York - 214- 854 - - 214 854 1,068
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Oneonta, New York - 367- 524 - - 367 524 891
- --------------------------------------------------------------------------------------------------------------------------------
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Popeye's Famous Fried Chicken Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Thomasville, Georgia - (i) 114 407 - - 114 407 521
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Valdosta, Georgia - (i) 159 378 - - 159 378 537
- --------------------------------------------------------------------------------------------------------------------------------
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Red Robin Restaurant:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Columbus, Ohio - 722- - 1,366 - 722 1,366 2,088
- --------------------------------------------------------------------------------------------------------------------------------
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Roadhouse Grill Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Brandon, Florida - (i) 914 - 691 - 914 691 1,605
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Centerville, Ohio (j) 1,228- - 762 - 1,228 762 1,990
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Clearwater, Florida - (i) 1,370 - 947 - 1,370 947 2,317
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Fairfield, Ohio - (i) 1,152 - 910 - 1,152 910 2,062
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Grove City, Ohio - 650- - 978 - 650 978 1,628
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Jacksonville, Florida - (i) 394 - 1,443 - 394 1,443 1,837
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Jacksonville, Florida - 1,314- - 888 - 1,314 888 2,201
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Rock Hill, South Carolina (j) 609- - 904 - 609 904 1,513
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Union Township, Ohio - 704- - 1,054 - 704 1,054 1,757
- --------------------------------------------------------------------------------------------------------------------------------
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Rubio's Baja Grill Restaurant:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Taylorsville, Utah - (i) 890 - 487 - 890 487 1,377
- --------------------------------------------------------------------------------------------------------------------------------
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Ruby Tuesday's Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Bartow, Florida - (i) 416 - 963 - 416 963 1,380
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Champlin, Minnesota - (i) 506 - - - 506 - 506
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Colorado Springs, Colorado - (i) 696 - 1,006 - 696 1,006 1,702
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Coral Springs, Florida - (i) 715 - 1,013 - 715 1,013 1,728
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Dillon, Colorado - (i) 557 - 1,133 - 557 1,133 1,690
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Draper, Utah - (i) 519 - - - 519 - 519
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Independence, Missouri - 981- - - - 981 - 981
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Kansas City, Missouri - 633- - - - 633 - 633
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Lakeland, Florida - (i) 574 743 - - 574 743 1,317
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Lakewood, Washington - 431- - - - 431 - 431
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
London, Kentucky - (i) 354 - - - 354 - 354
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Orange City, Florida - (i) 720 - - - 720 - 720
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Somerset, Kentucky - (i) 546 - 869 - 546 869 1,414
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Vero Beach, Florida - (i) 537 - 1,268 - 537 1,268 1,804
- --------------------------------------------------------------------------------------------------------------------------------
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Ruth's Chris Steak House Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
King of Prussia, Pennsylvania - (i) 965 550 - - 965 550 1,515
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Tampa, Florida - (i) 1,076 1,063 - - 1,076 1,063 2,139
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- --------------------------------------------------------------------------------------------------------------------------------
Ryan's Family Steak House Restaurant:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Spring Hill, Florida - (i) 591 - 1,175 - 591 1,175 1,767
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Saint Louis Bread Company Restaurant:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Florissant, Missouri - (i) 706 - 627 - 706 627 1,332
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Shoney's Restaurant
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Debary, Florida (j) 900- - - - 900 - 900
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Smokey Bones
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Morrow, Georgia (j) (i) 935 1,843 - - 935 1,843 2,778
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Sonny's Real Pit Bar-B-Q Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Athens, Georgia - (i) 629 963 - - 629 963 1,591
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Conyers, Georgia - 371- 593 - - 371 593 964
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Doraville, Georgia - (i) 585 813 - - 585 813 1,398
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Marietta, Georgia - (i) 528 871 - - 528 871 1,398
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Norcross, Georgia - (i) 734 961 - - 734 961 1,695
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Smyrna, Georgia - (i) 634 643 - - 634 643 1,278
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Thomasville, Georgia - (i) 263 - - - 263 - 263
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Venice, Florida - 499- 960 - - 499 960 1,458
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Sprint PCS Retail Store:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Saint Joseph, Missouri (j) 379- - 388 - 379 388 767
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Steak & Ale Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Altamonte Springs, Florida - (i) 1,006 691 - - 1,006 691 1,697
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Birmingham, Alabama - 715- - - - 715 - 715
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
College Park, Georgia - (i) 802 - - - 802 - 802
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Conroe, Texas - (i) 591 - - - 591 - 591
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Greenville, South Carolina - (i) 671 - - - 671 - 671
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Houston, Texas - (i) 964 - - - 964 - 964
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Houston, Texas - (i) 777 - - - 777 - 777
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Huntsville, Alabama - (i) 641 - - - 641 - 641
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Jacksonville, Florida - 670- - - - 670 - 670
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Maitland, Florida - (i) 684 - - - 684 - 684
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Memphis, Tennessee - (i) 810 798 - - 810 798 1,609
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Mesquite, Texas - (i) 592 - - - 592 - 592
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Miami, Florida - (i) 594 - - - 594 - 594
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Middletown, New Jersey - (i) 934 763 - - 934 763 1,697
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Norcross, Georgia - (i) 740 - - - 740 - 740
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Orlando, Florida - (i) 923 725 - - 923 725 1,648
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Pensacola, Florida - (i) 354 - - - 354 - 354
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Tulsa, Oklahoma - (i) 434 - - - 434 - 434
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Super Smokers BBQ Restaurant:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Saint Peters, Missouri - 377- 692 - - 377 692 1,069
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Taco Bell Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Colonial Heights, Virginia - (i) 447 384 - - 447 384 831
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Hayes, Virginia - (i) 300 - - - 300 - 300
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Livingston, Tennessee - (i) 212 - - - 212 - 212
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Richmond, Virginia - (i) 403 - - - 403 - 403
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Richmond, Virginia - (i) 405 451 - - 405 451 856
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Richmond, Virginia - (i) 475 479 - - 475 479 954
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Saint Louis, Missouri - (i) 350 - - - 350 - 350
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Saint Louis, Missouri - (i) 309 351 - - 309 351 660
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Wentzville, Missouri - (i) 339 - 491 - 339 491 830
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Williamsburg, Virginia - (i) 344 - - - 344 - 344
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Taco Bell/Pizza Hut Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Arlington, Texas - 277- - 550 - 277 550 827
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Dallas, Texas - (i) 335 695 - - 335 695 1,030
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Dallas, Texas - 356- - 497 - 356 497 853
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Texas Roadhouse Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Ammon, Idaho - (i) 506 - 806 - 506 806 1,312
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Arvada, Colorado - (i) 538 - 1,149 - 538 1,149 1,687
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Aurora, Colorado - (i) 657 - 1,209 - 657 1,209 1,866
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Cedar Rapids, Iowa - 582- - 1,085 - 582 1,085 1,667
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
College Station, Texas - (i) 520 - 1,074 - 520 1,074 1,594
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Concord, North Carolina - (i) 664 - 987 - 664 987 1,651
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Dickson City, Pennsylvania - (i) 596 - 1,079 - 596 1,079 1,675
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Gastonia, North Carolina - (i) 235 - 1,116 - 235 1,116 1,351
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Hickory, North Carolina - (i) 560 - 1,032 - 560 1,032 1,593
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Shively, Kentucky - (i) 714 996 - - 714 996 1,709
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
TGI Friday's Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Goodyear, Arizona - (i) 967 - 1,727 - 967 1,727 2,694
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Henderson, Nevada - (i) 1,385 - - - 1,385 - 1,385
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Independence, Missouri - (i) 856 - - - 856 - 856
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Leawood, Kansas - (i) 2,459 - - - 2,459 - 2,459
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Mesa, Arizona - (i) 914 - - - 914 - 914
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Shawnee, Kansas - (i) 885 - - - 885 - 885
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Temecula, California - (i) 1,240 - - - 1,240 - 1,240
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Union City, California - (i) 1,213 - - - 1,213 - 1,213
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Tin Alley Grill Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Crystal, Minnesota - (i) 371 432 - - 371 432 802
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Gloucester, New Jersey - (i) 422 529 - - 422 529 951
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
TropiGrill Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Altamonte Springs, Florida - (i) 549 701 - - 549 701 1,250
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Orlando, Florida - (i) 618 631 - - 618 631 1,250
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Village Inn Restaurant:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Omaha, Nebraska - (i) 512 756 - - 512 756 1,268
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Wendy's Old Fashioned Hamburgers Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Atascadero, California - (i) 486 - 706 - 486 706 1,192
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Camarillo, California - (i) 640 - 689 - 640 689 1,329
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Knoxville, Tennessee - (i) 358 - 445 - 358 445 803
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Knoxville, Tennessee - (i) 556 - 442 - 556 442 998
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Paso Robles, California - (i) 489 - 736 - 489 736 1,225
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Westlake Village, California - (i) 841 - 699 - 841 699 1,540
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL: 282,205 174,608 148,783 282,205 323,391 605,596
- --------------------------------------------------------===================-====================-===============================
- --------------------------------------------------------===================-====================-===============================
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Property of Joint Venture in Which
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
the Company has a 59.22% Interest
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
and has Invested in Under
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
an Operating Lease:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Bennigan's Restaurant:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Orlando, Florida - 708- - 1,008 - 708 1,008 1,716
- --------------------------------------------------------========------------==========-----------===============================
- --------------------------------------------------------========------------==========-----------===============================
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Properties the Company
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
has invested in Under
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Direct Financing Leases:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Applebee's Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Freeport, Illinois (i)- 198 1,009 - - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Rockford, Illinois (i)- - 1,096 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Tullahoma, Tennessee (i)- 324 1,009 - - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Arby's Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Allen, Texas (i)- - - 609 - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Grand Rapids, Michigan (i)- - 938 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Huntsville, Alabama - -- - 596 - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Newark, Ohio - -- - 340 - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
The Colony, Texas (i)- - - 593 - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Bennigan's Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Bedford, Texas (i)- - 955 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Clearwater, Florida (i)- - 1,043 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Colorado Springs, Colorado (i)- - 903 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Englewood, Colorado (i)- - 1,131 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Florham Park, New Jersey (i)- - 1,092 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Houston, Texas (i)- - 985 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Jacksonville, Florida (i)- - 1,061 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Jacksonville, Florida (i)- - 819 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
North Richland Hills, Texas (i)- - 983 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Oklahoma City, Oklahoma - -- 1,015 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Pensacola, Florida (i)- - 980 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Saint Louis Park, Minnesota (i)- - 1,280 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Tampa, Florida - -- 1,325 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Winston-Salem, North Carolina (i)- 248 993 - - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Woodridge, Illinois (i)- - 992 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Black-eyed Pea Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Dallas, Texas - -- 686 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Fort Worth, Texas - -- 655 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Hendersonville, Tennessee - -- 735 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Hillsboro, Texas - -- - 716 - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Burger King Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Port Angeles, Washington - -- 696 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Chevys Fresh Mex Restaurant:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Annapolis, Maryland - -- - 1,540 - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Clay Pit
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Addison, Texas - -- 568 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Denny's Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Akron, Ohio (i)- 137 938 - - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Duncan, South Carolina (i)- - 827 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Landrum, South Carolina (i)- - 493 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Mooresville, North Carolina (i)- - 737 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Topeka, Kansas (i)- - 700 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Winter Springs, Florida (i)- - - 887 - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Fresh Choice
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Dallas, Texas - -- 382 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
International House Of Pancakes Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Alexandria, Virginia (i)- - 853 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Anderson, South Carolina (i)- - 957 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Blue Bell, Pennsylvania (i)- - 830 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Chesapeake, Virginia (i)- - 1,059 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Christiansburg, Virginia (i)- - 918 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Corpus Christi, Texas (i)- - 864 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Crestwood, Illinois (i)- - 935 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Flagstaff, Arizona (i)- 294 1,121 - - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Fredericksburg, Virginia (i)- - 973 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Hickory, North Carolina (i)- - 1,202 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Hollywood, California (i)- - 995 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Houston, Texas (i)- - 1,017 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Houston, Texas (i)- - 765 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Loveland, Colorado (i)- - 964 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Maryville, Tennessee (i)- 244 963 - - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Montgomery, Alabama (i)- - 843 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Pittsburg, California (i)- - 1,014 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Plano, Texas (i)- - 982 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Salem, New Hampshire (i)- - 779 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
San Antonio, Texas (i)- - 1,081 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Tuscaloosa, Alabama (i)- - 931 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Victoria, Texas (i)- - 814 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Virginia Beach, Virginia (i)- - 1,014 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Warner Robins, Georgia (i)- - 833 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
KFC Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Baton Rouge, Louisiana - 85- 609 - - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Port Allen, Louisiana (i)- - 953 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Putnam, Connecticut - -- 531 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
NI's International Buffet Restaurant:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Eastlake, Ohio - 256- 1,473 - - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Popeye's Famous Fried Chicken Restaurant:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Starke, Florida (i)- 209 427 - - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Ruby Tuesday's Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Champlin, Minnesota (i)- - - 1,152 - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Draper, Utah (i)- - - 1,036 - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Independence, Missouri - -- - 554 - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Kansas City, Missouri - -- - 1,115 - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Lakewood, Washington - -- - 1,127 - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
London, Kentucky (i)- - - 845 - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Louisville, Kentucky (i)- - - 1,052 - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Orange City, Florida (i)- - - 1,047 - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Puyallup, Washington - -- - 934 - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Saint George, Utah - -- - 896 - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Sebring, Florida (i)- 231 - 776 - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Sonny's Real Pit Bar-B-Q Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Thomasville, Georgia (i)- - - 989 - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Steak & Ale Restaurants: - -- 682 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
College Park, Georgia (i)- - 910 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Conroe, Texas (i)- - 1,033 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Greenville, South Carolina (i)- - 1,180 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Houston, Texas (i)- - 979 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Houston, Texas (i)- - 1,093 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Huntsville, Alabama (i)- - 810 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Jacksonville, Florida - -- 879 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Maitland, Florida (i)- - 792 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Mesquite, Texas (i)- - 908 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Miami, Florida (i)- - 1,177 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Norcross, Georgia (i)- - 967 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Pensacola, Florida (i)- - 826 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Tulsa, Oklahoma (i)- - 1,068 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Taco Bell Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Hayes, Virginia (i)- - 443 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Livingston, Tennessee (i)- - - 436 - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Richmond, Virginia (i)- - 575 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Saint Louis, Missouri (i)- - 472 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Williamsburg, Virginia (i)- - 438 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Texas Roadhouse Restaurant:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Fayetteville, North Carolina - -- 944 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
TGI Friday's Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Henderson, Nevada (i)- - - 1,974 - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Independence, Missouri (i)- - - 1,665 - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Leawood, Kansas (i)- - - 1,430 - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Mesa, Arizona (i)- - - 1,440 - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Shawnee, Kansas (i)- - - 1,749 - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Temecula, California (i)- - - 1,477 - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Union City, California (i)- - - 1,985 - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
TGI Friday's/Redfish Looziana Roadhouse Restaurant:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
San Diego, California (i)- 2,400 - 3,646 - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Wendy's Old Fashioned Hamburgers Restaurants:
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Carmel Mountain, California (i)- - 595 - - (h) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Knoxville, Tennessee (i)- - - 464 - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
San Diego, California (i)- - - 590 - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Santa Maria, California (i)- - - 700 - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Sevierville, Tennessee (i)- - - 532 - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Seymour, Tennessee (i)- - - 473 - (e) (e) (e)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL: 4,626 70,500 35,364
- --------------------------------------------------------===================-====================--------------------------------
- --------------------------------------------------------===================-====================--------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------
Depreciation in
- ----------------------------------------
- ----------------------------------------
Date Latest Income
- ----------------------------------------
- ----------------------------------------
Accumulated of Con- Date Statement is
- ----------------------------------------
- ----------------------------------------
Depreciation struction Acquired Computed
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
137 1991 8/98 (c)
- ----------------------------------------
- ----------------------------------------
175 1995 8/98 (c)
- ----------------------------------------
- ----------------------------------------
167 1996 8/98 (c)
- ----------------------------------------
- ----------------------------------------
179 1993 8/98 (c)
- ----------------------------------------
- ----------------------------------------
173 1994 8/98 (c)
- ----------------------------------------
- ----------------------------------------
148 1992 8/98 (c)
- ----------------------------------------
- ----------------------------------------
168 1997 8/98 (c)
- ----------------------------------------
- ----------------------------------------
165 1998 8/98 (c)
- ----------------------------------------
- ----------------------------------------
149 1995 8/98 (c)
- ----------------------------------------
- ----------------------------------------
153 1997 12/96 (c)
- ----------------------------------------
- ----------------------------------------
63 1999 8/99 (c)
- ----------------------------------------
- ----------------------------------------
(d) 1996 1/99 (d)
- ----------------------------------------
- ----------------------------------------
162 1999 10/99 (c)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
(d) 1999 12/99 (d)
- ----------------------------------------
- ----------------------------------------
84 1988 5/98 (c)
- ----------------------------------------
- ----------------------------------------
91 1998 8/98 (c)
- ----------------------------------------
- ----------------------------------------
65 1995 1/99 (c)
- ----------------------------------------
- ----------------------------------------
121 1996 9/96 (c)
- ----------------------------------------
- ----------------------------------------
47 1995 1/99 (c)
- ----------------------------------------
- ----------------------------------------
48 1994 1/99 (c)
- ----------------------------------------
- ----------------------------------------
42 1984 1/99 (c)
- ----------------------------------------
- ----------------------------------------
102 1998 12/98 (c)
- ----------------------------------------
- ----------------------------------------
83 1998 7/98 (c)
- ----------------------------------------
- ----------------------------------------
97 1999 12/98 (c)
- ----------------------------------------
- ----------------------------------------
72 1999 12/99 (c)
- ----------------------------------------
- ----------------------------------------
81 2000 1/00 (c)
- ----------------------------------------
- ----------------------------------------
(d) 1995 8/95 (d)
- ----------------------------------------
- ----------------------------------------
86 1990 8/97 (c)
- ----------------------------------------
- ----------------------------------------
105 1995 8/97 (c)
- ----------------------------------------
- ----------------------------------------
56 1993 1/99 (c)
- ----------------------------------------
- ----------------------------------------
94 2000 12/99 (c)
- ----------------------------------------
- ----------------------------------------
115 1995 8/97 (c)
- ----------------------------------------
- ----------------------------------------
88 1994 8/97 (c)
- ----------------------------------------
- ----------------------------------------
104 1995 8/97 (c)
- ----------------------------------------
- ----------------------------------------
51 1990 1/99 (c)
- ----------------------------------------
- ----------------------------------------
100 1992 7/97 (c)
- ----------------------------------------
- ----------------------------------------
92 1999 7/99 (c)
- ----------------------------------------
- ----------------------------------------
45 1992 1/99 (c)
- ----------------------------------------
- ----------------------------------------
84 1998 5/98 (c)
- ----------------------------------------
- ----------------------------------------
52 1991 1/99 (c)
- ----------------------------------------
- ----------------------------------------
109 1998 1/99 (c)
- ----------------------------------------
- ----------------------------------------
61 1992 1/99 (c)
- ----------------------------------------
- ----------------------------------------
(d) 1999 12/99 (d)
- ----------------------------------------
- ----------------------------------------
106 1999 3/99 (c)
- ----------------------------------------
- ----------------------------------------
99 1999 9/99 (c)
- ----------------------------------------
- ----------------------------------------
49 1998 12/98 (c)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
99 1978 10/99 (c)
- ----------------------------------------
- ----------------------------------------
142 1987 10/99 (c)
- ----------------------------------------
- ----------------------------------------
116 1979 10/99 (c)
- ----------------------------------------
- ----------------------------------------
154 1991 10/99 (c)
- ----------------------------------------
- ----------------------------------------
64 1980 10/99 (c)
- ----------------------------------------
- ----------------------------------------
89 1978 10/99 (c)
- ----------------------------------------
- ----------------------------------------
87 1978 10/99 (c)
- ----------------------------------------
- ----------------------------------------
88 1977 10/99 (c)
- ----------------------------------------
- ----------------------------------------
119 1977 10/99 (c)
- ----------------------------------------
- ----------------------------------------
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179 1999 6/00 (c)
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10 1999 2/00 (c)
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21 1996 1/99 (c)
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254 1999 4/99 (c)
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143 1999 4/99 (c)
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258 1990 5/98 (c)
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84 1996 10/96 (c)
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52 1996 7/96 (c)
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57 1989 3/99 (c)
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49 1980 6/97 (c)
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81 1999 10/99 (c)
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39 1997 7/97 (c)
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41 1999 2/99 (c)
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163 1999 4/99 (c)
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147 1997 7/98 (c)
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168 1999 1/99 (c)
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298 1995 11/95 (c)
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161 1999 7/99 (c)
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179 1998 8/98 (c)
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211 1998 4/99 (c)
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263 1995 12/95 (c)
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191 1998 8/98 (c)
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209 1997 11/97 (c)
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166 1999 7/99 (c)
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146 1999 12/99 (c)
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173 1999 12/99 (c)
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225 1997 1/97 (c)
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186 1997 5/97 (c)
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209 1998 12/98 (c)
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201 1997 12/97 (c)
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222 1999 3/99 (c)
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278 1996 9/96 (c)
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170 1999 10/99 (c)
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306 1995 2/96 (c)
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127 2000 7/00 (c)
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185 1999 9/99 (c)
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184 1983 10/97 (c)
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141 1979 11/97 (c)
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114 1982 10/97 (c)
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131 1997 9/97 (c)
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131 1972 6/97 (c)
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174 1997 4/99 (c)
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163 1999 10/99 (c)
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162 1997 12/98 (c)
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146 1998 12/98 (c)
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110 1996 7/97 (c)
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146 1998 9/98 (c)
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129 1994 5/97 (c)
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146 1998 12/98 (c)
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91 1997 7/97 (c)
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151 1971 6/97 (c)
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117 1999 3/99 (c)
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87 1998 8/98 (c)
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97 1999 10/99 (c)
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110 1998 9/98 (c)
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80 1997 9/97 (c)
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65 1997 3/97 (c)
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109 1999 12/99 (c)
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119 1997 6/97 (c)
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82 1998 5/98 (c)
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112 1998 9/98 (c)
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126 1999 2/99 (c)
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169 1992 4/97 (c)
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89 1998 5/98 (c)
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114 1999 4/99 (c)
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97 1999 6/99 (c)
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125 1999 3/99 (c)
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110 1999 4/99 (c)
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119 1999 4/99 (c)
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109 1999 5/99 (c)
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75 1998 4/98 (c)
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123 1999 3/99 (c)
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198 1999 1/00 (c)
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183 1999 2/00 (c)
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147 1999 4/99 (c)
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107 1982 6/99 (c)
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35 2000 8/00 (c)
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64 1991 5/99 (c)
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73 1995 5/99 (c)
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70 1991 5/99 (c)
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(d) 1997 7/97 (d)
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95 2000 12/99 (c)
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93 1994 3/99 (c)
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73 2000 5/00 (c)
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70 2000 12/99 (c)
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73 1999 12/99 (c)
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174 1995 11/95 (c)
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118 1996 9/96 (c)
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(d) 2001 9/98 (d)
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54 1996 3/97 (c)
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19 1992 2/97 (c)
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70 1990 3/97 (c)
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14 1998 10/00 (c)
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(d) 1978 5/96 (d)
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25 1980 10/00 (c)
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(d) 1986 5/96 (d)
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84 1989 3/97 (c)
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58 1983 3/97 (c)
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51 1975 3/97 (c)
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63 1983 3/97 (c)
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(d) 1976 4/96 (d)
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74 1983 3/97 (c)
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37 1979 3/97 (c)
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39 1980 3/97 (c)
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191 1994 9/98 (c)
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134 1995 9/98 (c)
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79 1980 10/99 (c)
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85 1999 10/99 (c)
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161 2000 5/00 (c)
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103 1999 1/00 (c)
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110 1999 2/99 (c)
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63 2000 3/00 (c)
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146 1999 4/99 (c)
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129 1999 10/99 (c)
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138 1999 10/99 (c)
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243 1998 12/98 (c)
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116 1999 2/00 (c)
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75 1998 7/00 (c)
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105 2000 4/00 (c)
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107 1997 6/97 (c)
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134 1999 11/99 (c)
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(d) 1999 3/00 (d)
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146 1999 7/99 (c)
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(d) 1999 5/99 (d)
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127 1998 11/98 (c)
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159 1998 7/98 (c)
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162 1999 1/00 (c)
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- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
121 1977 6/97 (c)
- ----------------------------------------
- ----------------------------------------
235 1996 6/97 (c)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
276 1996 1/97 (c)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
148 1996 12/96 (c)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
(d) 1991 2/02 (d)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
270 1999 4/99 (c)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
179 1981 6/98 (c)
- ----------------------------------------
- ----------------------------------------
110 1994 6/98 (c)
- ----------------------------------------
- ----------------------------------------
151 1990 6/98 (c)
- ----------------------------------------
- ----------------------------------------
162 1988 6/98 (c)
- ----------------------------------------
- ----------------------------------------
179 1986 6/98 (c)
- ----------------------------------------
- ----------------------------------------
120 1981 6/98 (c)
- ----------------------------------------
- ----------------------------------------
(d) 1999 12/99 (d)
- ----------------------------------------
- ----------------------------------------
6 1978 7/99 (c)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
87 1996 9/96 (c)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
128 1979 6/98 (c)
- ----------------------------------------
- ----------------------------------------
(d) 1993 6/98 (d)
- ----------------------------------------
- ----------------------------------------
(d) 1973 6/98 (d)
- ----------------------------------------
- ----------------------------------------
(d) 1993 6/98 (d)
- ----------------------------------------
- ----------------------------------------
(d) 1976 6/98 (d)
- ----------------------------------------
- ----------------------------------------
(d) 1973 6/98 (d)
- ----------------------------------------
- ----------------------------------------
(d) 1972 6/98 (d)
- ----------------------------------------
- ----------------------------------------
(d) 1974 6/98 (d)
- ----------------------------------------
- ----------------------------------------
(d) 1977 6/98 (d)
- ----------------------------------------
- ----------------------------------------
(d) 1969 6/98 (d)
- ----------------------------------------
- ----------------------------------------
134 1979 12/98 (c)
- ----------------------------------------
- ----------------------------------------
(d) 1988 6/98 (d)
- ----------------------------------------
- ----------------------------------------
(d) 1974 6/98 (d)
- ----------------------------------------
- ----------------------------------------
141 1985 6/98 (c)
- ----------------------------------------
- ----------------------------------------
(d) 1984 12/98 (d)
- ----------------------------------------
- ----------------------------------------
134 1978 6/98 (c)
- ----------------------------------------
- ----------------------------------------
(d) 1978 6/98 (d)
- ----------------------------------------
- ----------------------------------------
(d) 1969 6/98 (d)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
107 1981 3/99 (c)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
61 1994 2/99 (c)
- ----------------------------------------
- ----------------------------------------
(d) 1994 2/99 (d)
- ----------------------------------------
- ----------------------------------------
(d) 1998 10/98 (d)
- ----------------------------------------
- ----------------------------------------
(d) 1994 2/99 (d)
- ----------------------------------------
- ----------------------------------------
72 1994 2/99 (c)
- ----------------------------------------
- ----------------------------------------
76 1994 2/99 (c)
- ----------------------------------------
- ----------------------------------------
(d) 1991 10/98 (d)
- ----------------------------------------
- ----------------------------------------
61 1991 10/98 (c)
- ----------------------------------------
- ----------------------------------------
28 2000 5/00 (c)
- ----------------------------------------
- ----------------------------------------
(d) 1994 2/99 (d)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
63 2000 8/00 (c)
- ----------------------------------------
- ----------------------------------------
101 1997 7/99 (c)
- ----------------------------------------
- ----------------------------------------
61 2000 4/00 (c)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
111 1999 12/99 (c)
- ----------------------------------------
- ----------------------------------------
125 2000 9/00 (c)
- ----------------------------------------
- ----------------------------------------
154 1999 3/00 (c)
- ----------------------------------------
- ----------------------------------------
136 2000 5/00 (c)
- ----------------------------------------
- ----------------------------------------
125 2000 6/00 (c)
- ----------------------------------------
- ----------------------------------------
118 2000 5/00 (c)
- ----------------------------------------
- ----------------------------------------
81 2000 11/00 (c)
- ----------------------------------------
- ----------------------------------------
151 1999 12/99 (c)
- ----------------------------------------
- ----------------------------------------
143 1999 9/99 (c)
- ----------------------------------------
- ----------------------------------------
137 1998 11/99 (c)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
223 1999 2/00 (c)
- ----------------------------------------
- ----------------------------------------
(d) 1999 10/99 (d)
- ----------------------------------------
- ----------------------------------------
(d) 1999 3/99 (d)
- ----------------------------------------
- ----------------------------------------
(d) 2000 6/00 (d)
- ----------------------------------------
- ----------------------------------------
(d) 1997 5/98 (d)
- ----------------------------------------
- ----------------------------------------
(d) 1999 3/00 (d)
- ----------------------------------------
- ----------------------------------------
(d) 1999 12/99 (d)
- ----------------------------------------
- ----------------------------------------
14 1999 4/00 (c)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
90 1981 10/97 (c)
- ----------------------------------------
- ----------------------------------------
110 1981 10/97 (c)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
121 1994 9/98 (c)
- ----------------------------------------
- ----------------------------------------
109 1994 9/98 (c)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
103 1989 10/99 (c)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
81 2000 7/00 (c)
- ----------------------------------------
- ----------------------------------------
172 1996 7/96 (c)
- ----------------------------------------
- ----------------------------------------
111 1996 5/96 (c)
- ----------------------------------------
- ----------------------------------------
79 1998 8/98 (c)
- ----------------------------------------
- ----------------------------------------
102 1999 9/99 (c)
- ----------------------------------------
- ----------------------------------------
132 1998 5/98 (c)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
51,449
============----------------------------
============----------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
173 1998 11/98 (c)
============----------------------------
============----------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
(g) 1996 2/99 (g)
- ----------------------------------------
- ----------------------------------------
(f) 1996 1/99 (f)
- ----------------------------------------
- ----------------------------------------
(g) 1995 8/98 (g)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
(f) 1999 12/99 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1995 8/95 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1978 12/99 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1999 12/99 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1999 12/99 (f)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
(f) 1986 6/98 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1979 6/98 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1979 6/98 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1984 6/98 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1983 6/98 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1979 6/98 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1981 6/98 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1983 6/98 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1979 6/98 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1986 6/98 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1983 6/98 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1976 6/98 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1980 6/98 (f)
- ----------------------------------------
- ----------------------------------------
(g) 1982 6/98 (g)
- ----------------------------------------
- ----------------------------------------
(f) 1987 12/98 (f)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
(f) 1994 8/99 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1991 3/97 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1974 8/97 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1996 10/97 (f)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
(f) 1985 1/99 (f)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
(f) 1999 12/99 (f)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
(f) 1991 10/97 (f)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
(g) 1992 3/99 (g)
- ----------------------------------------
- ----------------------------------------
(f) 1992 3/99 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1992 3/99 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1992 3/99 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1989 3/99 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1994 3/99 (f)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
(f) 1996 3/97 (f)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
(f) 1972 5/99 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1997 10/98 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1997 10/99 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1998 12/99 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1998 1/00 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1997 8/99 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1996 11/98 (f)
- ----------------------------------------
- ----------------------------------------
(g) 1997 5/99 (g)
- ----------------------------------------
- ----------------------------------------
(f) 1997 9/99 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1997 3/99 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1996 6/97 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1997 7/99 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1998 1/00 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1997 8/97 (f)
- ----------------------------------------
- ----------------------------------------
(g) 1997 12/98 (g)
- ----------------------------------------
- ----------------------------------------
(f) 1998 11/99 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1998 4/99 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1997 9/99 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1997 4/99 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1997 6/99 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1998 8/99 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1997 8/97 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1997 4/99 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1997 8/99 (f)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
(g) 1987 6/99 (g)
- ----------------------------------------
- ----------------------------------------
(f) 1996 5/99 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1997 7/97 (f)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
(g) 1996 12/96 (g)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
(g) 1997 9/97 (g)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
(f) 1999 3/00 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1999 5/99 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1999 3/99 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1999 2/00 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1999 1/00 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1997 11/97 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1999 10/99 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1999 4/99 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1999 6/99 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1999 9/99 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1999 7/99 (f)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
(f) 1999 12/99 (f)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
(f) 1993 6/98 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1973 6/98 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1993 6/98 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1976 6/98 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1973 6/98 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1972 6/98 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1974 6/98 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1977 6/98 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1969 6/98 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1988 6/98 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1974 6/98 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1984 12/98 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1978 6/98 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1969 6/98 (f)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
(f) 1994 2/99 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1998 10/98 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1994 2/99 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1991 10/98 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1994 2/99 (f)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
(f) 1998 2/99 (f)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
(f) 1999 10/99 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1999 3/99 (f)
- ----------------------------------------
- ----------------------------------------
(f) 2000 6/00 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1997 5/98 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1999 3/00 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1999 12/99 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1999 4/00 (f)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
(f) 1998 3/99 (f)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
(f) 1997 10/98 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1998 9/98 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1996 12/96 (f)
- ----------------------------------------
- ----------------------------------------
(f) 2000 4/00 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1996 6/96 (f)
- ----------------------------------------
- ----------------------------------------
(f) 1998 10/98 (f)
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2003
(a) Transactions in real estate and accumulated depreciation during 2003, 2002
and 2001 are summarized below. The balances in 2002, 2001 and 2000 have
been adjusted to reflect the reclassification of properties accounted for
as discontinued operations.
(In thousands)
Cost Accumulated
(b)(j) Depreciation
----------------- ----------------
Properties the Company has Invested
in Under Operating Leases:
Balance, December 31, 2000 $ 599,904 $ 19,489
Acquisitions 6,127 --
Dispositions (19,047 ) (642 )
Reclassifications from direct
financing leases 6,053 --
Depreciation expense (c) -- 11,515
----------------- ----------------
Balance, December 31, 2001 593,037 30,632
Acquisitions 6,183 325
Dispositions (2,541 ) (166 )
Reclassifications from direct
financing leasing 3,809 --
Depreciation expense (c) -- 10,529
----------------- ----------------
Balance, December 31, 2002 600,488 41,050
Acquisitions -- --
Dispositions (43 ) --
Reclassifications from direct financing
leases 5,151 --
Depreciation expense (c) -- 10,399
----------------- ----------------
Balance December 31, 2003 $ 605,596 $ 51,449
================= ================
Property of Joint Venture in Which the Company
has a 59.22% Interest and has Invested in
Under an Operating Lease:
Balance, December 31, 2000 $ 1,716,405 $ 72,087
Depreciation expense -- 33,603
----------------- ----------------
Balance, December 31, 2001 1,716,405 105,690
Depreciation expense -- 33,604
----------------- ----------------
Balance, December 31, 2002 1,716,405 139,294
Depreciation Expense -- 33,604
----------------- ----------------
Balance, December 31, 2003 $ 1,716,405 $ 172,898
================= ================
(b) As of December 31, 2003, 2002 and 2001, the aggregate cost of the
properties owned by the Company and its subsidiaries for federal income
tax purposes was $621.5 million, $657.3 million and $745.3 million,
respectively. Substantially, all of the leases are treated as operating
leases for federal income tax purposes.
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED
DEPRECIATION - CONTINUED
December 31, 2003
(c) Depreciation expense is computed for buildings and improvements based upon
estimated lives of 30 years.
(d) The building portion of this property is owned by the tenant; therefore,
depreciation is not applicable.
(e) For financial reporting purposes, certain components of the lease relating
to land and/or building have been recorded as a direct financing lease.
Accordingly, costs relating to these components of this lease are not
shown.
(f) For financial reporting purposes, the portion of this lease relating to
the building has been recorded as direct financing lease. The cost of the
building has been included in net investment in direct financing leases;
therefore, depreciation is not applicable.
(g) For financial reporting purposes, the lease for the land and building has
been recorded as direct financing lease. The cost of the land and building
has been included in net investment in direct financing leases; therefore,
depreciation is not applicable.
(h) The Company owns the building only relating to this property. This
property is subject to a ground lease between the tenant and an
unaffiliated third party. In connection therewith, the Company entered
into either a tri-party agreement with the tenant and the owner of the
land or an assignment of interest in the ground lease with the landlord of
the land. The tri-party agreement or assignment of interest each provide
that the tenant is responsible for all obligations under the ground lease
and provide certain rights to the Company to help protect its interest in
the building in the event of a default by the tenant under the terms of
the ground lease.
(i) The property is encumbered at December 31, 2003.
(j) For financial reporting purposes, the undepreciated cost of the following
properties was written down to its net realizable value due to an
anticipated impairment in value. The Company recognized the impairments by
recording an allowance for loss on land and/or building in the amounts
listed below for each property as of December 31, 2003. The impairments at
December 31, 2003 represent the difference between the properties'
carrying values and the property manager's estimate of the net realizable
value of the properties based upon anticipated sales prices to interested
third parties. The cost of the properties presented on this schedule is
the gross amount at which the properties were carried at December 31,
2003, excluding the allowances for loss.
CNL RESTAURANT PROPERTIES, INC.
AND SUBSIDIARIES
NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED
DEPRECIATION - CONTINUED
December 31, 2003
(j) (continued)
The following are a list of properties and the related impairment at
December 31, 2003:
Total
-----------------
Big Boy - Arnold, MO $ 190,000
Big Boy - Blue Springs, MO 160,587
Big Boy, Bridgeton, MO 150,000
Big Boy - Collinsville, IL 134,764
Big Boy, Columbia, MO 133,333
Big Boy - Crystal City, MO 133,333
Big Boy - Fenton, MO 150,000
Big Boy - Lee's Summit, MO 189,769
Big Boy - Merriam, KS 183,425
Big Boy - N. Kansas City, MO 190,000
Big Boy - Sedalia, MO 189,914
Black-eyed Pea - Fort Worth, TX 312,735
Black-eyed Pea - Glendale, AZ 380,415
Black-eyed Pea - Grapevine, TX 873,196
Boston Market - St. Joseph, MO 143,132
Burger King - Chattanooga, TN 41,016
Burger King - Lynnwood, WA 240,163
Chevys Fresh Mex - Brandon, FL 103,029
Chevys Fresh Mex - Clearwater, FL 6,245
Chevys Fresh Mex - Merriam, KS 1,139,377
Chevys Fresh Mex - Orlando, FL 714,979
Chevys Fresh Mex - Tampa. FL 257,331
Chevys Fresh Mex - Taylor, MI 232,197
Darryl's - Montgomery, AL 436,392
Darryl's - Raleigh, NC 172,363
Darryl's - Richmond, VA 546,174
Houlihan's - Langhorne, PA 616,693
Pizza Hut - Bowling Green, OH 187,305
Pizza Hut - Weirton, WV 108,163
Rio Bravo Fresh Mex - Atlanta, GA 880,618
Rio Bravo Fresh Mex - Jacksonville, FL 1,300,911
Rio Bravo Fresh Mex - Lake Mary, FL 43,500
Rio Bravo Fresh Mex - Morrow, GA 520,833
Roadhouse Grill - Centerville, OH 956,295
Roadhouse Grill - Rock Hill, SC 655,260
Shoney's-Debary, FL 324,790
-----------------
$ 12,998,237
=================
CNL RESTAURANT PROPERTIES, INC
AND SUBSIDIARIES
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
December 31, 2003
(In thousands except for number of loans)
Interest Final Periodic Prior Face Amount
Description Rate Maturity Date Payment Term Liens of Mortgages
Mortgage note receivables:
PRB Management, LLC 9.44% to 10.25% 2/1/2021 Note 1 $ 27,224
US Beef Corporation 9.80% 12/1/2020 Note 1 $ 19,926
Metro Corral 9.62% 1/1/2021 Note 1 $ 16,968
Kessler Family, LLC 10.51% 2/1/2020 Note 1 $ 15,299
HR IV, LLC 10.20% 11/1/2020 Note 1 $ 12,668
174 loans as mortgage loans
on franchised restaurant
businesses with original
amounts ranging from
$69 to $8,640 3.09 % to 11.37% 07/01/2005 to
09/01/2023 N/A N/A N/A
Total mortgage note receivables
8 loans held for sale on
franchised restaurant
businesses with original
amounts ranging
from $300 to $17,924 5.00% to 9.00% 12/03/2004 to N/A N/A N/A
10/01/2013
Carrying Amount Principal Amount of Loans
of Mortgages Subject to Delinquent
Note (4) Principal or Interest
$ 25,512 $ -
18,808 -
15,987 -
13,671 -
11,943 -
215,615 9,092
301,536 9,092
1,490 2,937
- ----------------------------------------
Note(3) $ 303,026 $ 12,029
========================================
2003 2002 2001
Balance at beginning of period $ 351,811 $ 387,992 $ 377,922
Note (2) New mortgage loans - non-cash 621 4,571 -
New mortgage loans - 15,047 3,479
Accrued interest (1,933) 1,441 2,974
Loans written off (1,206) (7,368) -
Collection of principal (38,627) (32,183) (762)
Deferred financing income 205 206 (440)
Unamortized loan costs (59) (147) (1,963)
Valuation adjustment 455 (15,839) 15,823
Provision for uncollectible mortgage note(8,241) (1,909) (9,041)
Balance at end of period $ 303,026 $ 351,811 $ 387,992
Note (1) Principal and interest payable at level amount over life. Prepayment penalty terms - Loans may prepay during agreed
number of years with assessed premiums based on Treasury rate or swap breakage costs; then, 1% of the entire unpaid
principal balance.
Note (2) Sold properties and took note for portion of proceeds and accepted mortagage note in lieu of other receivables.
Note (3) Amounts do not include equipment and other notes receivable of $18,583.
Note (4) Carrying amount is net of provisions for loan losses.
EXHIBITS
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 Restaurant Properties, Inc. Second Amended and Restated
Articles of Incorporation (included as Exhibit 3.3 to the
Registrant's Form 10-Q for the quarter ended June 30, 2000 and
incorporated herein by reference).
3.2 Articles of Amendment to Second Amended and Restated Articles of
Incorporation of CNL Restaurant Properties, Inc. (included as
Exhibit 3.4 to the Registrant's Form 10-Q for the quarter ended
June 30, 2002 and incorporated herein by reference).
3.3 Articles of Amendment to Second Amended and Restated Articles of
Incorporation of CNL American Properties Fund, Inc. (included as
Exhibit 3.5 to the Registrant's Form 10-Q for the quarter ended
June 30, 2003 and incorporated herein by reference).
3.4 Second Amended and Restated Bylaws of CNL American Properties
Fund, Inc. (included as Exhibit 3.6 to the Registrant's Form
10-Q for the quarter ended September 30, 2003 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 the Registrant 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 the
Registrant and Steven D. Shackelford, dated as of February 18,
1998, between the Registrant and Curtis B. McWilliams, and dated
as of September 1, 1999, between the Registrant and each of
Howard J. Singer, John L. Farren, Timothy J. Neville, Michael I.
Wood and Barry L. Goff (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 Franchise Receivable Funding and Servicing Agreement dated as of
October 14, 1999 between CNL APF Partners, LP and Neptune
Funding Corporation (included as Exhibit 10.5 to the
Registrant's Form 10-K for the year ended December 31, 1999 and
incorporated herein by reference).
10.4 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 (included as Exhibit 10.6 to the
Registrant's Form 10-K for the year ended December 31, 1999 and
incorporated herein by reference).
10.5 1999 Performance Incentive Plan (included as Exhibit 10.1 to
Amendment No. 1 to the Form S-4 and incorporated herein by
reference).
10.6 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).
10.7 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).
10.8 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).
10.9 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).
10.10 Employment Agreement by and between Michael Wood and the
Registrant, dated August 31, 1999 (included as Exhibit 10.19 to
the Registrant's Form 10-Q for the quarter ended March 31, 2001
and incorporated herein by reference).
10.11 Employment Agreement by and between Brent Heaton and the
Registrant, dated September 29, 1999 (included as Exhibit 10.20
to the Registrant's Form 10-Q for the quarter ended March 31,
2001 and incorporated herein by reference).
10.12 Addendum to Employment Agreement dated as of November 1, 1999,
between the Registrant and Curtis McWilliams (included as
Exhibit 10.21 to the Registrant's Form 10-Q for the quarter
ended March 31, 2001 and incorporated herein by reference). The
following persons have signed a substantially identical Addendum
relating to their respective employment agreements; Steve
Shackelford (dated November 1, 1999), John Walker (dated
November 3, 1999), Barry Goff (dated November 1, 1999), and
Brent Heaton (dated November 3, 1999).
10.13 Addendum to Employment Agreement dated as of November 1, 1999,
between the Registrant and Robert Chapin (included as Exhibit
10.22 to the Registrant's Form 10-Q for the quarter ended March
31, 2001 and incorporated herein by reference). The following
persons have signed a substantially identical Addendum relating
to their respective employment agreements: Howard Singer (dated
November 1, 1999), Michael Wood (dated November 8, 1999) and
Timothy Neville (dated November 24, 1999).
10.14 Second Addendum to Employment Agreement dated as of June 16,
2000, between the Registrant and Curtis McWilliams (included as
Exhibit 10.23 to the Registrant's Form 10-Q for the quarter
ended March 31, 2001 and incorporated herein by reference). The
following persons have signed a substantially identical Second
Addendum relating to their respective employment agreements:
Howard Singer (dated June 19, 2000), Robert Chapin (dated June
20, 2000) and Brent Heaton (dated October 30, 2000).
10.15 Second Addendum to Employment Agreement dated as of August 20,
2000, between the Registrant and Barry Goff (included as Exhibit
10.24 to the Registrant's Form 10-Q for the quarter ended March
31, 2001 and incorporated herein by reference).
10.16 Second Addendum to Employment Agreement dated as of October 24,
2000, between the Registrant and Michael Wood (included as
Exhibit 10.27 to the Registrant's Form 10-Q for the quarter
ended March 31, 2001 and incorporated herein by reference).
10.17 Amended and Restated Master Purchase Agreement dated as of
October 11, 2001, among Bank of America, N.A., CNL Financial
VII, LP and CNL Franchise Network, LP (included as Exhibit 10.29
to the Registrant's Form 10-K for the year ended December 31,
2001 and incorporated herein by reference).
10.18 Third Amended and Restated Side Letter dated as of October 11,
2001, among Bank of America, N.A., CNL Financial VII, LP and CNL
Franchise Network, LP (included as Exhibit 10.30 to the
Registrant's Form 10-K for the year ended December 31, 2001 and
incorporated herein by reference).
10.19 Loan and Security Agreement dated as of June 14, 2002 between
CNL Financial IX, LP and Nieuw Amsterdam Receivables Corporation
(included as Exhibit 10.31 to the Registrant's Form 10-Q for the
quarter ended June 30, 2002 and incorporated herein by
reference).
10.20 Letter Agreement dated December 15, 2003 between Bank of
America, N.A., CNL Financial VII, LP and CNL Restaurant Capital,
LP (filed herewith)
10.21 Employment Agreement dated as of May 5, 2003 by and between CNL
Franchise Network GP Corp. and Steven D. Shackelford (filed
herewith).
10.22 Employment Agreement dated as of May 5, 2003, by and between CNL
Franchise Network GP Corp. and Curtis B. McWilliams (filed
herewith).
21 Subsidiaries of the Registrant (filed herewith).
31.1 Certification of Chief Executive Officer Pursuant to Rule
13a-14(a) as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 (filed herewith).
31.2 Certification of Chief Financial Officer Pursuant to Rule
13a-14(a) as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 (filed herewith).
32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C.
Section 1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (filed herewith).
32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C.
Section 1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (filed herewith).
EXHIBIT 10.20
LETTER AGREEMENT DATED DECEMBER 15, 2003
BETWEEN BANK OF AMERICA, N.A.,
CNL FINANCIAL VII, LP AND
CNL RESTAURANT CAPITAL, LP
EXHIBIT 10.21
EMPLOYMENT AGREEMENT
STEVEN D. SHACKELFORD
EXHIBIT 10.22
EMPLOYMENT AGREEMENT
CURTIS B. MCWILLIAMS
EXHIBIT 21
SUBSIDIARIES OF THE REGISTRANT
EXHIBIT 31.1
RULE 13a-14(a) CERTIFICATION OF CHIEF EXECUTIVE OFFICER
EXHIBIT 31.2
RULE 13a-14(a) CERTIFICATION OF CHIEF FINANCIAL OFFICER
EXHIBIT 32.1
SECTION 1350 CERTIFICATION OF CHIEF EXECUTIVE OFFICER
EXHIBIT 32.2
SECTION 1350 CERTIFICATION OF CHIEF FINANCIAL OFFICER