-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BLnnx67KbDdLV7RuS5QWkgHZpXDIFF28vXuLmOfsdKXRa/OgQkm+U9ePqebeZ+2d zDXQeW5CvojdCven3zfeYg== 0000892569-96-002226.txt : 19961106 0000892569-96-002226.hdr.sgml : 19961106 ACCESSION NUMBER: 0000892569-96-002226 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961105 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DEL TACO RESTAURANT PROPERTIES I CENTRAL INDEX KEY: 0000711213 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 953852699 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-16191 FILM NUMBER: 96654300 BUSINESS ADDRESS: STREET 1: 23041 AVENIDA DE LA CARLOTA, SUITE 400 CITY: LAGUNA HILLS STATE: CA ZIP: 92653 BUSINESS PHONE: 714 462-9300 MAIL ADDRESS: STREET 1: 1800 W KATELLA AVENUE CITY: ORANGE STATE: CA ZIP: 92667 10-Q 1 FORM 10-Q FOR QUARTER ENDED 9-30-96 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark one) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996 ----------------------------------------- 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 NO. 2-80930 DEL TACO RESTAURANT PROPERTIES I a California limited partnership (Exact name of registrant as specified in its charter) CALIFORNIA 95-3852699 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 23041 AVENIDA DE LA CARLOTA, SUITE 400, LAGUNA HILLS, CA 92653 (Address of principal executive offices) (Zip Code) (714) 462-7399 (Registrant's telephone number, including area code) 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 for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- -1- 2 INDEX DEL TACO RESTAURANT PROPERTIES I --------------------------------
PART I. FINANCIAL INFORMATION PAGE NUMBER - ------------------------------ ----------- Item 1. Financial Statements and Supplementary Data Balance Sheets at September 30, 1996 (Unaudited) and December 31, 1995 3 Statements of Income for the three and nine months ended September 30, 1996 and 1995 (Unaudited) 4 Statements of Cash Flows for the nine months ended September 30, 1996 and 1995 (Unaudited) 5 Notes to Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 PART II. OTHER INFORMATION - -------------------------- Item 6. Exhibits and Reports on Form 8-K 10 SIGNATURES 11 - ----------
-2- 3 DEL TACO RESTAURANT PROPERTIES I -------------------------------- BALANCE SHEETS --------------
SEPTEMBER 30 December 31 1996 1995 ------------ ------------ (UNAUDITED) ASSETS ------ CURRENT ASSETS: Cash $ 128,039 $ 115,012 Receivable from General Partner (Note 4) 37,789 36,654 Deposits 600 600 ---------- ---------- Total current assets 166,428 152,266 ---------- ---------- PROPERTY AND EQUIPMENT, AT COST Land and improvements 1,852,482 1,852,482 Buildings and improvements 1,013,134 1,013,134 Machinery and equipment 1,136,026 1,136,026 ---------- ---------- 4,001,642 4,001,642 Less--accumulated depreciation 1,617,600 1,584,768 ---------- ---------- 2,384,042 2,416,874 ---------- ---------- $2,550,470 $2,569,140 ========== ========== LIABILITIES AND PARTNERS' EQUITY -------------------------------- CURRENT LIABILITIES: Payable to Limited Partners $ 11,163 $ 8,898 Accounts payable 550 907 ---------- ---------- Total current liabilities 11,713 9,805 ---------- ---------- PARTNERS' EQUITY Limited Partners 2,273,386 2,293,755 General Partner-Del Taco, Inc. 265,371 265,580 ---------- ---------- 2,538,757 2,559,335 ---------- ---------- $2,550,470 $2,569,140 ========== ==========
The accompanying notes are an integral part of these financial statements -3- 4 DEL TACO RESTAURANT PROPERTIES I -------------------------------- STATEMENTS OF INCOME -------------------- (UNAUDITED) -----------
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30 SEPTEMBER 30 1996 1995 1996 1995 -------- -------- ---------- -------- REVENUES: Rent (Notes 3 and 4) $120,783 $113,958 $334,752 $ 326,854 Interest 705 583 1,823 1,707 Other 25 100 375 325 -------- -------- -------- --------- 121,513 114,641 336,950 328,886 -------- -------- -------- --------- EXPENSES: General and administrative 9,705 6,923 39,020 35,239 Depreciation 10,944 31,322 32,829 106,690 -------- -------- -------- --------- 20,649 38,245 71,849 141,929 -------- -------- -------- --------- Net income $100,864 $ 76,396 $265,101 $ 186,957 ======== ======== ======== ========= Net income per Limited Partnership Unit (Note 2) $ 11.41 $ 8.64 $ 29.99 $ 21.15 ======== ======== ======== =========
The accompanying notes are an integral part of these financial statements. -4- 5 DEL TACO RESTAURANT PROPERTIES I -------------------------------- STATEMENTS OF CASH FLOWS ------------------------ (UNAUDITED) -----------
NINE MONTHS ENDED SEPTEMBER 30 1996 1995 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $265,101 $186,957 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 32,829 106,690 Increase (decrease)in payable to Limited Partners 2,265 (3,459) (Increase) decrease in receivable from General Partner (1,135) 4,251 Increase (decrease) in accounts payable (355) 4,188 -------- -------- Net cash provided by operating activities 298,705 298,627 CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions to partners 285,678 292,290 -------- -------- Net increase in cash 13,027 6,337 Beginning cash balance 115,012 120,720 -------- -------- Ending cash balance $128,039 $127,057 ======== ========
The accompanying notes are an integral part of these financial statements. -5- 6 DEL TACO RESTAURANT PROPERTIES I -------------------------------- NOTES TO FINANCIAL STATEMENTS ----------------------------- SEPTEMBER 30, 1996 ------------------ NOTE 1 - BASIS OF PRESENTATION The accompanying financial statements, some of which are unaudited, have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements and should therefore be read in conjunction with the financial statements and notes thereto contained in the Registrant's annual report on Form 10-K for the year ended December 31, 1995. In the opinion of management, all adjustments (consisting of normal recurring accruals) necessary to present fairly the partnership's financial position at September 30, 1996, the results of operations and cash flows for the nine month periods ended September 30, 1996 and 1995 have been included. Operating results for the three and nine months ended September 30, 1996 are not necessarily indicative of the results that may be expected for the year ending December 31, 1996. NOTE 2 - NET INCOME PER LIMITED PARTNERSHIP UNIT Net income per Limited Partnership Unit is based upon the weighted average number of Units outstanding during the periods presented, which amounted to 8,751 in 1996 and 1995. Pursuant to the Partnership Agreement, annual partnership net income is allocated one percent to the General Partner and 99 percent to the Limited Partners. A Partnership net loss in any year will be allocated 24 percent to the General Partner and 76 percent to the Limited Partners until the losses so allocated equal income previously allocated. Any additional losses will be allocated one percent to the General Partner and 99 percent to the Limited Partners. Partnership gains from any sale or refinancing will be allocated one percent to the General Partner and 99 percent to the Limited Partners until allocated gains and profits equal losses. Additional gains will be allocated 24 percent to the General Partner and 76 percent to the Limited Partners. -6- 7 DEL TACO RESTAURANT PROPERTIES I - -------------------------------- NOTES TO FINANCIAL STATEMENTS - CONTINUED - ----------------------------------------- SEPTEMBER 30, 1996 - ------------------ NOTE 3 - LEASING ACTIVITIES The Registrant leases (the "Leases") certain properties (the "Properties") for operation of restaurants to Del Taco, Inc. ("General Partner") on a triple net basis. The Leases are for terms of 35 years commencing with the completion of the restaurant facility located on each Property and require monthly rentals equal to 12 percent of the gross sales of the restaurants. There is no minimum rental under any of the Leases. The Registrant had a total of six Properties leased as of September 30, 1996 and 1995, two of which have been subleased to Del Taco franchisees (one of which is affiliated with Del Taco, Inc.) The Registrant's property at Baseline and Archibald in Rancho Cucamonga, California is subleased by Del Taco, Inc. to a franchisee. In November 1995, the franchise agreement and the sublease expired. In a letter dated November 20, 1995, the franchise agreement and the sublease were extended to May 26, 1996. Del Taco, Inc. and the franchisee have not reached an agreement regarding the franchise and sublease terms after May 26, 1996. Management of the General Partner (Del Taco, Inc.) anticipates that on or before December 31, 1996 one of the following dispositions will be initiated: 1) the franchise agreement and sublease will be renewed for a 15 year term; 2) Del Taco, Inc. will operate the restaurant; 3) Del Taco will sublease the property to a new third party; or 4) the property will be offered for sale. NOTE 4 - TRANSACTIONS WITH DEL TACO The receivable from General Partner consists primarily of rent accrued for the month of September. The September rent receivable was collected on October 11, 1996. Del Taco, Inc. serves in the capacity of general partner in other partnerships which are engaged in the business of operating restaurants, and four partnerships which were formed for the purpose of acquiring real property in California for construction of Mexican-American restaurants for lease under long-term agreements to Del Taco, Inc. for operation under the Del Taco trade name. In addition, see Note 5 with respect to certain distributions to the General Partner. -7- 8 NOTE 5 - DISTRIBUTIONS On October 14, 1996, a distribution to the Limited Partners of $109,123 or approximately $12.47 per Limited Partnership Unit, was approved. Such distribution was paid on October 15, 1996. The General Partner also received a distribution of $1,102 with respect to its 1% partnership interest. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources - ------------------------------- The Registrant commenced offering of Limited Partnership Units on March 21, 1983. By March 20, 1984, the sale of such Units provided a total capitalization for the Registrant of $4,375,500. Fifteen percent of the cash received from the sale of Limited Partnership Units was used to pay commissions to brokers and to reimburse the General Partner for offering costs incurred. The remaining funds were expended for the acquisition of sites and construction of six restaurants. In 1985, the first four restaurants opened for business and two additional restaurants were opened in 1986. Approximately $4,002,000 was expended for such purposes. Since the six restaurants owned by the Registrant opened, cash flow from Lease payments received from Del Taco, the Registrant's General Partner, which leases all six restaurants, has provided adequate liquidity for operation of the Registrant. However, the Registrant's overwhelmingly predominant source of income to meet its expenses and fund distributions to its Limited Partners is payments from Del Taco under the Leases, comprising primarily rent calculated on the basis of the gross sales of the restaurants operated on the Properties, as to which there are no contractually specified minimum or guaranteed amounts. Thus, the adequacy of the Registrant's liquidity and capital resources in the future will depend primarily upon the gross revenues of such restaurants as well as upon Del Taco's financial condition and results of operations generally. -8- 9 Results of Operations - --------------------- The Registrant owns six Mexican-American restaurants that are under long-term lease to its General Partner for operation under the Del Taco trade name. The Registrant receives rental revenues equal to 12 percent of restaurant sales. For the three months ended September 30, rental revenues increased from $113,958 in 1995 to $120,783 in 1996. For the nine months ended September 30, rental revenues increased from $326,854 in 1995 to $334,752 in 1996. Such changes in rental revenue are directly attributable to changes in sales at the restaurants. The following table sets forth the percentage relationship to total general and administrative expenses of items included in the Registrant's Statements of Income:
Percentage of Total General & Administrative Expense -------------------------------- Nine Months Ended September 30 1996 1995 ------ ------- Accounting fees 39.85% 42.55% Distribution of information to Limited Partners 57.15 55.38 Other 3.00 2.07 ------ ------ 100.00% 100.00% ====== ======
Operating expenses include general and administrative expenses which consist primarily of accounting fees and costs of distribution of information to the Limited Partners. For the three months ended September 30, general and administrative expenses increased from $6,923 in 1995 to $9,705 in 1996. The increase in general and administrative expense was caused primarily by printing costs for new checks and envelopes and stationary and nonrecurring costs associated with a special mailing to Limited Partners. For the nine months ended September 30, general and administrative expenses increased from $35,239 in 1995 to $39,020 in 1996. For the three months ended September 30, the Registrant incurred depreciation expense in the amount of $10,944 in 1996 and $31,322 in 1995. The Registrant incurred depreciation expense of $32,829 and $106,690 for nine months ended -9- 10 September 30, 1996 and 1995,respectively. Depreciation expense decreased because signs and food processing equipment (included as part of machinery and equipment) became fully depreciated during 1995. For the three months ended September 30, revenues increased by $6,872 while expenses decreased by $17,596 resulting in an increase in net income from $76,396 in 1995 to $100,864 in 1996. For the nine months ended September 30, revenues increased by $8,064 while expenses decreased by $70,080 resulting in an increase in the Registrant's net income from $186,957 for the nine months ended September 30, 1995 to $265,101 for the corresponding period in 1996. For the reasons stated under "Liquidity and Capital Resources" above, the Registrant's results of operations in the future will depend primarily upon the gross revenues of the restaurants located on the Properties leased to Del Taco as well as upon Del Taco's financial condition and results of operations generally. PART II. OTHER INFORMATION - --------------------------- Item 6. Exhibits and Reports on Form 8-K (b) No reports on Form 8-K were filed during the nine months ended September 30, 1996. (c) Exhibit 27 - Financial Data Schedule. -10- 11 SIGNATURES Pursuant to the requirements 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. DEL TACO RESTAURANT PROPERTIES I (a California limited partnership) Registrant Del Taco, Inc. General Partner Date: October 30, 1996 /s/ Robert J. Terrano ------------------------------------ Robert J. Terrano Executive Vice President, Chief Financial Officer Date: October 30, 1996 /s/ C. Douglas Mitchell ------------------------------------ C. Douglas Mitchell Vice President and Corporate Controller -11- EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS DEC-31-1996 JUL-01-1996 SEP-30-1996 128,039 600 37,789 0 0 166,428 4,001,642 1,617,600 2,550,470 11,713 0 0 0 0 2,538,757 2,550,470 0 121,513 0 20,649 0 0 0 100,864 0 100,864 0 0 0 100,864 11.41 11.41
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