-----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, BOQLyT0CBBRK58S9qtwBVsBrVu9R6dG4OQn+0bm14BVFj5+8nWDjQVqYFhDx2gwy pkH4ew/5m7MUCWVXmQDzyw== 0000892569-97-000642.txt : 19970314 0000892569-97-000642.hdr.sgml : 19970314 ACCESSION NUMBER: 0000892569-97-000642 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970313 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-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-16191 FILM NUMBER: 97555625 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-K 1 FORM 10-K FOR FISCAL YEAR ENDED DECEMBER 31, 1996 1 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (MARK ONE) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] FOR THE TRANSITION PERIOD FROM ______________ TO ______________ COMMISSION FILE NUMBER 2-80930 DEL TACO RESTAURANT PROPERTIES I (A CALIFORNIA LIMITED PARTNERSHIP) (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) CALIFORNIA (STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) 23041 AVENIDA DE LA CARLOTA LAGUNA HILLS, CALIFORNIA (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) 95-3852699 (I.R.S. EMPLOYER IDENTIFICATION NUMBER) 92653 (ZIP CODE) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (714) 462-9300 SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE 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 ___ DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant's Form S-11 Registration Statement filed December 17, 1982 are incorporated by reference into Part IV of this report. ================================================================================ 2 PART I ITEM 1. BUSINESS The Registrant is a publicly-held Limited Partnership organized under the California Uniform Limited Partnership Act. In accordance with the Partnership Agreement, the Registrant's General Partner is Del Taco, Inc., a California corporation ("General Partner"). The Registrant sold 8,751 Units aggregating $4,375,500 through an offering of Limited Partnership Units from March 21, 1983 through March 20, 1984. The Registrant has engaged in the business of acquiring sites in California for the construction of six Mexican-American restaurants for long-term lease to Del Taco, Inc. for operation under the Del Taco trade name. Each Property is leased for 35 years on a triple-net basis for a rent equal to twelve percent of gross sales of the restaurant constructed thereon. The activities of the Registrant relating to acquisition and development of the Properties is presented under Item 2 below. The term of the Partnership Agreement is until April 30, 2022, unless terminated earlier by means provided therein. Because the six Properties owned by the Registrant constitute virtually all of the Registrant's income producing assets, the business of the Registrant is almost entirely dependent on the success of the Del Taco trade name restaurants which lease those Properties. In turn, the success of those restaurants, which are not operated by the Registrant, is dependent on a large variety of factors, including, but not limited to, consumer demand and preference for fast food, in general, and for Mexican-American food in particular. The Registrant has no full time employees. The General Partner is vested with full authority as to the general management and supervision of the business and affairs of the Registrant, and has a one percent interest in the profits and distributions of the Registrant. Limited Partners have no right to participate in the management or conduct of such business and affairs. 2 3 ITEM 2. PROPERTIES The Registrant has acquired six Properties with proceeds obtained from the sale of Limited Partnership Units:
Date of Date of Restaurant Commencement of Address City, State Acquisition Constructed Operation(1) - ------- ----------- ----------- ----------- ------------- Riverside Rialto, CA September 28, 60 seat with February 12, 1985 Avenue 1984 drive through service window Elden Moreno Valley, CA March 8, 1985 60 seat with June 30, 1985 Avenue drive through service window Foothill La Verne, CA April 16, 1985 60 seat with November 6, 1985 Boulevard drive through service window Baseline & Rancho Cucamonga, July 10, 1985 60 seat with November 26, 1985 Archibald CA drive through service window Elkhorn Sacramento, CA August 22, 1985 60 seat with January 15, 1986 Boulevard drive through service window Haven Rancho Cucamonga, September 20, 60 seat with February 14, 1986 Avenue CA 1985 drive through service window
(1) Commencement of operation is the first date Del Taco, Inc., as lessee, operated the facility on the site as a Del Taco restaurant. 3 4 PART II ITEM 3. LEGAL PROCEEDINGS The Registrant is not a party to any material pending legal proceedings. ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS On July 14, 1994, the General Partner held a special meeting of limited partners of the Partnership at the Doubletree Hotel, 100 The City Drive, Orange, California, for the purpose of voting on whether Del Taco should continue to serve as the General Partner of the Partnership. A proposal to remove Del Taco as General Partner failed to obtain the necessary majority vote, receiving only 6.99 percent of eligible votes, and was defeated. Thus, Del Taco will continue to serve as sole General Partner of the Partnership, subject to all of the rights and responsibilities set forth in the Partnership's Restated Certificate and Agreement of Limited Partnership. ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SECURITY HOLDER MATTERS The Registrant, a publicly-held Limited Partnership, sold 8,751 ($4,375,500) Limited Partnership Units during the offering period ended March 20, 1984 and currently has 995 Limited Partners of record. There is no public market for the trading of the Units. Distributions made by the Registrant to the Limited Partners during the past three fiscal years are described in Note 7 to the Notes to the Financial Statements contained under Item 8. 4 5 ITEM 6. SELECTED FINANCIAL DATA
For the Year Ended December 31, 1996 1995 1994 1993 1992 ---- ---- ---- ---- ---- Rental Revenue $452,203 $436,262 $420,245 $421,178 $418,960 Interest and 2,902 2,729 2,729 3,281 1,511 other income Net income 365,387 275,020 222,295 233,111 242,251 Net income per limited Partnership Unit(1) 41.34 31.11 25.15 26.37 27.41 Cash Distributions per Limited Partnership Unit(2)(3)(4)(5)(6) 44.82 45.70 58.70 18.49 55.34 Total Assets 2,543,173 2,569,140 2,700,433 2,993,046 2,938,465 Long-term Obligations None None None None None
(1) The net income per Limited Partnership Unit was calculated based upon 8,751 weighted average Units outstanding for all years presented. (2) Cash distributions for the quarter ended December 31, 1992 amounted to $11.68 per Limited Partnership Unit and were paid December 31, 1992. Five quarterly distributions were disbursed during the year ended December 31, 1992. (3) Two quarterly distributions were disbursed during the year ended December 31, 1993. Cash distributions for the quarters ended September 30, 1993 and December 31, 1993 amounted to $24.95 and were paid January 31, 1994 and February 2, 1994, respectively. (4) Cash distributions for the quarter ended December 31, 1994 amounted to $11.70 per Limited Partnership Unit and were paid January 17, 1995. Five distributions were disbursed during the year ended December 31, 1994. 5 6 ITEM 6. SELECTED FINANCIAL DATA - Continued (5) Cash distributions for the quarter ended December 31, 1995 amounted to $11.46 per Limited Partnership Unit and were paid January 15, 1996. Four distributions were disbursed during the year ended December 31, 1995. (6) Cash distributions for the quarter ended December 31, 1996 amounted to $12.63 per Limited Partnership Unit and were paid January 31, 1997. Four distributions were disbursed during the year ended December 31, 1996. ITEM 7. 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, and its sublessee as to one of the Properties, 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 (and, as to one of the Properties, Del Taco's sub-lessee) 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. 6 7 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued Results of Operations The Registrant owns six Properties that are under long-term lease to Del Taco for restaurant operations (Del Taco, in turn, has subleased two of the restaurants to Del Taco franchisees, one of which is affiliated with Del Taco). The Registrant receives rental revenues equal to 12 percent of restaurant sales. The Registrant had rental revenues of $452,203 for the year ended December 31, 1996, representing an increase from the rental revenues of $436,262 in 1995. Such increase is directly attributable to increased sales at the restaurants. The property at Baseline and Archibald is subleased by Del Taco, Inc. to a franchisee. In November 1996, the franchise agreement and the sublease on the property at Baseline and Archibald were renewed for a 15 year term. The following table sets forth, for the periods indicated, the percentage relationship to total general and administrative expenses, of items included in the Registrant's Statements of Income: PERCENTAGE OF TOTAL GENERAL & ADMIN. EXPENSE
Year Ended December 31, 1996 1995 1994 ---- ---- ---- Accounting fees 36.02% 35.17% 38.84% Distribution of information to Limited Partners 61.43 62.35 57.39 Legal fees -- -0.76 0.00 Other 2.55 3.24 3.77 ------- ------- ------- 100.00% 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 year ended December 31, general and administrative expenses increased from $42,441 in 1995 to $45,943 in 1996 reflecting higher costs for accounting and distribution of information to the limited Partners. The Registrant incurred depreciation expense in the amount of $43,775 for the year ended December 31, 1996, $121,530 for the year ended December 31, 1995 and $157,376 for the year ended December 31, 1994. Depreciation expense decreased because signs and equipment became fully depreciated during 1996 and 1995. 7 8 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued 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. In Fiscal 1996, the Registrant adopted Statement of Financial Accounting Standards (SFAS) No. 121, "Accounting for the Impairment of Long Lived Assets and for Long Lived Assets to be Disposed of." The adoption of SFAS No. 121 did not have a material impact on the Registrant's financial statements. 8 9 ITEM 8. FINANCIAL STATEMENTS PART I. INFORMATION
INDEX PAGE NUMBER ----- ----------- Report of Independent Public Accountants 10 Balance Sheets at December 31, 1996 and 1995 11 Statements of Income for the years ended December 31, 1996, 1995 and 1994 12 Statement of Changes in Partners' Equity for the three years ended December 31, 1996 13 Statements of Cash Flows for the years ended December 31, 1996, 1995 and 1994 14 Notes to Financial Statements 15-19
9 10 ARTHUR ANDERSEN LLP REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ---------------------------------------- To the Partners of Del Taco Restaurant Properties I: We have audited the accompanying balance sheets of DEL TACO RESTAURANT PROPERTIES I (a California limited partnership) as of December 31, 1996 and 1995, and the related statements of income, changes in partners' equity and cash flows for each of the three years in the period ended December 31, 1996. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Del Taco Restaurant Properties I as of December 31, 1996 and 1995, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1996, in conformity with generally accepted accounting principles. /s/ ARTHUR ANDERSEN LLP -------------------------------- ARTHUR ANDERSEN LLP Orange County, California February 14, 1997 11 DEL TACO RESTAURANT PROPERTIES I BALANCE SHEETS
DECEMBER 31 1996 1995 --------------- --------------- ASSETS CURRENT ASSETS: Cash $ 130,996 $ 115,012 Receivable from Del Taco, Inc. (Note 5) 38,478 36,654 Deposits 600 600 --------------- --------------- Total current assets 170,074 152,266 --------------- --------------- PROPERTY AND EQUIPMENT, AT COST (NOTE 1) 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 1,628,543 1,584,768 --------------- --------------- 2,373,099 2,416,874 --------------- --------------- $ 2,543,173 $ 2,569,140 =============== =============== LIABILITIES AND PARTNERS' EQUITY CURRENT LIABILITIES: Payable to Limited Partners $ 11,319 $ 8,898 Accounts Payable 3,000 907 --------------- --------------- Total current liabilities 14,319 9,805 --------------- --------------- PARTNERS' EQUITY (NOTE 2) Limited Partners 2,263,579 2,293,755 General Partner - Del Taco, Inc. 265,275 265,580 --------------- --------------- 2,528,854 2,559,335 --------------- --------------- $ 2,543,173 $ 2,569,140 =============== ===============
The accompanying notes are an integral part of these financial statements. 11 12 DEL TACO RESTAURANT PROPERTIES I STATEMENTS OF INCOME
YEAR ENDED DECEMBER 31 1996 1995 1994 ------------ ------------ ------------ REVENUES: Rent (Note 4) $ 452,203 $ 436,262 $ 420,245 Interest 2,265 2,279 2,429 Other 637 450 300 ------------ ------------ ------------ 455,105 438,991 422,974 ------------ ------------ ------------ EXPENSES: General and administrative 45,943 42,441 43,303 Depreciation 43,775 121,530 157,376 ------------ ------------ ------------ 89,718 163,971 200,679 ------------ ------------ ------------ Net Income $ 365,387 $ 275,020 $ 222,295 ============ ============ ============ Net Income per Limited Partnership Unit (Note 1) $41.34 $31.11 $25.15 ============ ============ ============
The accompanying notes are an integral part of these financial statements. 12 13 DEL TACO RESTAURANT PROPERTIES I STATEMENT OF CHANGES IN PARTNERS' EQUITY THREE YEARS ENDED DECEMBER 31, 1996
Limited Partners ------------------------- General Units Amount Partner Total ----------- ----------- ----------- ----------- Balance, December 31, 1993 8,751 $2,715,115 $269,837 $2,984,952 Net income 220,072 2,223 222,295 Cash distributions (Note 7) (513,793) (5,191) (518,984) ----------- ----------- ----------- ----------- Balance, December 31, 1994 8,751 2,421,394 266,869 2,688,263 Net income 272,270 2,750 275,020 Cash distributions (Note 7) (399,909) (4,039) (403,948) ----------- ----------- ----------- ----------- Balance, December 31, 1995 8,751 2,293,755 265,580 2,559,335 Net income 361,733 3,654 365,387 Cash distributions (Note 7) (391,909) (3,959) (395,868) ----------- ----------- ----------- ----------- Balance, December 31, 1996 8,751 $2,263,579 $265,275 $2,528,854 =========== =========== =========== ===========
The accompanying notes are an integral part of these financial statements. 13 14 DEL TACO RESTAURANT PROPERTIES I STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31 1996 1995 1994 ----------- ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $365,387 $275,020 $222,295 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 43,775 121,530 157,376 Increase (decrease) in payable to Limited Partners 2,421 (3,272) 4,076 (Increase) decrease in receivable from General Partner (1,824) 4,056 (2,834) Increase in accounts payable 2,093 906 -- ----------- ----------- ----------- Net cash provided by operating activities 411,852 398,240 380,913 CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions to partners (395,868) (403,948) (518,984) ----------- ----------- ----------- Net increase (decrease) in cash 15,984 (5,708) (138,071) Beginning cash balance 115,012 120,720 258,791 ----------- ----------- ----------- Ending cash balance $130,996 $115,012 $120,720 =========== =========== ===========
The accompanying notes are an integral part of these financial statements. 14 15 DEL TACO RESTAURANT PROPERTIES I NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES THE PARTNERSHIP: Del Taco Restaurant Properties I (a California limited partnership) was formed on November 30, 1982, for the purpose of acquiring real property in California for construction of six Mexican-American restaurants to be leased under long-term agreements to Del Taco, Inc. (General Partner for operation under the Del Taco trade name). As of February 14, 1986, all six restaurants had commenced operation on acquired properties. BASIS OF ACCOUNTING: The Partnership utilizes the accrual method of accounting for transactions relating to the business of the Partnership. Distributions are made to the General and Limited Partners in accordance with the provisions of the Partnership Agreement (see Note 2). PROPERTY AND EQUIPMENT: Property and equipment is stated at cost. Depreciation is computed using the straight-line method over estimated useful lives which are 20 years for land improvements, 35 years for buildings and improvements, and 10 years for machinery and equipment. INCOME TAXES: No provision has been made for federal or state income taxes on Partnership net income, since the Partnership is not subject to income tax. Partnership income is includable in the taxable income of the individual partners as required under applicable income tax laws. Certain items, primarily related to depreciation methods, are accounted for differently for income tax reporting purposes (see Note 6). NET INCOME PER LIMITED PARTNERSHIP UNIT: Net income per Limited Partnership Unit is based upon the weighted average number of Units outstanding during the period which amounted to 8,751 for all years presented. USE OF ESTIMATES: The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 15 16 DEL TACO RESTAURANT PROPERTIES I NOTES TO FINANCIAL STATEMENTS - CONTINUED DECEMBER 31, 1996 NOTE 2 - PARTNERS' EQUITY 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. In 1986, the General Partner contributed additional capital of $280,000 to the Partnership in order to provide funds necessary to complete the sixth and final restaurant. NOTE 3 - SITE ACQUISITION AND DEVELOPMENT FEE Under terms of the Partnership Agreement, the General Partner is entitled to receive a site acquisition and development fee in an amount equal to the lesser of five percent of the cost of the related property or $30,000. The fee shall be for service rendered in connection with site selection and the design and supervision of construction of improvements to acquired properties. No site acquisition and development fees were paid in 1996, 1995 and 1994. NOTE 4 - LEASING ACTIVITIES The Registrant leases certain 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 December 31, 1996, 1995 and 1994, two of which have been subleased to Del Taco franchisees (one of which is affiliated with Del Taco, Inc.) 16 17 DEL TACO RESTAURANT PROPERTIES I NOTES TO FINANCIAL STATEMENTS - CONTINUED DECEMBER 31, 1996 NOTE 4 - LEASING ACTIVITIES - Continued The property at Baseline and Archibald is subleased by Del Taco, Inc. to a franchisee. In November 1996, the franchise agreement and the sublease on the property at Baseline and Archibald were renewed for a 15 year term. NOTE 5 - RELATED PARTIES The receivable from Del Taco consists of rent accrued for the month of December 1996. The rent receivable was collected on January 17, 1997. The General Partner received $3,959 in distributions relating to its one percent interest in the Registrant for the year ended December 31, 1996. Del Taco, Inc. serves in the capacity of general partner in other partnerships which are engaged in the business of operating restaurants, and three other 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. 17 18 DEL TACO RESTAURANT PROPERTIES I NOTES TO FINANCIAL STATEMENTS - CONTINUED DECEMBER 31, 1996 NOTE 6 - INCOME TAXES A reconciliation of financial statement net income to taxable income for each of the periods is as follows:
1996 1995 1994 ---- ---- ---- Net income per financial statements $365,387 $275,020 $222,295 Excess book depreciation (4,780) 72,975 108,695 -------- -------- -------- Taxable income $360,607 $347,995 $330,990 ======== ======== ========
A reconciliation of partnership equity per the financial statements to net worth for tax purposes as of December 31, 1996, is as follows: Partners' equity per financial statements $2,528,854 Issue costs of Limited Partnership Units capitalized for tax purposes 637,325 Excess tax depreciation (135,068) Other 235 ---------- Net worth for tax purposes $3,031,346 ==========
18 19 DEL TACO RESTAURANT PROPERTIES I NOTES TO FINANCIAL STATEMENTS - CONTINUED DECEMBER 31, 1996 NOTE 7 - CASH DISTRIBUTIONS TO LIMITED PARTNERS Cash distributions paid to Limited Partners for the three years ended December 31, 1996 were as follows:
Weighted Number of Distributions Average Units per Limited Number of Outstanding Partnership Units at the End of Quarter Ended Unit Outstanding Quarter ------------------ --------------- --------------- September 30, 1993 $ 8.95 8,751 8,751 December 31, 1993 16.00 8,751 8,751 March 31, 1994 8.91 8,751 8,751 June 30, 1994 13.15 8,751 8,751 September 30, 1994 11.69 8,751 8,751 ------ Total paid in 1994 $58.70 ====== December 31, 1994 $11.70 8,751 8,751 March 31, 1995 10.90 8,751 8,751 June 30, 1995 10.47 8,751 8,751 September 30, 1995 12.63 8,751 8,751 ------ Total paid in 1995 $45.70 ====== December 31, 1995 $11.46 8,751 8,751 March 31, 1996 10.68 8,751 8,751 June 30, 1996 10.21 8,751 8,751 September 30, 1996 12.47 8,751 8,751 ------ Total paid in 1996 $44.82 ======
Cash distributions per Limited Partnership Unit were calculated based upon the weighted average number of units outstanding for each quarter and were paid from operations. Cash distributions for the quarter ended December 31, 1996 amounted to $12.63 per Limited Partnership Unit and were paid January 31, 1997. 19 20 PART III ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT'S GENERAL PARTNER (a) & (b) The executive officers and directors of the General Partner and their ages are set forth below:
Name Title Age - ---- ----- --- Kevin K. Moriarty Director, Chairman and Chief Executive Officer 50 Paul W. Hitzelberger Executive Vice President, Brand Strategy and Franchise Relations/Development 52 Robert Terrano Executive Vice President and Chief Financial Officer 41 James D. Stoops Executive Vice President, Operations 44 Janet D. Simmons Senior Vice President, Purchasing 40 Michael L. Annis Vice President, Secretary and General Counsel 50 C. Douglas Mitchell Vice President and Corporate Controller 46
The above referenced executive officers and directors of the General Partner will hold office until the annual meeting of its shareholders and directors, which is scheduled for the later part of 1997. (c) None (d) No family relationship exists between any such director or executive officer of the General Partner. (e) The following is an account of the business experience during the past five years of each such director and executive officer: 20 21 Kevin K. Moriarty, Director, Chairman and Chief Executive Officer of Del Taco, Inc. Mr. Moriarty began his career with Burger King Corporation in 1974 in Operations Unit Management. In 1983, he was promoted to Area Manager in New York, and was subsequently promoted to the Regional Vice President, Chicago Region in 1985. In 1988, he became Executive Vice President and General Manager of the North Central Division. Mr. Moriarty served in that position until 1990 when he joined Del Taco, Inc. as President and Chief Executive Officer on July 31, 1990. Mr. Moriarty has served as a Director of the General Partner since 1990. Paul W. Hitzelberger, Executive Vice President, Brand Strategy and Franchise Relations/Development of Del Taco, Inc. He was appointed to his current position in December 1995. Previously, Mr. Hitzelberger was Executive Vice President, Marketing from February 1991 and Vice President, Marketing from 1989 to 1991. Mr. Hitzelberger has responsibility for franchise development, relations and training and will oversee public relations and training for the corporation. From September 1988 through September 1989, Mr. Hitzelberger was Chief Executive Officer of Environmental Marketing Group. Prior to that, Mr. Hitzelberger was a Vice President of Del Taco, Inc. Prior to joining Del Taco, Inc., he served as Vice President - Marketing at the department store division of Lucky Stores, Inc., a major supermarket retailer. Prior to his position with Lucky, Mr. Hitzelberger held various positions in marketing and retailing at Wallpapers to Go, Inc., a division of General Mills, Inc., and Coast to Coast Stores, Inc. a subsidiary of Household Merchandising, Inc. Mr. Hitzelberger received a Master of Business Administration degree from Loyola University in Chicago, Illinois. Robert J. Terrano, Executive Vice President and Chief Financial Officer of Del Taco, Inc. From May 1994 to April 1995, Mr. Terrano served as Chief Financial Officer for Denny's, Inc. in Spartanburg, S.C. From August 1983 to May 1994, he served with Burger King Corporation, Miami Florida, in a variety of positions, most recently as Division Controller. Mr. Terrano joined Del Taco, Inc. in April 1995. James D. Stoops, Executive Vice President, Operations of Del Taco, Inc. From 1968 to 1991, Mr. Stoops served in a wide variety of Operations positions with Burger King Corporation with increasing levels of responsibility. In 1985, Mr. Stoops was appointed Region Vice President/General Manager for the New York region and served in that position until October of 1990. In January of 1991, he joined Del Taco, Inc. in his current post. Janet D. Simmons, Senior Vice President, Purchasing of Del Taco, Inc. From 1979 to 1986, Ms. Simmons was with Denny's Incorporated. She served in the Research and Development department in a variety of positions until 1982 when she was promoted to the position of Purchasing Agent. Ms. Simmons was hired in 1986 as Manager of Contract Purchasing with Carl Karcher Enterprises, a post she held until March 1990 when she became Vice President, Purchasing for Del Taco, Inc. Ms. Simmons has a Bachelor of Science degree in Foods and Nutrition from Cal State Polytechnic University in Pomona, California. 21 22 Michael L. Annis, Vice President, Secretary and General Counsel of Del Taco, Inc. From 1981 to 1986 Mr. Annis served as Regional Real Estate Manager and Director of Real Estate Services with Taco Bell, Inc. In 1986 he served as Regional General Manager with Quaker State Minit Lube. In January of 1987 Mr. Annis joined Red Robin International, Inc. as General Counsel and was subsequently promoted to Vice President/Secretary and later Vice President Real Estate Development/Secretary and General Counsel, the position he held until joining Del Taco, Inc. in December of 1993. Mr. Annis received his J.D. Degree from Whittier College. C. Douglas Mitchell, Vice President and Corporate Controller. Mr. Mitchell joined Del Taco, Inc. in August of 1994 as Controller and was promoted to his current position in January 1996. From 1990 to 1994, Mr. Mitchell was a Senior Audit Manager with Coopers & Lybrand. Prior to 1990, Mr. Mitchell held various positions in finance and accounting with the Geneva Companies (a subsidiary of Chemical Bank), Zaremba Corporation (a real estate developer) and The Dexter Corporation (an international manufacturer of specialty materials). Mr. Mitchell has a Bachelor of Science degree with a major in accounting from the University of Southern California. ITEM 11. MANAGEMENT REMUNERATION AND TRANSACTIONS The Registrant has no executive officers or directors and pays no direct remuneration to any executive officer or director of its General Partner. The Registrant has not issued any options or stock appreciation rights to any executive officer or director of its General Partner, nor does the Registrant propose to pay any annuity, pension or retirement benefits to any executive officer or director of its General Partner. The Registrant has no plan, nor does the Registrant presently propose a plan, which will result in any remuneration being paid to any executive officer or director of the General Partner upon termination of employment. 22 23 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT (a) No person of record currently owns more than five percent of Limited Partnership Units of the Registrant, nor was any person known of by the Registrant to own of record and beneficially, or beneficially only, more than five percent of such securities. (b) Neither Del Taco, Inc., nor any executive officer or director of Del Taco, Inc. owns any Limited Partnership Units of the Registrant. (c) The Registrant knows of no contractual arrangements, the operation or the terms of which may at a subsequent date result in a change in control of the Registrant, except for provisions in the Partnership Agreement providing for removal of the General Partner by holders of a majority of the Limited Partnership Units and if a material event of default occurs under the financing agreements of the General Partner. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS (a) No transactions have occurred between the Registrant and any executive officer or director of its General Partner. During 1996, the following transactions occurred between the Registrant and the General Partner pursuant to the terms of the Partnership Agreement. (1) The General Partner earned $3,654 as its one percent share of the net income of the Registrant. (2) The General Partner received $3,959 in distributions relating to its one percent interest in the Registrant. (b) During 1996, the Registrant had no business relationships with any entity of a type required to be reported under this item. (c) Neither the General Partner, any director or officer of the General Partner or any associate of any such person, was indebted to the Registrant at any time during 1996 for any amount in excess of $60,000. (d) Not applicable. 23 24 PART IV ITEM 14(a)(1) AND (2). EXHIBITS, FINANCIAL STATEMENTS SCHEDULES, AND REPORTS ON FORM 8-K All schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted. (b) No reports on Form 8-K were filed during the last quarter of 1996. (c) Exhibits required by Item 601 of Regulation S-K: 1. Incorporated herein by reference, Restated Certificate and Agreement of Limited Partnership of Del Taco Restaurant Properties I filed as Exhibit 3.01 to Registrant's Registration Statement on Form S-11 as filed with the Securities and Exchange Commission on December 17, 1982. 2. Incorporated herein by reference, Amendment to Restated Certificate and Agreement of Limited Partnership of Del Taco Restaurant Properties I. 3. Incorporated herein by reference, Form of Standard Lease to be entered into by Registrant and Del Taco, Inc., as lessee, filed as Exhibit 10.02 to Registrant's Registration Statement on Form S-11 as filed with the Securities and Exchange Commission on December 17, 1982. 27. Financial Data Schedule. 24 25 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. DEL TACO RESTAURANT PROPERTIES I a California limited partnership Registrant Del Taco, Inc. General Partner
Date March 07, 1997 Kevin K. Moriarty -------------- ----------------- Kevin K. Moriarty Director, Chairman and Chief Executive Officer Date March 07, 1997 Michael L. Annis -------------- ---------------- Michael L. Annis Vice President, Secretary and General Counsel Date March 07, 1997 Robert J. Terrano -------------- ----------------- Robert J. Terrano Executive Vice President and Chief Financial Officer Date March 07, 1997 C. Douglas Mitchell -------------- ------------------- C. Douglas Mitchell Vice President and Corporate Controller
25 EX-27 2 FINANCIAL DATA SCHEDULE
5 12-MOS DEC-31-1996 JAN-01-1996 DEC-01-1996 130,996 600 38,478 0 0 170,074 4,001,642 1,628,543 2,543,173 14,319 0 0 0 0 2,528,854 2,543,173 0 455,105 0 89,718 0 0 0 365,387 0 365,387 0 0 0 365,387 41.34 41.34
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