-----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, MAtuUZRodMGWYi0NNtFdtmbnmJrVSGa2GZP0289H3LI4f/J0MhFGhgc3b0bOopv9 imPrkCMgU2OEquZipJ1u2A== 0000892569-96-000502.txt : 19960507 0000892569-96-000502.hdr.sgml : 19960507 ACCESSION NUMBER: 0000892569-96-000502 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960506 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DEL TACO RESTAURANT PROPERTIES II CENTRAL INDEX KEY: 0000749153 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 330064245 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-16190 FILM NUMBER: 96556585 BUSINESS ADDRESS: STREET 1: 1800 W KATELLA AVE CITY: ORANGE STATE: CA ZIP: 92667 BUSINESS PHONE: 7147444334 MAIL ADDRESS: STREET 1: 1800 W KATELLA AVENUE CITY: ORANGE STATE: CA ZIP: 92667 10-Q 1 FORM 10-Q FOR QUARTER ENDED MARCH 31, 1996 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 MARCH 31, 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. 2-92121 DEL TACO RESTAURANT PROPERTIES II A CALIFORNIA LIMITED PARTNERSHIP (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) CALIFORNIA 33-0064245 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 1800 W. KATELLA AVENUE, ORANGE, CALIFORNIA 92667 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(714) 744-4334 (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 --- --- =============================================================================== 2 INDEX DEL TACO RESTAURANT PROPERTIES II PART I. FINANCIAL INFORMATION PAGE NUMBER Item 1. Financial Statements and Supplementary Data Balance Sheets at March 31, 1996 (Unaudited) and December 31, 1995 3 Statements of Income for the three months ended March 31, 1996 and 1995 (Unaudited) 4 Statements of Cash Flows for the three months ended March 31, 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 II BALANCE SHEETS
MARCH 31, December 31 1996 1995 ----------- ----------- (UNAUDITED) ASSETS ------ CURRENT ASSETS: Cash $ 105,619 $ 108,954 Receivable from General Partner (Note 4) 27,305 36,166 Deposits 1,000 1,000 ----------- ----------- Total current assets 133,924 146,120 ----------- ----------- PROPERTY AND EQUIPMENT, AT COST Land and improvements 1,806,006 1,806,006 Buildings and improvements 1,238,879 1,238,879 Machinery and equipment 898,950 898,950 ----------- ----------- 3,943,835 3,943,835 Less--accumulated depreciation 1,292,702 1,256,682 ----------- ----------- 2,651,133 2,687,153 ----------- ----------- $ 2,785,057 $ 2,833,273 =========== =========== LIABILITIES AND PARTNERS' EQUITY -------------------------------- CURRENT LIABILITIES: Payable to Limited Partners $ 5,150 $ 3,562 Accounts Payable 8,925 1,050 ----------- ----------- Total current liabilities 14,075 4,612 ----------- ----------- PARTNERS' EQUITY Limited Partners 2,792,323 2,849,424 General Partner-Del Taco, Inc. (21,341) (20,763) ----------- ----------- 2,770,982 2,828,661 ----------- ----------- $ 2,785,057 $ 2,833,273 =========== ===========
The accompanying notes are an integral part of these financial statements -3- 4 DEL TACO RESTAURANT PROPERTIES II STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED MARCH 31 1996 1995 ---- ---- REVENUES: Rent (Notes 3 and 4) $ 98,238 $101,067 Interest 596 677 Other 175 275 -------- -------- 99,009 102,019 -------- -------- EXPENSES: General and administrative 20,282 20,674 Depreciation 36,019 36,019 -------- -------- 56,301 56,693 -------- -------- Net income $ 42,708 $ 45,326 ======== ======== Net income per Limited Partnership Unit (Note 2) $ 1.57 $ 1.66 ======== ========
The accompanying notes are an integral part of these financial statements. -4- 5 DEL TACO RESTAURANT PROPERTIES II STATEMENTS OF CASH FLOWS (UNAUDITED)
THREE MONTHS ENDED MARCH 31 1996 1995 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 42,708 $ 45,326 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 36,019 36,019 Increase (decrease) in payable to Limited Partner 1,588 (2,758) Decrease (increase) in receivable from General Partner 8,861 (420) Increase in accounts payable 7,875 12,441 --------- --------- Net cash provided by operating activities 97,051 90,608 CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions to partners 100,386 110,926 --------- --------- Net decrease in cash (3,335) (20,318) Beginning cash balance 108,954 133,369 --------- --------- Ending cash balance 105,619 113,051 ========= =========
The accompanying notes are an integral part of these financial statements. -5- 6 DEL TACO RESTAURANT PROPERTIES II NOTES TO FINANCIAL STATEMENTS MARCH 31, 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 March 31, 1996, the results of operations and cash flows for the three month periods ended March 31, 1996 and 1995 have been included. Operating results for the three months ended March 31, 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 27,006 in 1996 and 1995. Pursuant to the Partnership Agreement, annual partnership income or loss is 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, distributions and syndication costs previously allocated. Additional gains will be allocated 15 percent to the General Partner and 85 percent to the Limited Partners. -6- 7 DEL TACO RESTAURANT PROPERTIES II NOTES TO FINANCIAL STATEMENTS - CONTINUED MARCH 31, 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 five Properties leased as of March 31, 1996 and 1995. NOTE 4 - TRANSACTIONS WITH DEL TACO The receivable from General Partner consists primarily of rent accrued for the month of March. The March rent was collected on April 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. NOTE 5 - DISTRIBUTIONS On April 9, 1996, a distribution to the Limited Partners of $94,515 or approximately $3.49 per Limited Partnership Unit, was approved. Such distribution was paid on April 16, 1996. The General Partner also received a distribution of $955 with respect to its 1% partnership interest. -7- 8 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 September 11, 1984. By December 31, 1985, the sale of such Units provided a total capitalization for the Registrant of $6,751,500. 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 seven restaurants. In June 1986, the first two restaurants opened for business. Four additional restaurants opened in 1987, and the seventh restaurant opened in April of 1988. Approximately $5,600,000 was expended for such purposes. Two restaurants were sold in 1994. Since the restaurants owned by the Registrant commenced operation, cash flow from Lease payments received from Del Taco, the Registrant's General Partner, which leases all five remaining 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. Results of Operations The Registrant owned seven Properties that were under long-term lease to Del Taco for restaurant operations. Two restaurants were sold in 1994 and five are currently operating. For the five operating Del Taco restaurants, the Registrant receives rental revenues equal to 12 percent of restaurant sales. -8- 9 Rental revenues for the three months ended March 31, decreased from $101,067 in 1995 to $98,238 in 1996. The decrease in revenues is directly attributable to decreased 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 Three Months Ended March 31 1996 1995 ------- ----- Accounting fees 76.67% 72.19% Distribution of information to Limited Partners 22.10 24.30 Other 1.23 3.51 ------ ------ 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. General and administrative expenses decreased for the three months ended March 31 from $20,674 in 1995 to $20,282 in 1996. Depreciation expense was $36,019 for the three months ended March 31, 1996 and 1995. For the three months ended March 31, 1996 revenues decreased $3,010 and expenses decreased $392, creating a decrease in net income from $45,326 in 1995 to $42,708 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. -9- 10 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (b) No reports on Form 8-K were filed during the three months ended March 31, 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 II (a California limited partnership) Registrant Del Taco, Inc. General Partner Date: April 30, 1996 /s/ Robert J. Terrano --------------------- Robert J. Terrano Executive Vice President, Chief Financial Officer Date: April 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 JAN-01-1996 MAR-31-1996 105,619 1,000 27,305 0 0 133,924 3,943,835 1,292,702 2,785,057 14,075 0 0 0 0 2,770,982 2,785,057 0 99,009 0 56,301 0 0 0 42,708 0 42,708 0 0 0 42,708 1.57 1.57
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