-----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, Hv4weoPFgpv60fGKXQIl+2jEkycq27cn1En6+YmvZxFLO4bRYynMmqSTb+3jQ2BO AKFJbTBok/2m6Ljva+tcZw== 0000892569-96-002227.txt : 19961106 0000892569-96-002227.hdr.sgml : 19961106 ACCESSION NUMBER: 0000892569-96-002227 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 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: 96654301 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 THE 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. 2-92121 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 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 II ---------------------------------
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 II --------------------------------- BALANCE SHEETS --------------
SEPTEMBER 30 December 31 1996 1995 ------------ ----------- (UNAUDITED) ASSETS ------ CURRENT ASSETS: Cash $ 117,157 $ 108,954 Receivable from General Partner (Note 4) 35,548 36,166 Deposits 1,000 1,000 ---------- ---------- Total current assets 153,705 146,120 ---------- ---------- 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 1,364,739 1,256,682 ---------- ---------- 2,579,096 2,687,153 ---------- ---------- $2,732,801 $2,833,273 ========== ========== LIABILITIES AND PARTNERS' EQUITY -------------------------------- CURRENT LIABILITIES: Payable to Limited Partners 6,023 3,562 Accounts Payable 759 1,050 ---------- ---------- Total current liabilities 6,782 4,612 ---------- ---------- PARTNERS' EQUITY Limited Partners 2,747,811 2,849,424 General Partner-Del Taco, Inc. (21,792) (20,763) ---------- ---------- 2,726,019 2,828,661 ---------- ---------- $2,732,801 $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 NINE MONTHS ENDED SEPTEMBER 30 SEPTEMBER 30 1996 1995 1996 1995 -------- -------- -------- -------- REVENUES: Rent (Notes 3 and 4) $114,583 $114,459 $319,601 $328,795 Interest 569 547 1,542 1,802 Other 275 75 665 450 -------- -------- -------- -------- 115,427 115,081 321,808 331,047 -------- -------- -------- -------- EXPENSES: General and administrative 10,726 8,867 42,734 39,038 Depreciation 36,017 36,017 108,054 108,055 -------- -------- -------- -------- 46,743 44,884 150,788 147,093 -------- -------- -------- -------- Net income $ 68,684 $ 70,197 $171,020 $183,954 ======== ======== ======== ======== Net income per Limited Partnership Unit (Note 2) $ 2.52 $ 2.57 $ 6.27 $ 6.74 ======== ======== ======== ========
The accompanying notes are an integral part of these financial statements. -4- 5 DEL TACO RESTAURANT PROPERTIES II --------------------------------- STATEMENTS OF CASH FLOWS ------------------------ (UNAUDITED) -----------
NINE MONTHS ENDED SEPTEMBER 30 1996 1995 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $171,020 $183,954 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 108,054 108,055 Increase (decrease) in payable to Limited Partners 2,461 (13,605) (Increase) decrease in receivable from General Partner 618 (121) Increase (decrease) in accounts payable (288) 4,955 -------- -------- Net cash provided by operating activities 281,865 283,238 CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions to partners 273,662 295,080 -------- -------- Net increase (decrease) in cash 8,203 (11,842) Beginning cash balance 108,954 133,369 -------- -------- Ending cash balance $117,157 $121,527 ======== ========
The accompanying notes are an integral part of these financial statements. -5- 6 DEL TACO RESTAURANT PROPERTIES II --------------------------------- 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 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 - ----------------------------------------- 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 five Properties leased as of September 30, 1996 and 1995. NOTE 4 - TRANSACTIONS WITH DEL TACO The receivable from General Partner consists primarily of rent accrued for the month of September. The September rent 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. NOTE 5 - DISTRIBUTIONS On October 14, 1996, a distribution to the Limited Partners of $103,342 or approximately $3.83 per Limited Partnership Unit, was approved. Such distribution was paid on October 15, 1996. The General Partner also received a distribution of $1,044 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 September 30, increased from $114,459 in 1995 to $114,583 in 1996. The Registrant had rental revenues of $319,601 for the nine months ended September 30, 1996, representing a decrease from the rental revenues of $328,795 in 1995. 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 -------------------------------- Nine Months Ended September 30 1996 1995 ------- ------- Accounting fees 36.39% 38.23% Distribution of information to Limited Partners 60.49 59.25 Other 3.12 2.52 ------ ------ 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 increased for the three months ended September 30 from $8,867 in 1995 to $10,726 in 1996. The increase in general and administrative expense was caused primarily by printing costs for new checks, 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 $39,038 in 1995 to $42,734 in 1996. Depreciation expense was $36,017 for the three months ended September 30, 1996 and 1995. The Registrant incurred depreciation expense in the amount of $108,054 for the nine months ended September 30, 1996 and $108,055 for the nine months ended September 30, 1995. -9- 10 For the three months ended September 30, 1996 revenues increased $346 and expenses increased $1,859, creating a decrease in net income from $70,197 in 1995 to $68,684 in 1996. As a result of decreased revenues totaling $9,239 for the nine months ended September 30, 1996 and increased expenses totaling $3,695 for the nine months ended September 30, 1996, the net income of the Registrant decreased from $183,954 for the nine months ended September 30, 1995 to $171,020 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 II (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 117,157 1,000 35,548 0 0 153,705 3,943,835 1,364,739 2,732,801 6,782 0 0 0 0 2,726,019 2,732,801 0 115,427 0 46,743 0 0 0 68,684 0 68,684 0 0 0 68,684 2.52 2.52
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