e10vk
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,
2010
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
no. 0-16190
DEL TACO RESTAURANT PROPERTIES
II
(A California limited partnership)
(Exact name of registrant as
specified in its charter)
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California
(State or other jurisdiction of
incorporation or organization)
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33-0064245
(I.R.S. Employer
Identification Number)
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25521 Commercentre Drive
Lake Forest, California
(Address of principal executive
offices)
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92630
(Zip Code)
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Registrants telephone number, including area code:
(949) 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 if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes No
X
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the
Exchange
Act. Yes No
X
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
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any,
every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of
Regulation S-T
(§ 232.405 of this chapter) during the preceding
12 months (or for such shorter period that the registrant
was required to submit and post such
files). Yes No
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of
Regulation S-K
(§ 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrants
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. o
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of
large accelerated filer, accelerated
filer and smaller reporting company in
Rule 12b-2
of the Exchange Act. (Check one):
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Large
accelerated
filer o
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Accelerated
filer o
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Non-accelerated
filer þ
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Smaller
reporting
company o
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(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company
(as defined in
Rule 12b-2
of the Exchange
Act). Yes No
X
DOCUMENTS
INCORPORATED BY REFERENCE
Portions of the registrants
Form S-11
Registration Statement filed December 17, 1982 are
incorporated by reference into Part IV of this report.
TABLE OF CONTENTS
PART I
Del Taco Restaurant Properties II (the Partnership, us, we or our) is a publicly-held limited
partnership organized under the California Uniform Limited Partnership Act. The Partnerships
General Partner is Del Taco LLC, a California limited liability company (Del Taco or the General
Partner). The Partnership sold 27,006 units totaling $6.751 million through an offering of limited
partnership units from September 1984 through December 1985. The term of the partnership agreement
is until April 30, 2025, unless terminated earlier by means provided in the partnership agreement.
The business of the Partnership is ownership and leasing of restaurants in California to Del Taco.
The Partnership acquired land and constructed seven Mexican-American restaurants for long-term
lease to Del Taco. Two restaurants were sold in 1994. Each property is leased for 35 years on a
triple net basis. Rent is equal to twelve percent of gross sales of the restaurants. As of December
31, 2010, the Partnership had a total of five properties leased to Del Taco.
The Partnership has no full time employees. The Partnership agreement assigns full authority for
general management and supervision of the business affairs of the Partnership to the General
Partner. The General Partner has a one percent interest in the profits or losses and distributions
of the Partnership. Limited partners have no right to participate in the day to day management or
conduct of the Partnerships business affairs.
None.
2
The Partnership acquired seven properties with proceeds obtained from the sale of partnership
units:
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Date of |
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Date of |
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Restaurant |
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Commencement |
Address |
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City, State |
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Acquisition |
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Constructed |
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of Operation (1) |
Bear Valley Road
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Victorville, CA
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February 4, 1986
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60 seat with drive
through service
window
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June 13, 1986 |
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West Valley
Boulevard
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Colton, CA
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March 11, 1986
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60 seat with drive
through service
window
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June 24, 1986 |
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Palmdale Boulevard
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Palmdale, CA
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December 12, 1986
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60 seat with drive
through service
window
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May 7, 1987 |
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South Gate Town
Center
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South Gate, CA
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January 28, 1987
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60 seat with drive
through service
window
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May 28, 1987 (2) |
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Main Avenue
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Fallbrook, CA
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March 10, 1987
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60 seat with drive
through service
window
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August 19, 1987 (3) |
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De Anza Country
Shopping Center
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Pedley, CA
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April 13, 1987
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60 seat with drive
through service
window
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October 28, 1987 |
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Varner Road
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Thousand Palms, CA
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October 14, 1987
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60 seat with drive
through service
window
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April 28, 1988 |
See also
Schedule III Real Estate and Accumulated Depreciation included in Item 8.
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(1) |
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Commencement of operation is the first date Del Taco, as lessee, operated the facility on the
site as a Del Taco restaurant. |
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(2) |
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In May 1994, the South Gate property was sold yielding net proceeds to the Partnership of
$497,202. |
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(3) |
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In November 1994, the Fallbrook property was sold yielding net proceeds to the Partnership of
$357,531. |
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Item 3. |
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Legal Proceedings |
The Partnership is not a party to any material pending legal proceedings.
3
PART II
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Item 5. |
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Market for the Partnerships Common Equity, Related Security Holder Matters and Issuer Purchases of Equity Securities |
The Partnership sold 27,006 ($6,751,500) limited partnership units during the public offering
period ended December 31, 1985 and currently has 917 limited partners of record. There is no public
market for the trading of the units. Distributions made by the Partnership to the limited partners
during the past three fiscal years are described in Note 6 to the Notes to the Financial Statements
contained under Item 8.
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Item 6. |
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Selected Financial Data |
The selected financial data presented as of and for the years ended December 31, 2010, 2009, 2008,
2007, and 2006, has been derived from the audited financial statements and should be read in
conjunction with the financial statements and related notes and Item 7, Managements Discussion and
Analysis of Financial Condition and Results of Operations.
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Years ended December 31, |
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2010 |
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2009 |
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2008 |
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2007 |
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2006 |
Rental revenues |
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$ |
546,584 |
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$ |
539,513 |
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$ |
547,191 |
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$ |
584,595 |
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$ |
631,571 |
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General and
administrative expense |
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72,011 |
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79,023 |
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75,327 |
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76,924 |
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73,986 |
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Depreciation expense |
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35,396 |
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35,396 |
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35,396 |
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38,057 |
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54,180 |
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Interest and other income |
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2,727 |
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2,468 |
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5,885 |
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5,156 |
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4,584 |
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Net income |
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441,904 |
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427,562 |
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442,353 |
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474,770 |
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507,989 |
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Net income per limited
partnership unit |
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16.20 |
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15.67 |
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16.22 |
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17.40 |
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18.62 |
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Cash distributions per
limited partnership unit |
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17.28 |
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17.12 |
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17.98 |
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19.34 |
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21.58 |
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Total assets |
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2,033,122 |
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2,060,970 |
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2,098,078 |
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2,145,392 |
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2,206,089 |
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Long-term obligations |
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Item 7. |
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Managements Discussion and Analysis of Financial Condition and Results of Operations |
Managements discussion and analysis of financial condition, results of operations, liquidity and
capital resources, and off balance sheet arrangements and contractual obligations contained within
this report on Form 10-K is more clearly understood when read in conjunction with the notes to the
financial statements.
4
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Item 7. |
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Managements Discussion and Analysis of Financial Condition and Results of Operations (Continued) |
The notes to the financial statements elaborate on certain terms that are used throughout this
discussion and provide information about the Partnership and the basis of presentation used in this
report on Form 10-K.
The five restaurants leased to Del Taco make up all of the income producing assets of the
Partnership. Therefore, the business of the Partnership is entirely dependent on the success of Del
Taco as the operator of the restaurants located at our properties. The success of the restaurants
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.
Liquidity and Capital Resources
Del Taco Restaurant Properties II (the Partnership or the Company) offered limited partnership
units for sale between September 1984 and December 1985. In total, $6.751 million was raised
through the sale of limited partnership units and used to acquire sites, build seven restaurants,
pay commissions to brokers and to reimburse Del Taco LLC (the General Partner or Del Taco) for
offering costs incurred. Two restaurants were sold in 1994.
The Partnerships only source of cash flow is rental income from the properties from the triple net
leases. Such operating income has historically been and is expected to continue to be sufficient to
fund the Partnerships operating expenses. Net cash provided by operating activities in excess of
the Partnerships ongoing needs is distributed to the partners.
Off Balance Sheet Arrangements and Contractual Obligations
None.
Results of Operations
The Partnership owned seven properties that were under long-term lease to Del Taco for restaurant
operations. Two restaurants were sold in 1994 and five are currently operating.
5
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Item 7. |
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Managements Discussion and Analysis of Financial Condition and Results of Operations (Continued) |
Results
of Operations (Continued)
The following table sets forth rental revenues earned by restaurant by year:
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Years Ended December 31, |
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2010 |
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2009 |
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2008 |
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Bear Valley Rd., Victorville, CA |
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$ |
97,293 |
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$ |
97,504 |
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$ |
96,785 |
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West Valley Blvd., Colton, CA |
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134,047 |
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133,234 |
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129,665 |
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Palmdale Blvd., Palmdale, CA |
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66,797 |
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63,934 |
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65,355 |
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DeAnza Country Shopping Center, Pedley, CA |
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118,913 |
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118,216 |
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123,082 |
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Varner Road, Thousand Palms, CA |
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129,534 |
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126,625 |
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132,304 |
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Total |
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$ |
546,584 |
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$ |
539,513 |
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$ |
547,191 |
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The Partnership earns rental revenues equal to 12 percent of gross sales from the restaurants.
The Partnership earned rental revenues of $546,584 during the year ended December 31, 2010, which
represents an increase of $7,071 from 2009. The changes in rental revenues between 2009 and 2010
are directly attributable to changes in sales levels at the restaurants under lease due to local
competitive and industry factors.
The Partnership earned rental revenues of $539,513 during the year ended December 31, 2009, which
represents a decrease of $7,678 from 2008. The changes in rental revenues between 2008 and 2009 are
directly attributable to changes in sales levels at the restaurants under lease due to local
competitive and industry factors.
The following table breaks down general and administrative expenses by type of expense:
Percentage of Total General and Administrative Expense
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Years Ended December 31, |
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2010 |
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2009 |
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2008 |
Accounting fees |
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60.02 |
% |
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56.12 |
% |
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63.97 |
% |
Distribution of information
to limited partners |
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35.89 |
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35.49 |
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34.95 |
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Other |
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4.09 |
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8.39 |
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1.08 |
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100.00 |
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100.00 |
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100.00 |
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General and administrative costs decreased by $7,012 from 2009 to 2010. The decrease was caused
primarily by decreased printing costs and bank charges and there not being an appraisal on any
restaurants in 2010.
General and administrative costs increased by $3,696 from 2008 to 2009. The increase was caused by
increased printing costs, bank charges and an appraisal on one of the restaurants, partially offset
by reduced accounting and tax preparation costs.
6
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Item 7. |
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Managements Discussion and Analysis of Financial
Condition and Results of Operations
(Continued) |
Results
of Operations (Continued)
Net income increased by $14,342 from 2009 to 2010 due to the increase in revenues of $7,071, the
increase in other income of $259 and the decrease in general and administrative expenses of $7,012.
Net income decreased by $14,791 from 2008 to 2009 due to the decreases in revenues of $7,678, the
decrease in other income of $3,417 and the $3,696 increase in general and administrative expenses.
Recent Accounting Pronouncements
None that applies to the Partnership.
Critical Accounting Policies and Estimates
Managements discussion and analysis of financial condition and results of operations, as well as
disclosures included elsewhere in this report on Form 10-K are based upon the Partnerships
financial statements, which have been prepared in accordance with accounting principles generally
accepted in the United States of America. The preparation of these financial statements requires
management to make estimates and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses. The Partnership believes the critical accounting policies that most impact
the financial statements are described below. A summary of the significant accounting policies of
the Partnership can be found in Note 1 to the Financial Statements which is included in Item 8 of
this Form 10-K.
Revenue Recognition: Rental revenue is recognized based on 12 percent of gross sales of the
restaurants for the corresponding period, and is earned at the point of sale.
7
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Item 7. |
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Managements Discussion and Analysis of Financial Condition and Results of Operations (Continued) |
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.
The Partnership accounts for property and equipment in accordance with authoritative guidance
issued by the Financial Accounting Standards Board that requires long-lived assets be reviewed for
impairment whenever events or changes in circumstances indicate that the carrying value of the
asset may not be recoverable. In evaluating long-lived assets held for use, an impairment loss is
recognized if the sum of the expected future cash flows (undiscounted and without interest charges)
is less than the carrying value of the asset. Once a determination has been made that an impairment
loss should be recognized for long-lived assets, various assumptions and estimates are used to
determine fair value including, among others, estimated costs of construction and development,
recent sales of comparable properties and the opinions of fair value prepared by independent real
estate appraisers. Long-lived assets to be disposed of are reported at the lower of carrying amount
or fair value less cost to sell.
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Item 7A. |
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Quantitative and Qualitative Disclosures About Market Risk |
None.
8
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Item 8. |
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Financial Statements and Supplementary Data |
PART I. INFORMATION
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INDEX |
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PAGE NUMBER |
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Report of Independent Registered Public Accounting Firm
Squar, Milner, Peterson, Miranda & Williamson, LLP |
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10 |
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Balance Sheets at December 31, 2010 and 2009 |
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11 |
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Statements of Income for the years ended
December 31, 2010, 2009 and 2008 |
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12 |
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Statements of Partners Equity for
the years ended December 31, 2010, 2009 and 2008 |
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13 |
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Statements of Cash Flows for the years ended
December 31, 2010, 2009 and 2008 |
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14 |
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Notes to Financial Statements |
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15-19 |
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Schedule III Real Estate and Accumulated Depreciation |
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26 |
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9
Report of Independent Registered Public Accounting Firm
To the Partners
Del Taco Restaurant Properties II:
We have audited the accompanying balance sheets of Del Taco Restaurant Properties II (a California
Limited Partnership) as of December 31, 2010 and 2009 and the related statements of income,
partners equity, and cash flows for each of the three years in the period ended December 31, 2010.
Our audits also included the financial statement schedule of the Partnership listed in Item 15.
These financial statements and financial statement schedule are the responsibility of the
Partnerships management. Our responsibility is to express an opinion on these financial statements
and financial statement schedule based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. The
Company is not required to have, nor were we engaged to perform an audit of its internal control
over financial reporting. Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the Companys internal control
over financial reporting. Accordingly, we express no such opinion. 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 II as of December 31, 2010 and
2009 and the results of its operations and its cash flows for each of the three years in the period
ended December 31, 2010, in conformity with U.S. generally accepted accounting principles. Also, in
our opinion, the related financial statement schedule, when considered in relation to the basic
financial statements taken as a whole, presents fairly, in all material respects, the information
set forth therein.
/s/ Squar, Milner, Peterson, Miranda & Williamson, LLP
Newport Beach, California
March 29, 2011
10
DEL TACO RESTAURANT PROPERTIES II
BALANCE SHEETS
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December 31, |
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2010 |
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2009 |
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ASSETS
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CURRENT ASSETS: |
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Cash |
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$ |
162,482 |
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$ |
156,281 |
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Receivable from Del Taco LLC |
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46,950 |
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45,681 |
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Deposits |
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1,991 |
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1,913 |
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Total current assets |
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211,423 |
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203,875 |
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PROPERTY AND EQUIPMENT: |
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Land and improvements |
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1,806,006 |
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1,806,006 |
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Buildings and improvements |
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1,238,879 |
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1,238,879 |
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Machinery and equipment |
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898,950 |
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898,950 |
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3,943,835 |
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3,943,835 |
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Lessaccumulated depreciation |
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2,122,136 |
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2,086,740 |
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1,821,699 |
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1,857,095 |
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$ |
2,033,122 |
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$ |
2,060,970 |
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LIABILITIES AND PARTNERS EQUITY
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CURRENT LIABILITIES: |
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Payable to limited partners |
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$ |
38,835 |
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$ |
37,360 |
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Accounts payable |
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14,973 |
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15,171 |
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Total current liabilities |
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53,808 |
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52,531 |
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PARTNERS EQUITY: |
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|
|
Limited partners; 27,006 units outstanding at December 31, 2010
and December 31, 2009 |
|
|
2,008,573 |
|
|
|
2,037,407 |
|
General partner-Del Taco LLC |
|
|
(29,259 |
) |
|
|
(28,968 |
) |
|
|
|
|
|
|
|
|
|
|
1,979,314 |
|
|
|
2,008,439 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2,033,122 |
|
|
$ |
2,060,970 |
|
|
|
|
|
|
|
|
See accompanying notes to financial statements.
11
DEL TACO RESTAURANT PROPERTIES II
STATEMENTS OF INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31, |
|
|
|
2010 |
|
|
2009 |
|
|
2008 |
|
RENTAL REVENUES |
|
$ |
546,584 |
|
|
$ |
539,513 |
|
|
$ |
547,191 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative |
|
|
72,011 |
|
|
|
79,023 |
|
|
|
75,327 |
|
Depreciation |
|
|
35,396 |
|
|
|
35,396 |
|
|
|
35,396 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
107,407 |
|
|
|
114,419 |
|
|
|
110,723 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
439,177 |
|
|
|
425,094 |
|
|
|
436,468 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest |
|
|
202 |
|
|
|
193 |
|
|
|
1,085 |
|
Other |
|
|
2,525 |
|
|
|
2,275 |
|
|
|
4,800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
441,904 |
|
|
$ |
427,562 |
|
|
$ |
442,353 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per limited
partnership unit (note 2) |
|
$ |
16.20 |
|
|
$ |
15.67 |
|
|
$ |
16.22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of limited partnership units
used in computing per unit amounts |
|
|
27,006 |
|
|
|
27,006 |
|
|
|
27,006 |
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to financial statements.
12
DEL TACO RESTAURANT PROPERTIES II
STATEMENTS OF PARTNERS EQUITY
Years Ended December 31, 2010, 2009, and 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Limited Partners |
|
|
General |
|
|
|
|
|
|
Units |
|
|
Amount |
|
|
Partner |
|
|
Total |
|
Balance, December 31, 2007 |
|
|
27,006 |
|
|
$ |
2,124,009 |
|
|
$ |
(28,092 |
) |
|
$ |
2,095,917 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
|
|
|
|
|
|
437,930 |
|
|
|
4,423 |
|
|
|
442,353 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Distributions |
|
|
|
|
|
|
(485,593 |
) |
|
|
(4,905 |
) |
|
|
(490,498 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2008 |
|
|
27,006 |
|
|
|
2,076,346 |
|
|
|
(28,574 |
) |
|
|
2,047,772 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
|
|
|
|
|
|
423,287 |
|
|
|
4,275 |
|
|
|
427,562 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Distributions |
|
|
|
|
|
|
(462,226 |
) |
|
|
(4,669 |
) |
|
|
(466,895 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2009 |
|
|
27,006 |
|
|
|
2,037,407 |
|
|
|
(28,968 |
) |
|
|
2,008,439 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
|
|
|
|
|
|
437,485 |
|
|
|
4,419 |
|
|
|
441,904 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Distributions |
|
|
|
|
|
|
(466,319 |
) |
|
|
(4,710 |
) |
|
|
(471,029 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2010 |
|
|
27,006 |
|
|
$ |
2,008,573 |
|
|
$ |
(29,259 |
) |
|
$ |
1,979,314 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to financial statements.
13
DEL TACO RESTAURANT PROPERTIES II
STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31, |
|
|
|
2010 |
|
|
2009 |
|
|
2008 |
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
441,904 |
|
|
$ |
427,562 |
|
|
$ |
442,353 |
|
Adjustments to reconcile net income to net
cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
|
35,396 |
|
|
|
35,396 |
|
|
|
35,396 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Receivable from Del Taco LLC |
|
|
(1,269 |
) |
|
|
(2,161 |
) |
|
|
2,111 |
|
Deposits |
|
|
(78 |
) |
|
|
(186 |
) |
|
|
(193 |
) |
Payable to limited partners |
|
|
1,475 |
|
|
|
1,709 |
|
|
|
170 |
|
Accounts payable |
|
|
(198 |
) |
|
|
516 |
|
|
|
661 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities |
|
|
477,230 |
|
|
|
462,836 |
|
|
|
480,498 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash distributions to partners |
|
|
(471,029 |
) |
|
|
(466,895 |
) |
|
|
(490,498 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash |
|
|
6,201 |
|
|
|
(4,059 |
) |
|
|
(10,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning cash balance |
|
|
156,281 |
|
|
|
160,340 |
|
|
|
170,340 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending cash balance |
|
$ |
162,482 |
|
|
$ |
156,281 |
|
|
$ |
160,340 |
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to financial statements.
14
DEL TACO RESTAURANT PROPERTIES II
NOTES TO FINANCIAL STATEMENTS
NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Partnership: Del Taco Restaurant Properties II, a California limited partnership (the
Partnership), was formed on June 20, 1984, for the purpose of acquiring real property in California
for construction of seven Mexican-American restaurants to be leased under long-term agreements to
Del Taco LLC (General Partner or Del Taco), for operation under the Del Taco trade name. The
South Gate and Fallbrook properties were sold on May 18, 1994 and November 30, 1994, respectively.
The term of the partnership agreement is until April 30, 2025 unless terminated earlier by means
provided in the partnership agreement.
The Partnership has no full time employees (see Note 4). The Partnership agreement assigns full
authority for general management and supervision of the business affairs of the Partnership to the
General Partner. The General Partner has a one percent interest in the profits or losses and
distributions of the Partnership. Limited partners have no right to participate in the day to day
management or conduct of the Partnerships business affairs.
Distributions are made to the general and limited partners in accordance with the provisions of the
Partnership agreement (see Note 2).
Basis of Accounting: The Partnership utilizes the accrual method of accounting for
transactions relating to the business of the Partnership. The summary of significant accounting
policies presented below is designed to assist in understanding the Partnerships financial
statements. Such financial statements and accompanying notes are the representations of the
Partnerships management, who is responsible for their integrity and objectivity. These accounting
policies conform to accounting principles generally accepted in the United States of America
(GAAP) in all material respects, and have been consistently applied in preparing the accompanying
financial statements.
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.
The Partnership accounts for property and equipment in accordance with authoritative guidance
issued by the Financial Accounting Standards Board that requires long-lived assets be reviewed for
impairment whenever events or changes in circumstances indicate that the carrying value of the
asset may not be recoverable. In evaluating long-lived assets held for use, an impairment loss is
recognized if the sum of the expected future cash flows (undiscounted and without interest charges)
is less than the carrying value of the asset. Once a determination has been made that an
impairment loss should be recognized for long-lived assets, various assumptions and estimates are
used to determine fair value including, among others, estimated costs of construction and
development, recent sales of comparable properties and the opinions of fair value prepared by
independent real estate appraisers. Long-lived assets to be disposed of are reported at the lower
of carrying amount or fair value less cost to sell.
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 5).
15
DEL TACO RESTAURANT PROPERTIES II
NOTES TO FINANCIAL STATEMENTS CONTINUED
NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Net Income Per Limited Partnership Unit: Net income per limited partnership unit is
based on net income attributable to the limited partners (after 1% allocation to the general
partner) using the weighted average number of units outstanding during the periods presented which
amounted to 27,006 units for all years presented.
Use of Estimates: The preparation of the financial statements in conformity with GAAP
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 periods. Actual results could differ from those estimates.
Revenue Recognition: Rental revenue is recognized based on 12 percent of gross sales of
the restaurants for the corresponding period, and is earned at the point of sale.
Concentration of Risk: The five restaurants leased to Del Taco make up all of the income
producing assets of the Partnership and contributed all of the Partnerships rental revenues for
the three years ended December 31, 2010. Therefore, the business of the Partnership is entirely
dependent on the success of the Del Taco trade name restaurants that lease the properties.
The Partnership maintains substantially all of its cash and cash equivalents at one major
commercial bank. The Federal Depository Insurance Commissions limits were $250,000 for interest
bearing accounts at December 31, 2010 and 2009. At December 31, 2010 and 2009, the Partnership had
approximately $172,000 and $167,000, respectively, on deposit at one financial institution.
Fair Value of Financial Instruments: The fair values of cash, accounts receivables,
deposits, accounts payable and payables to limited partners approximate the carrying amounts due to
their short maturities.
NOTE 2 PARTNERS EQUITY
Pursuant to the partnership agreement, annual partnership income or loss is allocated one
percent to Del Taco 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.
NOTE 3 LEASING ACTIVITIES
The Partnership leases certain properties for operation of restaurants to Del Taco 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. The leases expire in the years 2021 to 2022. There is no minimum rental
under any of the leases. The Partnership had a total of five properties leased as of December 31,
2010, 2009, and 2008.
The five restaurants operated by Del Taco, for which the Partnership is the lessor, had combined,
unaudited sales of $4,554,867, $4,495,944, and $4,559,922 and unaudited net losses of $354,958,
$479,295 and $473,380 for the years ended December 31, 2010, 2009 and 2008, respectively. Del
Taco net income by restaurant includes charges for general and administrative expenses incurred in
connection with supervision of restaurant operations and interest expense and the decrease in net
loss from the corresponding period of the prior years primarily relates to decreased interest
expense.
16
DEL TACO RESTAURANT PROPERTIES II
NOTES TO FINANCIAL STATEMENTS CONTINUED
NOTE 4 RELATED PARTIES
The receivable from Del Taco consists of rent accrued for the month of December 2010 and 2009. The
rent receivable was collected in January 2011 and 2010.
The General Partner received $4,710, $4,669 and $4,905 in distributions relating to its one percent
interest in the Partnership for the years ended December 31, 2010, 2009 and 2008, respectively.
Del Taco 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 for operation under the Del Taco trade name.
The General Partner provides certain minimal managerial and accounting services to the Partnership
at no cost.
NOTE 5 INCOME TAXES (UNAUDITED)
The Partnership is not subject to income taxes because its income is taxed directly to the General
Partner and limited partners. The reconciling items presented in the table below are the only
items that create a difference between the tax basis and reported amounts of the Partnerships
assets and liabilities.
A reconciliation of financial statement net income to taxable income for each of the periods is as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010 |
|
|
2009 |
|
|
2008 |
|
Net income per financial statements |
|
$ |
441,904 |
|
|
$ |
427,562 |
|
|
$ |
442,353 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excess book depreciation |
|
|
3,777 |
|
|
|
3,777 |
|
|
|
3,777 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable income |
|
$ |
445,681 |
|
|
$ |
431,339 |
|
|
$ |
446,130 |
|
|
|
|
|
|
|
|
|
|
|
A reconciliation of partnership equity per the financial statements to partners equity for tax
purposes as of December 31, 2010, is as follows (unaudited):
|
|
|
|
|
Partners equity per financial statements |
|
$ |
1,979,314 |
|
|
|
|
|
|
Issue costs of limited partnership units
capitalized for tax purposes |
|
|
986,745 |
|
|
|
|
|
|
Difference in book vs. tax depreciation |
|
|
127,087 |
|
|
|
|
|
|
Writedown of real estate previously held for sale |
|
|
161,963 |
|
|
|
|
|
|
Other |
|
|
5,465 |
|
|
|
|
|
|
|
|
|
|
Partners equity for tax purposes |
|
$ |
3,260,574 |
|
|
|
|
|
17
DEL TACO RESTAURANT PROPERTIES II
NOTES TO FINANCIAL STATEMENTS CONTINUED
NOTE 6 CASH DISTRIBUTIONS TO LIMITED PARTNERS
Cash distributions to limited partners for the three years ended December 31, 2010 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash |
|
|
Weighted |
|
|
Number of Units |
|
|
|
Distribution per |
|
|
Average Number |
|
|
Outstanding at |
|
|
|
Limited Partnership |
|
|
of Units |
|
|
the End of |
|
Quarter Ended |
|
Unit |
|
|
Outstanding |
|
|
Quarter |
|
December 31, 2007 |
|
$ |
4.76 |
|
|
|
27,006 |
|
|
|
27,006 |
|
March 31, 2008 |
|
|
3.83 |
|
|
|
27,006 |
|
|
|
27,006 |
|
June 30, 2008 |
|
|
4.75 |
|
|
|
27,006 |
|
|
|
27,006 |
|
September 30, 2008 |
|
|
4.64 |
|
|
|
27,006 |
|
|
|
27,006 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total paid in 2008 |
|
$ |
17.98 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2008 |
|
$ |
4.39 |
|
|
|
27,006 |
|
|
|
27,006 |
|
March 31, 2009 |
|
|
3.99 |
|
|
|
27,006 |
|
|
|
27,006 |
|
June 30, 2009 |
|
|
3.85 |
|
|
|
27,006 |
|
|
|
27,006 |
|
September 30, 2009 |
|
|
4.89 |
|
|
|
27,006 |
|
|
|
27,006 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total paid in 2009 |
|
$ |
17.12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2009 |
|
$ |
4.18 |
|
|
|
27,006 |
|
|
|
27,006 |
|
March 31, 2010 |
|
|
3.48 |
|
|
|
27,006 |
|
|
|
27,006 |
|
June 30, 2010 |
|
|
4.52 |
|
|
|
27,006 |
|
|
|
27,006 |
|
September 30, 2010 |
|
|
5.10 |
|
|
|
27,006 |
|
|
|
27,006 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total paid in 2010 |
|
$ |
17.28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash distributions per limited partnership unit were calculated based upon the weighted
average units outstanding for each quarter and were paid from operations. Distributions declared
in January 2010, for the quarter ended December 31, 2010, amounted to $4.35 per limited partnership
unit and were paid in February 2011.
NOTE 7 RESULTS BY QUARTER (UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First |
|
Second |
|
Third |
|
Fourth |
|
|
Quarter |
|
Quarter |
|
Quarter |
|
Quarter |
Year ended December 31, 2010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental revenues |
|
$ |
129,334 |
|
|
$ |
139,639 |
|
|
$ |
141,801 |
|
|
$ |
135,810 |
|
Net income |
|
|
83,810 |
|
|
|
120,583 |
|
|
|
120,734 |
|
|
|
116,777 |
|
Net income per
limited partnership
unit |
|
|
3.07 |
|
|
|
4.42 |
|
|
|
4.43 |
|
|
|
4.28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental revenues |
|
$ |
127,892 |
|
|
$ |
137,183 |
|
|
$ |
137,739 |
|
|
$ |
136,699 |
|
Net income |
|
|
81,237 |
|
|
|
116,323 |
|
|
|
111,883 |
|
|
|
118,119 |
|
Net income per
limited partnership
unit |
|
|
2.98 |
|
|
|
4.26 |
|
|
|
4.10 |
|
|
|
4.33 |
|
18
DEL TACO RESTAURANT PROPERTIES II
NOTES TO FINANCIAL STATEMENTS CONTINUED
NOTE 8 PAYABLE TO LIMITED PARTNERS
Payable to limited partners represents a reclassification from cash for distribution checks made to
limited partners that have remained outstanding for six months or longer.
19
|
|
|
Item 9. |
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosures |
None
|
|
|
Item 9A. |
|
Controls and Procedures |
Disclosure controls and procedures
We maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed in our reports under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the SECs rules
and forms, and that such information is accumulated and communicated to management,
including our Chief Executive Officer and Chief Financial Officer, to allow timely
decisions regarding required disclosure. In designing and evaluating our disclosure
controls and procedures, our management recognized that any system of controls and
procedures, no matter how well designed and operated, can provide only reasonable
assurance of achieving the desired control objectives, as ours are designed to do, and
management necessarily was required to apply its judgment in
evaluating the costbenefit
relationship of possible controls and procedures.
In connection with the preparation of this Annual Report on Form 10-K, an evaluation was
performed under the supervision and with the participation of our management, including
our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the
design and operation of our disclosure controls and procedures (as defined in Rule
13a-15(e) under the Exchange Act). Based on that evaluation, our Chief Executive Officer
and Chief Financial Officer concluded that our disclosure controls and procedures were
effective as of the end of the period covered by this Annual Report on Form 10-K to
ensure that the information required to be disclosed by us in reports that we file or
submit under the Exchange Act is recorded, processed, summarized and reported within the
time periods specified in the Securities and Exchange Commissions rules and forms, and
to ensure that the information required to be disclosed by us in reports that we file or
submit under the Exchange Act is accumulated and communicated to our management,
including our Chief Executive Officer and Chief Financial Officer, as appropriate, to
allow timely decisions regarding required disclosures.
Internal control over financial reporting
(a) Managements Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control
over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. Our
internal control system is designed to provide reasonable assurance to our management
regarding the preparation and fair presentation of published financial statements. All
internal control systems, no matter how well designed, have inherent limitations.
Therefore, even those systems determined to be effective can provide only reasonable
assurance with respect to the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted
accounting principles.
Management has assessed the effectiveness of our internal control over financial
reporting as of December 31, 2010. In making its assessment of internal control over
financial reporting, management used the criteria set forth in Internal Control
Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO).
20
Management has concluded that, as of December 31, 2010, our internal control over
financial reporting was effective based on these criteria.
This annual report does not include an attestation report of the Partnerships registered
public accounting firm regarding the effectiveness of internal control over financial
reporting. Pursuant to temporary rules of the Securities and Exchange Commission, such
attestation report is not required to be included in this filing; the Partnership is only
required to provide managements report in this annual report.
(b) Changes in internal controls:
There were no significant changes in the
Partnerships internal controls over financial
reporting that occurred during our most recent fiscal
quarter that materially affected, or is reasonably
likely to materially affect, our internal control over
financial reporting.
|
|
|
Item 9B. |
|
Other Information |
None.
PART III
|
|
|
Item 10. |
|
Directors, Executive Officers, and Corporate Governance |
(a) & (b) Del Taco serves as the Partnerships sole general partner. Individuals who perform the
functions of directors and officers of the Partnership consist of the following officers of Del
Taco:
|
|
|
|
|
|
|
Name |
|
Title |
|
Age |
Paul J.B. Murphy, III |
|
Chief Executive Officer |
|
|
56 |
|
James W. Lyons |
|
Chief Development Officer |
|
|
55 |
|
James D. Stoops |
|
Executive Vice President, Operations |
|
|
58 |
|
Janet D. Erickson |
|
Executive Vice President, Purchasing |
|
|
54 |
|
Steven L. Brake |
|
Chief Financial Officer |
|
|
38 |
|
Del Tacos term as general partner will continue indefinitely, subject to the right of a majority
in interest of the limited partners to remove and replace it. The above referenced officers of the
General Partner will hold office until their resignation or the election or appointment of their
successor.
(c) None
(d) No family relationship exists between any such officer of the General Partner.
(e) The following is an account of the business experience during the past five years of each
such officer:
21
Item 10. Directors, Executive
Officers, and Corporate Governance (Continued)
Paul J.B. Murphy, III, Chief Executive Officer of Del Taco LLC. Mr. Murphy has served as
Chief Executive Officer since February of 2009. He previously served as President and Chief
Executive Officer of Einstein Noah Restaurant Group, Inc. (formerly, New World Restaurant Group,
Inc.) from October of 2003 to December of 2008.
James W. Lyons, Chief Development Officer of Del Taco LLC. Mr. Lyons has served as Chief
Development Officer since September of 2008. He previously served as Chief Operating Officer of
Popeyes Chicken and Biscuits (a division of AFC Enterprises, Inc.), from March of 2008 to December
of 2007, and as Chief Development Officer of Popeyes Chicken and Biscuits from July of 2004 to
March of 2007. Prior to that, he served as Vice President of Development for Dominos Pizza from
2002 to July of 2004.
James D. Stoops, Executive Vice President, Operations of Del Taco LLC. 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. Erickson, Executive Vice President, Purchasing of Del Taco LLC. From 1979 to
1986, Ms. Erickson was with Dennys 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. Erickson 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. Erickson has a Bachelor of Science degree in Foods and Nutrition from Cal State
Polytechnic University in Pomona, California.
Steven L. Brake, Senior Vice President, Chief Financial Officer of Del Taco LLC. Mr. Brake
has served as Chief Financial Officer since April of 2010 and previously served as Treasurer from
March 2006 to April 2010 and as the Corporate Controller of Del Taco LLC from September 2003 to
March of 2006. From December 1995 until September 2003 Mr. Brake spent seven years with Arthur
Andersen and one year with KPMG LLP in their respective audit departments. Mr. Brake was a
licensed certified public accountant and holds a Bachelor of Arts degree in Economics from the
University of California, Irvine and an MBA from the Paul Merage School of Business at the
University of California, Irvine.
Code of Ethics
The Partnership has no executive officers or any fulltime employees and, accordingly, has not
adopted a code of ethics.
22
|
|
|
Item 11. |
|
Executive Compensation |
The Partnership has no executive officers or directors and pays no direct remuneration to any
executive officer or director of its General Partner. The Partnership has not issued any options
or stock appreciation rights to any executive officer or director of its General Partner, nor does
the Partnership propose to pay any annuity, pension or retirement benefits to any executive officer
or director of its General Partner. The Partnership has no plan, nor does the Partnership
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.
|
|
|
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
Partnership, nor was any person known of by the Partnership to own of record and beneficially,
or beneficially only, more than five percent of such securities. |
(b) |
|
Neither Del Taco LLC, nor any executive officer or director of Del Taco LLC, owns any limited
partnership units of the Partnership. |
(c) |
|
The Partnership 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 Partnership, 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. |
23
|
|
|
Item 13. |
|
Certain Relationships, Related Transactions, and Director Independence |
(a) |
|
No transactions have occurred between the Partnership and any executive officer or director
of its General Partner. |
|
|
During 2010, the following transactions occurred between the Partnership and the General
Partner pursuant to the terms of the partnership agreement. |
|
(1) |
|
The General Partner earned $4,419 as its one percent share of the net income of
the Partnership. |
|
(2) |
|
The General Partner received $4,710 in distributions relating to its one percent
interest in the Partnership. |
(b) |
|
During 2010, the Partnership 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 Partnership at any time during 2010 for any amount. |
(d) Not applicable.
|
|
|
Item 14. |
|
Principal Accountant Fees and Services |
The following table presents fees for professional services rendered by Squar, Milner, Peterson,
Miranda & Williamson, LLP (Squar Milner).
|
|
|
|
|
|
|
|
|
|
|
2010 |
|
|
2009 |
|
Audit Fees |
|
$ |
16,563 |
|
|
$ |
17,547 |
|
Audit-Related Fees |
|
|
0 |
|
|
|
0 |
|
Tax Fees |
|
|
0 |
|
|
|
0 |
|
All Other Fees |
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
16,563 |
|
|
$ |
17,547 |
|
|
|
|
|
|
|
|
The General Partner approves all the audit and non-audit services, and related fees, provided to
the Partnership by the independent auditors prior to the services being rendered.
24
PART IV
|
|
|
Item 15. |
|
Exhibits and Financial Statement Schedules |
(a)(1) |
|
Financial Statements |
|
|
|
Included in Part II of this report: |
|
|
|
Report of Independent Registered Public Accounting Firm Squar, Milner, Peterson, Miranda & Williamson, LLP
Balance Sheets
Statements of Income
Statements of Partners Equity
Statements of Cash Flows
Notes to Financial Statements |
|
(a)(2) |
|
Financial Statement Schedule |
|
|
|
Schedule III Real Estate and Accumulated Depreciation |
|
|
|
Financial statement schedules other than those referred to above have been omitted because
they are not applicable or not required. |
|
(b) |
|
Reports on Form 8-K |
|
|
|
None |
|
(c) |
|
Exhibits required by Item 601 of Regulation S-K: |
|
1. |
|
Incorporated herein by reference, Agreement of Limited Partnership of Del Taco Restaurant Properties II filed
as Exhibit 3.01 to Partnerships Registration Statement
on Form S-11 as filed with the Securities and Exchange
Commission on July 10, 1984. |
|
|
2. |
|
Incorporated herein by reference, Amendment to Agreement
of Limited Partnership of Del Taco Restaurant Properties
II. |
|
|
3. |
|
Incorporated herein by reference, Form of Standard Lease
to be entered into by partnership and Del Taco, Inc., as
lessee, filed as Exhibit 10.02 to Partnerships
Registration Statement on Form S-11 as filed with the
Securities and Exchange Commission on July 10, 1984. |
|
|
31.1 |
|
Paul J.B. Murphy, IIIs Certification Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 |
|
|
31.2 |
|
Steven L. Brakes Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
|
32.1 |
|
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
25
DEL TACO RESTAURANT PROPERTIES II
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Initial cost
to company |
|
Cost capitalized
subsequent to acquisition |
|
Gross amount at
which carried at close of period |
|
|
|
|
|
|
|
|
|
|
|
|
|
Life on which |
|
|
|
|
|
|
Land |
|
Buildings & |
|
|
|
Land, Buildings & |
|
|
|
|
|
|
|
|
|
|
|
|
|
depreciation in latest |
Description |
|
|
|
|
|
& land |
|
Improve- |
|
Carrying |
|
improvements |
|
Accumulated |
|
Date of |
|
Date |
|
income statement |
(All Restaurants) |
|
Encumbrances |
|
improvements |
|
ments |
|
costs |
|
Total |
|
depreciation |
|
construction |
|
acquired |
|
is computed |
|
Victorville, CA |
|
$ |
|
|
|
$ |
327,770 |
|
|
$ |
224,843 |
|
|
$ |
|
|
|
$ |
552,613 |
|
|
$ |
221,994 |
|
|
|
1986 |
|
|
|
1986 |
|
|
20 (LI), 35 (BI) |
Colton, CA |
|
|
|
|
|
|
262,661 |
|
|
|
180,179 |
|
|
|
|
|
|
|
442,840 |
|
|
|
177,899 |
|
|
|
1986 |
|
|
|
1986 |
|
|
20 (LI), 35 (BI) |
Palmdale, CA |
|
|
|
|
|
|
404,791 |
|
|
|
277,677 |
|
|
|
|
|
|
|
682,468 |
|
|
|
274,164 |
|
|
|
1986 |
|
|
|
1986 |
|
|
20 (LI), 35 (BI) |
Pedley, CA |
|
|
|
|
|
|
364,334 |
|
|
|
249,925 |
|
|
|
|
|
|
|
614,259 |
|
|
|
246,761 |
|
|
|
1987 |
|
|
|
1987 |
|
|
20 (LI), 35 (BI) |
Thousand Palms, CA |
|
|
|
|
|
|
446,450 |
|
|
|
306,255 |
|
|
|
|
|
|
|
752,705 |
|
|
|
302,367 |
|
|
|
1987 |
|
|
|
1987 |
|
|
20 (LI), 35 (BI) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
$ |
1,806,006 |
|
|
$ |
1,238,879 |
|
|
$ |
|
|
|
$ |
3,044,885 |
|
|
$ |
1,223,185 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
Restaurants |
|
Depreciation |
Balances at December 31, 2007: |
|
$ |
3,044,885 |
|
|
$ |
1,116,997 |
|
Additions |
|
|
|
|
|
|
35,396 |
|
Retirements |
|
|
|
|
|
|
|
|
|
|
|
Balances at December 31, 2008: |
|
|
3,044,885 |
|
|
|
1,152,393 |
|
Additions |
|
|
|
|
|
|
35,396 |
|
Retirements |
|
|
|
|
|
|
|
|
|
|
|
Balances at December 31, 2009: |
|
|
3,044,885 |
|
|
|
1,187,789 |
|
Additions |
|
|
|
|
|
|
35,396 |
|
Retirements |
|
|
|
|
|
|
|
|
|
|
|
Balances at December 31, 2010: |
|
$ |
3,044,885 |
|
|
$ |
1,223,185 |
|
|
|
|
The aggregate cost basis of Del Taco Restaurant Properties II real estate assets for Federal income
tax purposes was $2,188,770 at December 31, 2010.
See accompanying report of independent registered public accounting firm.
26
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the
Partnership 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
Del Taco LLC
General Partner
|
|
Date March 30, 2011 |
Paul J.B. Murphy, III
|
|
|
Paul J.B. Murphy, III |
|
|
Chief Executive Officer |
|
|
|
|
Date March 30, 2011 |
James W. Lyons
|
|
|
James W. Lyons |
|
|
Chief Development Officer |
|
|
|
|
Date March 30, 2011 |
Steven L. Brake
|
|
|
Steven L. Brake |
|
|
Chief Financial Officer |
|
27
EXHIBIT INDEX
|
|
|
|
|
Exhibit |
|
Description |
|
1. |
|
|
Incorporated herein by reference, Agreement of Limited |
|
|
|
|
|
|
|
|
|
Partnership of Del Taco Restaurant Properties II filed
as Exhibit 3.01 to Partnerships Registration Statement
on Form S-11 as filed with the Securities and Exchange
Commission on July 10, 1984. |
|
|
|
|
|
|
2. |
|
|
Incorporated herein by reference, Amendment to Agreement
of Limited Partnership of Del Taco Restaurant Properties
II. |
|
|
|
|
|
|
3. |
|
|
Incorporated herein by reference, Form of Standard Lease
to be entered into by partnership and Del Taco, Inc., as
lessee, filed as Exhibit 10.02 to Partnerships
Registration Statement on Form S-11 as filed with the
Securities and Exchange Commission on July 10, 1984. |
|
|
|
|
|
|
31.1 |
|
|
Paul J.B. Murphy, IIIs Certification Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 |
|
|
|
|
|
|
31.2 |
|
|
Steven L. Brakes Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
|
|
|
|
|
32.1 |
|
|
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
28