10-Q

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, 2012

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. 0-16191

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 incorporation or organization)	(I.R.S. Employer Identification Number)
25521 Commercentre Drive Lake Forest, California	92630
(Address of principal executive offices)	(Zip Code)

(949) 462-9300

(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  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, 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  x    No  ¨

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.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x  (Do not check if a smaller reporting company)	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 registrant’s Form S-11 Registration Statement filed December 17, 1982 are incorporated by reference into Part IV of this report.

INDEX

DEL TACO RESTAURANT PROPERTIES II

	PAGE NUMBER
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheets at September 30, 2012 (Unaudited) and December 31, 2011		3
Condensed Statements of Income for the three and nine months ended September  30, 2012 and 2011 (Unaudited)		4
Condensed Statements of Cash Flows for the nine months ended September 30, 2012 and 2011 (Unaudited)		5
Notes to Condensed Financial Statements (Unaudited)		6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		8
Item 3. Quantitative and Qualitative Disclosures About Market Risk		10
Item 4. Controls and Procedures		10
PART II. OTHER INFORMATION
Item 6. Exhibits		11
SIGNATURE		12

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PART I. FINANCIAL INFORMATION

ITEM I. FINANCIAL STATEMENTs

DEL TACO RESTAURANT PROPERTIES II

CONDENSED BALANCE SHEETS

	September 30, 2012			December 31, 2011
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash	$	164,742		$	169,872
Receivable from Del Taco LLC		42,767			44,281
Other current assets		1,624			1,534
Total current assets		209,133			215,687
PROPERTY AND EQUIPMENT:
Land		1,430,345			1,430,345
Land improvements		375,661			375,661
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		2,184,079			2,157,532
		1,759,756			1,786,303
	$	1,968,889		$	2,001,990
LIABILITIES AND PARTNERS’ EQUITY
CURRENT LIABILITIES:
Payable to limited partners	$	46,700		$	44,363
Accounts payable		10,939			27,697
Total current liabilities		57,639			72,060
PARTNERS’ EQUITY:
Limited partners; 27,006 units outstanding at September 30, 2012 and December 31, 2011		1,941,189			1,959,682
General partner-Del Taco LLC		(29,939	)		(29,752	)
		1,911,250			1,929,930
	$	1,968,889		$	2,001,990

See accompanying notes to condensed financial statements.

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DEL TACO RESTAURANT PROPERTIES II

CONDENSED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
RENTAL REVENUES	$	135,209	$	136,771	$	400,058	$	404,401
EXPENSES:
General and administrative		11,798		13,340		68,462		64,780
Depreciation		8,849		8,849		26,547		26,547
		20,647		22,189		95,009		91,327
Operating income		114,562		114,582		305,049		313,074
OTHER INCOME:
Interest		47		46		141		136
Other		515		875		1,490		2,175
Net income	$	115,124	$	115,503	$	306,680	$	315,385
Net income per limited partnership unit (Note 2)	$	4.22	$	4.23	$	11.24	$	11.56
Number of units used in computing per unit amounts		27,006		27,006		27,006		27,006

See accompanying notes to condensed financial statements.

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DEL TACO RESTAURANT PROPERTIES II

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended September 30,
	2012			2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	306,680		$	315,385
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		26,547			26,547
Changes in operating assets and liabilities:
Receivable from Del Taco LLC		1,514			3,466
Other current assets		(90	)		457
Payable to limited partners		2,337			5,097
Accounts payable		(16,758	)		(5,721	)
Net cash provided by operating activities		320,230			345,231
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions to partners		(325,360	)		(333,882	)
Net change in cash		(5,130	)		11,349
Beginning cash balance		169,872			162,482
Ending cash balance	$	164,742		$	173,831

See accompanying notes to condensed financial statements.

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DEL TACO RESTAURANT PROPERTIES II

NOTES TO CONDENSED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2012

UNAUDITED

NOTE 1—BASIS OF PRESENTATION

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America 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 accounting principles generally accepted in the United States of America for complete financial statements and should therefore be read in conjunction with the financial statements and notes thereto contained in the annual report on Form 10-K for the year ended December 31, 2011 for Del Taco Restaurant Properties II (the Partnership or the Company). In the opinion of management, all adjustments (consisting of normal recurring accruals) necessary to present fairly the Partnership’s financial position at September 30, 2012, the results of operations for the three and nine month periods ended September 30, 2012 and 2011 and cash flows for the nine month periods ended September 30, 2012 and 2011 have been included. Operating results for the three and nine months ended September 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012. Amounts related to disclosure of December 31, 2011 balances within these condensed financial statements were derived from the 2011 audited financial statements.

Management has evaluated events subsequent to September 30, 2012 through the date that the accompanying condensed financial statements were filed with the Securities and Exchange Commission for transactions and other events which may require adjustment of and/or disclosure in such financial statements.

NOTE 2—NET INCOME PER LIMITED PARTNERSHIP UNIT

Net income per limited partnership unit is based on net income attributable to the limited partners (after one percent allocation to the general partner) using the weighted average number of units outstanding during the periods presented which amounted to 27,006 in 2012 and 2011.

Pursuant to the partnership agreement, annual partnership income or loss is allocated one percent to Del Taco LLC, formerly known as Del Taco, Inc. (Del Taco or 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.

NOTE 3—LEASING ACTIVITIES

The Partnership leases five 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 terminate in the years 2021 to 2023.

Pursuant to the lease agreements, minimum rentals of $3,500 per month are due to the Partnership during the first six months of any non-operating period caused by an insured casualty loss.

For the three months ended September 30, 2012, the five restaurants operated by Del Taco, for which the Partnership is the lessor, had combined, unaudited sales of $1,126,739 and unaudited net losses of $28,811 as compared to unaudited sales of $1,139,760 and unaudited net losses of $17,298, respectively, for the corresponding period in 2011. Net income or loss of each restaurant includes charges for general and administrative expenses incurred in connection with supervision of restaurant operations and interest expense and the increase in net loss from the corresponding period of the prior year primarily relates to increases in operating costs.

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DEL TACO RESTAURANT PROPERTIES II

NOTES TO CONDENSED FINANCIAL STATEMENTS—CONTINUED

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2012

UNAUDITED

NOTE 3—LEASING ACTIVITIES—continued

For the nine months ended September 30, 2012, the five restaurants operated by Del Taco, for which the Partnership is the lessor, had combined, unaudited sales of $3,333,816 and unaudited net losses of $108,277 as compared to $3,370,004 and unaudited net losses of $105,765 for the corresponding period in 2011. Net income or loss of each restaurant includes charges for general and administrative expenses incurred in connection with supervision of restaurant operations and interest expense and the increase in net loss from the corresponding period of the prior year primarily relates to increases in operating costs.

NOTE 4—TRANSACTIONS WITH DEL TACO

The receivable from Del Taco consists primarily of rent accrued for the month of September 2012. The September rent receivable was collected in October 2012.

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.

In addition, see Note 5 with respect to certain distributions to the General Partner.

NOTE 5—DISTRIBUTIONS

Total cash distributions declared and paid in February, May and August 2012 were $102,510, $104,125 and $118,725, respectively. On October 25, 2012, a distribution to the limited partners of $111,912, or approximately $4.14 per limited partnership unit, was approved. Such distribution was paid on November 5, 2012. The General Partner also received a distribution of $1,130 with respect to its 1% partnership interest in November 2012.

NOTE 6—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.

NOTE 7—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 Partnership’s rental revenues during the three and nine months ended September 30, 2012 and 2011. 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. Although the Partnership at times maintains balances that exceed the federally insured limit, it has not experienced any losses related to these balances and management believes the credit risk to be minimal.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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. $6.751 million was raised through the sale of limited partnership units and used to acquire sites and build seven restaurants and also to 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 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 the Del Taco trade name restaurants that lease the properties. The success of the restaurants is dependent on a large variety of factors, including, but not limited to, competition, consumer demand and preference for fast food, in general, and for Mexican-American food in particular.

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.

The following table sets forth rental revenue earned by restaurant (unaudited):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Bear Valley Rd., Victorville, CA	$	21,293	$	23,925	$	64,545	$	70,602
West Valley Blvd., Colton, CA		35,609		34,222		102,641		99,362
Palmdale Blvd., Palmdale, CA		17,189		17,759		51,527		52,327
DeAnza Country Shopping Center, Pedley, CA		33,805		31,052		97,034		89,732
Varner Road, Thousand Palms, CA		27,313		29,813		84,311		92,378
Total	$	135,209	$	136,771	$	400,058	$	404,401

The Partnership receives rental revenues equal to 12 percent of gross sales from the restaurants. The Partnership earned rental revenue of $135,209 during the three month period ended September 30, 2012, which represents a decrease of $1,562 from the corresponding period in 2011. The Partnership earned rental revenue of $400,058 during the nine month period ended September 30, 2012, which represents a decrease of $4,343 from the corresponding period in 2011. The changes in rental revenues between 2011 and 2012 are directly attributable to changes in sales levels at the restaurants under lease due to local competitive and industry factors.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—continued

The following table breaks down general and administrative expenses by type of expense:

	Percent of Total General & Administrative Expense
	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Accounting fees		46.16	%		41.79	%		64.97	%		66.72	%
Distribution of information to limited partners		53.84	%		58.21	%		35.03	%		33.28	%
		100.00	%		100.00	%		100.00	%		100.00	%

General and administrative costs for the three month period decreased primarily due to decreased costs for printing. General and administrative costs for the nine month period increased primarily due to increased costs for printing.

For the three month period ended September 30, 2012, net income decreased by $379 from 2011 to 2012 due to the decrease in revenues of $1,562 and the decrease in interest and other income of $359, partially offset by the decrease in general and administrative expenses of $1,542. For the nine month period ended September 30, 2012, net income decreased $8,705 from 2011 to 2012 due to the decrease in revenues of $4,343, the decrease in interest and other income of $680 and the increase in general and administrative expenses of $3,682.

Significant Recent Accounting Pronouncements

None.

Off-Balance Sheet Arrangements

None

Critical Accounting Policies and Estimates

Management’s discussion and analysis of financial condition and results of operations, as well as disclosures included elsewhere in this report on Form 10-Q are based upon the Partnership’s 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 the Partnership’s December 31, 2011 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.

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Item 2. Management’s 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.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

None.

Item 4. Controls and Procedures

(a) Evaluation of disclosure controls and procedures:

As of the end of the period covered by this quarterly report, we carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective in timely alerting them to material information relating to the Company required to be included in the Company’s periodic Securities and Exchange Commission filings.

(b) Changes in internal controls:

There were no significant changes in the Company’s 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.

(c) Asset-backed issuers:

Not applicable.

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PART II. OTHER INFORMATION

There is no information required to be reported for any items under Part II, except as follows:

Item 6. Exhibits

(a) Exhibits

31.1	Paul J. B. Murphy, III’s Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Steven L. Brake’s Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification pursuant to subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document*
101.SCH	XBRL Taxonomy Extension Schema Document*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document*
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document*
101.LAB	XBRL Taxonomy Extension Label Linkbase Document*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document*

* Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under these sections.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, 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 LLC
	General Partner
Date: November 14, 2012	/s/ Steven L. Brake
	Steven L. Brake
	Chief Financial Officer
	(Principal Financial Officer)

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EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECURITIES

ACT RULES 13A-14 AND 15D-14 AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Paul J. B. Murphy, III, certify that:

1. I have reviewed this quarterly (“report”) on Form 10-Q of Del Taco Restaurant Properties II;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 14, 2012	/s/ Paul J. B. Murphy, III
	Paul J. B. Murphy, III
	Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF TREASURER PURSUANT TO SECURITIES

ACT RULES 13A-14 AND 15D-14 AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Steven L. Brake, certify that:

1. I have reviewed this quarterly report (“report”) on Form 10-Q of Del Taco Restaurant Properties II;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 14, 2012	/s/ Steven L. Brake
	Steven L. Brake
	Chief Financial Officer
	(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(SUBSECTIONS (a) AND (b) OF SECTION 1350, CHAPTER 63 OF TITLE 18,

UNITED STATES CODE)

In connection with the Quarterly Report of Del Taco Restaurant Properties II (the “Company”) on Form 10-Q for the period ended September 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.

Date: November 14, 2012	/s/ Paul J. B. Murphy, III
	Paul J. B. Murphy, III
	Chief Executive Officer
Date: November 14, 2012	/s/ Steven L. Brake
	Steven L. Brake
	Chief Financial Officer
	(Principal Financial Officer)

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

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TRANSACTIONS WITH DEL TACO

9 Months Ended

Sep. 30, 2012

TRANSACTIONS WITH DEL TACO

NOTE 4—TRANSACTIONS WITH DEL TACO

The receivable from Del Taco consists primarily of rent accrued for the month of September 2012. The September rent receivable was collected in October 2012.

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.

In addition, see Note 5 with respect to certain distributions to the General Partner.

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LEASING ACTIVITIES

9 Months Ended

Sep. 30, 2012

LEASING ACTIVITIES

NOTE 3—LEASING ACTIVITIES

The Partnership leases five 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 terminate in the years 2021 to 2023.

Pursuant to the lease agreements, minimum rentals of $3,500 per month are due to the Partnership during the first six months of any non-operating period caused by an insured casualty loss.

For the three months ended September 30, 2012, the five restaurants operated by Del Taco, for which the Partnership is the lessor, had combined, unaudited sales of $1,126,739 and unaudited net losses of $28,811 as compared to unaudited sales of $1,139,760 and unaudited net losses of $17,298, respectively, for the corresponding period in 2011. Net income or loss of each restaurant includes charges for general and administrative expenses incurred in connection with supervision of restaurant operations and interest expense and the increase in net loss from the corresponding period of the prior year primarily relates to increases in operating costs.

For the nine months ended September 30, 2012, the five restaurants operated by Del Taco, for which the Partnership is the lessor, had combined, unaudited sales of $3,333,816 and unaudited net losses of $108,277 as compared to $3,370,004 and unaudited net losses of $105,765 for the corresponding period in 2011. Net income or loss of each restaurant includes charges for general and administrative expenses incurred in connection with supervision of restaurant operations and interest expense and the increase in net loss from the corresponding period of the prior year primarily relates to increases in operating costs.

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Condensed Balance Sheets (USD $)	Sep. 30, 2012	Dec. 31, 2011
CURRENT ASSETS:
Cash	$ 164,742	$ 169,872
Receivable from Del Taco LLC	42,767	44,281
Other current assets	1,624	1,534
Total current assets	209,133	215,687
PROPERTY AND EQUIPMENT:
Land	1,430,345	1,430,345
Land improvements	375,661	375,661
Buildings and improvements	1,238,879	1,238,879
Machinery and equipment	898,950	898,950
Property and equipment, gross	3,943,835	3,943,835
Less-accumulated depreciation	2,184,079	2,157,532
Property and equipment, net	1,759,756	1,786,303
Total assets	1,968,889	2,001,990
CURRENT LIABILITIES:
Payable to limited partners	46,700	44,363
Accounts payable	10,939	27,697
Total current liabilities	57,639	72,060
PARTNERS' EQUITY:
Limited partners; 27,006 units outstanding at September 30, 2012 and December 31, 2011	1,941,189	1,959,682
General partner-Del Taco LLC	(29,939)	(29,752)
Total partners' equity	1,911,250	1,929,930
Total liabilities and partners' equity	$ 1,968,889	$ 2,001,990

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BASIS OF PRESENTATION

9 Months Ended

Sep. 30, 2012

BASIS OF PRESENTATION

NOTE 1—BASIS OF PRESENTATION

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America 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 accounting principles generally accepted in the United States of America for complete financial statements and should therefore be read in conjunction with the financial statements and notes thereto contained in the annual report on Form 10-K for the year ended December 31, 2011 for Del Taco Restaurant Properties II (the Partnership or the Company). In the opinion of management, all adjustments (consisting of normal recurring accruals) necessary to present fairly the Partnership’s financial position at September 30, 2012, the results of operations for the three and nine month periods ended September 30, 2012 and 2011 and cash flows for the nine month periods ended September 30, 2012 and 2011 have been included. Operating results for the three and nine months ended September 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012. Amounts related to disclosure of December 31, 2011 balances within these condensed financial statements were derived from the 2011 audited financial statements.

Management has evaluated events subsequent to September 30, 2012 through the date that the accompanying condensed financial statements were filed with the Securities and Exchange Commission for transactions and other events which may require adjustment of and/or disclosure in such financial statements.

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NET INCOME PER LIMITED PARTNERSHIP UNIT

9 Months Ended

Sep. 30, 2012

NET INCOME PER LIMITED PARTNERSHIP UNIT

NOTE 2—NET INCOME PER LIMITED PARTNERSHIP UNIT

Net income per limited partnership unit is based on net income attributable to the limited partners (after one percent allocation to the general partner) using the weighted average number of units outstanding during the periods presented which amounted to 27,006 in 2012 and 2011.

Pursuant to the partnership agreement, annual partnership income or loss is allocated one percent to Del Taco LLC, formerly known as Del Taco, Inc. (Del Taco or 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.

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Condensed Balance Sheets (Parenthetical)	Sep. 30, 2012	Dec. 31, 2011
Limited partners, units outstanding	27,006	27,006

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Payable to Limited Partners - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2012
Period of payable outstanding to limited partners	Six months or longer

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Document and Entity Information	9 Months Ended
	Sep. 30, 2012
Entity Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3
Entity Registrant Name	DEL TACO RESTAURANT PROPERTIES II
Entity Central Index Key	0000749153
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer

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Concentration of Risk - Additional Information (Detail)	Sep. 30, 2012 Property	Sep. 30, 2011 Restaurants
Number of properties leased	5	5

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Condensed Statements of Income (Unaudited) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
RENTAL REVENUES	$ 135,209	$ 136,771	$ 400,058	$ 404,401
EXPENSES:
General and administrative	11,798	13,340	68,462	64,780
Depreciation	8,849	8,849	26,547	26,547
Operating Expenses, Total	20,647	22,189	95,009	91,327
Operating income	114,562	114,582	305,049	313,074
OTHER INCOME:
Interest	47	46	141	136
Other	515	875	1,490	2,175
Net income	$ 115,124	$ 115,503	$ 306,680	$ 315,385
Net income per limited partnership unit (Note 2)	4.22	4.23	11.24	11.56
Number of units used in computing per unit amounts	27,006	27,006	27,006	27,006

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CONCENTRATION OF RISK

9 Months Ended

Sep. 30, 2012

CONCENTRATION OF RISK

NOTE 7—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 Partnership’s rental revenues during the three and nine months ended September 30, 2012 and 2011. 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. Although the Partnership at times maintains balances that exceed the federally insured limit, it has not experienced any losses related to these balances and management believes the credit risk to be minimal.

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PAYABLE TO LIMITED PARTNERS

9 Months Ended

Sep. 30, 2012

PAYABLE TO LIMITED PARTNERS

NOTE 6—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.

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Transactions with Del Taco - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2012 PartnershipUnit
Number of other partnerships formed for acquisition	3

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Net Income per Limited Partnership Unit - Additional Information (Detail)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Number of units used in computing per unit amounts	27,006	27,006	27,006	27,006
Percentage of net income attributable general partner			1.00%
Percentage of net income attributable limited partners			99.00%
Percentage of gain on sale and refinancing allocated to general partner			1.00%
Percentage of gain on sale and refinancing allocated to limited partners			99.00%
Percentage of additional gain on sale and refinancing allocated to general partner			15.00%
Percentage of additional gain on sale and refinancing allocated to limited partners			85.00%

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Leasing Activities - Additional Information (Detail) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012 Restaurants Property	Sep. 30, 2011 Restaurants	Sep. 30, 2012 Restaurants Property	Sep. 30, 2011 Restaurants
Number of properties leased	5	5	5	5
Number of Lease years			35 years
Percentage of gross sales of the restaurants			12.00%
Leases expiration date			2021 to 2023
Minimum rentals due to partnership			$ 3,500
Combined unaudited sales	1,126,739	1,139,760	3,333,816	3,370,004
Combined unaudited net losses	$ 28,811	$ 17,298	$ 108,277	$ 105,765
Number of restaurants operated	5		5

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Distributions -Additional Information (Detail) (USD $)	1 Months Ended			3 Months Ended
	Aug. 31, 2012	May 31, 2012	Feb. 29, 2012	Sep. 30, 2012
Total cash distributions declared and paid	$ 118,725	$ 104,125	$ 102,510
Distribution to limited partner, declaration date				Oct. 25, 2012
Distribution to limited partners amount approved				111,912
Declaration to limited partner, per unit amount declared				$ 4.14
Distribution to limited partner, distribution date				Nov. 05, 2012
Distributions to general partner				$ 1,130
General partner, partnership interest percentage				1.00%
Distribution to general partner, distribution date				Nov. 30, 2012

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Condensed Statements of Cash Flows (Unaudited) (USD $)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 306,680	$ 315,385
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	26,547	26,547
Changes in operating assets and liabilities:
Receivable from Del Taco LLC	1,514	3,466
Other current assets	(90)	457
Payable to limited partners	2,337	5,097
Accounts payable	(16,758)	(5,721)
Net cash provided by operating activities	320,230	345,231
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions to partners	(325,360)	(333,882)
Net change in cash	(5,130)	11,349
Beginning cash balance	169,872	162,482
Ending cash balance	$ 164,742	$ 173,831

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DISTRIBUTIONS

9 Months Ended

Sep. 30, 2012

DISTRIBUTIONS

NOTE 5—DISTRIBUTIONS

Total cash distributions declared and paid in February, May and August 2012 were $102,510, $104,125 and $118,725, respectively. On October 25, 2012, a distribution to the limited partners of $111,912, or approximately $4.14 per limited partnership unit, was approved. Such distribution was paid on November 5, 2012. The General Partner also received a distribution of $1,130 with respect to its 1% partnership interest in November 2012.