-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QoxUe7XqkvRoIhrV8OZzJWmK6d8B2YeCAEYIHB0uGuNS9tmKBA/Nv7ZOu64eDIm9 GFWu5FM045LthInhVU0vbg== 0000892569-96-002229.txt : 19961106 0000892569-96-002229.hdr.sgml : 19961106 ACCESSION NUMBER: 0000892569-96-002229 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961105 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DEL TACO INCOME PROPERTIES IV CENTRAL INDEX KEY: 0000812630 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 330241855 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 033-13437 FILM NUMBER: 96654303 BUSINESS ADDRESS: STREET 1: 23041 AVENIDA DE LA CARLOTA, SUITE 400 CITY: LAGUNA HILLS STATE: CA ZIP: 92653 BUSINESS PHONE: 714 462-9300 MAIL ADDRESS: STREET 1: 1800 W KATELLA AVE CITY: ORANGE STATE: CA ZIP: 92667 10-Q 1 FORM 10-Q FOR QUARTER ENDED 9-30-1996 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark one) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED, SEPTEMBER 30, 1996 ------------------------------------------ OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to --------------------- ------------------ COMMISSION FILE NO. 33-13437 DEL TACO INCOME PROPERTIES IV a California limited partnership (Exact name of registrant as specified in its charter) CALIFORNIA 33-0241855 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 23041 AVENIDA DE LA CARLOTA, SUITE 400, LAGUNA HILLS, CA 92653 (Address of principal executive offices) (Zip Code) (714) 462-7399 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- -1- 2 INDEX DEL TACO INCOME PROPERTIES IV -----------------------------
PART I. FINANCIAL INFORMATION PAGE NUMBER - ------------------------------ ----------- Item 1. Financial Statements and Supplementary Data Balance Sheets at September 30, 1996 (Unaudited) and December 31, 1995 3 Statements of Income for the three and nine months ended September 30, 1996 and 1995 (Unaudited) 4 Statements of Cash Flows for the nine months ended September 30, 1996 and 1995 (Unaudited) 5 Notes to Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 PART II. OTHER INFORMATION - -------------------------- Item 6. Exhibits and Reports on Form 8-K 10 SIGNATURES 11 - ----------
-2- 3 DEL TACO INCOME PROPERTIES IV ----------------------------- BALANCE SHEETS --------------
SEPTEMBER 30 December 31 1996 1995 ----------- ----------- (UNAUDITED) ASSETS ------ CURRENT ASSETS: Cash $ 71,234 $ 73,542 Receivable from General Partner (Note 4) 25,818 20,087 Deposits 400 400 ---------- ---------- Total current assets 97,452 94,029 ---------- ---------- PROPERTY AND EQUIPMENT, AT COST Land and improvements 1,236,700 1,236,700 Buildings and improvements 1,289,860 1,289,860 Machinery and equipment 484,789 484,789 ---------- ---------- 3,011,349 3,011,349 Less--accumulated depreciation 687,859 610,047 ---------- ---------- 2,323,490 2,401,302 ---------- ---------- $2,420,942 $2,495,331 ========== ========== LIABILITIES AND PARTNERS' EQUITY -------------------------------- CURRENT LIABILITIES: Payable to Limited Partners $ 3,068 $ 1,652 Accounts Payable 467 825 ---------- ---------- Total current liabilities 3,535 2,477 OBLIGATION TO GENERAL PARTNER 137,953 137,953 ---------- ---------- PARTNERS' EQUITY Limited Partners 2,287,812 2,362,487 General Partner-Del Taco, Inc. (8,358) (7,586) ---------- ---------- 2,279,454 2,354,901 ---------- ---------- $2,420,942 $2,495,331 ========== ==========
The accompanying notes are an integral part of these financial statements -3- 4 DEL TACO INCOME PROPERTIES IV ----------------------------- STATEMENTS OF INCOME -------------------- (UNAUDITED) -----------
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30 SEPTEMBER 30 1996 1995 1996 1995 -------- -------- -------- -------- REVENUES: Rent (Notes 3 and 4) $ 71,440 $ 73,589 $263,122 $206,317 Interest 373 283 864 784 Other 25 - 25 75 -------- -------- -------- -------- 71,838 73,872 264,011 207,176 -------- -------- -------- -------- EXPENSES: General and administrative 7,629 5,856 34,357 31,997 Depreciation 25,937 25,937 77,813 77,802 -------- -------- -------- -------- 33,566 31,793 112,170 109,799 -------- -------- -------- -------- Net income $ 38,272 $ 42,079 $151,841 $ 97,377 ======== ======== ======== ======== Net income per Limited Partnership Unit (Note 2) $ 0.23 $ 0.25 $ 0.91 $ 0.58 ======== ======== ======== ========
The accompanying notes are an integral part of these financial statements. -4- 5 DEL TACO INCOME PROPERTIES IV ----------------------------- STATEMENTS OF CASH FLOWS ------------------------ (UNAUDITED) -----------
NINE MONTHS ENDED SEPTEMBER 30 1996 1995 --------- -------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $151,841 $ 97,377 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 77,813 77,802 Increase (decrease) in payable to Limited Partners 1,416 (522) (Increase) decrease in receivable from General Partner (5,731) (833) Increase (decrease) in accounts payable (358) 3,353 -------- -------- Net cash provided by operating activities 224,981 177,177 CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions to partners 227,289 173,839 -------- -------- Net increase (decrease) in cash (2,308) 3,338 Beginning cash balance 73,542 74,956 -------- -------- Ending cash balance $ 71,234 $ 78,294 ======== ========
The accompanying notes are an integral part of these financial statements. -5- 6 DEL TACO INCOME PROPERTIES IV ----------------------------- NOTES TO FINANCIAL STATEMENTS ----------------------------- SEPTEMBER 30, 1996 ------------------ NOTE 1 - BASIS OF PRESENTATION The accompanying financial statements, some of which are unaudited, have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements and should therefore be read in conjunction with the financial statements and notes thereto contained in the Registrant's annual report on Form 10-K for the year ended December 31, 1995. In the opinion of management, all adjustments (consisting of normal recurring accruals) necessary to present fairly the partnership's financial position at September 30, 1996, the results of operations and cash flows for the nine month periods ended September 30, 1996 and 1995 have been included. Operating results for the three and nine months ended September 30, 1996 are not necessarily indicative of the results that may be expected for the year ending December 31, 1996. NOTE 2 - NET INCOME PER LIMITED PARTNERSHIP UNIT Net income per Limited Partnership Unit is based upon the weighted average number of Units outstanding during the periods presented which amounted to 165,415 in 1996 and 1995. Pursuant to the Partnership Agreement, annual partnership income or loss is allocated one percent to the General Partner and 99 percent to the Limited Partners. Partnership gains from any sale or refinancing will be allocated one percent to the General Partner and 99 percent to the Limited Partners until allocated gains and profits equal losses, distributions and syndication costs, and until each class of Limited Partners receive their priority return as defined in the Partnership Agreement. Additional gains will be allocated 12 percent to the General Partner and 88 percent to the Limited Partners. NOTE 3 - LEASING ACTIVITIES The Registrant leases (the "Leases") certain properties (the "Properties") for operation of restaurants to Del Taco, Inc. ("General Partner") on a triple net basis. The Leases are for terms of 32 years -6- 7 DEL TACO INCOME PROPERTIES IV - ----------------------------- NOTES TO FINANCIAL STATEMENTS - CONTINUED - ----------------------------------------- SEPTEMBER 30, 1996 - ------------------ commencing with the completion of the restaurant facility located on each Property and require monthly rentals equal to 12 percent of the gross sales of the restaurants. There is no minimum rental under any of the Leases. The Registrant had a total of three Properties leased as of September 30, 1996 and 1995, one of which has been subleased to a Del Taco franchisee. Rental revenue for the nine month periods ended September 30, 1996 was higher than the corresponding period in 1995 due to the earning of supplemental rent, as provided for in the lease agreements, based on the operating results of the individual restaurants. NOTE 4 - TRANSACTIONS WITH DEL TACO The receivable from the General Partner consists primarily of rent accrued for the month of September. The September rent was collected on October 11, 1996. Del Taco, Inc. serves in the capacity of general partner in other partnerships which are engaged in the business of operating restaurants, and four partnerships which were formed for the purpose of acquiring real property in California for construction of Mexican-American restaurants for lease under long-term agreements to Del Taco, Inc. for operation under the Del Taco trade name. In addition, see Note 5 with respect to certain distributions to the General Partner. NOTE 5 - DISTRIBUTIONS On October 14, 1996, a distribution to the Limited Partners of $60,902, or approximately $.37 per Limited Partnership Unit, was approved. Such distribution was paid October 15, 1996. The General Partner also received a distribution of $615 with respect to its 1% partnership interest. -7- 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources - ------------------------------- The Registrant commenced an offering of Limited Partnership Units on June 5, 1987. By June 1, 1988, the sale of such Units provided a total capitalization for the Registrant of $4,135,375 including $1,000 attributable to the Special Limited Partner. 14.5 percent of the cash received from the sale of Limited Partnership Units was used to pay commissions to brokers and to reimburse the General Partner for offering costs incurred. Approximately $3,000,000 of the remaining funds were expended for the acquisition of sites and construction of three restaurants. During 1989, the first restaurant opened for business. The two additional restaurants commenced operation in 1990. In February 1992, the Registrant distributed to Limited Partners of record on December 31, 1991 $442,270 of net proceeds not utilized as reserves and not invested in properties. Since the three restaurants owned by the Registrant opened, cash flow from Lease payments received from Del Taco, the Registrant's General Partner, which leases all three restaurants, has provided adequate liquidity for operation of the Registrant. However, the Registrant's overwhelmingly predominant source of income to meet its expenses and fund distributions to its Limited Partners is payments from Del Taco under the Leases, comprising primarily rent calculated on the basis of the gross sales of the restaurants operated on the Properties, as to which there are no contractually specified minimum or guaranteed amounts. Thus, the adequacy of the Registrant's liquidity and capital resources in the future will depend primarily upon the gross revenues of such restaurants as well as upon Del Taco's financial condition and results of operations generally. -8- 9 Results of Operations - --------------------- The Registrant owns three Properties that are under long-term lease to Del Taco for restaurant operations (Del Taco, in turn, has sub-leased one of the restaurants to a Del Taco franchisee). The Registrant receives rental revenues equal to 12 percent of restaurant sales. The Registrant had rental revenue of $71,440 for the three months ended September 30, 1996 representing a decrease from the rental revenues of $73,589 in 1995. The Registrant had rental revenue of $263,122 for the nine months ended September 30, 1996 representing an increase from the rental revenues of $206,317 in 1995. Such increase was attributable to the earning of supplemental rent, as provided for in the lease agreements, based on the operating results of individual restaurants. The following table sets forth the percentage relationship to total general and administrative expenses of items included in the Registrant's Statements of Income:
Percentage of Total General & Administrative Expense -------------------------------- Nine Months Ended September 30 1996 1995 ------- ------- Accounting fees 45.45% 49.77% Distribution of information to Limited Partners 51.31 47.62 Other 3.24 2.61 ------ ------ 100.00% 100.00% ====== ======
Operating expenses include general and administrative expenses which consist primarily of accounting fees and costs of distribution of information to the Limited Partners. For the three months ended September 30, general and administrative expenses increased from $5,856 in 1995 to $7,629 in 1996. The increase in general and administrative expense was caused primarily by printing costs for new checks, envelopes and stationary. For the nine months ended September 30, general and administrative expenses increased from $31,997 in 1995 to $34,357 in 1996. The Registrant incurred depreciation expense in the amount of $25,937 for the three months ended September 30, 1996 and 1995, respectively. The Registrant incurred depreciation expense in the amount of $77,813 and $77,802 for the nine months ended September 30, 1996 and 1995, respectively. -9- 10 As a result of decreased revenues totaling $2,034 for the three months ended September 30,1996 and increased expenses totaling $1,773 for the three months ended September 30, 1996, the net income of the Registrant decreased from $42,079 for the three months ended September 30, 1995 to $38,272 for the corresponding period in 1996. As a result of increased revenues totaling $56,835 for the nine months ended September 30, 1996 and increased expenses totaling $2,371 for the nine months ended September 30, 1996, the net income of the Registrant increased from $97,377 for the nine months ended September 30, 1995 to $151,841 for the corresponding period in 1996. For the reasons stated under "Liquidity and Capital Resources" above, the Registrant's results of operations in the future will depend primarily upon the gross revenues of the restaurants located on the Properties leased to Del Taco as well as upon Del Taco's financial condition and results of operations generally. PART II. OTHER INFORMATION - --------------------------- Item 6. Exhibits and Reports on Form 8-K (b) No reports on Form 8-K were filed during the nine months ended September 30, 1996. (c) Exhibit 27 - Financial Data Schedule. -10- 11 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. DEL TACO INCOME PROPERTIES IV (a California limited partnership) Registrant Del Taco, Inc. General Partner Date: October 30, 1996 /s/ Robert J. Terrano -------------------------------- Robert J. Terrano Executive Vice President, Chief Financial Officer Date: October 30, 1996 /s/ C. Douglas Mitchell -------------------------------- C. Douglas Mitchell Vice President and Corporate Controller -11- EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS DEC-31-1996 JUL-01-1996 SEP-30-1996 71,234 400 25,818 0 0 97,452 3,011,349 687,859 2,420,942 3,535 0 0 0 0 2,279,454 2,420,942 0 71,838 0 33,566 0 0 0 38,272 0 38,272 0 0 0 38,272 0.23 0.23
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