-----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, PkI2Y7c0N6pH3Ovk1XWW/XeIXZR+R/WdMLeJ58mnmk2uzIm5fyQnzEeV2rA2fdGC YKepYZdgXsu1RNPCVzocCQ== 0000892569-97-000641.txt : 19970314 0000892569-97-000641.hdr.sgml : 19970314 ACCESSION NUMBER: 0000892569-97-000641 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970313 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-K SEC ACT: 1934 Act SEC FILE NUMBER: 033-13437 FILM NUMBER: 97555624 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-K 1 FORM 10-K FOR FISCAL YEAR ENDED DECEMBER 31, 1996 1 ================================================================================ 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, 1996 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 NUMBER 33-13437 DEL TACO INCOME PROPERTIES IV (A CALIFORNIA LIMITED PARTNERSHIP) (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) CALIFORNIA (STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) 23041 AVENIDA DE LA CARLOTA LAGUNA HILLS, CALIFORNIA (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) 33-0241855 (I.R.S. EMPLOYER IDENTIFICATION NUMBER) 92653 (ZIP CODE) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (714) 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 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 ___ DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant's Form S-11 Registration Statement filed June 5, 1987 are incorporated by reference into Part IV of this report. ================================================================================ 2 PART I ITEM 1. BUSINESS The Registrant is a publicly-held Limited Partnership organized under the California Uniform Limited Partnership Act. In accordance with the Partnership Agreement, the Registrant's General Partner is Del Taco, Inc., a California corporation ("General Partner"). The Registrant sold 165,415 Units aggregating $4,135,375 through an offering of Limited Partnership Units from June 5, 1987 through June 3, 1988. The Registrant has engaged in the business of acquiring sites in California for the construction of three Mexican-American restaurants for long-term lease to Del Taco, Inc. for operation under the Del Taco trade name. Each Property is leased for 32 years on a triple-net basis for a rent equal to twelve percent of gross sales of the restaurant constructed thereon. The activities of the Registrant relating to acquisition and development of the Properties is presented under Item 2 below. The term of the Partnership Agreement is until December 31, 2027 unless terminated earlier by means provided therein. Because the three Properties owned by the Registrant constitute virtually all of the Registrant's income producing assets, the business of the Registrant is almost entirely dependent on the success of the Del Taco trade name restaurants which lease those Properties. In turn, the success of those restaurants, which are not operated by the Registrant, 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. The Registrant has no full time employees. The General Partner is vested with full authority as to the general management and supervision of the business and affairs of the Registrant, and has a one percent interest in the profits or losses and distributions of the Registrant. Limited Partners have no right to participate in the management or conduct of such business and affairs. 2 3 ITEM 2. PROPERTIES The Registrant has acquired three Properties with proceeds obtained from the sale of Limited Partnership Units:
Date of Date of Restaurant Commencement of Address City, State Acquisition Constructed Operation (1) - ------- ----------- ----------- ----------- ------------- Orangethorpe Placentia, August 5, 1988 60 seat with March 27, Avenue CA drive through 1989 service window Lakeshore Lake Elsinore, February 1, 1989 60 seat with April 18, (2) Drive CA drive through 1990 service window Highland Avenue San Bernardino, December 8, 1989 60 seat with July 13, CA drive through 1990 service window
(1) Commencement of operation is the first date Del Taco, Inc., as lessee, operated the facility on the site as a Del Taco restaurant. (2) The restaurant is subleased to a franchisee of Del Taco, Inc. and the restaurant operates as a Del Taco restaurant. PART II ITEM 3. LEGAL PROCEEDINGS The Registrant is not a party to any material pending legal proceedings. ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS On July 14, 1994, the General Partner held a special meeting of limited partners of the Partnership at the Doubletree Hotel, 100 The City Drive, Orange, California, for the purpose of voting on whether Del Taco should continue to serve as the General Partner of the Partnership. A proposal to remove Del Taco as General Partner failed to obtain the necessary majority vote, receiving only 6.18 percent of eligible votes, and was defeated. Thus, Del Taco will continue to serve as sole General Partner of the Partnership, subject to all of the rights and responsibilities set forth in the Partnership's Restated Certificate and Agreement of Limited Partnership. 3 4 ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SECURITY HOLDER MATTERS The Registrant, a publicly-held Limited Partnership, sold 165,415 ($4,135,375) Limited Partnership Units during the offering period ended June 3, 1988 and currently has 386 Limited Partners of record. There is no public market for the trading of the Units. Distributions made by the Registrant to the Limited Partners during the past three fiscal years are described in Note 7 to the Notes to the Financial Statements contained under Item 8. ITEM 6. SELECTED FINANCIAL DATA
For the Year Ended December 31, 1996 1995 1994 1993 1992 ---- ---- ---- ---- ---- Rental Revenue $361,980 $275,561 $273,076 $259,530 $246,973 Interest and other income 1,244 1,193 1,792 2,221 4,097 Dividend Income - - - - 1,762 Net income 219,223 134,697 135,669 127,455 122,755 Net income per Limited Partnership Unit (1) 1.31 .81 .81 .76 .73 Cash Distributions per Limited Partnership Unit (2)(3)(4)(5)(6) From operations 1.74 1.45 2.00 .61 1.67 Return of Capital - - - - 2.67 Total Assets 2,429,366 2,495,331 2,603,405 2,807,793 2,783,310 Long-term Obligations 137,953 137,953 137,953 137,953 137,953
4 5 ITEM 6. SELECTED FINANCIAL DATA - CONTINUED (1) The net income per Limited Partnership Unit was calculated based upon 165,415 weighted average Units outstanding for all years presented. (2) Cash distributions for the quarter ended December 31, 1992 amounted to $.28 per Limited Partnership Unit and were paid December 31, 1992. Five quarterly distributions were disbursed during the year ended December 31, 1992. (3) Two quarterly distributions were disbursed during the year ended December 31, 1993. Cash distributions for the quarters ended September 30, 1993 and December 31, 1993 amounted to $.83 and were paid January 31, 1994 and February 2, 1994, respectively. (4) Cash distributions for the quarter ended December 31, 1994 amounted to $.40 per Limited Partnership Unit and were paid January 17, 1995. Five quarterly distributions were disbursed during the year ended December 31, 1994. (5) Cash distributions for the quarter ended December 31, 1995 amounted to $.40 per Limited Partnership Unit and were paid January 17, 1996. Four distributions were disbursed during the year ended December 31, 1995. (6) Cash distributions for the quarter ended December 31, 1996 amounted to $.41 per Limited Partnership Unit and were paid January 31, 1997. Four distributions were disbursed during the year ended December 31, 1996. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources The Registrant commenced offering of Limited Partnership Units on June 5, 1987. By June 3, 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. 5 6 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. 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 $361,980 for the year ended December 31, 1996, representing an increase from the rental revenues of $275,561 and $273,076 in 1995 and 1994, respectively. Such increase is directly attributable to the earning of supplemental rent in the amount of $87,490. The following table sets forth, for the periods indicated, the percentage relationship to total general and administrative expenses of items included in the Registrant's Statements of Income: Percentage of Total General & Admin. Expense
Year Ended December 31, 1996 1995 1994 -------- ------- ------ Accounting fees 41.12% 41.57% 47.16% Distribution of information to Limited Partners 55.77 55.85 48.84 Other 3.11 2.58 4.00 ------- ------- ------ 100.00% 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 years ended December 31, general and administrative expenses increased from $38,307 in 1995 to $40,251 in 1996 reflecting higher costs for accounting and administration of the partnership. The Registrant incurred depreciation expense of $103,750 for each of the years ended December 31, 1996, 1995 and 1994. 6 7 For the reasons stated under "Liquidity and Capital Resources" above, the Registrant's result 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. In Fiscal 1996, the Registrant adopted Statement of Financial Accounting Standards (SFAS) No. 121, "Accounting for the Impairment of Long Lived Assets and for Long Lived Assets to be Disposed of." The adoption of SFAS No. 121 did not have a material impact on the Registrant's financial statements. 7 8 ITEM 8. FINANCIAL STATEMENTS PART I. INFORMATION
INDEX PAGE NUMBER ----- ----------- Report of Independent Public Accountants 9 Balance Sheets at December 31, 1996 and 1995 10 Statements of Income for the years ended December 31, 1996, 1995 and 1994 11 Statement of Changes in Partners' Equity for the three years ended December 31, 1996 12 Statements of Cash Flows for the years ended December 31, 1996, 1995 and 1994 13 Notes to Financial Statements 14-18
8 9 ARTHUR ANDERSEN LLP REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ---------------------------------------- To the Partners of Del Taco Restaurant Properties IV: We have audited the accompanying balance sheets of DEL TACO RESTAURANT PROPERTIES IV (a California limited partnership) as of December 31, 1996 and 1995, and the related statements of income, changes in partners' equity and cash flows for each of the three years in the period ended December 31, 1996. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. 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 IV as of December 31, 1996 and 1995, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1996, in conformity with generally accepted accounting principles. /s/ ARTHUR ANDERSEN LLP -------------------------------- ARTHUR ANDERSEN LLP Orange County, California February 14, 1997 9 10 DEL TACO INCOME PROPERTIES IV BALANCE SHEETS
DECEMBER 31, 1996 1995 ----------------- -------------- ASSETS CURRENT ASSETS: Cash $ 79,857 $ 73,542 Receivable from Del Taco, Inc. (Note 5) 51,558 20,087 Deposits 400 400 ----------------- -------------- Total current assets 131,815 94,029 ----------------- -------------- PROPERTY AND EQUIPMENT, AT COST (NOTE 1) 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 713,798 610,047 ----------------- -------------- 2,297,551 2,401,302 ----------------- -------------- $2,429,366 $2,495,331 ================= ============== LIABILITIES AND PARTNERS' EQUITY CURRENT LIABILITIES: Payable to Limited Partners $ 3,038 $ 1,652 Accounts Payable 3,000 825 ----------------- -------------- Total current liabilities 6,038 2,477 ----------------- -------------- OBLIGATION TO GENERAL PARTNER (NOTE 3) 137,953 137,953 PARTNERS' EQUITY (NOTE 2) Limited Partners 2,293,656 2,362,487 General Partner - Del Taco, Inc. (8,281) (7,586) ----------------- -------------- 2,285,375 2,354,901 ----------------- -------------- $2,429,366 $2,495,331 ================= ==============
The accompanying notes are an integral part of these financial statements. 10 11 DEL TACO INCOME PROPERTIES IV STATEMENTS OF INCOME
YEAR ENDED DECEMBER 31 1996 1995 1994 ------------ ------------ ------------ REVENUES: Rent (Note 4) $361,980 $275,561 $273,076 Interest 1,194 1,068 1,592 Other 50 125 200 ------------ ------------ ------------ 363,224 276,754 274,868 ------------ ------------ ------------ EXPENSES: General and administrative 40,251 38,307 35,449 Depreciation 103,750 103,750 103,750 ------------ ------------ ------------ 144,001 142,057 139,199 ------------ ------------ ------------ Net Income $219,223 $134,697 $135,669 ============ ============ ============ Net Income per Limited Partnership Unit (Note 1) $1.31 $.81 $.81 ===== ==== ====
The accompanying notes are an integral part of these financial statements. 11 12 DEL TACO INCOME PROPERTIES IV STATEMENT OF CHANGES IN PARTNERS' EQUITY THREE YEARS ENDED DECEMBER 31, 1996
Limited Partners -------------------------- General Units Amount Partner Total ------------- ------------- ------------- ------------- Balance, December 31, 1993 165,415 $2,668,325 $(4,501) $2,663,824 Net income 134,312 1,357 135,669 Cash distributions (Note 7) (332,914) (3,363) (336,277) ------------- ------------- ------------- ------------- Balance, December 31, 1994 165,415 2,469,723 (6,507) 2,463,216 Net income 133,350 1,347 134,697 Cash distributions (Note 7) (240,586) (2,426) (243,012) ------------- ------------- ------------- ------------- Balance, December 31, 1995 165,415 2,362,487 (7,586) 2,354,901 Net income 217,031 2,192 219,223 Cash distributions (Note 7) (285,862) (2,887) (288,749) ------------- ------------- ------------- ------------- Balance, December 31, 1996 165,415 $2,293,656 $(8,281) $2,285,375 ============= ============= ============= =============
The accompanying notes are an integral part of these financial statements. 12 13 DEL TACO INCOME PROPERTIES IV STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31 1996 1995 1994 ------------ ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $219,223 $134,697 $135,669 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 103,750 103,750 103,750 Increase (decrease) in payable to Limited Partner 1,387 (583) (3,780) (Increase) decrease in receivable from General Partner (31,471) 2,909 (1,131) Decrease in accounts payable 2,175 825 - ------------ ------------ ------------ Net cash provided by operating activities 295,064 241,598 235,508 CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions to partners (288,749) (243,012) (336,277) ------------ ------------ ------------ Net increase (decrease) in cash 6,315 (1,414) (101,769) Beginning cash balance 73,542 74,956 176,725 ------------ ------------ ------------ Ending cash balance $79,857 $73,542 $74,956 ============ ============ ============
The accompanying notes are an integral part of these financial statements. 13 14 DEL TACO INCOME PROPERTIES IV NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES THE PARTNERSHIP: Del Taco Income Properties IV (a California limited partnership) was formed on March 23, 1987, for the purpose of acquiring real property in California for construction of three Mexican-American restaurants to be leased under long-term agreements to Del Taco, Inc. (General Partner for operation under the Del Taco trade name). As of July 13, 1990, all three restaurants had commenced operation on acquired properties. BASIS OF ACCOUNTING: The Partnership utilizes the accrual method of accounting for transactions relating to the business of the Partnership. Distributions are made to the General and Limited Partners in accordance with the provisions of the Partnership Agreement (see Note 2). 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. 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 6). NET INCOME PER LIMITED PARTNERSHIP UNIT: Net income per Limited Partnership Unit is calculated based upon 165,415 weighted average Units outstanding for all years presented. USE OF ESTIMATES: The preparation of the financial statements in conformity with generally accepted accounting principles 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 period. Actual results could differ from those estimates. 14 15 DEL TACO INCOME PROPERTIES IV NOTES TO FINANCIAL STATEMENTS - CONTINUED DECEMBER 31, 1996 NOTE 2 - PARTNERS' EQUITY Pursuant to the Partnership Agreement, annual partnership net 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 - SITE SELECTION AND DEVELOPMENT FEE Under terms of the Partnership Agreement, the General Partner is entitled to receive a fee in an amount equal to five percent of the gross proceeds of the offering. The fee shall be for services rendered in connection with site selection and the design and supervision of construction of improvements to acquired properties. One percent of the gross proceeds of the offering has been paid to the General Partner. The remaining four percent of this fee shall be earned at the time the services are rendered, but shall not be paid and shall be subordinated to the Limited Partners' interests until all restaurants have opened and the Limited Partners have received certain minimum returns on their investment, as required by the Partnership Agreement. It is the policy of the Partnership to accrue the site selection and development fee as an obligation to the General Partner. No fees were earned for such services during 1996, 1995 and 1994. NOTE 4 - LEASING ACTIVITIES The Registrant leases certain properties for operation of restaurants to Del Taco, Inc. (General Partner) on a triple net basis. The leases are for terms of 32 years commencing with the completion of the restaurant facility located on each property and require monthly rentals equal to 12 percent of the gross sales of the restaurants. There is no minimum rental under any of the leases. The Registrant had a total of three Properties leased to Del Taco as of December 31, 1996, 1995 and 1994 (Del Taco, in turn, has subleased one of the restaurants to a Del Taco franchisee). Rental revenue for the year ended December 31, 1996 was higher than 1995 and 1994 due to the earning of $87,490 of supplemental rent, as provided for in the lease agreements, based on the operating results of the individual restaurants. 15 16 DEL TACO INCOME PROPERTIES IV NOTES TO FINANCIAL STATEMENTS - CONTINUED DECEMBER 31, 1996 NOTE 5 - RELATED PARTIES The receivable from Del Taco consists of rent accrued for the month of December 1996 as well as supplemental rent. These amounts were collected on January 17, 1997. The General Partner received $2,887 in distributions relating to its one percent interest in the Registrant for the year ended December 31, 1996. Del Taco, Inc. 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, Inc. for operation under the Del Taco trade name. Partners Network Corp., a California corporation ("PNC"), which is wholly-owned by the same principals who own the Dealer Manager, who was primarily responsible for selling Limited Partnership Units, is the Special Limited Partner of the Partnership, as defined in the Partnership Agreement. PNC will monitor the Partnership investments and perform services in connection with the disposition of properties in the future. In return for such services, PNC will be entitled to receive certain subordinated distributions and payments. 16 17 DEL TACO INCOME PROPERTIES IV NOTES TO FINANCIAL STATEMENTS - CONTINUED DECEMBER 31, 1996 NOTE 6 - INCOME TAXES A reconciliation of financial statement net income to taxable income for each of the periods is as follows:
1996 1995 1994 ----------- ----------- ----------- Net income per financial statements $219,223 $134,697 $135,669 Excess book depreciation 27,151 20,124 19,930 Amortization of capitalized startup costs -- -- (2,624) ----------- ----------- ----------- Taxable income $246,374 $154,821 $152,975 =========== =========== ===========
A reconciliation of partnership equity per the financial statements to net worth for tax purposes as of December 31, 1996, is as follows: Partners' equity per financial statements $2,285,375 Issue costs of Limited Partnership Units capitalized for tax purposes 579,259 Excess tax depreciation (38,569) Other -- ---------- Net worth for tax purposes $2,826,065 ==========
17 18 DEL TACO INCOME PROPERTIES IV NOTES TO FINANCIAL STATEMENTS - CONTINUED DECEMBER 31, 1996 NOTE 7 - CASH DISTRIBUTIONS TO LIMITED PARTNERS Cash distributions paid to Limited Partners for the three years ended December 31, 1996 were as follows:
Weighted Number of Distributions Average Units per Limited Number of Outstanding Partnership Unit Units at the End of Quarter Ended Outstanding Quarter ------------------ --------------- --------------- September 30, 1993 $ .21 165,415 165,415 December 31, 1993 .62 165,415 165,415 March 31, 1994 .27 165,415 165,415 June 30, 1994 .49 165,415 165,415 September 30, 1994 .41 165,415 165,415 ------ Total paid in 1994 $ 2.00 ====== December 31, 1994 $ .40 165,415 165,415 March 31, 1995 .33 165,415 165,415 June 30, 1995 .31 165,415 165,415 September 30, 1995 .41 165,415 165,415 ------ Total paid in 1995 $ 1.45 ====== December 31, 1995 $ .40 165,415 165,415 March 31, 1996 .32 165,415 165,415 June 30, 1996 .65 165,415 165,415 September 30, 1996 .37 165,415 165,415 ------ Total paid in 1996 $ 1.74 ======
Cash distributions per Limited Partnership Unit were calculated based upon the weighted average number of units outstanding for each quarter and were paid from operations. Cash distributions for the quarter ended December 31, 1996 amounted to $.41 per Limited Partnership Unit and were paid January 31, 1997. 18 19 PART III ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT'S GENERAL PARTNER (a) & (b) The executive officers and directors of the General Partner and their ages are set forth below:
Name Title Age - ---- ----- --- Kevin K. Moriarty Director, Chairman and Chief Executive Officer 50 Paul W. Hitzelberger Executive Vice President, Brand Strategy and Franchise Relations/Development 52 Robert J. Terrano Executive Vice President and Chief Financial Officer 41 James D. Stoops Executive Vice President, Operations 44 Janet D. Simmons Senior Vice President, Purchasing 40 Michael L. Annis Vice President, Secretary and General Counsel 50 C. Douglas Mitchell Vice President and Corporate Controller 46
The above referenced executive officers and directors of the General Partner will hold office until the annual meeting of its shareholders and directors, which is scheduled for the later part of 1997. (c) None (d) No family relationship exists between any such director or executive officer of the General Partner. (e) The following is an account of the business experience during the past five years of each such director and executive officer: 19 20 Kevin K. Moriarty, Director, Chairman and Chief Executive Officer of Del Taco, Inc. Mr. Moriarty began his career with Burger King Corporation in 1974 in Operations Unit Management. In 1983, he was promoted to Area Manager in New York, and was subsequently promoted to the Regional Vice President, Chicago Region in 1985. In 1988, he became Executive Vice President and General Manager of the North Central Division. Mr. Moriarty served in that position until 1990 when he joined Del Taco, Inc. as President and Chief Executive Officer on July 31, 1990. Mr. Moriarty has served as a Director of the General Partner since 1990. Paul W. Hitzelberger, Executive Vice President, Brand Strategy and Franchise Relations/Development of Del Taco, Inc. He was appointed to his current position in December 1995. Mr. Hitzelberger has responsibility for franchise development, relations and training and will oversee public relations and training for the corporation. From 1991 to 1995, Mr. Hitzelberger was Executive Vice President, Marketing of Del Taco, Inc. From September 1988 through September 1989, Mr. Hitzelberger was Chief Executive Officer of Environmental Marketing Group. Prior to that, Mr. Hitzelberger was a Vice President of Del Taco, Inc. Prior to joining Del Taco, Inc., he served as Vice President - Marketing at the department store division of Lucky Stores, Inc., a major supermarket retailer. Prior to his position with Lucky, Mr. Hitzelberger held various positions in marketing and retailing at Wallpapers to Go, Inc., a division of General Mills, Inc., and Coast to Coast Stores, Inc. a subsidiary of Household Merchandising, Inc. Mr. Hitzelberger received a Master of Business Administration degree from Loyola University in Chicago, Illinois. Robert J. Terrano, Executive Vice President and Chief Financial Officer of Del Taco, Inc. From May 1994 to April 1995, Mr. Terrano served as Chief Financial Officer for Denny's, Inc. in Spartanburg, S.C. From August 1983 to May 1994, he served with Burger King Corporation, Miami Florida, in a variety of positions, most recently as Division Controller. Mr. Terrano joined Del Taco, Inc. in April 1995. James D. Stoops, Executive Vice President, Operations of Del Taco, Inc. 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. Simmons, Senior Vice President, Purchasing of Del Taco, Inc. From 1979 to 1986, Ms. Simmons was with Denny's Inc. 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. Simmons 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. Simmons has a Bachelor of Science degree in Foods and Nutrition from Cal State Polytechnic University in Pomona, California. 20 21 Michael L. Annis, Vice President, Secretary and General Counsel of Del Taco, Inc. From 1981 to 1986 Mr. Annis served as Regional Real Estate Manager and Director of Real Estate Services with Taco Bell, Inc. In 1986 he served as Regional General Manager with Quaker State Minit Lube. In January of 1987 Mr. Annis joined Red Robin International, Inc. as General Counsel and was subsequently promoted to Vice President/Secretary and later Vice President Real Estate Development/Secretary and General Counsel, the position he held until joining Del Taco, Inc. in December of 1993. Mr. Annis received his J.D. Degree from Whittier College. C. Douglas Mitchell, Vice President and Corporate Controller. Mr. Mitchell joined Del Taco, Inc. in August of 1994 as Controller and was promoted to his current position in January 1996. From 1990 to 1994, Mr. Mitchell was a Senior Audit Manager with Coopers & Lybrand. Prior to 1990, Mr. Mitchell held various positions in finance and accounting with the Geneva Companies (a subsidiary of Chemical Bank), Zaremba Corporation (a real estate developer) and The Dexter Corporation (an international manufacturer of specialty materials). Mr. Mitchell has a Bachelor of Science degree with a major in accounting from the University of Southern California. ITEM 11. MANAGEMENT REMUNERATION AND TRANSACTIONS The Registrant has no executive officers or directors and pays no direct remuneration to any executive officer or director of its General Partner. The Registrant has not issued any options or stock appreciation rights to any executive officer or director of its General Partner, nor does the Registrant propose to pay any annuity, pension or retirement benefits to any executive officer or director of its General Partner. The Registrant has no plan, nor does the Registrant 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 Registrant, nor was any person known of by the Registrant to own of record and beneficially, or beneficially only, more than five percent of such securities. (b) Neither Del Taco, Inc., nor any executive officer or director of Del Taco, Inc. owns any Limited Partnership Units of the Registrant. (c) The Registrant 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 Registrant, 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. 21 22 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS (a) No transactions have occurred between the Registrant and any executive officer or director of its General Partner. During 1996, the following transactions occurred between the Registrant and the General Partner pursuant to the terms of the Partnership Agreement. (1) The General Partner earned $2,192 as its one percent share of the net income of the Registrant. (2) The General Partner received $2,887 in distributions relating to its one percent interest in the Registrant. (b) During 1996, the Registrant 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 Registrant at any time during 1996 for any amount in excess of $60,000. (d) Not applicable. 22 23 PART IV ITEM 14(a)(1) AND (2). EXHIBITS, FINANCIAL STATEMENTS SCHEDULES, AND REPORTS ON FORM 8-K All schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted. (b) No reports on Form 8-K were filed during the last quarter of 1996. (c) Exhibits required by Item 601 of Regulation S-K: 1. Incorporated herein by reference, Restated Agreement of Limited Partnership of Del Taco Income Properties IV filed as Exhibit 3.01 to Registrant's Registration Statement on Form S-11 as filed with the Securities and Exchange Commission on June 5, 1987. 2. Incorporated herein by reference, Amendment to Restated Agreement of Limited Partnership of Del Taco Income Properties IV. 3. Incorporated herein by reference, Form of Standard Lease to be entered into by Registrant and Del Taco, Inc., as lessee, filed as Exhibit 10.02 to Registrant's Registration Statement on Form S-11 as filed with the Securities and Exchange Commission on June 5, 1987. 27. Financial Data Schedule. 23 24 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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 March 07, 1997 Kevin K. Moriarty -------------- ----------------- Kevin K. Moriarty Director, Chairman and Chief Executive Officer Date March 07, 1997 Michael L. Annis -------------- ---------------- Michael L. Annis Vice President, Secretary and General Counsel Date March 07, 1997 Robert J. Terrano -------------- ----------------- Robert J. Terrano Executive Vice President and Chief Financial Officer Date March 07, 1997 C. Douglas Mitchell -------------- ------------------- C. Douglas Mitchell Vice President and Corporate Controller
24 EX-27 2 FINANCIAL DATA SCHEDULE
5 12-MOS DEC-31-1996 JAN-01-1996 DEC-31-1996 79,857 400 51,558 0 0 131,815 3,011,349 713,798 2,429,366 6,038 0 0 0 0 2,285,375 2,429,366 0 363,224 0 144,001 0 0 0 219,223 0 219,223 0 0 0 219,223 1.31 1.31
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