<PAGE> 1
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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, 1995
-------------------------------------------------
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
---------------------- ----------------------
COMMISSION FILE NO. 2-80930
DEL TACO RESTAURANT PROPERTIES I
A CALIFORNIA LIMITED PARTNERSHIP
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CALIFORNIA 95-3852699
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
1800 W. KATELLA AVENUE, ORANGE, CALIFORNIA 92667
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(714) 744-4334
(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
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<PAGE> 2
INDEX
DEL TACO RESTAURANT PROPERTIES I
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE NUMBER
- ------------------------------ -----------
<S> <C>
Item 1. Financial Statements and Supplementary Data
Balance Sheets at September 30, 1995 (Unaudited) and
December 31, 1994 3
Statements of Income for the three and nine months ended
September 30, 1995 and 1994 (Unaudited) 4
Statements of Cash Flows for the nine months ended
September 30, 1995 and 1994 (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
</TABLE>
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<PAGE> 3
<TABLE>
<CAPTION>
DEL TACO RESTAURANT PROPERTIES I
BALANCE SHEETS
September 30 December 31
1995 1994
------------ ----------
(Unaudited)
<S> <C> <C>
ASSETS
------
CURRENT ASSETS:
Cash $ 127,057 $ 120,720
Receivable from General Partner (Note 4) 36,458 40,709
Deposits 600 600
---------- ----------
Total current assets 164,115 162,029
---------- ----------
PROPERTY AND EQUIPMENT, at cost
Land and improvements 1,852,482 1,852,482
Buildings and improvements 1,013,134 1,013,134
Machinery and equipment 1,136,026 1,136,026
---------- ----------
4,001,642 4,001,642
Less--accumulated depreciation 1,569,929 1,463,238
---------- ----------
2,431,713 2,538,404
---------- ----------
$2,595,828 $2,700,433
========== ==========
LIABILITIES AND PARTNERS' EQUITY
--------------------------------
CURRENT LIABILITIES:
Payable to Limited Partners $ 8,711 $ 12,170
Accounts payable 4,188 -
---------- ----------
Total current liabilities 12,899 12,170
---------- ----------
PARTNERS' EQUITY
Limited Partners 2,317,113 2,421,394
General Partner-Del Taco, Inc. 265,816 266,869
---------- ----------
2,582,929 2,688,263
---------- ----------
$2,595,828 $2,700,433
========== ==========
</TABLE>
The accompanying notes are an
integral part of these financial statements
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<PAGE> 4
DEL TACO RESTAURANT PROPERTIES I
STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
REVENUES:
Rent (Notes 3 and 4) $113,958 $110,565 $326,854 $308,945
Interest 583 518 1,707 1,787
Other 100 125 325 300
-------- -------- -------- --------
114,641 111,208 328,886 311,032
-------- -------- -------- --------
EXPENSES:
General and administrative 6,923 6,803 35,239 38,207
Depreciation 31,322 39,345 106,690 118,032
-------- -------- -------- --------
38,245 46,148 141,929 156,239
-------- -------- -------- --------
Net income $ 76,396 $ 65,060 $186,957 $154,793
======== ======== ======== ========
Net income per Limited
Partnership Unit (Note 2) $ 8.64 $ 7.36 $ 21.15 $ 17.51
======== ======== ======== ========
</TABLE>
The accompanying notes are an
integral part of these financial statements.
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<PAGE> 5
DEL TACO RESTAURANT PROPERTIES I
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30
1995 1994
---- ----
<S> <C> <C>
SOURCE OF CASH:
From operations:
Net income $ 186,957 $ 154,793
Depreciation 106,690 118,032
--------- ---------
Total cash provided from operations 293,647 272,825
Cash distributions 292,290 415,623
--------- ---------
Excess (deficiency) of cash
generated over distributions 1,357 (142,798)
Increase in payable to Limited Partners - 1,288
Decrease in receivable from General Partner 4,251 -
Increase in accounts payable 4,188 1,473
--------- ---------
9,796 (140,037)
--------- ---------
USE OF CASH:
Decrease in payable to Limited Partners 3,459 -
Increase in receivable from General Partner - 991
--------- ---------
Increase/(decrease) in cash during period 6,337 (141,028)
Beginning cash balance 120,720 258,791
--------- ---------
Ending cash balance $ 127,057 $ 117,763
========= =========
</TABLE>
The accompanying notes are an
integral part of these financial statements.
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<PAGE> 6
DEL TACO RESTAURANT PROPERTIES I
NOTES TO FINANCIAL STATEMENTS
September 30, 1995
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, 1994. In the
opinion of management, all adjustments (consisting of normal recurring
accruals) necessary to present fairly the partnership's financial position at
September 30, 1995, the results of operations and cash flows for the nine month
periods ended September 30, 1995 and 1994 have been included. Operating
results for the three and nine months ended September 30, 1995 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1995.
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
8,751 in 1995 and 1994.
Pursuant to the Partnership Agreement, annual partnership net income is
allocated one percent to the General Partner and 99 percent to the Limited
Partners. A Partnership net loss in any year will be allocated 24 percent to
the General Partner and 76 percent to the Limited Partners until the losses so
allocated equal income previously allocated. Any additional losses will be
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. Additional gains will be allocated
24 percent to the General Partner and 76 percent to the Limited Partners.
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<PAGE> 7
DEL TACO RESTAURANT PROPERTIES I
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 1995
NOTE 3 - LEASING ACTIVITIES
The Registrant leases (the "Leases") certain properties (the "Properties") for
operation of restaurants to Del Taco, Inc. ("General Partner") on a triple net
basis. The Leases are for terms of 35 years commencing with the completion of
the restaurant facility located on each Property and require monthly rentals
equal to 12 percent of the gross sales of the restaurants. There is no minimum
rental under any of the Leases. The Registrant had a total of six Properties
leased as of September 30, 1995 and 1994, two of which have been subleased to
Del Taco franchisees (one of which is affiliated with Del Taco, Inc.)
NOTE 4 - TRANSACTIONS WITH DEL TACO
The receivable from General Partner consists primarily of rent accrued for the
month of September. The September rent receivable was collected on October 20,
1995.
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 10, 1995, a distribution to the Limited Partners of $110,541, or
approximately $12.63 per Limited Partnership Unit, was approved. Such
distribution was paid on October 16, 1995. The General Partner also received a
distribution of $1,117 with respect to its 1% partnership interest.
-7-
<PAGE> 8
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Liquidity and Capital Resources
The Registrant commenced offering of Limited Partnership Units on March 21,
1983. By March 20, 1984, the sale of such Units provided a total
capitalization for the Registrant of $4,375,500. Fifteen percent of the cash
received from the sale of Limited Partnership Units was used to pay commissions
to brokers and to reimburse the General Partner for offering costs incurred.
The remaining funds were expended for the acquisition of sites and construction
of six restaurants. In 1985, the first four restaurants opened for business
and two additional restaurants were opened in 1986. Approximately $4,002,000
was expended for such purposes.
Since the six restaurants owned by the Registrant opened, cash flow from Lease
payments received from Del Taco, the Registrant's General Partner, which leases
all six 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 six Mexican-American restaurants that are under long-term
lease to its General Partner for operation under the Del Taco trade name. The
Registrant receives rental revenues equal to 12 percent of restaurant sales.
For the three months ended September 30, rental revenues increased from
$110,565 in 1994 to $113,958 in 1995. For the nine months ended September 30,
rental revenues increased from $308,945 in 1994 to $326,854 in 1995. Such
increases are directly attributable to increased sales at the restaurants.
The following table sets forth the percentage relationship to total general and
administrative expenses of items included in the Registrant's Statements of
Income:
-8-
<PAGE> 9
<TABLE>
<CAPTION>
Percentage of Total
General & Administrative Expense
---------------------------------
Nine Months Ended
June 30
1995 1994
------- --------
<S> <C> <C>
Accounting fees 42.55% 44.02%
Distribution of
information to
Limited Partners 55.38 53.26
Other 2.07 2.72
------ ------
100.00% 100.00%
====== ======
</TABLE>
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 $6,803 in 1994 to $6,923 in 1995. For
the nine months ended September 30, general and administrative expenses
decreased from $38,207 in 1994 to $35,239 in 1995. For the three months ended
September 30, the Registrant incurred deprecation expense in the amount of
$31,322 in 1995 and $39,345 in 1994. The Registrant incurred depreciation
expense of $106,690 and $118,032 for the nine months ended September 30, 1995
and 1994, respectively. Depreciation expense decreased beacause signs and food
processing equipment (included as part of machinery and equipment) became fully
depreciated during 1995.
For the three months ended September 30, revenues increased by $3,433 while
expenses decreased by $7,903 resulting in an increase in net income from
$65,060 in 1994 to $76,396 in 1995. For the nine months ended September 30,
revenues increased by $17,854 while expenses decreased by $14,310 resulting in
an increase in the Registrant's net income from $154,793 for the nine months
ended September 30, 1994 to $186,957 for the corresponding period in 1995.
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.
-9-
<PAGE> 10
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(b) No reports on Form 8-K were filed during the six months ended
September 30, 1995.
(C) Exhibit 27 - Financial Data Schedule
-10-
<PAGE> 11
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DEL TACO RESTAURANT PROPERTIES I
(a California limited partnership)
Registrant
Del Taco, Inc.
General Partner
Date: October 24 1995 /s/ Robert J. Terrano
---------------------------------------
Robert J. Terrano
Executive Vice President,
Chief Financial Officer
(duly authorized to sign on
behalf of the Registrant)
-11-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 127,057
<SECURITIES> 0
<RECEIVABLES> 36,458
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 164,115
<PP&E> 4,001,642
<DEPRECIATION> 1,569,929
<TOTAL-ASSETS> 2,595,828
<CURRENT-LIABILITIES> 12,899
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 2,582,929
<TOTAL-LIABILITY-AND-EQUITY> 2,595,828
<SALES> 0
<TOTAL-REVENUES> 328,886
<CGS> 0
<TOTAL-COSTS> 141,929
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 186,957
<INCOME-TAX> 0
<INCOME-CONTINUING> 186,957
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 186,957
<EPS-PRIMARY> 21.15
<EPS-DILUTED> 21.15
</TABLE>
