<PAGE> 1
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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 2-80930
DEL TACO RESTAURANT PROPERTIES I
(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)
95-3852699
(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
December 17, 1982 are incorporated by reference into Part IV of this report.
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<PAGE> 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 8,751 Units aggregating
$4,375,500 through an offering of Limited Partnership Units from March 21, 1983
through March 20, 1984.
The Registrant has engaged in the business of acquiring sites in California for
the construction of six Mexican-American restaurants for long-term lease to Del
Taco, Inc. for operation under the Del Taco trade name. Each Property is leased
for 35 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 April 30, 2022,
unless terminated earlier by means provided therein.
Because the six 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 and
distributions of the Registrant. Limited Partners have no right to participate
in the management or conduct of such business and affairs.
2
<PAGE> 3
ITEM 2. PROPERTIES
The Registrant has acquired six Properties with proceeds obtained from the sale
of Limited Partnership Units:
<TABLE>
<CAPTION>
Date of
Date of Restaurant Commencement of
Address City, State Acquisition Constructed Operation(1)
- ------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Riverside Rialto, CA September 28, 60 seat with February 12, 1985
Avenue 1984 drive through
service window
Elden Moreno Valley, CA March 8, 1985 60 seat with June 30, 1985
Avenue drive through
service window
Foothill La Verne, CA April 16, 1985 60 seat with November 6, 1985
Boulevard drive through
service window
Baseline & Rancho Cucamonga, July 10, 1985 60 seat with November 26, 1985
Archibald CA drive through
service window
Elkhorn Sacramento, CA August 22, 1985 60 seat with January 15, 1986
Boulevard drive through
service window
Haven Rancho Cucamonga, September 20, 60 seat with February 14, 1986
Avenue CA 1985 drive through
service window
</TABLE>
(1) Commencement of operation is the first date Del Taco, Inc., as lessee,
operated the facility on the site as a Del Taco restaurant.
3
<PAGE> 4
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 6.99 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.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SECURITY
HOLDER MATTERS
The Registrant, a publicly-held Limited Partnership, sold 8,751 ($4,375,500)
Limited Partnership Units during the offering period ended March 20, 1984 and
currently has 995 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.
4
<PAGE> 5
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
For the Year Ended December 31,
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Rental Revenue $452,203 $436,262 $420,245 $421,178 $418,960
Interest and 2,902 2,729 2,729 3,281 1,511
other income
Net income 365,387 275,020 222,295 233,111 242,251
Net income
per limited
Partnership
Unit(1) 41.34 31.11 25.15 26.37 27.41
Cash Distributions
per Limited
Partnership
Unit(2)(3)(4)(5)(6) 44.82 45.70 58.70 18.49 55.34
Total Assets 2,543,173 2,569,140 2,700,433 2,993,046 2,938,465
Long-term
Obligations None None None None None
</TABLE>
(1) The net income per Limited Partnership Unit was calculated based upon
8,751 weighted average Units outstanding for all years presented.
(2) Cash distributions for the quarter ended December 31, 1992 amounted to
$11.68 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 $24.95 and were paid January 31, 1994 and
February 2, 1994, respectively.
(4) Cash distributions for the quarter ended December 31, 1994 amounted to
$11.70 per Limited Partnership Unit and were paid January 17, 1995. Five
distributions were disbursed during the year ended December 31, 1994.
5
<PAGE> 6
ITEM 6. SELECTED FINANCIAL DATA - Continued
(5) Cash distributions for the quarter ended December 31, 1995 amounted to
$11.46 per Limited Partnership Unit and were paid January 15, 1996. Four
distributions were disbursed during the year ended December 31, 1995.
(6) Cash distributions for the quarter ended December 31, 1996 amounted to
$12.63 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 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, and its sublessee as to one of the Properties, 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 (and, as to one
of the Properties, Del Taco's sub-lessee) 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.
6
<PAGE> 7
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - Continued
Results of Operations
The Registrant owns six Properties that are under long-term lease to Del Taco
for restaurant operations (Del Taco, in turn, has subleased two of the
restaurants to Del Taco franchisees, one of which is affiliated with Del Taco).
The Registrant receives rental revenues equal to 12 percent of restaurant sales.
The Registrant had rental revenues of $452,203 for the year ended December 31,
1996, representing an increase from the rental revenues of $436,262 in 1995.
Such increase is directly attributable to increased sales at the restaurants.
The property at Baseline and Archibald is subleased by Del Taco, Inc. to a
franchisee. In November 1996, the franchise agreement and the sublease on the
property at Baseline and Archibald were renewed for a 15 year term.
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
<TABLE>
<CAPTION>
Year Ended December 31,
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Accounting fees 36.02% 35.17% 38.84%
Distribution of
information to
Limited Partners 61.43 62.35 57.39
Legal fees -- -0.76 0.00
Other 2.55 3.24 3.77
------- ------- -------
100.00% 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 year ended December 31, general and administrative
expenses increased from $42,441 in 1995 to $45,943 in 1996 reflecting higher
costs for accounting and distribution of information to the limited Partners.
The Registrant incurred depreciation expense in the amount of $43,775 for the
year ended December 31, 1996, $121,530 for the year ended December 31, 1995 and
$157,376 for the year ended December 31, 1994. Depreciation expense decreased
because signs and equipment became fully depreciated during 1996 and 1995.
7
<PAGE> 8
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - Continued
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.
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.
8
<PAGE> 9
ITEM 8. FINANCIAL STATEMENTS
PART I. INFORMATION
<TABLE>
<CAPTION>
INDEX PAGE NUMBER
----- -----------
<S> <C>
Report of Independent Public Accountants 10
Balance Sheets at December 31, 1996 and 1995 11
Statements of Income for the years ended
December 31, 1996, 1995 and 1994 12
Statement of Changes in Partners' Equity for
the three years ended December 31, 1996 13
Statements of Cash Flows for the years ended
December 31, 1996, 1995 and 1994 14
Notes to Financial Statements 15-19
</TABLE>
9
<PAGE> 10
ARTHUR ANDERSEN LLP
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To the Partners of
Del Taco Restaurant Properties I:
We have audited the accompanying balance sheets of DEL TACO RESTAURANT
PROPERTIES I (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
I 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
<PAGE> 11
DEL TACO RESTAURANT PROPERTIES I
BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31
1996 1995
--------------- ---------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 130,996 $ 115,012
Receivable from Del Taco, Inc. (Note 5) 38,478 36,654
Deposits 600 600
--------------- ---------------
Total current assets 170,074 152,266
--------------- ---------------
PROPERTY AND EQUIPMENT, AT COST (NOTE 1)
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 1,628,543 1,584,768
--------------- ---------------
2,373,099 2,416,874
--------------- ---------------
$ 2,543,173 $ 2,569,140
=============== ===============
LIABILITIES AND PARTNERS' EQUITY
CURRENT LIABILITIES:
Payable to Limited Partners $ 11,319 $ 8,898
Accounts Payable 3,000 907
--------------- ---------------
Total current liabilities 14,319 9,805
--------------- ---------------
PARTNERS' EQUITY (NOTE 2)
Limited Partners 2,263,579 2,293,755
General Partner - Del Taco, Inc. 265,275 265,580
--------------- ---------------
2,528,854 2,559,335
--------------- ---------------
$ 2,543,173 $ 2,569,140
=============== ===============
</TABLE>
The accompanying notes are an integral part of
these financial statements.
11
<PAGE> 12
DEL TACO RESTAURANT PROPERTIES I
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31
1996 1995 1994
------------ ------------ ------------
<S> <C> <C> <C>
REVENUES:
Rent (Note 4) $ 452,203 $ 436,262 $ 420,245
Interest 2,265 2,279 2,429
Other 637 450 300
------------ ------------ ------------
455,105 438,991 422,974
------------ ------------ ------------
EXPENSES:
General and administrative 45,943 42,441 43,303
Depreciation 43,775 121,530 157,376
------------ ------------ ------------
89,718 163,971 200,679
------------ ------------ ------------
Net Income $ 365,387 $ 275,020 $ 222,295
============ ============ ============
Net Income per Limited
Partnership Unit (Note 1) $41.34 $31.11 $25.15
============ ============ ============
</TABLE>
The accompanying notes are an integral part of
these financial statements.
12
<PAGE> 13
DEL TACO RESTAURANT PROPERTIES I
STATEMENT OF CHANGES IN PARTNERS' EQUITY
THREE YEARS ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
Limited Partners
------------------------- General
Units Amount Partner Total
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Balance, December 31, 1993 8,751 $2,715,115 $269,837 $2,984,952
Net income 220,072 2,223 222,295
Cash distributions (Note 7) (513,793) (5,191) (518,984)
----------- ----------- ----------- -----------
Balance, December 31, 1994 8,751 2,421,394 266,869 2,688,263
Net income 272,270 2,750 275,020
Cash distributions (Note 7) (399,909) (4,039) (403,948)
----------- ----------- ----------- -----------
Balance, December 31, 1995 8,751 2,293,755 265,580 2,559,335
Net income 361,733 3,654 365,387
Cash distributions (Note 7) (391,909) (3,959) (395,868)
----------- ----------- ----------- -----------
Balance, December 31, 1996 8,751 $2,263,579 $265,275 $2,528,854
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of
these financial statements.
13
<PAGE> 14
DEL TACO RESTAURANT PROPERTIES I
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $365,387 $275,020 $222,295
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation 43,775 121,530 157,376
Increase (decrease) in payable to
Limited Partners 2,421 (3,272) 4,076
(Increase) decrease in receivable
from General Partner (1,824) 4,056 (2,834)
Increase in accounts
payable 2,093 906 --
----------- ----------- -----------
Net cash provided by operating
activities 411,852 398,240 380,913
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions to partners (395,868) (403,948) (518,984)
----------- ----------- -----------
Net increase (decrease) in cash 15,984 (5,708) (138,071)
Beginning cash balance 115,012 120,720 258,791
----------- ----------- -----------
Ending cash balance $130,996 $115,012 $120,720
=========== =========== ===========
</TABLE>
The accompanying notes are an
integral part of these financial statements.
14
<PAGE> 15
DEL TACO RESTAURANT PROPERTIES I
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
THE PARTNERSHIP: Del Taco Restaurant Properties I (a California limited
partnership) was formed on November 30, 1982, for the purpose of acquiring real
property in California for construction of six 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 February 14, 1986, all six
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 based upon the weighted average number of Units outstanding during the period
which amounted to 8,751 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.
15
<PAGE> 16
DEL TACO RESTAURANT PROPERTIES I
NOTES TO FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1996
NOTE 2 - PARTNERS' EQUITY
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.
In 1986, the General Partner contributed additional capital of $280,000 to the
Partnership in order to provide funds necessary to complete the sixth and final
restaurant.
NOTE 3 - SITE ACQUISITION AND DEVELOPMENT FEE
Under terms of the Partnership Agreement, the General Partner is entitled to
receive a site acquisition and development fee in an amount equal to the lesser
of five percent of the cost of the related property or $30,000. The fee shall be
for service rendered in connection with site selection and the design and
supervision of construction of improvements to acquired properties. No site
acquisition and development fees were paid in 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
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 December 31, 1996, 1995
and 1994, two of which have been subleased to Del Taco franchisees (one of which
is affiliated with Del Taco, Inc.)
16
<PAGE> 17
DEL TACO RESTAURANT PROPERTIES I
NOTES TO FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1996
NOTE 4 - LEASING ACTIVITIES - Continued
The property at Baseline and Archibald is subleased by Del Taco, Inc. to a
franchisee. In November 1996, the franchise agreement and the sublease on the
property at Baseline and Archibald were renewed for a 15 year term.
NOTE 5 - RELATED PARTIES
The receivable from Del Taco consists of rent accrued for the month of December
1996. The rent receivable was collected on January 17, 1997.
The General Partner received $3,959 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.
17
<PAGE> 18
DEL TACO RESTAURANT PROPERTIES I
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:
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Net income per financial statements $365,387 $275,020 $222,295
Excess book depreciation (4,780) 72,975 108,695
-------- -------- --------
Taxable income $360,607 $347,995 $330,990
======== ======== ========
</TABLE>
A reconciliation of partnership equity per the financial statements to net worth
for tax purposes as of December 31, 1996, is as follows:
<TABLE>
<S> <C>
Partners' equity per financial
statements $2,528,854
Issue costs of Limited Partnership
Units capitalized for tax purposes 637,325
Excess tax depreciation (135,068)
Other 235
----------
Net worth for tax purposes $3,031,346
==========
</TABLE>
18
<PAGE> 19
DEL TACO RESTAURANT PROPERTIES I
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:
<TABLE>
<CAPTION>
Weighted Number of
Distributions Average Units
per Limited Number of Outstanding
Partnership Units at the End of
Quarter Ended Unit Outstanding Quarter
------------------ --------------- ---------------
<S> <C> <C> <C>
September 30, 1993 $ 8.95 8,751 8,751
December 31, 1993 16.00 8,751 8,751
March 31, 1994 8.91 8,751 8,751
June 30, 1994 13.15 8,751 8,751
September 30, 1994 11.69 8,751 8,751
------
Total paid in 1994 $58.70
======
December 31, 1994 $11.70 8,751 8,751
March 31, 1995 10.90 8,751 8,751
June 30, 1995 10.47 8,751 8,751
September 30, 1995 12.63 8,751 8,751
------
Total paid in 1995 $45.70
======
December 31, 1995 $11.46 8,751 8,751
March 31, 1996 10.68 8,751 8,751
June 30, 1996 10.21 8,751 8,751
September 30, 1996 12.47 8,751 8,751
------
Total paid in 1996 $44.82
======
</TABLE>
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 $12.63 per Limited Partnership Unit and were paid January 31, 1997.
19
<PAGE> 20
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:
<TABLE>
<CAPTION>
Name Title Age
- ---- ----- ---
<S> <C> <C>
Kevin K. Moriarty Director, Chairman and Chief Executive Officer 50
Paul W. Hitzelberger Executive Vice President, Brand Strategy and
Franchise Relations/Development 52
Robert 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
</TABLE>
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:
20
<PAGE> 21
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. Previously, Mr. Hitzelberger was Executive Vice President,
Marketing from February 1991 and Vice President, Marketing from 1989 to 1991.
Mr. Hitzelberger has responsibility for franchise development, relations and
training and will oversee public relations and training for the corporation.
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 Incorporated. She served in the Research
and Development department in a variety of positions until 1982 when she was
promoted to the position of Purchasing Agent. Ms. 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.
21
<PAGE> 22
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.
22
<PAGE> 23
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.
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 $3,654 as its one percent share of the
net income of the Registrant.
(2) The General Partner received $3,959 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.
23
<PAGE> 24
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 Certificate and Agreement
of Limited Partnership of Del Taco Restaurant Properties I filed as
Exhibit 3.01 to Registrant's Registration Statement on Form S-11 as
filed with the Securities and Exchange Commission on December 17,
1982.
2. Incorporated herein by reference, Amendment to Restated Certificate
and Agreement of Limited Partnership of Del Taco Restaurant
Properties I.
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 December 17,
1982.
27. Financial Data Schedule.
24
<PAGE> 25
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 RESTAURANT PROPERTIES I
a California limited partnership
Registrant
Del Taco, Inc.
General Partner
<TABLE>
<CAPTION>
<S> <C>
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
</TABLE>
25
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-01-1996
<CASH> 130,996
<SECURITIES> 600
<RECEIVABLES> 38,478
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 170,074
<PP&E> 4,001,642
<DEPRECIATION> 1,628,543
<TOTAL-ASSETS> 2,543,173
<CURRENT-LIABILITIES> 14,319
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,528,854
<TOTAL-LIABILITY-AND-EQUITY> 2,543,173
<SALES> 0
<TOTAL-REVENUES> 455,105
<CGS> 0
<TOTAL-COSTS> 89,718
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 365,387
<INCOME-TAX> 0
<INCOME-CONTINUING> 365,387
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 365,387
<EPS-PRIMARY> 41.34
<EPS-DILUTED> 41.34
</TABLE>
