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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 JUNE 30, 2000 .
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)
<TABLE>
<S> <C>
CALIFORNIA 95-3852699
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
23041 AVENIDA DE LA CARLOTA, LAGUNA HILLS, CALIFORNIA 92653
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
(949) 462-9300
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES X NO ___
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INDEX
DEL TACO RESTAURANT PROPERTIES I
PAGE NUMBER
-----------
PART I. FINANCIAL INFORMATION PAGE NUMBER
Item 1. Financial Statements and Supplementary Data
Balance Sheets at June 30, 2000 (Unaudited) and
December 31, 1999 3
Statements of Income for the three and six months ended
June 30, 2000 and 1999 (Unaudited) 4
Statements of Cash Flows for the six months ended
June 30, 2000 and 1999 (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
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DEL TACO RESTAURANT PROPERTIES I
BALANCE SHEETS
June 30, December 31,
2000 1999
------------ ----------
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash $ 167,341 $ 170,290
Receivable from General Partner 51,434 46,970
Deposits 600 600
---------- ----------
Total current assets 219,375 217,860
---------- ----------
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 1,781,745 1,759,859
---------- ----------
2,219,897 2,241,783
---------- ----------
$2,439,272 $2,459,643
========== ==========
LIABILITIES AND PARTNERS' EQUITY
CURRENT LIABILITIES:
Payable to Limited Partners $ 38,752 $ 31,001
Accounts payable 4,929 7,828
---------- ----------
Total current liabilities 43,681 38,829
---------- ----------
PARTNERS' EQUITY:
Limited Partners 2,131,538 2,156,509
General Partner-Del Taco, Inc. 264,053 264,305
---------- ----------
2,395,591 2,420,814
---------- ----------
$2,439,272 $2,459,643
========== ==========
The accompanying notes are an
integral part of these financial statements
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DEL TACO RESTAURANT PROPERTIES I
STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- ----------------------
2000 1999 2000 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
REVENUES:
Rent $144,883 $130,880 $279,134 $256,537
Interest 1,489 925 2,367 2,082
Other 75 175 375 600
-------- -------- -------- --------
146,447 131,980 281,876 259,219
-------- -------- -------- --------
EXPENSES:
General and administrative 9,621 9,935 30,875 31,026
Depreciation 10,943 10,943 21,886 21,886
-------- -------- -------- --------
20,564 20,878 52,761 52,912
-------- -------- -------- --------
Net income $125,883 $111,102 $229,115 $206,307
======== ======== ======== ========
Net income per limited
partnership unit $ 14.24 $ 12.57 $ 25.92 $ 23.34
======== ======== ======== ========
</TABLE>
The accompanying notes are an
integral part of these financial statements.
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DEL TACO RESTAURANT PROPERTIES I
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
-----------------------
2000 1999
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 229,115 $ 206,307
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 21,886 21,886
(Increase) decrease in receivable from General Partner (4,463) 3,234
Decrease in deposits -- 30
Increase in accounts payable and payable
to limited partners 4,851 2,085
--------- ---------
Net cash provided by operating activities 251,389 233,542
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions to partners (254,338) (247,447)
--------- ---------
Net decrease in cash (2,949) (13,905)
Beginning cash balance 170,290 162,979
--------- ---------
Ending cash balance $ 167,341 $ 149,074
========= =========
</TABLE>
The accompanying notes are an
integral part of these financial statements.
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DEL TACO RESTAURANT PROPERTIES I
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
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, 1999. In the opinion of
management, all adjustments (consisting of normal recurring accruals) necessary
to present fairly the partnership's financial position at June 30, 2000, the
results of operations and cash flows for the six month periods ended June 30,
2000 and 1999 have been included. Operating results for the three and six months
ended June 30, 2000 are not necessarily indicative of the results that may be
expected for the year ending December 31, 2000.
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 2000 and 1999.
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.
NOTE 3 - LEASING ACTIVITIES
The partnership leases certain properties for operation of restaurants to Del
Taco, Inc. 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.
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DEL TACO RESTAURANT PROPERTIES I
NOTES TO FINANCIAL STATEMENTS - CONTINUED
JUNE 30, 2000
NOTE 3 - LEASING ACTIVITIES - CONTINUED
For the three months ended June 30, 2000, the five restaurants operated by Del
Taco, for which the partnership is the lessor, had combined, unaudited sales of
$1,005,834 and net income of $61,342 as compared to $905,803 and $46,489
respectively, for the corresponding period in 1999. Net income by restaurant
includes charges for general and administrative expenses incurred in connection
with supervision of restaurant operations and interest expense (1999 combined,
unaudited net income amounts have been changed to measure net income on a
consistent basis with the year 2000 presentation). For the three months ended
June 30, 2000, the one restaurant operated by a Del Taco franchisee, for which
the partnership is the lessor, had unaudited sales of $201,525 as compared with
$184,867 during the same period in 1999.
For the six months ended June 30, 2000, the five restaurants operated by Del
Taco, for which the partnership is the lessor, had combined, unaudited sales of
$1,933,897 and net income of $105,100 as compared to $1,779,012 and $78,688
respectively, for the corresponding period in 1999. For the six months ended
June 30, 2000, the one restaurant operated by a Del Taco franchisee, for which
the partnership is the lessor, had unaudited sales of $392,223 as compared with
$358,800 during the same period in 1999.
For the three months and six months ended June 30, 2000, the Elkhorn Boulevard
restaurant in Sacramento, California reported net income of $629 and a net loss
of $3,187 as compared to net losses of $1,058 and $4,941 for the corresponding
periods in 1999.
NOTE 4 - TRANSACTIONS WITH DEL TACO
The receivable from General Partner consists primarily of rent accrued for the
month of June. The June rent receivable was collected on July 13, 2000.
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.
In addition, see Note 5 with respect to certain distributions to the General
Partner.
NOTE 5 - DISTRIBUTIONS
On July 17, 2000, a distribution to the limited partners of $122,354, or
approximately $13.98 per limited partnership unit, was approved. Such
distribution was paid on July 18, 2000. The General Partner also received a
distribution of $1,236 with respect to its 1% partnership interest.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Liquidity and Capital Resources
The partnership offered limited partnership units for sale between March 1983
and March 1984. 15% of the $4.375 million raised through sale of limited
partnership units was used to pay commissions to brokers and to reimburse the
General Partner for offering costs incurred. Approximately $4 million of the
remaining funds were used to acquire sites and build six restaurants.
The six restaurants leased to Del Taco make up almost all of the income
producing assets of the partnership. Therefore, the business of the partnership
is almost entirely dependent on the success of the Del Taco trade name
restaurants that lease the properties. The success of the restaurants is
dependent on a large variety of factors, including, but not limited to, consumer
demand and preference for fast food, in general, and for Mexican-American food
in particular.
Results of Operations
The partnership 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 following table sets forth rental revenue earned by restaurant for the year:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------- --------------------
2000 1999 2000 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Riverside Avenue, Rialto, CA $ 22,228 $ 21,295 $ 43,455 $ 41,452
Elden Avenue, Moreno Valley, CA 24,184 19,695 46,169 38,807
Foothill Boulevard, La Verne, CA 30,639 28,598 58,115 55,461
Baseline & Archibald, Rancho Cucamonga, CA 24,183 22,184 47,067 43,056
Elkhorn Boulevard, Sacramento, CA 15,843 15,070 30,222 28,907
Haven Avenue, Rancho Cucamonga, CA 27,806 24,038 54,106 48,854
-------- -------- -------- --------
Total $144,883 $130,880 $279,134 $256,537
======== ======== ======== ========
</TABLE>
The partnership receives rental revenues equal to 12 percent of gross sales from
the restaurants. The partnership earned rental revenue of $144,883 during the
three month period ended June 30, 2000, which represents an increase of $14,003
from 1999. The partnership earned rental revenue of $279,134 during the six
month period ended June 30, 2000, which represents an increase of $22,597 from
1999. The changes in rental revenue between 1999 and 2000 are directly
attributable to changes in sales levels at the restaurants under lease.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - CONTINUED
The following table breaks down general and administrative expenses by type of
expense:
Percentage of Total
General & Administrative Expense
Six Months Ended
June 30,
-------------------
2000 1999
------ ------
Accounting fees 65.58% 67.68%
Distribution of information to Limited Partners 34.42 32.32
------ ------
100.00% 100.00%
======= ======
General and administrative costs for the six month period ended June 30,
decreased from 1999 to 2000 due to decreased costs for the distribution of
information to limited partners.
For the three month period ended June 30, 2000, net income increased $14,781
from 1999 to 2000 due to the increase in revenues of $14,467 and a $314 decrease
in general and administrative expenses. For the six month period ended June 30,
2000, net income increased by $22,808 from 1999 to 2000 due to the increase in
revenues of $22,657 and the decrease in general and administrative expenses of
$151.
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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
June 30, 2000.
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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: July 31, 2000 /s/ Robert J. Terrano
--------------------------------
Robert J. Terrano
Executive Vice President,
Chief Financial Officer
Date: July 31, 2000 /s/ C. Douglas Mitchell
--------------------------------
C. Douglas Mitchell
Vice President and Corporate
Controller
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EXHIBIT INDEX
Exhibit
Number Description
------ -----------
27.1 Financial Data Schedule
