<PAGE> 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, 1999
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 NO. 2-92121
DEL TACO RESTAURANT PROPERTIES II
(A California limited partnership)
(Exact name of registrant specified in its charter)
CALIFORNIA 33-0064245
(State or other jurisdiction of incorporation or (I.R.S. Employer
organization) Identification Number)
23041 AVENIDA DE LA CARLOTA
LAGUNA HILLS, CALIFORNIA 92653
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (949) 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 July
10, 1984 are incorporated by reference into Part IV of this report.
<PAGE> 2
PART I
ITEM 1. BUSINESS
The partnership is a publicly-held limited partnership organized under the
California Uniform Limited Partnership Act. The partnership's General Partner is
Del Taco, Inc., a California corporation ("General Partner"). The partnership
sold 27,006 units totaling $6.751 million through an offering of limited
partnership units from September 1984 through December 1985. The term of the
partnership agreement is until April 30, 2025 unless terminated earlier by means
provided in the partnership agreement.
The business of the partnership is ownership and leasing of restaurants in
California to Del Taco, Inc. The partnership acquired land and constructed seven
Mexican-American restaurants for long-term lease to Del Taco, Inc. Two
restaurants were sold in 1994. Each property is leased for 35 years on a triple
net basis. Rent is equal to twelve percent of gross sales of the restaurants. As
of December 31, 1999, the partnership had a total of five properties leased to
Del Taco.
The partnership has no full time employees. The partnership agreement assigns
full authority for general management and supervision of the business affairs of
the partnership to the General Partner. The General Partner has a one percent
interest in the profits or losses and distributions of the partnership. Limited
partners have no right to participate in the management or conduct of the
partnership's business affairs.
2
<PAGE> 3
ITEM 2. PROPERTIES
The partnership acquired seven properties with proceeds obtained from the sale
of partnership units:
<TABLE>
<CAPTION>
Date of Restaurant Date of Commencement
Address City, State Acquisition Constructed of Operation(1)
- ------- --------------- ---------------- ------------------ --------------------
<S> <C> <C> <C> <C>
Bear Valley Road Victorville, CA February 4, 1986 60 seat with drive June 13, 1986
through service
window
West Valley Colton, CA March 11, 1986 60 seat with drive June 24, 1986
Boulevard through service
window
Palmdale Boulevard Palmdale, CA December 12, 1986 60 seat with drive May 7, 1987
through service
window
South Gate Town South Gate, CA January 28, 1987 60 seat with drive May 28, 1987(2)
Center through service
window
Main Avenue Fallbrook, CA March 10, 1987 60 seat with drive August 19, 1987(3)
through service
window
De Anza Country Pedley, CA April 13, 1987 60 seat with drive October 28, 1987
Shopping Center through service
window
Varner Road Thousand Palms, CA October 14, 1987 60 seat with drive April 28, 1988
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.
(2) In May 1994, the South Gate property was sold yielding net proceeds to
the partnership of $497,202.
(3) In November 1994, the Fallbrook property was sold yielding net proceeds
to the partnership of $357,531.
3
<PAGE> 4
PART II
ITEM 3. LEGAL PROCEEDINGS
The partnership is not a party to any material pending legal proceedings.
ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. MARKET FOR THE PARTNERSHIP'S COMMON EQUITY AND RELATED SECURITY HOLDER
MATTERS
The partnership sold 27,006 ($6,751,500) limited partnership units during the
public offering period ended December 31, 1985 and currently has 1,209 limited
partners of record. There is no public market for the trading of the units.
Distributions made by the partnership to the limited partners during the past
three fiscal years are described in Note 6 to the Notes to the Financial
Statements contained under Item 8.
4
<PAGE> 5
ITEM 6. SELECTED FINANCIAL DATA
For the Year Ended December 31,
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Rental revenue $ 488,519 $ 481,219 $ 448,625 $ 431,906 $ 439,055
Interest and
other income 5,282 5,149 5,523 2,810 2,799
Net income 387,894 380,601 315,041 239,807 250,634
Net income
per limited
partnership
unit(1) 14.22 13.95 11.55 8.79 9.19
Cash distributions
per limited
partnership unit 16.35 15.35 14.92 13.85 14.89
Total assets 2,526,820 2,578,195 2,612,583 2,698,704 2,833,273
Long-term
obligations None None None None None
</TABLE>
(1) The net income per limited partnership unit was calculated based upon
27,006 weighted average units outstanding for all years presented.
ITEM 7. 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 September
1984 and December 1985. 15% of the $6.751 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 $5.6 million of the
remaining funds were used to acquire sites and build seven restaurants. Two
restaurants were sold in 1994.
5
<PAGE> 6
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (Continued)
The five 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 owned seven properties that were under long-term lease to Del
Taco for restaurant operations. Two restaurants were sold in 1994 and five are
currently operating.
The following table sets forth rental revenue earned by restaurant for the year:
<TABLE>
<CAPTION>
Year Ended December 31,
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Bear Valley Rd., Victorville, CA $ 94,094 $ 96,067 $ 88,858
West Valley Blvd., Colton, CA
112,182 103,013 95,315
Palmdale Blvd., Palmdale, CA
80,472 83,284 88,048
DeAnza Country Shopping Center, Pedley, CA
69,307 64,971 55,595
Varner Road, Thousand Palms, CA
132,464 133,884 120,809
-------- -------- --------
Total $488,519 $481,219 $448,625
======== ======== ========
</TABLE>
The partnership receives rental revenues equal to 12 percent of gross sales from
the restaurants. The partnership earned rental revenue of $488,519 during the
year ended December 31, 1999, which represents an increase of $7,300 from 1998.
The increase in rental revenue was caused by an increase in sales at the
restaurants under lease.
6
<PAGE> 7
ITEM 7. 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 & ADMIN. EXPENSE
<TABLE>
<CAPTION>
Year Ended December 31,
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
Accounting fees 57.67% 56.39% 56.02%
Distribution of
information to
limited partners 40.78 42.06 42.37
Other 1.55 1.55 1.61
------ ------ ------
100.00% 100.00% 100.00%
====== ====== ======
</TABLE>
Certain reclassifications have been made to the 1998 and 1997 amounts in the
table above to conform to the current year presentation.
General and administrative costs increased from 1998 to 1999 due to increased
costs for accounting and income tax return preparation. Depreciation expense was
the same in both 1998 and 1999.
Net income increased by $7,293 from 1998 to 1999 due to the increase in revenues
of $7,433 offset by the $140 increase in general and administrative expenses.
7
<PAGE> 8
ITEM 8. FINANCIAL STATEMENTS
PART I. INFORMATION
<TABLE>
<CAPTION>
INDEX PAGE NUMBER
----- -----------
<S> <C>
Report of Independent Public Accountants 9
Balance Sheets at December 31, 1999 and 1998 10
Statements of Income for the years ended
December 31, 1999, 1998 and 1997 11
Statement of Changes in Partners' Equity for
the three years ended December 31, 1999 12
Statements of Cash Flows for the years ended
December 31, 1999, 1998 and 1997 13
Notes to Financial Statements 14-17
</TABLE>
8
<PAGE> 9
[ARTHUR ANDERSON LLP LETTERHEAD]
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of
Del Taco Restaurant Properties, II:
We have audited the accompanying balance sheets of Del Taco Restaurant
Properties II (a California Limited Partnership) as of December 31, 1999 and
1998, and the related statements of income, partners' equity and cash flows for
the years then ended. These financial statements and the schedule referred to
below 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 from
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
II as December 31, 1999 and 1998, and the results of its operations and its
cash flows for the years then ended in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule in the index of the
financial statements is presented for purposes of complying with the Securities
and Exchange Commission's rules and is not part of the basic financial
statements. This schedule has been subjected to the auditing procedures applied
in our audits of the basic financial statements and, in our opinion, fairly
states in all material respects, the financial data required to be set forth
therein in relation to the basic financial statements taken as a whole.
/s/ ARTHUR ANDERSEN LLP
- -----------------------
ARTHUR ANDERSEN LLP
Orange County, California
March 1, 2000
9
<PAGE> 10
DEL TACO RESTAURANT PROPERTIES II
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
1999 1998
----------- -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 139,292 $ 134,928
Receivable from Del Taco, Inc. 41,324 42,415
Deposits 1,000 1,468
----------- -----------
Total current assets 181,616 178,811
----------- -----------
PROPERTY AND EQUIPMENT, at cost:
Land and improvements 1,806,006 1,806,006
Buildings and improvements 1,238,879 1,238,879
Machinery and equipment 898,950 898,950
----------- -----------
3,943,835 3,943,835
Less--accumulated depreciation 1,598,631 1,544,451
----------- -----------
2,345,204 2,399,384
----------- -----------
$ 2,526,820 $ 2,578,195
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
CURRENT LIABILITIES:
Payable to limited partners $ 15,666 $ 12,099
Accounts payable 8,666 5,434
----------- -----------
Total current liabilities 24,332 17,533
----------- -----------
PARTNERS' EQUITY:
Limited partners 2,526,513 2,584,106
General Partner-Del Taco, Inc. (24,025) (23,444)
----------- -----------
2,502,488 2,560,662
----------- -----------
$ 2,526,820 $ 2,578,195
=========== ===========
</TABLE>
The accompanying notes are an
integral part of these financial statements.
10
<PAGE> 11
DEL TACO RESTAURANT PROPERTIES II
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Year Ended December 31,
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
REVENUES:
Rent $488,519 $481,219 $448,625
Interest 2,882 2,424 2,848
Other 2,400 2,725 2,675
-------- -------- --------
493,801 486,368 454,148
-------- -------- --------
EXPENSES:
General and administrative 51,727 51,587 49,595
Depreciation 54,180 54,180 89,512
-------- -------- --------
105,907 105,767 139,107
-------- -------- --------
Net income $387,894 $380,601 $315,041
======== ======== ========
Net income per limited
partnership unit $ 14.22 $ 13.95 $ 11.55
======== ======== ========
</TABLE>
The accompanying notes are an
integral part of these financial statements.
11
<PAGE> 12
DEL TACO RESTAURANT PROPERTIES II
STATEMENT OF CHANGES IN PARTNERS' EQUITY
THREE YEARS ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
Limited Partners
------------------------------ General
Units Amount Partner Total
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Balance, December 31, 1996 27,006 $ 2,712,800 $ (22,143) $ 2,690,657
Net income -- 311,891 3,150 315,041
Cash distributions -- (403,017) (4,071) (407,088)
----------- ----------- ----------- -----------
Balance, December 31, 1997 27,006 2,621,674 (23,064) 2,598,610
Net income -- 376,795 3,806 380,601
Cash distributions -- (414,363) (4,186) (418,549)
----------- ----------- ----------- -----------
Balance, December 31, 1998 27,006 2,584,106 (23,444) 2,560,662
Net income -- 384,015 3,879 387,894
Cash distributions -- (441,608) (4,460) (446,068)
----------- ----------- ----------- -----------
Balance, December 31, 1999 27,006 $ 2,526,513 $ (24,025) $ 2,502,488
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an
integral part of these financial statements.
12
<PAGE> 13
DEL TACO RESTAURANT PROPERTIES II
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 387,894 $ 380,601 $ 315,041
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 54,180 54,180 89,512
Increase in payable to limited partners 3,567 5,491 1,561
Decrease (increase) in receivable from General Partner 1,091 (4,083) (1,061)
Increase (decrease) in accounts payable 3,232 (1,931) 4,365
Decrease (increase) in deposits 468 (468) --
--------- --------- ---------
Net cash provided by operating activities 450,432 433,790 409,418
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions to partners (446,068) (418,549) (407,088)
--------- --------- ---------
NET INCREASE IN CASH 4,364 15,241 2,330
BEGINNING CASH BALANCE 134,928 119,687 117,357
--------- --------- ---------
ENDING CASH BALANCE $ 139,292 $ 134,928 $ 119,687
========= ========= =========
</TABLE>
The accompanying notes are an
integral part of these financial statements.
13
<PAGE> 14
DEL TACO RESTAURANT PROPERTIES II
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
THE PARTNERSHIP: Del Taco Restaurant Properties II (a California limited
partnership) was formed on June 20, 1984, for the purpose of acquiring real
property in California for construction of seven 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 April 28, 1988, all seven
restaurants had commenced operation on acquired properties. The South Gate and
Fallbrook properties were sold on May 18, 1994 and November 30, 1994,
respectively.
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.
The partnership accounts for property and equipment in accordance with 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." SFAS 121
requires that long-lived assets be reviewed for impairment whenever events or
changes in circumstances indicate that the carrying value of the asset may not
be recoverable. In evaluating long-lived assets held for use, an impairment loss
is recognized if the sum of the expected future cash flows (undiscounted and
without interest charges) is less than the carrying value of the asset. Once a
determination has been made that an impairment loss should be recognized for
long-lived assets, various assumptions and estimates are used to determine fair
value including, among others, estimated costs of construction and development,
recent sales of comparable properties and the opinions of fair value prepared by
independent real estate appraisers. Long-lived assets to be disposed of are
reported at the lower of carrying amount or fair value less cost to sell.
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 5).
14
<PAGE> 15
DEL TACO RESTAURANT PROPERTIES II
NOTES TO FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1999
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
(Continued)
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 27,006 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.
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
previously allocated. Additional gains will be allocated 15 percent to the
General Partner and 85 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. The
partnership had a total of five properties leased as of December 31, 1999, 1998
and 1997.
The five restaurants operated by Del Taco, for which the partnership is the
lessor, had combined, unaudited sales of $4,070,994, $4,010,160 and $3,738,542
and unaudited net income of $235,387, $262,790 and $194,001 for the years ended
December 31, 1999, 1998 and 1997, respectively. Net income by restaurant
includes charges for general and administrative expenses incurred in connection
with supervision of restaurant operations and interest expense.
15
<PAGE> 16
DEL TACO RESTAURANT PROPERTIES II
NOTES TO FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1999
NOTE 4 - RELATED PARTIES
The receivable from Del Taco consists of rent accrued for the month of December
1999. The rent receivable was collected on January 17, 2000.
The General Partner received $4,460 in distributions during 1999 relating to its
one percent interest in the partnership.
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.
NOTE 5 - INCOME TAXES
A reconciliation of financial statement net income to taxable income for each of
the periods is as follows:
<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Net income per financial statements $387,894 $380,601 $315,042
Excess book depreciation
8,511 8,241 43,573
-------- -------- --------
Taxable income $396,405 $388,842 $358,615
======== ======== ========
</TABLE>
A reconciliation of partnership equity per the financial statements to net worth
for tax purposes as of December 31, 1999, is as follows:
<TABLE>
<S> <C>
Partners' equity per financial
statements $2,502,488
Issue costs of limited partnership
units capitalized for tax purposes 986,745
Excess book depreciation 26,541
Writedown of Real Estate held for Sale 161,963
Other 5,465
----------
Net worth for tax purposes $3,683,202
==========
</TABLE>
16
<PAGE> 17
DEL TACO RESTAURANT PROPERTIES II
NOTES TO FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1999
NOTE 6 - CASH DISTRIBUTIONS TO LIMITED PARTNERS
Cash distributions to limited partners were as follows:
<TABLE>
<CAPTION>
Cash Weighted Number of Units
Distributions Average Number Outstanding at
Per Limited of Units the End of
Partnership Unit Outstanding Quarter
------------------- -------------- ----------------
<S> <C> <C> <C>
Quarter Ended
December 31, 1996 $ 3.82 27,006 27,006
March 31, 1997 3.38 27,006 27,006
June 30, 1997 3.54 27,006 27,006
September 30, 1997 4.18 27,006 27,006
---------
Total paid in 1997 $ 14.92
=========
December 31, 1997 $ 3.96 27,006 27,006
March 31, 1998 3.01 27,006 27,006
June 30, 1998 3.80 27,006 27,006
September 30, 1998 4.58 27,006 27,006
---------
Total paid in 1998 $ 15.35
=========
December 31, 1998 $ 4.34 27,006 27,006
March 31, 1999 3.64 27,006 27,006
June 30, 1999 3.91 27,006 27,006
September 30, 1999 4.46 27,006 27,006
---------
Total paid in 1999 $ 16.35
=========
</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, 1999 amounted
to $4.35 per limited partnership unit and were paid January 28, 2000.
17
<PAGE> 18
PART III
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP'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 53
C. Ronald Petty President 55
Paul W. Hitzelberger Executive Vice President, Brand Strategy and
Franchise Relations/Development 55
Robert Terrano Executive Vice President and
Chief Financial Officer 44
James D. Stoops Executive Vice President, Operations 47
Janet D. Simmons Senior Vice President, Purchasing 43
Michael L. Annis Vice President, Secretary and General Counsel 53
C. Douglas Mitchell Vice President and Corporate Controller 49
Timothy A. Hackbardt Vice President, Marketing 36
Shirlene Lopez Vice President, Corporate Development 35
</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 2000.
(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:
18
<PAGE> 19
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.
C. Ronald Petty, President of Del Taco, Inc. Mr. Petty began his career in the
restaurant business in 1973 with McDonald's Corporation. He was employed by
McDonald's in a real estate capacity until 1978. For the next 12 years, Mr.
Petty was in various officer positions with Burger King. These positions
included Vice President of Real Estate, Sr. Vice President of Development,
Region Vice President, Sr. Vice President European Operations, President of
International and President of U.S. Mr. Petty served as President of Miami Subs
from 1990-1992; President and CEO of Denny's 1993-1996; President and CEO of
Peter Piper Pizza 1996-1998; President of Del Taco December 1998-present.
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. He also oversees 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.
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.
19
<PAGE> 20
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.
Timothy A. Hackbardt, Vice President, Marketing of Del Taco, Inc. Mr. Hackbardt
joined Del Taco, Inc. in November 1999. Prior to then, since November of 1995,
he served as Vice President of Marketing of Taco Time International, Inc.,
Eugene, OR. From September 1994 to November 1995, Mr. Hackbardt was Director of
Marketing for Wok Spirit Chinese Delivery restaurants in Newport Beach, CA. From
December 1992 to September 1994, Mr. Hackbardt was Director of Marketing for
Fosters Freeze International, Inc., San Luis Obispo, CA. Prior to then, Mr.
Hackbardt held various positions in the television and radio industry in sales
and sales management. Mr. Hackbardt is a graduate of Central Michigan University
where he received a Bachelor of Applied Arts, majoring in Broadcast and
Cinematic Arts and minoring in Marketing.
Shirlene Lopez, Vice President, Corporate Development & Design of Del Taco, Inc.
Ms. Lopez began her career with Del Taco in 1978 as an hourly employee and
advanced through the ranks to General Manager in 1984. Ms. Lopez was promoted to
the corporate office in 1989 as Human Resource Manager. In 1994, she was
promoted to Executive Project Manager reporting to the CEO and in 1996, to
Director of Corporate Development in charge of all interior image and design.
Ms. Lopez has held her current position since August 1997.
ITEM 11. MANAGEMENT REMUNERATION AND TRANSACTIONS
The partnership has no executive officers or directors and pays no direct
remuneration to any executive officer or director of its General Partner. The
partnership has not issued any options or stock appreciation rights to any
executive officer or director of its General Partner, nor does the partnership
propose to pay any annuity, pension or retirement benefits to any executive
officer or director of its General Partner. The partnership has no plan, nor
does the partnership 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 partnership, nor was any person known of by the
partnership 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 partnership.
20
<PAGE> 21
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT -
(Continued)
(c) The partnership 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 partnership , 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 partnership and any executive
officer or director of its General Partner.
During 1999, the following transactions occurred between the partnership
and the General Partner pursuant to the terms of the partnership
agreement.
(1) The General Partner earned $3,879 as its one percent share of
the net income of the partnership.
(2) The General Partner received $4,460 in distributions relating to
its one percent interest in the partnership.
(b) During 1999, the partnership 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
partnership at any time during 1999 for any amount in excess of $60,000.
(d) Not applicable.
21
<PAGE> 22
PART IV
ITEM 14(a)(1) AND (2). EXHIBITS, FINANCIAL STATEMENTS SCHEDULES, AND REPORTS ON
FORM 8-K
Financial statement schedules:
Schedule III - Real Estate and Accumulated Depreciation
Financial statement schedules other than those referred to above have
been omitted because they are not applicable or not required.
(b) No reports on Form 8-K were filed during the last quarter of 1999.
(c) Exhibits required by Item 601 of Regulation S-K:
1. Incorporated herein by reference, Agreement of Limited
Partnership of Del Taco Restaurant Properties II filed as
Exhibit 3.01 to Partnership's Registration Statement on Form
S-11 as filed with the Securities and Exchange Commission on
July 10, 1984.
2. Incorporated herein by reference, Amendment to Agreement of
Limited Partnership of Del Taco Restaurant Properties II.
3. Incorporated herein by reference, Form of Standard Lease to be
entered into by partnership and Del Taco, Inc., as lessee, filed
as Exhibit 10.02 to Partnership's Registration Statement on Form
S-11 as filed with the Securities and Exchange Commission on
July 10, 1984.
22
<PAGE> 23
DEL TACO RESTAURANT PROPERTIES II - SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
Cost capitalized Gross amount at
Initial cost subsequent to which carried at
to company acquisition close of period
--------------------------------------------------------------------------------
Land Buildings & Land, buildings &
Description & land Improve- Carrying improvements
(All Restaurants) Encumbrances improvements ments costs Total
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Victorville, CA $ -- $ 327,770 $ 224,843 $ -- $ 552,613
Colton, CA -- 262,661 180,179 -- 442,840
Palmdale, CA -- 404,791 277,677 -- 682,468
Pedley, CA -- 364,334 249,925 -- 614,259
Thousand Palms, CA -- 446,450 306,255 -- 752,705
---------------------------------------------------------------------------------------------------
$ -- $ 1,806,006 $ 1,238,879 $ -- $ 3,044,885
===================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Life on which
depreciation in latest
Description Accumulated Date of Date income statement
(All Restaurants) depreciation construction acquired is computed
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Victorville, CA $ 126,984 1986 1986 20 (LI), 35 (BI)
Colton, CA 101,760 1986 1986 20 (LI), 35 (BI)
Palmdale, CA 156,824 1986 1986 20 (LI), 35 (BI)
Pedley, CA 141,150 1987 1987 20 (LI), 35 (BI)
Thousand Palms, CA 172,962 1987 1987 20 (LI), 35 (BI)
-----------
$ 699,680
===========
</TABLE>
<TABLE>
Accumulated
Restaurants depreciation
----------- ------------
<S> <C> <C>
Balances at December 31, 1996: $3,044,885 $ 537,140
Acquisitions -- 54,180
Sales -- --
---------- ----------
Balances at December 31, 1997: 3,044,885 591,320
Acquisitions -- 54,180
Sales -- --
---------- ----------
Balances at December 31, 1998: 3,044,885 645,500
Acquisitions -- 54,180
Sales -- --
---------- ----------
Balances at December 31, 1999: $3,044,885 $ 699,680
========== ==========
</TABLE>
23
<PAGE> 24
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the partnership has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
DEL TACO RESTAURANT PROPERTIES II
a California limited partnership
Del Taco, Inc.
General Partner
Date March 07, 2000 Kevin K. Moriarty
-------------- -----------------------------------
Kevin K. Moriarty
Director, Chairman and Chief
Executive Officer
Date March 07, 2000 Michael L. Annis
-------------- -----------------------------------
Michael L. Annis
Vice President, Secretary and
General Counsel
Date March 07, 2000 Robert J. Terrano
-------------- -----------------------------------
Robert J. Terrano
Executive Vice President and
Chief Financial Officer
Date March 07, 2000 C. Douglas Mitchell
-------------- -----------------------------------
C. Douglas Mitchell
Vice President and Corporate
Controller
24
<PAGE> 25
EXHIBIT
INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- ------- -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 139,292
<SECURITIES> 1,000
<RECEIVABLES> 41,324
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 181,616
<PP&E> 3,943,835
<DEPRECIATION> 1,598,631
<TOTAL-ASSETS> 2,526,820
<CURRENT-LIABILITIES> 24,332
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,502,488
<TOTAL-LIABILITY-AND-EQUITY> 2,526,820
<SALES> 0
<TOTAL-REVENUES> 493,801
<CGS> 0
<TOTAL-COSTS> 105,907
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 387,894
<INCOME-TAX> 0
<INCOME-CONTINUING> 387,894
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 387,894
<EPS-BASIC> 14.22
<EPS-DILUTED> 14.22
</TABLE>
