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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 10-K
(Mark One)
[X] | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |
For the fiscal year ended December 31, 2005
OR
[ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |
For the transition period from to
Commission file no. 33-13437
DEL TACO INCOME PROPERTIES IV
California (State or other jurisdiction of incorporation or organization) | 33-0241855 (I.R.S. Employer Identification Number) | |
25521 Commercentre Drive Lake Forest, California (Address of principal executive offices) | 92630 (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 if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No X
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes No X
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s Form S-11 Registration Statement filed June 5, 1987 are incorporated by reference into Part IV of this report.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated filer Non-accelerated filer X
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No X
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Date of Commencement of | ||||||||
Address | City, State | Date of Acquisition | Restaurant Constructed | Operation (1) | ||||
Orangethorpe Avenue | Placentia, CA | August 5, 1988 | 60 seat with drive through service window | March 27, 1989 | ||||
Lakeshore Drive | Lake Elsinore, CA | February 1, 1989 | 60 seat with drive through service window | April 18, 1990(2) | ||||
Highland Avenue | San Bernardino, CA | December 8, 1989 | 60 seat with drive through service window | July 13, 1990 |
(1) | Commencement of operation is the first date Del Taco, as lessee, operated the facility on the site as a Del Taco restaurant. | |
(2) | The restaurant is subleased to a franchisee of Del Taco and the restaurant operates as a Del Taco restaurant. |
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Years Ended December 31, | ||||||||||||||||||||
2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||
Rental revenues | $ | 458,027 | $ | 439,657 | $ | 439,657 | $ | 432,629 | $ | 434,848 | ||||||||||
General and administrative expense | 62,255 | 60,837 | 62,441 | 45,707 | 43,193 | |||||||||||||||
Depreciation expense | 55,268 | 55,268 | 55,268 | 55,268 | 55,268 | |||||||||||||||
Interest and other income | 2,348 | 1,955 | 1,858 | 3,127 | 4,241 | |||||||||||||||
Net income | 342,852 | 325,507 | 323,806 | 334,781 | 340,628 | |||||||||||||||
Net income per limited partnership unit | 2.05 | 1.95 | 1.94 | 2.00 | 2.04 | |||||||||||||||
Cash distributions per limited partnership unit | 2.34 | 2.52 | 2.34 | 2.35 | 2.32 | |||||||||||||||
Total assets | 1,840,586 | 1,892,767 | 1,975,153 | 2,039,717 | 2,101,201 | |||||||||||||||
Long-term obligations | 137,953 | 137,953 | 137,953 | 137,953 | 137,953 |
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Years Ended December 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
Orangethorpe Ave., Placentia, CA | $ | 176,686 | $ | 169,881 | $ | 175,288 | ||||||
Lakeshore Drive, Lake Elsinore, CA | 185,435 | 176,599 | 174,899 | |||||||||
Highland Ave., San Bernardino, CA | 95,906 | 93,177 | 89,470 | |||||||||
Total | $ | 458,027 | $ | 439,657 | $ | 439,657 | ||||||
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Years Ended December 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
Accounting fees | 64.47 | % | 59.98 | % | 57.29 | % | ||||||
Distribution of information to limited partners | 33.94 | 38.62 | 41.30 | |||||||||
Other | 1.59 | 1.40 | 1.41 | |||||||||
100.00 | 100.00 | 100.00 | ||||||||||
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INDEX | PAGE NUMBER | |||
Report of Independent Registered Public Accounting Firm — Squar, Milner, Reehl & Williamson, LLP | 8 | |||
Report of Independent Registered Public Accounting Firm — KPMG LLP | 9 | |||
Balance Sheets at December 31, 2005 and 2004 | 10 | |||
Statements of Income for the years ended December 31, 2005, 2004 and 2003 | 11 | |||
Statements of Partners’ Equity for the years ended December 31, 2005, 2004 and 2003 | 12 | |||
Statements of Cash Flows for the years ended December 31, 2005, 2004 and 2003 | 13 | |||
Notes to Financial Statements | 14-18 | |||
Schedule III — Real Estate and Accumulated Depreciation | 24 |
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Del Taco Income Properties IV:
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Del Taco Income Properties IV:
/s/ KPMG LLP |
March 4, 2005
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December 31, | ||||||||
2005 | 2004 | |||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash | $ | 150,403 | $ | 140,285 | ||||
Receivable from Del Taco, Inc. | 38,934 | 45,765 | ||||||
Deposits | 400 | 600 | ||||||
Total current assets | 189,737 | 186,650 | ||||||
PROPERTY AND EQUIPMENT: | ||||||||
Land and improvements | 1,236,700 | 1,236,700 | ||||||
Buildings and improvements | 1,289,860 | 1,289,860 | ||||||
Machinery and equipment | 484,789 | 484,789 | ||||||
3,011,349 | 3,011,349 | |||||||
Less—accumulated depreciation | 1,360,500 | 1,305,232 | ||||||
1,650,849 | 1,706,117 | |||||||
�� | ||||||||
$ | 1,840,586 | $ | 1,892,767 | |||||
LIABILITIES AND PARTNERS’ EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Payable to limited partners | $ | 37,993 | $ | 36,913 | ||||
Accounts payable | 5,923 | 10,567 | ||||||
Total current liabilities | 43,916 | 47,480 | ||||||
OBLIGATION TO GENERAL PARTNER | 137,953 | 137,953 | ||||||
PARTNERS’ EQUITY: | ||||||||
Limited partners; 165,375 units outstanding at December 31, 2005 and December 31, 2004 | 1,673,263 | 1,721,394 | ||||||
General partner-Del Taco, Inc. | (14,546 | ) | (14,060 | ) | ||||
1,658,717 | 1,707,334 | |||||||
$ | 1,840,586 | $ | 1,892,767 | |||||
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Years Ended December 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
RENTAL REVENUES | $ | 458,027 | $ | 439,657 | $ | 439,657 | ||||||
EXPENSES: | ||||||||||||
General and administrative | 62,255 | 60,837 | 62,441 | |||||||||
Depreciation | 55,268 | 55,268 | 55,268 | |||||||||
117,523 | 116,105 | 117,709 | ||||||||||
Operating income | 340,504 | 323,552 | 321,948 | |||||||||
OTHER INCOME: | ||||||||||||
Interest | 1,848 | 1,380 | 1,258 | |||||||||
Other | 500 | 575 | 600 | |||||||||
Net income | $ | 342,852 | $ | 325,507 | $ | 323,806 | ||||||
Net income per limited partnership unit (note 2) | $ | 2.05 | $ | 1.95 | $ | 1.94 | ||||||
Number of limited partnership units used in computing per unit amounts | 165,375 | 165,375 | 165,375 | |||||||||
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Limited Partners | General | |||||||||||||||
Units | Amount | Partner | Total | |||||||||||||
Balance, December 31, 2002 | 165,375 | $ | 1,881,610 | $ | (12,442 | ) | $ | 1,869,168 | ||||||||
Net Income | — | 320,568 | 3,238 | 323,806 | ||||||||||||
Cash Distributions | — | (386,594 | ) | (3,905 | ) | (390,499 | ) | |||||||||
Balance, December 31, 2003 | 165,375 | 1,815,584 | (13,109 | ) | 1,802,475 | |||||||||||
Net Income | — | 322,252 | 3,255 | 325,507 | ||||||||||||
Cash Distributions | — | (416,442 | ) | (4,206 | ) | (420,648 | ) | |||||||||
Balance, December 31, 2004 | 165,375 | 1,721,394 | (14,060 | ) | 1,707,334 | |||||||||||
Net Income | — | 339,423 | 3,429 | 342,852 | ||||||||||||
Cash Distributions | — | (387,554 | ) | (3,915 | ) | (391,469 | ) | |||||||||
Balance, December 31, 2005 | 165,375 | $ | 1,673,263 | $ | (14,546 | ) | $ | 1,658,717 | ||||||||
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Years Ended December 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
Net income | $ | 342,852 | $ | 325,507 | $ | 323,806 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Depreciation | 55,268 | 55,268 | 55,268 | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
Receivable from Del Taco, Inc. | 6,831 | 40,082 | 18,750 | |||||||||
Deposits | 200 | (126 | ) | 36 | ||||||||
Payable to limited partners | 1,080 | 5,223 | 2,603 | |||||||||
Accounts payable | (4,644 | ) | 7,532 | (474 | ) | |||||||
Net cash provided by operating activities | 401,587 | 433,486 | 399,989 | |||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
Cash distributions to partners | (391,469 | ) | (420,648 | ) | (390,499 | ) | ||||||
Net increase in cash | 10,118 | 12,838 | 9,490 | |||||||||
Beginning cash balance | 140,285 | 127,447 | 117,957 | |||||||||
Ending cash balance | $ | 150,403 | $ | 140,285 | $ | 127,447 | ||||||
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NOTES TO FINANCIAL STATEMENTS— CONTINUED
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NOTES TO FINANCIAL STATEMENTS— CONTINUED
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NOTES TO FINANCIAL STATEMENTS— CONTINUED
2005 | 2004 | 2003 | ||||||||||
Net income per financial statements | $ | 342,852 | $ | 325,507 | $ | 323,806 | ||||||
Excess book depreciation | 14,915 | 14,915 | 14,915 | |||||||||
Taxable income | $ | 357,767 | $ | 340,422 | $ | 338,721 | ||||||
Partners’ equity per financial statements | $ | 1,658,717 | ||
Issue costs of limited partnership units capitalized for tax purposes | 579,259 | |||
Difference in book vs. tax depreciation | 229,837 | |||
Partners’ equity for tax purposes | $ | 2,467,813 | ||
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NOTES TO FINANCIAL STATEMENTS— CONTINUED
Cash | Weighted | Number of Units | ||||||||||
Distribution per | Average Number | Outstanding at | ||||||||||
Limited Partnership | of Units | the End of | ||||||||||
Quarter Ended | Unit | Outstanding | Quarter | |||||||||
December 31, 2002 | $ | 0.50 | 165,375 | 165,375 | ||||||||
March 31, 2003 | 0.82 | 165,375 | 165,375 | |||||||||
June 30, 2003 | 0.48 | 165,375 | 165,375 | |||||||||
September 30, 2003 | 0.54 | 165,375 | 165,375 | |||||||||
Total paid in 2003 | $ | 2.34 | ||||||||||
December 31, 2003 | $ | 0.54 | 165,375 | 165,375 | ||||||||
March 31, 2004 | 0.75 | 165,375 | 165,375 | |||||||||
June 30, 2005 | 0.56 | 165,375 | 165,375 | |||||||||
September 30, 2004 | 0.67 | 165,375 | 165,375 | |||||||||
Total paid in 2004 | $ | 2.52 | ||||||||||
December 31, 2004 | $ | 0.59 | 165,375 | 165,375 | ||||||||
March 31, 2005 | 0.63 | 165,375 | 165,375 | |||||||||
June 30, 2005 | 0.49 | 165,375 | 165,375 | |||||||||
September 30, 2005 | 0.63 | 165,375 | 165,375 | |||||||||
Total paid in 2005 | $ | 2.34 | ||||||||||
First | Second | Third | Fourth | |||||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||||
Year ended December 31, 2005 | ||||||||||||||||
Rental revenues | $ | 107,923 | $ | 116,001 | $ | 117,490 | $ | 116,613 | ||||||||
Net income | 60,089 | 93,728 | 94,353 | 94,682 | ||||||||||||
Net income per limited partnership unit | 0.36 | 0.56 | 0.56 | 0.57 | ||||||||||||
Year ended December 31, 2004 | ||||||||||||||||
Rental revenues | $ | 101,710 | $ | 109,478 | $ | 112,574 | $ | 115,895 | ||||||||
Net income | 55,569 | 86,709 | 89,735 | 93,494 | ||||||||||||
Net income per limited partnership unit | 0.33 | 0.52 | 0.54 | 0.56 |
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Name | Title | Age | ||||
Kevin K. Moriarty | Director, Chairman and Chief Executive Officer | 59 | ||||
C. Ronald Petty | President | 61 | ||||
Robert J. Terrano | Executive Vice President and Chief Financial Officer | 50 | ||||
James D. Stoops | Executive Vice President, Operations | 53 | ||||
Janet D. Erickson | Executive Vice President, Purchasing | 49 | ||||
Shirlene Lopez | Executive Vice President, Operations Services | 41 | ||||
Michael L. Annis | Senior Vice President, Secretary and General Counsel | 59 |
(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: |
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Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Security Holder Matters |
(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. | |
(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. |
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(a) | No transactions have occurred between the Partnership and any executive officer or director of its General Partner. |
During 2005, the following transactions occurred between the Partnership and the General Partner pursuant to the terms of the partnership agreement. |
(1) | The General Partner earned $3,429 as its one percent share of the net income of the Partnership. | ||
(2) | The General Partner received $3,915 in distributions relating to its one percent interest in the Partnership. |
(b) | During 2005, 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 2005 for any amount. | |
(d) | Not applicable. |
Squar | KPMG LLP | |||||||||||
2005 | 2005 | 2004 | ||||||||||
Audit Fees | $ | 1,080 | $ | 12,131 | $ | 10,800 | ||||||
Audit-Related Fees | 0 | 0 | 0 | |||||||||
Tax Fees | 0 | 11,250 | 11,187 | |||||||||
All Other Fees | 0 | 0 | 0 | |||||||||
Total | $ | 1,080 | $ | 23,381 | $ | 21,987 |
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(a)(1) | Financial Statements | |
Included in Part II of this report: | ||
Report of Independent Registered Public Accounting Firm — Squar, Milner, Reehl & Williamson, LLP | ||
Report of Independent Registered Public Accounting Firm — KPMG LLP | ||
Balance Sheets | ||
Statements of Income | ||
Statements of Partners’ Equity | ||
Statements of Cash Flows | ||
Notes to Financial Statements | ||
(a)(2) | 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) | Reports on Form 8-K | |
During the three months ended December 31, 2005, the following report on Form 8-K was filed: | ||
On October 28, 2005, Form 8-K was filed regarding the dismissal of KPMG LLP as the Partnership’s independent registered public accounting firm and the selection of Squar, Milner, Reehl & Williamson, LLP as the Partnership’s new independent registered public accountants. | ||
(c) | Exhibits required by Item 601 of Regulation S-K: |
1. | Incorporated herein by reference, Restated Agreement of Limited Partnership of | |||
Del Taco Income Properties IV filed as Exhibit 3.01 to Partnership’s Registration | ||||
Statement on Form S-11 as filed with the Securities and Exchange Commission on June 5, | ||||
1987. | ||||
2. | Incorporated herein by reference, Amendment to Restated Agreement of Limited | |||
Partnership of Del Taco Income Properties IV. | ||||
3. | Incorporated herein by reference, Form of Standard Lease to be entered into by | |||
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 June 5, 1987. | ||||
31.1 | Kevin K. Moriarty’s Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||
31.2 | Robert J. Terrano’s Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||
32.1 | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
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REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2005
Cost capitalized | Gross amount at | |||||||||||||||||||||||||||||||||||
Initial cost to company | subsequent to acquisition | which carried at close of period | Life on which | |||||||||||||||||||||||||||||||||
Land | Buildings & | Land, buildings & | depreciation in latest | |||||||||||||||||||||||||||||||||
Description | & land | Improve- | Carrying | improvements | Accumulated | Date of | Date | income statement | ||||||||||||||||||||||||||||
(All Restaurants) | Encumbrances | improvements | ments | costs | Total | depreciation | construction | acquired | is computed | |||||||||||||||||||||||||||
Placentia, CA | $ | — | $ | 465,933 | $ | 485,961 | $ | — | $ | 951,894 | $ | 329,921 | 1988 | 1988 | 20 (LI), 35 (BI) | |||||||||||||||||||||
Lake Elsinore, CA | — | 449,058 | 468,361 | — | 917,419 | 317,974 | 1989 | 1989 | 20 (LI), 35 (BI) | |||||||||||||||||||||||||||
San Bernardino, CA | — | 321,709 | 335,538 | — | 657,247 | 227,786 | 1989 | 1989 | 20 (LI), 35 (BI) | |||||||||||||||||||||||||||
$ | — | $ | 1,236,700 | $ | 1,289,860 | $ | — | $ | 2,526,560 | $ | 875,681 | |||||||||||||||||||||||||
Accumulated | ||||||||
Restaurants | Depreciation | |||||||
Balances at December 31, 2002: | $ | 2,526,560 | $ | 709,877 | ||||
Additions | — | 55,268 | ||||||
Retirements | — | — | ||||||
Balances at December 31, 2003: | 2,526,560 | 765,145 | ||||||
Additions | — | 55,268 | ||||||
Retirements | — | — | ||||||
Balances at December 31, 2004: | 2,526,560 | 820,413 | ||||||
Additions | — | 55,268 | ||||||
Retirements | — | — | ||||||
Balances at December 31, 2005: | $ | 2,526,560 | $ | 875,681 | ||||
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DEL TACO INCOME PROPERTIES IV a California limited partnership | |||
Del Taco, Inc. General Partner | |||
Date March 17, 2006 | Kevin K. Moriarty | ||
Kevin K. Moriarty | |||
Director, Chairman and Chief | |||
Executive Officer | |||
Date March 17, 2006 | Michael L. Annis | ||
Michael L. Annis | |||
Senior Vice President, Secretary and | |||
General Counsel | |||
Date March 17, 2006 | Robert J. Terrano | ||
Robert J. Terrano | |||
Executive Vice President and | |||
Chief Financial Officer |
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Exhibit | Description | |
1. | Incorporated herein by reference, Restated Agreement of Limited Partnership of Del Taco Income Properties IV filed as Exhibit 3.01 to Partnership’s Registration Statement on Form S-11 as filed with the Securities and Exchange Commission on June 5, 1987. | |
2. | Incorporated herein by reference, Amendment to Restated Agreement of Limited Partnership of Del Taco Income Properties IV. | |
3. | Incorporated herein by reference, Form of Standard Lease to be entered into by 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 June 5, 1987. | |
31.1 | Kevin K. Moriarty’s Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
31.2 | Robert J. Terrano’s Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
32.1 | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
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