Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended |
Mar. 31, 2015 | |
Document And Entity Information [Abstract] | |
Document Type | 10-Q |
Amendment Flag | FALSE |
Document Period End Date | 31-Mar-15 |
Document Fiscal Year Focus | 2015 |
Document Fiscal Period Focus | Q1 |
Trading Symbol | DTIPIV |
Entity Registrant Name | DEL TACO INCOME PROPERTIES IV |
Entity Central Index Key | 812630 |
Current Fiscal Year End Date | -19 |
Entity Filer Category | Non-accelerated Filer |
Entity Common Stock, Shares Outstanding | 165,375 |
Condensed_Balance_Sheets
Condensed Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
CURRENT ASSETS: | ||
Cash | $103,724 | $118,794 |
Receivable from Del Taco LLC | 42,183 | 39,830 |
Other current assets | 696 | 732 |
Total current assets | 146,603 | 159,356 |
PROPERTY AND EQUIPMENT: | ||
Land | 868,344 | 868,344 |
Land improvements | 368,356 | 368,356 |
Buildings and improvements | 1,289,860 | 1,289,860 |
Machinery and equipment | 484,789 | 484,789 |
Property and equipment, gross | 3,011,349 | 3,011,349 |
Less - accumulated depreciation | 1,775,658 | 1,766,445 |
Property and equipment, net | 1,235,691 | 1,244,904 |
Total assets | 1,382,294 | 1,404,260 |
CURRENT LIABILITIES: | ||
Payable to limited partners | 21,307 | 20,152 |
Accounts payable | 25,782 | 17,074 |
Total current liabilities | 47,089 | 37,226 |
OBLIGATION TO GENERAL PARTNER | 137,953 | 137,953 |
PARTNERS' EQUITY: | ||
Limited partners; 165,375 units outstanding at March 31, 2015 and December 31, 2014 | 1,216,413 | 1,247,924 |
General partner-Del Taco LLC | -19,161 | -18,843 |
Total partners' equity | 1,197,252 | 1,229,081 |
Total liabilities and partners' equity | $1,382,294 | $1,404,260 |
Condensed_Balance_Sheets_Paren
Condensed Balance Sheets (Parenthetical) | Mar. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Limited partners, units outstanding | 165,375 | 165,375 |
Condensed_Statements_of_Income
Condensed Statements of Income (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Income Statement [Abstract] | ||
RENTAL REVENUES | $117,878 | $109,722 |
EXPENSES: | ||
General and administrative | 53,857 | 36,967 |
Depreciation | 9,213 | 9,213 |
Total expenses | 63,070 | 46,180 |
Operating income | 54,808 | 63,542 |
OTHER INCOME: | ||
Interest | 30 | 34 |
Other | 975 | 75 |
Net income | $55,813 | $63,651 |
Net income per limited partnership unit (Note 2) | $0.33 | $0.38 |
Number of units used in computing per unit amounts | 165,375 | 165,375 |
Condensed_Statements_of_Cash_F
Condensed Statements of Cash Flows (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $55,813 | $63,651 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 9,213 | 9,213 |
Changes in operating assets and liabilities: | ||
Receivable from Del Taco LLC | -2,353 | -830 |
Other current assets | 36 | 76 |
Payable to limited partners | 1,155 | 151 |
Accounts payable | 8,708 | 14,348 |
Net cash provided by operating activities | 72,572 | 86,609 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Cash distributions to partners | -87,642 | -96,729 |
Net cash used in financing activities | -87,642 | -96,729 |
Net change in cash | -15,070 | -10,120 |
Beginning cash balance | 118,794 | 126,862 |
Ending cash balance | $103,724 | $116,742 |
Basis_of_Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | NOTE 1 - BASIS OF PRESENTATION |
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America 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 accounting principles generally accepted in the United States of America for complete financial statements and should therefore be read in conjunction with the financial statements and notes thereto contained in the annual report on Form 10-K for the year ended December 31, 2014 for Del Taco Income Properties IV (the Partnership or the Company). In the opinion of management, all adjustments (consisting of normal recurring accruals) necessary to present fairly the Partnership’s financial position at March 31, 2015 and the results of operations and cash flows for the three month periods ended March 31, 2015 and 2014 have been included. Operating results for the three months ended March 31, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. Amounts related to disclosure of December 31, 2014 balances within these condensed financial statements were derived from the 2014 audited financial statements. | |
Management has evaluated events subsequent to March 31, 2015 through the date that the accompanying condensed financial statements were filed with the Securities and Exchange Commission for transactions and other events which may require adjustment of and/or disclosure in such financial statements. |
Net_Income_Per_Limited_Partner
Net Income Per Limited Partnership Unit | 3 Months Ended |
Mar. 31, 2015 | |
Earnings Per Share [Abstract] | |
Net Income Per Limited Partnership Unit | NOTE 2 - NET INCOME PER LIMITED PARTNERSHIP UNIT |
Net income per limited partnership unit is based on net income attributable to the limited partners (after 1% allocation to the general partner) using the weighted average number of units outstanding during the periods presented, which amounted to 165,375 in 2015 and 2014. | |
Pursuant to the partnership agreement, annual partnership income or loss is allocated one percent to Del Taco LLC, formerly known as Del Taco Inc., (Del Taco or 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, and until each class of limited partners receive their priority return as defined in the partnership agreement. Additional gains will be allocated 12 percent to the General Partner and 88 percent to the limited partners. |
Leasing_Activities
Leasing Activities | 3 Months Ended |
Mar. 31, 2015 | |
Leases [Abstract] | |
Leasing Activities | NOTE 3 - LEASING ACTIVITIES |
The Partnership leases three properties for operation of restaurants to Del Taco on a triple net basis. One property has been subleased to a Del Taco franchisee. The leases are for terms of 32 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. The leases expire in the years 2021 to 2022. Pursuant to the lease agreements, minimum rentals of $3,500 per month are due to the Partnership during the first six months of any non-operating period caused by an insured casualty loss. | |
For the three months ended March 31, 2015, the two restaurants operated by Del Taco, for which the Partnership is the lessor, had combined, unaudited sales of $612,864 and unaudited net income of $10,344, as compared to unaudited sales of $581,837 and unaudited net losses of $4,402, respectively, for the corresponding period in 2014. Net income or loss of each restaurant includes charges for general and administrative expenses incurred in connection with supervision of restaurant operations and interest expense and the decrease in net loss from the corresponding period of the prior year primarily relates to increases in sales. For the three months ended March 31, 2015, the one restaurant operated by a Del Taco franchisee, for which the Partnership is the lessor, had unaudited sales of $369,454 as compared with $332,515 during the same period in 2014. |
Transactions_with_Del_Taco
Transactions with Del Taco | 3 Months Ended |
Mar. 31, 2015 | |
Related Party Transactions [Abstract] | |
Transactions with Del Taco | NOTE 4 - TRANSACTIONS WITH DEL TACO |
The receivable from Del Taco consists primarily of rent accrued for the month of March 2015. The March rent receivable was collected in April 2015. | |
Del Taco 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 for operation under the Del Taco trade name. | |
In addition, see Note 5 with respect to certain distributions to the General Partner. |
Distributions
Distributions | 3 Months Ended |
Mar. 31, 2015 | |
Equity [Abstract] | |
Distributions | NOTE 5 - DISTRIBUTIONS |
Total cash distributions declared and paid in February 2015 were $87,642. On April 23, 2015, a distribution to the limited partners of $50,903, or approximately $0.31 per limited partnership unit, was approved. Such distribution was paid on May 7, 2015. The General Partner also received a distribution of $514 with respect to its 1% partnership interest in May 2015. |
Payable_to_Limited_Partners
Payable to Limited Partners | 3 Months Ended |
Mar. 31, 2015 | |
Other Liabilities Disclosure [Abstract] | |
Payable to Limited Partners | NOTE 6 - PAYABLE TO LIMITED PARTNERS |
Payable to limited partners represents a reclassification from cash for distribution checks made to limited partners that have remained outstanding for six months or longer. |
Concentration_of_Risk
Concentration of Risk | 3 Months Ended |
Mar. 31, 2015 | |
Risks and Uncertainties [Abstract] | |
Concentration of Risk | NOTE 7 - CONCENTRATION OF RISK |
The three restaurants leased to Del Taco make up all of the income producing assets of the Partnership and contributed all of the Partnership’s rental revenues during the three months ended March 31, 2015 and 2014. Therefore, the business of the Partnership is entirely dependent on the success of the Del Taco trade name restaurants that lease the properties. | |
The Partnership maintains substantially all of its cash and cash equivalents at one major commercial bank. Although the Partnership at times maintains balances that exceed the federally insured limit, it has not experienced any losses related to these balances and management believes the credit risk to be minimal. |
Communication_from_Certain_Lim
Communication from Certain Limited Partners and Straw Poll Results | 3 Months Ended |
Mar. 31, 2015 | |
Text Block [Abstract] | |
Communication from Certain Limited Partners and Straw Poll Results | NOTE 8 - COMMUNICATION FROM CERTAIN LIMITED PARTNERS AND STRAW POLL RESULTS |
During the third quarter of 2014, several limited partners communicated to the General Partner their desire to potentially sell all of the properties and then dissolve the Partnership. Pursuant to the Partnership agreement, any decision to sell all of the properties and to dissolve the Partnership would require approval from a majority in interest of limited partners. On October 1, 2014 the General Partner initiated a “straw poll” of all limited partners to determine if there is sufficient interest to support a potential sale of the properties and dissolution of the Partnership, as disclosed in Form 8-K filed on October 1, 2014. Limited partner responses to the straw poll were received during the fourth quarter of 2014 and on December 17, 2014, Del Taco filed a Form 8-K to disclose the results of the poll. The poll was intended to gauge interest level only and the results indicate a strong majority of the units responded either “open to” or “strongly in favor of” Del Taco testing the market and presenting a sale proposal to the limited partners for a vote. Accordingly, Del Taco filed a Form 8-K on January 12, 2015 indicating its intention to initiate a sale process to market the properties owned by the Partnership that may result in the presentation of a sale transaction to the limited partners for approval. Del Taco intended to appoint a special committee comprised of a small group of qualified limited partners to facilitate the sale process and to manage any potential conflicts of interest with respect to Del Taco that may arise during the sale process, however, only one timely application was received. Del Taco does not believe one committee member could adequately perform the role required by the committee, and therefore, the sale process has commenced without a special committee and Del Taco will resolve any potential conflicts of interest pursuant to the Partnership’s partnership agreement and applicable law. | |
On February 17, 2015, MacKenzie Realty Capital, Inc. (“MacKenzie”), a limited partner, filed a schedule TO initiating a tender offer to purchase all units of the Partnership. The MacKenzie tender offer is unrelated to the sale process that Del Taco has initiated. On February 27, 2015, the Partnership filed a Schedule 14D-9 solicitation/recommendation statement in response to the Schedule TO. | |
On March 16, 2015, after evaluating several alternatives the General Partner engaged CBRE, Inc. (“CBRE”) as its commercial real estate broker to conduct a process to market the properties owned by the Partnership. The General Partner expects to evaluate offers; | |
however, there are no assurances that Del Taco will receive any acceptable offers or will be successful in entering into a binding agreement to sell the properties. |
Basis_of_Presentation_Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION |
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America 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 accounting principles generally accepted in the United States of America for complete financial statements and should therefore be read in conjunction with the financial statements and notes thereto contained in the annual report on Form 10-K for the year ended December 31, 2014 for Del Taco Income Properties IV (the Partnership or the Company). In the opinion of management, all adjustments (consisting of normal recurring accruals) necessary to present fairly the Partnership’s financial position at March 31, 2015 and the results of operations and cash flows for the three month periods ended March 31, 2015 and 2014 have been included. Operating results for the three months ended March 31, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. Amounts related to disclosure of December 31, 2014 balances within these condensed financial statements were derived from the 2014 audited financial statements. | |
Management has evaluated events subsequent to March 31, 2015 through the date that the accompanying condensed financial statements were filed with the Securities and Exchange Commission for transactions and other events which may require adjustment of and/or disclosure in such financial statements. | |
Net Income Per Limited Partnership Unit | NET INCOME PER LIMITED PARTNERSHIP UNIT |
Net income per limited partnership unit is based on net income attributable to the limited partners (after 1% allocation to the general partner) using the weighted average number of units outstanding during the periods presented, which amounted to 165,375 in 2015 and 2014. | |
Pursuant to the partnership agreement, annual partnership income or loss is allocated one percent to Del Taco LLC, formerly known as Del Taco Inc., (Del Taco or 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, and until each class of limited partners receive their priority return as defined in the partnership agreement. Additional gains will be allocated 12 percent to the General Partner and 88 percent to the limited partners. | |
Concentration of Risk | CONCENTRATION OF RISK |
The three restaurants leased to Del Taco make up all of the income producing assets of the Partnership and contributed all of the Partnership’s rental revenues during the three months ended March 31, 2015 and 2014. Therefore, the business of the Partnership is entirely dependent on the success of the Del Taco trade name restaurants that lease the properties. | |
The Partnership maintains substantially all of its cash and cash equivalents at one major commercial bank. Although the Partnership at times maintains balances that exceed the federally insured limit, it has not experienced any losses related to these balances and management believes the credit risk to be minimal. |
Net_Income_Per_Limited_Partner1
Net Income Per Limited Partnership Unit - Additional Information (Detail) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Earnings Per Share [Line Items] | ||
Percentage of net income allocated to general partner | 1.00% | |
Weighted average number of units outstanding to general partner | 165,375 | 165,375 |
General Partner [Member] | ||
Earnings Per Share [Line Items] | ||
Percentage of net income allocated to general partner | 1.00% | |
Percentage of gain on sale and refinancing allocated to General Partner | 1.00% | |
Percentage of additional gain on sale and refinancing allocated to General Partner | 12.00% | |
Limited Partners [Member] | ||
Earnings Per Share [Line Items] | ||
Percentage of net income attributable limited partners | 99.00% | |
Percentage of gain on sale and refinancing allocated to limited partners | 99.00% | |
Percentage of additional gain on sale and refinancing allocated to limited partners | 88.00% |
Leasing_Activities_Additional_
Leasing Activities - Additional Information (Detail) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Restaurants | Restaurants | |
Operating Leased Assets [Line Items] | ||
Number of restaurants leased to Del Taco | 3 | 3 |
Number of properties subleased to Del Taco franchisee | 1 | |
Number of lease years | 32 years | |
Percentage of gross sales of restaurants | 12.00% | |
Leases expiration period | 2021 to 2022 | |
Minimum rentals due to partnership | $3,500 | |
Number of restaurants operated | 2 | |
Combined unaudited sales | 612,864 | 581,837 |
Combined unaudited net income (losses) | 10,344 | -4,402 |
Del Taco franchisee [Member] | ||
Operating Leased Assets [Line Items] | ||
Number of restaurants operated | 1 | |
Combined unaudited sales | $369,454 | $332,515 |
Transactions_with_Del_Taco_Add
Transactions with Del Taco - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2015 | |
Acquisition | |
Related Party Transactions [Abstract] | |
Number of other partnerships formed for acquisition | 3 |
Distributions_Additional_Infor
Distributions - Additional Information (Detail) (USD $) | 1 Months Ended | 3 Months Ended |
Feb. 28, 2015 | Mar. 31, 2015 | |
Cash Distributions [Abstract] | ||
Total cash distributions declared and paid | $87,642 | |
Distribution to limited partner, declaration date | 23-Apr-15 | |
Distribution to limited partners amount declared | 50,903 | |
Distribution to limited partner, per unit amount declared | $0.31 | |
Distribution to limited partner, distribution date | 7-May-15 | |
Distributions to general partner | $514 | |
General partner, partnership interest percentage | 1.00% | |
Distribution to general partner, distribution date | 31-May-15 |
Payable_to_Limited_Partners_Ad
Payable to Limited Partners - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2015 | |
Payables and Accruals [Abstract] | |
Period of payable outstanding to limited partners | Six months or longer |
Concentration_of_Risk_Addition
Concentration of Risk - Additional Information (Detail) | Mar. 31, 2015 | Mar. 31, 2014 |
CommercialBank | Restaurants | |
Restaurants | ||
Risks and Uncertainties [Abstract] | ||
Number of restaurants leased to Del Taco | 3 | 3 |
Commercial bank | 1 |