UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to .
Commission File Number : 0-10979
PAINE WEBBER INCOME PROPERTIES THREE LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Delaware 13-3038189
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
265 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 439-8118
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 .
PAINE WEBBER INCOME PROPERTIES THREE LIMITED PARTNERSHIP
BALANCE SHEETS
MARCH 31, 1995 AND SEPTEMBER 30, 1994
(UNAUDITED)
ASSETS
March 31 September 30
Operating investment
property, at cost:
Land $ 950,000 $ 950,000
Building and improvements 4,087,560 4,087,560
Less: accumulated depreciation (1,236,048) (1,184,954)
3,801,512 3,852,606
Investments in joint ventures, at equity 3,312,660 3,265,156
Cash and cash equivalents 226,889 216,546
Deferred expenses, net 84,383 94,931
$ 7,425,444 $ 7,429,239
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable - affiliates $ 4,220 $ 4,220
Accrued expenses 60,719 42,471
Mortgage note payable 1,609,100 1,666,815
Partners' capital 5,751,405 5,715,733
$ 7,425,444 $7,429,239
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
FOR THE SIX MONTHS ENDED MARCH 31, 1995 AND 1994
(UNAUDITED)
General Limited
Partner Partners
Balance at September 30, 1993 $(57,821) $5,950,743
Cash distributions (2,110) (209,036)
Net loss (269) (26,612)
BALANCE AT MARCH 31, 1994 $(60,200) $5,715,095
Balance at September 30, 1994 $(59,593) $5,775,326
Cash distributions (2,111) (209,035)
Net income 2,468 244,350
BALANCE AT MARCH 31, 1995 $(59,236) $5,810,641
See accompanying notes.
PAINE WEBBER INCOME PROPERTIES THREE LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 1995 AND 1994
(UNAUDITED)
Three Months Ended Six Months Ended
March 31, March 31,
1995 1994 1995 1994
REVENUES:
Rental revenues $119,464 $119,464 $238,928 $238,928
Interest income 3,156 663 6,182 1,972
122,620 120,127 245,110 240,900
EXPENSES:
Interest expense 36,644 10,327 73,934 71,990
Management fees 4,220 4,220 8,440 8,440
Depreciation and
amortization expense 30,821 25,547 61,642 51,094
General and administrative 137,828 161,054 209,835 231,464
209,513 201,148 353,851 362,988
Operating loss (86,893) (81,021) (108,741) (122,088)
Partnership's share of
ventures' income 195,493 64,771 355,559 95,207
NET INCOME (LOSS) $108,600 $(16,250) $246,818 $(26,881)
Net income (loss) per Limited
Partnership Unit $ 4.99 $(0.75) $ 11.34 $ (1.23)
Cash distributions per
Limited Partnership Unit $ 4.85 $ 4.85 $ 9.70 $ 9.70
The above net income (loss) and cash distributions per Limited Partnership Unit
are based upon the 21,550 Units of Limited Partnership Interest outstanding for
each period.
See accompanying notes.
PAINE WEBBER INCOME PROPERTIES THREE LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED MARCH 31, 1995 AND 1994
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(UNAUDITED)
1995 1994
Cash flows from operating activities:
Net income (loss) $ 246,818 $ (26,881)
Adjustments to reconcile net income (loss) to
net cash used for operating activities:
Depreciation and amortization 61,642 51,094
Partnership's share of ventures' income (355,559) (95,207)
Changes in assets and liabilities:
Accounts payable - affiliates - (24,276)
Accounts payable and accrued expenses 18,248 2,751
Default interest payable - (77,410)
Total adjustments (275,669) (143,048)
Net cash used for operating activities (28,851) (169,929)
Cash flows from investing activities:
Distributions from joint ventures 308,055 379,831
Cash flows from financing activities:
Distributions to partners (211,146) (211,146)
Proceeds from issuance of mortgage note payable - 1,722,000
Payment of loan fees and expenses - (125,533)
Principal payments on mortgage note payable (57,715) (1,685,996)
Net cash used for financing activities (268,861) (300,675)
Net increase (decrease) in cash and
cash equivalents 10,343 (90,773)
Cash and cash equivalents, beginning of period 216,546 159,133
Cash and cash equivalents, end of period $226,889 $68,360
Cash paid during the period for interest $73,934 $149,400
See accompanying notes.
1. General
The accompanying financial statements, footnotes and discussion should be
read in conjunction with the financial statements and footnotes contained
in the Partnership's Annual Report for the year ended September 30, 1994.
In the opinion of management, the accompanying financial statements, which
have not been audited, reflect all adjustments necessary to present fairly
the results for the interim period. All of the adjustments reflected in
the accompanying interim financial statements are of a normal recurring
nature.
2. Real Estate Investments
The Partnership directly owns one operating investment property (Northeast
Plaza) and has investments in three joint venture partnerships which own
operating properties as more fully described in the Partnership's Annual
Report. The joint ventures are accounted for by using the equity method
because the Partnership does not have a voting control interest in the
ventures. Under the equity method, the assets, liabilities, revenues and
expenses of the joint ventures do not appear in the Partnership's financial
statements. Instead, the investments are carried at cost adjusted for the
Partnership's share of the ventures' earnings, losses and distributions.
Summarized operating results of the three joint ventures for the three and
six moths ended March 31, 1995 and 1994 are as follows:
Condensed Combined Summary of Operations
For the three and six months ended March 31, 1995 and 1994
Three Months Ended Six Months Ended
March 31, March 31,
1995 1994 1995 1994
Rental revenues and
expense recoveries $1,585,000 $1,462,000 $3,109,000 $2,912,000
Interest and other income 37,000 53,000 75,000 60,000
1,622,000 1,515,000 3,184,000 2,972,000
Property operating expenses 637,000 708,000 1,258,000 1,402,000
Interest expense 426,000 425,000 849,000 859,000
Depreciation and
amortization 215,000 222,000 425,000 444,000
1,278,000 1,355,000 2,532,000 2,705,000
NET INCOME $ 344,000 $ 160,000 $ 652,000 $ 267,000
Net income:
Partnership's share of
combined income $ 220,000 $ 90,000 $ 406,000 $ 145,000
Co-venturers' share of
combined income 124,000 70,000 246,000 122,000
$ 344,000 $ 160,000 $ 652,000 $ 267,000
Reconciliation of Partnership's Share of Operations
Three Months Ended Six Months Ended
March 31, March 31,
1995 1994 1995 1994
Partnership's share of
income, as shown above $220,000 $90,000 $406,000 $145,000
Amortization of excess basis (25,000) (25,000) (50,000) (50,000)
Partnership's share of
ventures' income $195,000 $65,000 $356,000 $95,000
3. Note and Interest Receivable, Net
Note and interest receivable at March 31, 1995 and September 30, 1994
consists of a $3,445,336 note received in connection with the Partnership's
sale of its joint venture interest in the Briarwood joint venture in
December of 1984. The note has been netted against deferred gain on the
sale of a like amount on the Partnership's balance sheet. The note bears
interest at 9% annually, matures on January 1, 2000 and is subordinated to a
first mortgage loan. Interest and principal payments on the note are
payable only to the extent of net cash flow from the properties sold, as
defined in the sale documents. Any interest not received will accrue
additional interest of 9% per annum. The Partnership's policy has been to
defer recognition of all interest income on the note until collected, due to
the uncertainty of its collectibility. To date, the Partnership has not
received any interest payments. Per the terms of the note agreement,
accrued interest receivable as of March 31, 1995 would be approximately
$4,922,000. Since the properties securing the note continue to generate
operating deficits and the Partnership's note receivable is subordinated to
other first mortgage debt, there is significant uncertainty as to the
collectibility of both the principal and accrued interest as of March 31,
1995. As a result, the portion of the remaining gain to be recognized,
which is represented by the note and accrued interest, has been deferred
until realized in cash.
4. Related Party Transactions
Management fees earned by the Adviser totalled $8,440 for each of the six-
month periods ended March 31, 1995 and 1994. Accounts payable - affiliates
at March 31, 1995 and September 30, 1994 consists of $4,220 of management
fees payable to the Adviser at both dates.
Included in general and administrative expenses for the six months ended
March 31, 1995 and 1994 is $35,320 and $42,261, respectively, representing
reimbursements to an affiliate of the General Partner for providing certain
financial, accounting and investor communication services to the
Partnership.
5. Mortgage Note Payable and Contingencies
The mortgage note payable at March 31, 1995 and September 30, 1994 is
secured by the Partnership's wholly-owned Northeast Plaza Shopping Center.
On March 29, 1994, the Partnership refinanced the existing wraparound
mortgage note secured by Northeast Plaza, which had been in default for over
two years, with a new loan issued by the prior underlying first mortgage
lender. The new loan, in the initial principal amount of $1,722,000, has a
term of five years and bears interest at a fixed rate of 9% per annum.
Monthly principal and interest payments of approximately $21,900 are due
until maturity in May 1999. The loan may be prepaid at anytime without
penalty. Closing costs of approximately $106,000 were paid out of the
proceeds of the refinancing. The refinancing was negotiated in conjunction
with a restructuring of the master lease that covers the Partnership's
interest in Northeast Plaza. The master lessee was also the holder of the
wraparound mortgage. As part of the refinancing, the wrap note holder
applied withheld rental payments, which totalled approximately $661,000,
against the outstanding balance of the wraparound mortgage.
Management believes that the Partnership's efforts to sell or refinance the
Northeast Plaza property have been impeded by potential buyer and lender
concerns of an environmental nature with respect to the property. During
1990, it was discovered that certain underground storage tanks of a Mobil
service station located adjacent to the shopping center had leaked and
contaminated the groundwater in the vicinity of the station. Since the time
that the contamination was discovered, Mobil Oil Corporation (Mobil) has
investigated the problem and is progressing with efforts to remedy the soil
and groundwater contamination under the supervision of the Florida
Department of Environmental Regulation, which has approved Mobil's remedial
action plan. During fiscal 1990, the Partnership had obtained an
indemnification agreement from Mobil in which Mobil agreed to bear the cost
of all damages and required clean-up expenses. Furthermore, Mobil
indemnified the Partnership against its inability to sell, transfer, or
obtain financing on the property because of the contamination.
As a result of the contamination of the groundwater at Northeast Plaza, the
Partnership has incurred certain damages, primarily related to the inability
to sell the property and to delays in the process of refinancing the
property's mortgage indebtedness. The Partnership has incurred significant
out-of-pocket and legal expenses in connection with such sale and
refinancing efforts. Despite repeated requests by the Partnership for
compensation under the terms of the indemnification agreement, to date Mobil
has refused to compensate the Partnership for any of these damages. During
the first quarter of fiscal 1993, the Partnership filed suit against Mobil
for breach of indemnity and property damage. The Partnership is seeking
judgment against Mobil which would award the Partnership compensatory
damages, out-of-pocket costs, attorneys' fees and such other relief as the
court may deem proper. The discovery phase of the lawsuit has been extended
and is now expected to be completed sometime before the end of fiscal 1995.
Once the discovery phase is completed, a trial date will be set. The
outcome of these legal proceedings cannot presently be determined.
PAINE WEBBER INCOME PROPERTIES THREE LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
As discussed further in the Annual Report, on March 29, 1994 the Partnership
refinanced the existing wraparound mortgage note secured by Northeast Plaza with
a new loan issued by the prior underlying first mortgage lender. The new loan,
in the initial principal amount of $1,722,000, has a term of five years and
bears interest at a fixed rate of 9% per annum. Monthly principal and interest
payments of approximately $21,900 are due until maturity in May 1999. The loan
may be prepaid at anytime without penalty. Closing costs of approximately
$106,000 were paid out of the proceeds of the refinancing. The refinancing was
negotiated in conjunction with a restructuring of the master lease that covers
the Partnership's interest in Northeast Plaza. The master lessee was also the
holder of the wraparound mortgage. As part of the refinancing, the wrap note
holder applied withheld master lease rental payments, which totalled
approximately $661,000, against the outstanding balance of the wraparound
mortgage. Rental payments to the Partnership were reinstated beginning in April
1994. Annual cash flow to the Partnership under the master lease will equal
approximately $215,000 after debt service. Initially, cash flow from Northeast
Plaza will be utilized to replenish the Partnership's cash reserves.
Management believes that the Partnership's efforts to sell or refinance the
Northeast Plaza property have been impeded by potential buyer and lender
concerns of an environmental nature with respect to the property. During 1990,
it was discovered that certain underground storage tanks of a Mobil service
station located adjacent to the shopping center had leaked and contaminated the
groundwater in the vicinity of the station. Since the time that the
contamination was discovered, Mobil has investigated the problem and is
progressing with efforts to remedy the soil and groundwater contamination under
the supervision of the Florida Department of Environmental Regulation, which has
approved Mobil's remedial action plan. During fiscal 1990, the Partnership had
obtained a formal indemnification agreement from Mobil Oil Corporation in which
Mobil agreed to bear the cost of all damages and required clean-up expenses.
Furthermore, Mobil indemnified the Partnership against its inability to sell,
transfer or obtain financing on the property because of the contamination. As a
result of the contamination of the groundwater at Northeast Plaza, the
Partnership has incurred certain damages, primarily related to the inability to
sell the property and to delays in the process of refinancing the property's
mortgage indebtedness. The Partnership has incurred significant out-of-pocket
and legal expenses in connection with such sale and refinancing efforts.
Despite repeated requests by the Partnership for compensation under the terms of
the indemnification agreement, Mobil has refused to compensate the Partnership
for its damages. During the first quarter of fiscal 1993, the Partnership filed
suit against Mobil for breach of indemnity and property damage. The Partnership
is seeking judgment against Mobil which would award the Partnership compensatory
damages, costs, attorneys' fees and such other relief as the Court may deem
proper. The discovery phase of the lawsuit has been extended and is now
expected to be completed sometime before the end of fiscal 1995. Once the
discovery phase is completed, a trial date will be set. The outcome of these
legal proceedings cannot presently be determined.
The operations of the Partnership's three joint venture investment properties
are stable and producing excess cash flow as of March 31, 1995. At the Pine
Trail Shopping Center, the national restaurant chain which renovated a building
on an out-parcel at the property and opened for business during the first
quarter of fiscal 1995 is generating increased shopper traffic and new business
for the Center's other tenants. Road construction near the center has been
completed, and the traffic flow to Pine Trail has improved as a result.
Occupancy at Pine Trail increased to 96% as of March 31, 1995. The Pine Trail
Shopping Center has five out-parcels on the site, covering six acres, which have
been leased by the Pine Trail Partnership from third parties under five separate
ground leases since the inception of the joint venture. During the second
quarter of fiscal 1995, the joint venture entered into a purchase and sale
agreement to acquire one of these out-parcels, containing 60,248 square feet,
for the purchase price of $350,000. This purchase price is significantly lower
than the assessed value of the out-parcel and comparable land sales in the area.
This purchase would be 100% financed with a non-recourse first mortgage loan
secured by the free-standing restaurant located on the out-parcel. The loan
would bear interest at the prime rate plus one-percent and would require monthly
principal and interest payments over a 5-year term. It is anticipated that this
purchase will be completed during the third quarter of fiscal 1995. Management
may seek to acquire the other out-parcels if favorable terms for such
acquisitions can be negotiated. Comprehensive ownership of all of the land
underlying the shopping center, if accomplished, should enhance the
marketability of the property under a sale scenario.
Occupancy at Camelot Apartments increased to 97% as of March 31, 1995. The
capital improvement program implemented at the property in 1994, which included
the continuation of a roof replacement process, has enabled the property to
increase occupancy levels and rental rates. Given the current strength of the
national real estate market with respect to multi-family apartment properties,
management plans to actively market this property for sale during fiscal 1995.
The decision as to whether to accept any offers which may result from these
planned marketing efforts will be based on an evaluation of the attractiveness
of the offers themselves and an assessment of the national and local market
factors affecting the appreciation potential of the property in the relatively
near term. Accordingly, there can be no assurances that a sale transaction will
be consummated in 1995. A portion of the property's cash flow will continue to
be reinvested in capital improvements for the property durng fiscal 1995 in
order to enhance the marketing efforts and maximize the potential offer prices.
A substantial portion of the venture's mortgage debt is scheduled to mature in
January 1996. Based on the strong operating results that the Camelot property
has consistently generated, management would not expect to have any difficulty
in refinancing the venture's debt obligation prior to this scheduled maturity
date.
As previously reported, the mortgage debt secured by Central Plaza was
scheduled to mature on December 1, 1994. During the first quarter, the venture
obtained an extension of the maturity date from the lender to January 1, 1995.
During the second quarter, the venture obtained a mortgage loan from a new
lender which enabled the venture to repay, in full, this maturing obligation.
The new loan, in the initial principal amount of $4,200,000, bears interest at a
rate of 10% per annum. Monthly payments of principal and interest of
approximately $37,000 are due until maturity in January 2002. Occupancy at the
Central Plaza Shopping Center decreased to 92% as of March 31, 1995 as a tenant
which had previously occupied 5,843 square feet of shop space vacated at the end
of the quarter.
At March 31, 1995, the Partnership had available cash and cash equivalents of
approximately $227,000. Such cash and cash equivalents will be used for working
capital requirements and distributions to the partners. The source of future
liquidity and distributions to the partners is expected to be through cash
generated from the operations of the Partnership's income-producing investment
properties and proceeds received from the sale or refinancing of such properties
or sales of the Partnership's interests in such properties. Such sources of
liquidity are expected to be sufficient to meet the Partnership's needs on both
a short-term and long-term basis. In addition, the Partnership has a note
receivable that it received as a portion of the proceeds from the sale of its
interest in the Briarwood joint venture in fiscal 1985. The note and related
accrued interest receivable have been netted against a deferred gain of a like
amount on the accompanying balance sheet. The interest owed on the note
receivable is currently payable only to the extent that the related properties
generate excess net cash flow. To date, no payments have been received on the
note, which matures on January 1, 2000, and none are expected in the near
future. Since the operating properties continue to generate net cash flow
deficits and the Partnership's note receivable is subordinated to the existing
first mortgage debt, there is significant uncertainty as to the collectibility
of the principal and accrued interest. Proceeds, if any, received on the note
would represent a source of additional liquidity for the Partnership.
RESULTS OF OPERATIONS
Three Months Ended March 31,1995
Net operating results for the three months ended March 31,1995 improved by
approximately $125,000 over the same period in the prior year. An increase in
the Partnership's share of ventures' income and a decrease in general and
administrative expenses are the primary reasons for this improvement in net
operating results for the second quarter of fiscal 1995. The Partnership's
share of ventures' income increased by approximately $131,000 for the second
quarter mainly due to an increase in rental revenues and a decrease in operating
expenses at both the Camelot Apartments and the Pine Trail Shopping Center.
Rental revenues were up by almost 12% at Camelot, primarily due to an increase
in the average occupancy of the apartment complex and an increase in rental
rates. Average occupancy for the second quarter increased from 95% for fiscal
1994 to 97% for fiscal 1995. Expenses declined at Camelot in the current period
as a result of the property upgrading program which was in process in the prior
year. Rental revenues at Pine Trail increased mainly due to an increase in the
average occupancy of the center. Occupancy at the center increased from 92% as
of March 31, 1994 to 96% at March 31, 1995. Property operating expenses at Pine
Trail decreased as a result of a capital improvement program which was completed
during fiscal 1994 and resulted in higher than normal repairs and maintenance
expenses in the prior period. General and administrative expenses decreased by
approxmately $23,000 for the second quarter of fiscal 1995 mainly due to certain
additional costs incurred in the prior year related to an independent valuation
of the Partnership's investment properties.
Six Months Ended March 31, 1995
The Partnership reported net income of approximately $247,000 for the six
months ended March 31, 1995 compared to a net loss of approximately $27,000 for
the same period in the prior year. The improvement in the Partnership's net
operating results can be attributed to an increase in the Partnership's share of
ventures' income of approximately $260,000 and a decrease in operating loss.
Increased revenues and lower repairs and maintenance expenses at the Camelot
Apartments and the Pine Trail Shopping Center were the primary contributors to
the favorable change in the Partnership's share of ventures' income for the six-
month period. Operating loss decreased by approximately $13,000 for the six
months ended March 31, 1995 mainly due to a decrease in general and
administrative expenses. General and administrative expenses decreased
primarily due to the additional costs incurred in the prior year related to the
independent valuation of the Partnership's properties.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
In November 1994, a series of purported class actions (the "New York
Limited Partnership Actions") were filed in the United States District Court for
the Southern District of New York concerning PaineWebber Incorporated's sale and
sponsorship of various limited partnership investments, including those offered
by the Partnership. The lawsuits were brought against PaineWebber Incorporated
and Paine Webber Group Inc. (together "PaineWebber"), among others, by allegedly
dissatisfied partnership investors. In March 1995, after the actions were
consolidated under the title In re PaineWebber Limited Partnership Litigation,
the plaintiffs amended their complaint to assert claims against a variety of
other defendants, including Third Income Properties, Inc., an affiliate of
PaineWebber and the Managing General Partner in the Partnership.
The amended complaint in the New York Limited Partnership Actions alleges
that, in connection with the sale of interests in PaineWebber Income Properties
Three Limited Partnership, PaineWebber and Third Income Properties, Inc. (1)
failed to provide adequate disclosure of the risks involved; (2) made false and
misleading representations about the safety of the investments and the
Partnership's anticipated performance; and (3) marketed the Partnership to
investors for whom such investments were not suitable. The plaintiffs, who
purport to be suing on behalf of all persons who invested in PaineWebber Income
Properties Three Limited Partnership, also allege that following the sale of the
partnership interests, PaineWebber and Third Income Properties, Inc.
misrepresented financial information about the Partnership's value and
performance. The amended complaint alleges that PaineWebber and Third Income
Properties, Inc. violated the Racketeer Influenced and Corrupt Organizations Act
("RICO") and the federal securities laws. The plaintiffs seek unspecified
damages, including reimbursement for all sums invested by them in the
partnerships, as well as disgorgement of all fees and other income derived by
PaineWebber from the limited partnerships. In addition, the plaintiffs also
seek treble damages under RICO. The defendants' time to move against or answer
the complaint has not yet expired.
Pursuant to provisions of the Partnership Agreement and other contractual
obligations, under certain circumstances the Partnership may be required to
indemnify Third Income Properties, Inc. and its affiliates for costs and
liabilities in connection with this litigation. The Managing General Partner
intends to vigorously contest the allegations of the action, and believes that
the action will be resolved without material adverse effect on the Partnership's
financial statements, taken as a whole.
Item 2. through 5. NONE
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: NONE
(b) Reports on Form 8-K:
PAINE WEBBER INCOME PROPERTIES THREE LIMITED PARTNERSHIP
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.
PAINE WEBBER INCOME PROPERTIES THREE
LIMITED PARTNERSHIP
By: THIRD INCOME PROPERTIES, INC.
General Partner
By: /s/ Walter V. Arnold
Walter V. Arnold
Senior Vice President and Chief
Financial Officer
Date: May 12, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Partnership's interim financial statements for the 6 months ended March 31, 1995
and is qualified in its entirety by reference to such financial statements
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> MAR-31-1995
<CASH> 226,889
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 226,889
<PP&E> 5,037,560
<DEPRECIATION> 1,236,048
<TOTAL-ASSETS> 7,425,444
<CURRENT-LIABILITIES> 64,939
<BONDS> 1,609,100
<COMMON> 0
0
0
<OTHER-SE> 5,751,405
<TOTAL-LIABILITY-AND-EQUITY> 7,425,444
<SALES> 0
<TOTAL-REVENUES> 600,669
<CGS> 0
<TOTAL-COSTS> 279,917
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 73,934
<INCOME-PRETAX> 246,818
<INCOME-TAX> 0
<INCOME-CONTINUING> 246,818
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 246,818
<EPS-PRIMARY> 11.34
<EPS-DILUTED> 11.34
</TABLE>
