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 MAY 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 : 0-15036
PAINE WEBBER QUALIFIED PLAN PROPERTY FUND FOUR, LP
(Exact name of registrant as specified in its charter)
Delaware 04-2841746
(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 QUALIFIED PLAN PROPERTY FUND FOUR, LP
BALANCE SHEETS
May 31, 1995 and August 31, 1994
(Unaudited)
ASSETS
May 31 August 31
Real estate investments:
Investment properties held for sale, net $11,200,000 $18,100,500
Land 3,177,000 3,177,000
Mortgage loans, net 13,001,500 13,001,500
27,378,500 34,279,000
Cash and cash equivalents 11,505,401 2,682,258
Interest receivable 117,742 117,742
Accounts receivable 13,630 36,675
Tax and tenant security deposit escrows - 94,083
Deferred expenses, net 144,590 165,110
Other assets 47,999 86,281
$39,207,862 $37,461,149
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable - affiliates $ 56,062 $ 56,062
Accounts payable and accrued expenses 66,557 156,155
Other liabilities 50,000 -
Tenant security deposits 55,399 68,695
Partners' capital 38,979,844 37,180,237
$39,207,862 $37,461,149
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
For the nine months ended May 31, 1995 and 1994
(Unaudited)
General Limited
Partners Partners
Balance at August 31, 1993 $(35,987) $37,131,479
Net income 21,469 2,104,005
Cash distributions (20,594) (2,018,234)
BALANCE AT MAY 31, 1994 $(35,112) $37,217,250
Balance at August 31, 1994 $(35,131) $37,215,368
Net income 38,592 3,799,845
Cash distributions (20,595) (2,018,235)
BALANCE AT MAY 31, 1995 $(17,134) $38,996,978
See accompanying notes.
PAINE WEBBER QUALIFIED PLAN PROPERTY FUND FOUR, LP
STATEMENTS OF INCOME
For the nine months ended May 31, 1995 and 1994
(Unaudited)
Three Months Ended Nine Months Ended
May 31, May 31,
1995 1994 1995 1994
REVENUES:
Interest from mortgage loans $353,226 $353,226 $1,059,676 $1,059,676
Land rent 114,262 104,178 362,963 336,562
Other interest income 111,704 21,317 176,508 57,556
579,192 478,721 1,599,147 1,453,794
EXPENSES:
Management fees 62,926 62,926 188,780 188,780
General and administrative 96,717 104,445 341,313 329,691
Amortization of deferred
expenses 6,840 6,840 20,520 20,520
166,483 174,211 550,613 538,991
Operating income 412,709 304,510 1,048,534 914,803
Income from operations of
investment properties
held for sale, net 362,565 379,865 1,010,416 1,210,671
Gain on sale of investment
property 1,779,487 - 1,779,487 -
NET INCOME $2,554,761 $684,375 $3,838,437 $2,125,474
Net income per Limited
Partnership Unit $2.82 $0.76 $4.24 $2.35
Cash distributions per Limited
Partnership Unit $0.75 $0.75 $2.25 $2.25
The above net income and cash distributions per Limited Partnership Unit are
based upon the 896,993 Units ($50 per Unit) of Limited Partnership Interest
outstanding during each period.
See accompanying notes.
PAINE WEBBER QUALIFIED PLAN PROPERTY FUND FOUR, LP
STATEMENTS OF CASH FLOWS
For the nine months ended May 31, 1995 and 1994
Increase (Decrease) in Cash and Cash Equivalents
(Unaudited)
1995 1994
Cash flows from operating activities:
Net income $ 3,838,437 $ 2,125,474
Adjustments to reconcile net income
to net cash provided by operating activities:
Gain on sale of investment property (1,779,487) -
Amortization of deferred expenses 20,520 20,520
Changes in assets and liabilities:
Accounts receivable 23,045 (16,839)
Tax and tenant security deposit escrows 94,083 (4,825)
Other assets 38,282 (11,192)
Accounts payable - affiliates - (33,975)
Accounts payable and accrued expenses (89,598) (76,462)
Other liabilities 50,000 -
Tenant security deposits (13,296) 7,874
Total adjustments (1,656,451) (114,899)
Net cash provided by operating activities 2,181,986 2,010,575
Cash flows from investing activities:
Net proceeds from sale of investment property 8,679,987 -
Cash flows from financing activities:
Distributions to partners (2,038,830) (2,038,828)
Net increase (decrease) in cash and
cash equivalents 8,823,143 (28,253)
Cash and cash equivalents, beginning of period 2,682,258 2,510,636
Cash and cash equivalents, end of period $11,505,401 $2,482,383
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 August 31, 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 accounting adjustments
reflected in the accompanying interim financial statements are of a normal
recurring nature.
2.Mortgage Loan and Land Investments
The following are the first mortgage loans outstanding and the cost of the
related land to the Partnership at May 31, 1995 and August 31, 1994:
Property Amount of Mortgage Loan Cost of Land
The Corner at Seven $ 6,188,000 $2,062,000
Corners Shopping Center
Fairfax County, Virginia
Willow Creek Apartments 3,055,000 345,000
Wichita, Kansas
Park South Apartments 4,230,000 770,000
Charlotte, North Carolina
13,473,000 3,177,000
Less: General loan loss reserve (471,500) -
$13,001,500 $3,177,000
In general, the loans are secured by first mortgages on the properties, the
owner's leasehold interest in the land and an assignment of all tenant
leases. Interest is payable monthly and the principal is due at maturity.
The interest rates on the mortgage loans range from 9.0% to 11.25%. The
land leases have terms of 40 years. Among the provisions of the lease
agreements, the Partnership is entitled to additional rent based upon gross
revenues of the underlying properties in excess of a base amount, as
defined. During the nine months ended May 31, 1995, the Partnership
received additional rent under the terms of The Corner at Seven Corners
Shopping Center and Park South Apartments land leases totalling $70,713 and
$37,885, respectively. During the nine months ended May 31, 1994, the
Partnership received additional rent under the terms of The Corner at Seven
Corners Shopping Center and Park South Apartments land leases totalling
$66,175 and $16,022, respectively. The lessees have the option to purchase
the land for specified periods of time, beginning between February of 1995
and December of 1997, at a price based on fair market value, as defined,
but not less than the original cost to the Partnership. The Partnership's
investments are structured to share in the appreciation in the value of the
underlying real estate. Accordingly, upon either sale, refinancing,
maturity of the mortgage loan or exercise of the option to repurchase the
land, the Partnership will receive a 40% to 50% share of the appreciation
above a specified base amount.
The mortgage loan secured by The Corner at Seven Corners Shopping Center
became prepayable in February 1995. On December 16, 1994, the borrower
notified the Partnership of an intent to prepay the loan and exercise the
option to purchase the land. Along with such formal notice, the borrower
sent a $50,000 deposit to the Partnership in accordance with the terms of
the ground lease. Management is presently negotiating with the borrower
regarding the share of the property's appreciation due to the Partnership
under the terms of the ground lease. If the parties reach an agreement
regarding this compensation and the borrower can obtain adequate financing,
a prepayment transaction could be completed by early fiscal 1996.
3.Investment Properties Held for Sale
Cordova Creek Apartments
As discussed in the Annual Report, the Partnership foreclosed under the terms
of the mortgage loan secured by Cordova Creek Apartments on February 20, 1990,
due to non-payment of the required interest payments. As a result of the
foreclosure, the Partnership owned the land and improvements and employed a
local property management company to manage the day-to-day operations of the
apartment complex, which is located in Memphis, Tennessee. An affiliated
partnership, PaineWebber Qualified Plan Property Fund Three, LP ("QP3"),
originally invested $250,000 for a 3.5% interest in the mortgage loan secured
by Cordova Creek and the related ground lease. As a result of the
foreclosure, QP3 retained a 3.5% interest in the net cash flow and the
eventual sale proceeds related to the operating property.
The fair value of the operating property, net of selling expenses, at the date
of foreclosure was estimated by management to be approximately equal to the
combined cost basis of the land and the original face amount of the mortgage
loan, totalling $6,900,500. This amount is included in the balance of
investment properties held for sale at August 31, 1994.
During the quarter ended May 31, 1995, the Partnership sold the Cordova Creek
Apartments to an unaffiliated third party for $9,100,000. After payment of
required transaction costs and compensation to QP3 for its 3.5% interest, the
net proceeds realized by the Partnership from the sale were approximately $8.7
million. Closing of this sale occurred on April 12, 1995. A special
distribution of $215 per original $1,000 investment, or $9,643,000, was made
to Limited Partners on June 15, 1995, which represented approximately $195
from the Cordova Creek net sales proceeds and $20 as a distribution from cash
reserves which were deemed to be in excess of the Partnership's expected
future requirements.
Martin Sunnyvale Research and Development Center
As discussed in the Annual Report, the Partnership foreclosed under the terms
of the mortgage loan secured by the Martin Sunnyvale Research and Development
Center on July 12, 1991. The borrower had defaulted on the payment terms of
the loan due to significant lease turnover during 1991. The property is
located in Sunnyvale, California. The combined carrying value of the original
land and loan investments, of $5,100,000, was adjusted to management's
estimate of the fair value of the property as of the date of the foreclosure,
of $3,400,000, and reclassified to investment properties held for sale. Since
the date of foreclosure, the Partnership has recorded provisions for possible
investment loss totalling $900,000 to write down the carrying value of the
Martin Sunnyvale investment property to reflect additional declines in its
estimated fair value, net of selling expenses. The resulting net carrying
value of $2,500,000 is included in the balance of investment properties held
for sale on the accompanying balance sheets at May 31, 1995 and August 31,
1994.
During fiscal 1994, the Partnership engaged the management and leasing agent
to explore the market for potential buyers for the investment property which
is 100% leased to three tenants. All of the existing leases are scheduled to
expire within the next 2 years. Management believes that marketing Martin
Sunnyvale for sale at this time is in the best interests of the Partnership
because by selling the property now the Partnership could save the substantial
costs of re-leasing the space as the existing leases expire. If any of the
existing tenants were to vacate, the market value of Martin Sunnyvale, as well
as the available property cash flow, could be severely reduced unless a
replacement tenant is secured. There can be no assurances, however, that the
Partnership will successfully secure acceptable terms for a sale of this
property in the near term. Moreover, since the Partnership began to market
Martin Sunnyvale for sale, the Partnership has been notified by a California
state water agency of a potential environmental problem at Martin Sunnyvale.
As a result of governmental required testing, management has learned that
there has been a contamination of the underground soil and water. This
contamination may have been caused by either a previous occupant at the site
or by an occupant of a nearby property. The environmental testing was paid
for by one of the parties identified as a potential contaminator. Management
believes that this contamination occurred prior to the Partnership's initial
mortgage loan and ground lease investments in the property, which were made in
1985. Due to this and other recently discovered environmental contamination
in the area, there have been several lawsuits filed by California state water
agencies against prior occupants of this site and nearby sites. Management
has engaged local counsel to monitor all legal actions to insure that the
Partnership's rights are fully protected. Management will seek full
indemnification from the parties potentially responsible. Until such time as
either a full indemnification is obtained or the property's environmental risk
is eliminated, it is extremely doubtful that a qualified purchaser for the
property could be found. Accordingly, the Partnership has suspended its
marketing efforts until this matter is resolved.
Bell Forge Square Shopping Center
As discussed in the Annual Report, on October 4, 1991, the Partnership
received a deed in lieu of foreclosure on the mortgage loan secured by the
Bell Forge Square Shopping Center. The property is located in Nashville,
Tennessee. The combined value of the land and the face amount of the mortgage
loan, of $9,000,000, was reclassified to investment properties held for sale
at the time of the foreclosure. During fiscal 1992, the Partnership had
recorded a provision for possible investment loss of $600,000 to write down
the carrying value of the Bell Forge Square investment property to reflect a
decline in its estimated fair value, net of selling expenses, as of August 31,
1992. During fiscal 1993, the Partnership recorded an adjustment to reduce
the valuation allowance by $300,000 to reflect a subsequent increase in the
estimated fair value of the Bell Forge Square property. The resulting net
carrying value of $8,700,000 is included in the balance of investment
properties held for sale on the accompanying balance sheets at May 31, 1995
and August 31, 1994.
The Partnership recognizes income from the investment properties held for sale
equal to its share of the excess of the properties' gross revenues over the
sum of property operating expenses (including capital improvement costs),
taxes and insurance.
Combined summarized operating results of the Martin Sunnyvale and Bell Forge
investment properties held for sale and for the Cordova Creek Apartments
(through the date of sale) for the three and nine months ended May 31, 1995
and 1994 are shown below:
Three Months Ended Nine Months Ended
May 31, May 31,
1995 1994 1995 1994
Rental income $456,140 $554,469 $1,782,612 $1,828,650
Other income 71,907 89,620 226,899 198,340
528,047 644,089 2,009,511 2,026,990
Property operating expenses 77,813 201,098 706,412 555,906
Property taxes and insurance 87,044 56,048 279,287 241,700
164,857 257,146 985,699 797,606
Income from operations, net $363,190 $386,943 $1,023,812 $1,229,384
Partnership's share of
combined operations $362,565 $379,865 $1,010,416 $1,210,671
QP3's share of Cordova
Creek operations 625 7,078 13,396 18,713
$363,190 $386,943 $1,023,812 $1,229,384
Property operating expenses for the nine months ended May 31, 1995 include
capital improvement costs at the Bell Forge Square Shopping Center of
approximately $326,000.
4.Related Party Transactions
The Adviser earned basic management fees of $188,780 for each of the nine-
month periods ended May 31, 1995 and 1994. Accounts payable - affiliates at
both May 31, 1995 and August 31, 1994 consists of management fees of $56,062
payable to the Adviser.
Included in general and administrative expenses for nine months ended May 31,
1995 and 1994 is $155,896 and $140,747, respectively, representing
reimbursements to an affiliate of the Managing General Partner for providing
certain financial, accounting and investor communication services to the
Partnership.
Also included in general and administrative expenses for the nine months ended
May 31, 1995 and 1994 is $4,259 and $2,690, respectively, representing fees
earned by Mitchell Hutchins Institutional Investors, Inc. for managing the
Partnership's cash assets.
5.Contingencies
The Partnership is involved in certain legal actions. The Managing General
Partner believes these actions will
be resolved without material adverse effect on the Partnership's financial
statements, taken as a whole.
6.Subsequent Event
On June 15, 1995, the Partnership distributed $9,642,675 to the Limited
Partners, representing the net sales proceeds from the Cordova Creek
Apartments along with certain excess cash reserves. In addition, on July 14,
1995 the Partnership distributed $6,865 to the General Partners and $672,745
to the Limited Partners for the quarter ended May 31, 1995.
PAINE WEBBER QUALIFIED PLAN PROPERTY FUND FOUR, LP
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
During the first quarter of fiscal 1995, the Partnership began actively
marketing the Cordova Creek Apartments for sale. On April 12, 1995, the
Partnership sold the property to an unaffiliated third party for $9,100,000.
This sale represented a substantial gain on the Partnership's original
investment in Cordova Creek. The Cordova Creek investments were originally made
by the Partnership on June 13, 1986 with a total investment of $6,900,500,
comprised of land purchased for $289,500 and a $6,611,000 mortgage loan secured
by the improvements. In addition to the Partnership's initial investment, an
affiliated partnership, Paine Webber Qualified Plan Property Fund Three
(`QP3'') contributed $250,000 or approximately 3.5% of the total net
investment, toward the original land and mortgage loan investments in Cordova
Creek. The original fixed return on the Partnership's investment was 11.25% per
year. During 1988, the borrower experienced financial problems at this property
due to the overbuilt Memphis apartment market and eventually defaulted under the
terms of the ground lease and mortgage. On February 20, 1990, the Partnership,
together with QP3, foreclosed and took title to the property. At the time of
the takeover, the property was 80% occupied and poorly managed. The Partnership
selected a local property management company to operate Cordova Creek and,
during 1991 and 1992, implemented a capital improvement program to upgrade the
units and common areas. For the past several years, Cordova Creek maintained an
average occupancy level in excess of 95%. After payment of required transaction
costs and compensation to QP3 for its 3.5% interest, the net proceeds realized
by the Partnership from the fiscal 1995 sale transaction totalled approximately
$8.7 million. Management believed that accepting the proposed offer was in the
Partnership's best interests because values for this 9-year old, 196-unit
apartment complex may have been at or near their peak for the current market
cycle. The Partnership made a special distribution of $215 per original $1,000
investment, or $9,643,000, to the Limited Partners on June 15, 1995,
representing approximately $195 from the Cordova Creek net sale proceeds and
approximately $20 of cash reserves which were deemed to be in excess of the
Partnership's expected future requirements. The Cordova Creek investment had
represented a significant source of cash flow for the Partnership prior to the
sale transaction. Cash flow from the Partnership's remaining investments is not
expected to be sufficient to support the current quarterly distribution rate of
6% per annum on remaining invested capital. As a result, management plans to
reduce the distribution rate to 5.75% effective for the fourth quarter of fiscal
1995.
As discussed in the Annual Report, the occupancy of the Martin Sunnyvale
Research and Development Center increased to 100% during fiscal 1994. With the
recent leasing activity, the operations of the property have been stabilized for
the near-term. However, rental rates continue to be depressed in the Sunnyvale
market due to the substantial existing oversupply of R&D space. Future
prospects for the high technology industries in Northern California are
generally considered uncertain at the present time. Accordingly, there are no
assurances that market conditions will be improved at the time of the
expirations of the three existing leases, which are scheduled to occur between
November 1996 and April 1997. In light of this situation, during fiscal 1994
the Partnership engaged the management and leasing agent to explore the market
for potential buyers for this investment property. Management believes that
marketing Martin Sunnyvale for sale at this time is in the best interests of the
Partnership because by selling the property now the Partnership could save the
substantial costs of re-leasing the space as the existing leases expire. As
described above, over the next 2 years, all three of the existing leases will
expire. If any of the existing tenants were to vacate, the market value of
Martin Sunnyvale, as well as the available property cash flow, could be severely
reduced unless a replacement tenant is secured. There can be no assurances,
however, that the Partnership will successfully secure acceptable terms for a
sale of this property in the near term. Moreover, since the Partnership began
to market Martin Sunnyvale for sale, the Partnership has been notified by a
California state water agency of a potential environmental problem at Martin
Sunnyvale. As a result of governmental required testing, management has learned
that there has been a contamination of the underground soil and water. This
contamination may have been caused by either a previous occupant at the site or
by an occupant of a nearby property. The environmental testing was paid for by
one of the parties identified as a potential contaminator. Management believes
that this contamination occurred prior to the Partnership's initial mortgage
loan and ground lease investments in the property, which were made in 1985. Due
to this and other recently discovered environmental contamination in the area,
there have been several lawsuits filed by California state water agencies
against prior occupants of this site and nearby sites. Management has engaged
local counsel to monitor all legal actions to insure that the Partnership's
rights are fully protected. Management will seek full indemnification from the
parties potentially responsible. Until such time as either a full
indemnification is obtained or the property's environmental risk is eliminated,
it is extremely doubtful that a qualified purchaser for the property could be
found. Accordingly, the Partnership has suspended its marketing efforts until
this matter is resolved.
The mortgage loans secured by the Willow Creek Apartments and The Corner at
Seven Corners Shopping Center bear interest at rates of 11.00% and 11.25% per
annum, respectively. With general real estate market conditions improving along
with the state of the overall economy, and with credit in the capital markets
for real estate transactions more accessible than in prior years, it is possible
that the current loans secured by these properties could be refinanced at lower
rates. However, the Partnership's mortgage loans contain certain restrictions
with regard to prepayments. The Willow Creek loan prohibits prepayment until
October 31, 1995 and includes a prepayment premium for any prepayment after
November 1995 at rates between 5% and 1% of the mortgage loan balance. In
addition to repaying the outstanding mortgage loans, the borrowers would be
required to exercise their options to purchase the underlying land at the time
of any prepayment transaction, including in such purchase price the
Partnership's share, if any, of the property's appreciation called for under the
terms of the ground lease. The Corner at Seven Corners mortgage loan became
prepayable without penalty on February 1, 1995. During December 1994, the
borrower of The Corner at Seven Corners loan sent formal notice to the
Partnership of an intent to prepay the first mortgage loan and to exercise the
option to purchase the underlying land. Management is presently negotiating
with the borrower regarding the share of the property's appreciation due to the
Partnership under the terms of the ground lease. If the parties reach agreement
regarding this compensation and the borrower can obtain adequate financing, a
prepayment transaction could be completed in early fiscal 1996. If completed,
the proceeds of this prepayment transaction would be distributed to the Limited
Partners.
At May 31, 1995, the Partnership had available cash and cash equivalents of
approximately $11,505,000. Such cash balance includes the $9,643,000 referred
to above which was distributed to the Limited Partners in June 1995. The
remaining amount of cash and cash equivalents will be used for the working
capital needs of the Partnership, distributions to the partners and, if
necessary, for tenant improvement expenses and other leasing costs of the
Partnership's investment properties acquired through foreclosure proceedings.
The source of future liquidity and distributions to the partners is expected to
be through cash generated from the Partnership's real estate and mortgage loan
investments, the repayment of the mortgage loans receivable and the future sales
or refinancings of the underlying land and the investment properties. Such
sources of liquidity are expected to be adequate to meet the Partnership's needs
on both a short-term and long-term basis.
RESULTS OF OPERATIONS
Three Months Ended May 31, 1995
The Partnership's net income increased by approximately $1,871,000 for the
three months ended May 31, 1995, when compared to the same period in the prior
year. The primary reason for the increase in net income is the gain realized by
the Partnership from the sale of the Cordova Creek Apartments on April 12, 1995
of approximately $1,779,000. In addition, operating income increased by
$108,000 primarily as a result of an increase in interest income on short-term
investments of approximately $90,000. Interest income increased due to higher
interest rates earned on invested cash reserves when compared to the prior year
and a significant increase in average cash balances as a result of the receipt
of the Cordova Creek proceeds. In addition, land rent revenue increased by
approximately $10,000 due to an increase in additional rent received under the
terms of the Corner at Seven Corners and Park South ground leases. The gain
realized from the sale of the Cordova Creek Apartments and the increase in
operating income were partially offset by a decrease in income from operations
of investment properties held for sale of approximately $17,000. This decrease
is a result of the sale of the Cordova Creek Apartments on April 12, 1995 as
less than three months of Cordova Creek's operations are included in the current
period's results.
Nine Months Ended May 31, 1995
The Partnership's net income increased by approximately $1,713,000 for the
nine months ended May 31, 1995, when compared to the same period in the prior
year. The primary reason for the increase in net income is the aforementioned
gain on the sale of Cordova Creek. In addition, operating income increased by
$134,000 primarily as a result of an increase in interest income on short-term
investments of approximately $119,000. Interest income increased due to higher
interest rates earned on invested cash reserves when compared to the prior year
and the significant increase in average cash balances as a result of the Cordova
Creek transaction. In addition, land rent revenue increased by approximately
$26,000 due to an increase in additional rent received under the terms of the
Corner at Seven Corners and Park South ground leases. The increases in interest
income and land rent income were partially offset by an increase in general and
administrative expenses of approximately $12,000, primarily due to an increase
in legal fees which resulted from management's engagement of local counsel to
monitor all legal actions concerning the environmental contamination at Martin
Sunnyvale. The gain realized from the sale of the Cordova Creek Apartments and
the increase in operating income were partially offset by a decrease in income
from operations of investment properties held for sale of approximately $200,000
for the nine-month period ended May 31, 1995. This decrease is partly a result
of the sale of the Cordova Creek Apartments on April 12, 1995 as less than nine
months of Cordova Creek's operations are included in the current period's
results. In addition, significant capital improvements of approximately
$326,000 have been incurred at the Bell Forge Square Shopping Center thus far
during fiscal 1995 in connection with the repair and improvement of the
property's exterior facade.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
As discussed in the Partnership's quarterly report on Form 10-Q for the
period ended February 28, 1995, 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. On May 30, 1995, the
court certified class action treatment of the claims asserted in the litigation.
Refer to the description of the claims in the prior quarterly report for further
information. The General Partners continue to believe 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:
Current Report on Form 8-K dated April 12, 1995 was filed by the
registrant.
PAINE WEBBER QUALIFIED PLAN PROPERTY FUND FOUR, LP
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 QUALIFIED PLAN PROPERTY
FUND FOUR, LP
By: FOURTH QUALIFIED PROPERTIES, INC.
Managing General Partner
By: /s/ Walter V. Arnold
Walter V. Arnold
Senior Vice President and Chief
Financial Officer
Dated: July 14, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Partnership's interim financial statements for the 9 months ended May 31, 1995
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> MAY-31-1995
<CASH> 11,505,401
<SECURITIES> 0
<RECEIVABLES> 13,132,872
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 11,636,773
<PP&E> 14,377,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 39,207,862
<CURRENT-LIABILITIES> 172,619
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 38,979,844
<TOTAL-LIABILITY-AND-EQUITY> 39,207,862
<SALES> 0
<TOTAL-REVENUES> 4,389,050
<CGS> 0
<TOTAL-COSTS> 550,613
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 3,838,437
<INCOME-TAX> 0
<INCOME-CONTINUING> 3,838,437
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,838,437
<EPS-PRIMARY> 4.24
<EPS-DILUTED> 4.24
</TABLE>
