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 JUNE 30, 1996
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 : 0-15037
PAINE WEBBER INCOME PROPERTIES SEVEN LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Delaware 04-2870345
(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 .
<PAGE>
PAINE WEBBER INCOME PROPERTIES SEVEN LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEETS
June 30, 1996 and September 30, 1995 (Unaudited)
(In thousands)
ASSETS
June 30 September 30
------- ------------
Operating investment property:
Land $ 698 $ 698
Buildings and improvements 4,269 4,269
Equipment and fixtures 107 107
--------- ----------
5,074 5,074
Less accumulated depreciation (1,620) (1,512)
--------- ----------
3,454 3,562
Cash and cash equivalents 4,696 3,252
Escrow deposits 61 75
Accounts receivable 126 84
Accounts receivable - affiliates 2 2
Other assets 30 32
Deferred expenses, net 126 141
--------- ----------
$ 8,495 $ 7,148
========= ==========
LIABILITIES AND PARTNERS' DEFICIT
Accounts payable and accrued expenses $ 31 $ 37
Accrued interest payable 16 16
Accrued real estate taxes 39 60
Other liabilities 10 10
Equity in losses from unconsolidated joint
ventures in excess
of investments and advances 7,887 6,275
Mortgage note payable 1,685 1,723
Partners' deficit (1,173) (973)
--------- ----------
$ 8,495 $ 7,148
======== ========
See accompanying notes.
<PAGE>
PAINE WEBBER INCOME PROPERTIES SEVEN LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three and nine months ended June 30, 1996 and 1995 (Unaudited)
(In thousands, except per Unit data)
Three Months Ended Nine Months Ended
June 30, June 30,
1996 1995 1996 1995
---- ---- ---- ----
Revenues:
Rental income and
expense recoveries $ 131 $ 115 $ 393 $ 365
Interest and other income 65 43 179 121
------- ------- ------ ------
196 158 572 486
Expenses:
Mortgage interest 50 49 150 162
Property operating expenses 18 17 96 85
Depreciation and amortization 38 38 115 115
Real estate taxes 20 20 57 62
General and administrative 64 168 242 298
------- ------- ------ ------
190 292 660 722
------- ------- ------ ------
Operating income (loss) 6 (134) (88) (236)
Partnership's share of
unconsolidated ventures'
income (losses) 13 (156) (112) (531)
------- ------- ------ ------
Income (loss) before
extraordinary gain 19 (290) (200) (767)
Extraordinary gain from
settlement of debt obligation - - - 518
------- ------- ------ ------
Net income (loss) $ 19 $ (290) $ (200) $ (249)
======== ======= ====== =======
Net income (loss) per Limited
Partnership Unit:
Income (loss) before
extraordinary gain $0.52 $(7.54) $(5.19) $(20.01)
Extraordinary gain - - - 13.51
----- ------ ------ -------
Net income (loss) $0.52 $(7.54) $(5.19) $ (6.50)
===== ====== ====== =======
The above per Limited Partnership Unit information is based upon the 37,969
Limited Partnership Units outstanding during each period.
See accompanying notes.
<PAGE>
PAINE WEBBER INCOME PROPERTIES SEVEN LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
For the nine months ended June 30, 1996 and 1995 (Unaudited)
(In thousands)
General Limited
Partners Partners
-------- --------
Balance at September 30, 1994 $ (756) $ (617)
Net loss (2) (247)
--------- --------
Balance at June 30, 1995 $ (758) $ (864)
========= ========
Balance at September 30, 1995 $ (752) $ (221)
Net loss (2) (198)
--------- --------
Balance at June 30, 1996 $ (754) $ (419)
========= ========
See accompanying notes.
<PAGE>
PAINE WEBBER INCOME PROPERTIES SEVEN LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the nine months ended June 30, 1996 and 1995 (Unaudited)
Increase (Decrease) in Cash and Cash Equivalents
(In thousands)
1996 1995
---- ----
Cash flows from operating activities:
Net loss $ (200) $ (249)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 115 115
Amortization of deferred financing costs 8 1
Partnership's share of unconsolidated
ventures' losses 112 531
Extraordinary gain from settlement of debt obligation - (518)
Changes in assets and liabilities:
Escrow deposits 14 17
Accounts receivable (42) (6)
Accounts receivable - affiliates - (2)
Other assets 2 (1)
Deferred expenses - (71)
Accrued interest payable - (4)
Accounts payable and accrued expenses (6) 6
Accrued real estate taxes (21) (17)
------ -------
Total adjustments 182 51
------ -------
Net cash used in operating activities (18) (198)
------ -------
Cash flows from investing activities:
Distributions from unconsolidated joint ventures 1,500 864
Advances to unconsolidated joint ventures - (2)
Additions to operating investment property - (73)
------- -------
Net cash provided by investing activities 1,500 789
------- -------
Cash flows from financing activities:
Proceeds from issuance of mortgage loan - 1,750
Principal payments on long-term debt (38) (2,065)
------- ------
Net cash used in financing activities (38) (315)
------- -------
Net increase in cash and cash equivalents 1,444 276
Cash and cash equivalents, beginning of period 3,252 2,571
------- --------
Cash and cash equivalents, end of period $ 4,696 $ 2,847
======== ========
Cash paid during the period for interest $ 142 $ 165
======== ========
See accompanying notes.
<PAGE>
PAINE WEBBER INCOME PROPERTIES
SEVEN LIMITED PARTNERSHIP
Notes to Consolidated Financial Statements
(Unaudited)
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, 1995.
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. Investments in Unconsolidated Joint Venture Partnerships
The Partnership has investments in four unconsolidated joint ventures which
own six operating properties, as more fully described in the Partnership's
Annual Report. The unconsolidated joint venture investments are accounted for
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 and
losses and distributions.
Summarized operations of the four unconsolidated joint ventures for the three
and nine months ended June 30, 1996 and 1995 are as follows:
Condensed Combined Summary of Operations
For the three and nine months ended June 30, 1996 and 1995
(in thousands)
Three Months Ended Nine Months Ended
June 30, June 30,
------------------ -----------------
1996 1995 1996 1995
---- ---- ---- ----
Rental revenues and expense
recoveries $2,589 $2,567 $7,792 $7,735
Interest and other income 124 98 311 255
2,713 2,665 8,103 7,990
Property operating expenses 948 877 2,720 2,686
Interest expense 957 1,103 2,893 3,350
Real estate taxes 462 437 1,408 1,284
Depreciation and amortization 396 393 1,211 1,169
------- ------- ------- -------
2,763 2,810 8,232 8,489
------- ------- ------- -------
Net loss $ (50) $ (145) $ (129) $ (499)
======= ======= ======= =======
Net loss:
Partnership's share of
combined income (loss) $ 15 $ (154) $ (107) $ (526)
Co-venturers' share of
combined income (loss) (65) 9 (22) 27
--------- -------- -------- -------
$ (50) $ (145) $ (129) $ (499)
======== ======== ======== =======
<PAGE>
Reconciliation of Partnership's Share of Operations
For the three and nine months ended June 30, 1996 and 1995 (in thousands)
Three Months Ended Nine Months Ended
June 30, June 30,
------------------ -----------------
1996 1995 1996 1995
---- ---- ---- ----
Partnership's share of combined
operations, as shown above $ 15 $ (154) $ (107) $ (526)
Amortization of excess basis (2) (2) (5) (5)
------ ------- ------ -------
Partnership's share of
unconsolidated ventures'
income (losses) $ 13 $ (156) $ (112) $ (531)
======= ======= ====== =======
3. Operating Investment Property
The Partnership has a controlling interest in one joint venture, West Palm
Beach Concourse Associates, which owns the Concourse Retail Plaza. The Retail
Plaza consists of 30,473 net rentable square feet located in West Palm Beach
Florida. Subsequent to a settlement and assignment agreement executed in
fiscal 1990, the Partnership's co-venture partner is Seventh Income
Properties Fund, Inc., the Managing General Partner of the Partnership. The
amended and restated terms of the joint venture agreement are more fully
described in the Partnership's Annual Report. The Partnership employs the
services of a local unaffiliated property management company to administer
the day-to-day operations of the investment property under the direction of
the Managing General Partner.
The following is a summary of property operating expenses for the three- and
nine-month periods ended June 30, 1996 and 1995 (in thousands):
Three Months Ended Nine Months Ended
June 30, June 30,
------------------ -----------------
1996 1995 1996 1995
---- ---- ---- ----
Repairs and maintenance $ 7 $ 8 $ 13 $ 22
Utilities 2 1 4 3
Insurance 1 1 4 4
Administrative and other 4 4 40 47
Bad debt - - 24 -
Management fees 4 3 11 9
------ ------- ------ -------
$ 18 $ 17 $ 96 $ 85
====== ======= ====== =======
4. Mortgage Note Payable
Mortgage note payable on the consolidated balance sheets relates to the
Partnership's consolidated joint venture, West Palm Beach Concourse
Associates, and is secured by the venture's operating investment property. At
June 30, 1996 and September 30, 1995, mortgage note payable
consists of the following (in thousands):
June 30 September 30
------- ------------
11.12% first mortgage, payable in
installments of $20 per month,
including interest, through January
1, 2005. All outstanding principal
and accrued interest is due on
January 10, 2005. $ 1,685 $ 1,723
========= ==========
During fiscal 1994, the venture reached an agreement with the second mortgage
lender to fully extinguish the $750,000 second mortgage lien on the Concourse
Retail Plaza in return for a cash payment of $300,000. The Partnership
advanced the funds required to complete this transaction in November 1994.
The transaction resulted in an extraordinary gain recognized during the
quarter ended December 31, 1994 of approximately $518,000.
In accordance with the Concourse mortgage loan agreements, certain insurance
premiums and real estate taxes are required to be held in escrow. The balance
of escrow deposits on the accompanying balance sheets at June 30, 1996 and
September 30, 1995 consists of such escrowed insurance premiums and real
estate taxes in the aggregate amounts of $61,000 and $75,000, respectively.
5. Related Party Transactions
Accounts receivable - affiliates at June 30, 1996 and September 30, 1995
consist of investor service fees due from the Daniel Meadows Partnership of
$2,000 at both dates.
Included in general and administrative expenses for each of the nine months
ended June 30, 1996 and 1995 is $65,000 and $66,000, 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 June 30, 1996 and 1995 is $13,000 and $4,000, respectively,
representing fees earned by Mitchell Hutchins Institutional Investors, Inc.
for managing the Partnership's cash assets.
6. Contingencies
The Partnership is involved in certain legal actions. At the present time,
the Managing General Partner is unable determine what impact, if any, the
resolution of these matters may have on the Partnership's financial
statements, taken as a whole.
<PAGE>
PAINE WEBBER INCOME PROPERTIES SEVEN LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
The Partnership's remaining investments consist of five multi-family
apartment complexes and two retail properties. The Managing General Partner's
strategy is to preserve the Partnership's remaining equity interests and to
seek strategic opportunities to enhance property values through either capital
improvements or debt modifications while the respective local economies and
rental markets improve in order to return as much of the Limited Partners'
invested capital as possible. At the present time, real estate values for
retail shopping centers in certain markets are being adversely impacted by the
effects of overbuilding and consolidations among retailers which have resulted
in an oversupply of space. It remains unclear at this time what impact, if any,
this general trend will have on the operations and market values of the
Partnership's retail properties in the near term. During the current quarter,
occupancy at the Concourse Retail Plaza fell to 90%, down from 100% at March
31, 1996, when a 4,000 square foot restaurant tenant vacated its space in early
May due to poor sales. Although this tenant vacated it's space, it remains
obligated to pay rent and its share of operating expenses for the remainder of
its lease term which expires in 2019. This tenant is a national operation and
is expected to continue to pay its rental obligation while it searches for a
suitable sublease tenant. Management continues to closely monitor the operating
performance of the property's three other restaurant tenants. As previously
reported, two of these tenants have reported declining sales and had fallen
behind on their rental payments. Subsequently, management negotiated agreements
with both tenants to cure the rental delinquencies. To date, one of these
tenants has fulfilled its obligations under such agreement while the other
tenant has experienced further financial difficulties and is seeking an influx
of capital in order to continue operations. At Colony Square, occupancy
improved from 91% as of March 31, 1996 to 95% as of June 30, 1996. However, two
tenants occupying a total of 5,300 square feet, or 13% of the net leasable
area, have fallen behind on their rental payments. Management continues to
analyze various potential capital improvement programs to determine whether
such enhancements might improve the leasing activity and stability of the
tenant roster at the property. Funds for any such improvements to this 40,000
square foot property would be provided by the Partnership from the cash flow of
its other joint venture investment properties.
As discussed in the Annual Report, under the terms of the HMF Associates
loan modification executed in fiscal 1992, all accrued and unpaid interest
outstanding as of June 30, 1992 was converted to principal. Subject to lender
approval, the Partnership was entitled to obtain additional advances up to
$9,100,000 to fund certain operating expenses of the joint venture and to cure
the construction defects in the operating investment properties. The loans and
any additional advances bear interest at a rate of 9% per annum. As of June 30,
1996, additional lender advances totalling approximately $4.8 million have been
made, and the total debt obligation of the joint venture totalled approximately
$23 million. Monthly payments are made in an amount equal to the "net operating
income", as defined, for the prior month. Unpaid interest is added to the
principal balance of the indebtedness on a monthly basis. The maturity date of
the loans is July 1, 1997 at which time all unpaid principal, interest and
advances are due. Despite the successful remediation of the construction defects
and the subsequent lease-up of the properties, the venture's net operating
income level is not sufficient to fully cover the interest accruing on the
outstanding debt obligation. As a result, the total obligation due to the
mortgage lender will continue to increase through the scheduled maturity date.
Furthermore, the current aggregate estimated value of the investment properties
is substantially less than the current debt obligation. During fiscal 1995,
management had preliminary discussions with the mortgage holder regarding a
possible loan modification aimed at preventing the further accumulation of the
deferred interest and reducing the overall debt obligation. Such a plan would
have involved a prepayment of the existing mortgage indebtedness at a discount
and would have required an equity infusion by the venture of between
approximately $1 million and $1.5 million. Management of the Partnership
evaluated whether an additional investment of this magnitude in the venture
would be economically prudent in light of the future appreciation potential of
the properties and concluded that it would be unwise to commit the additional
equity investment required to effect the proposed debt restructuring. Management
continues to examine alternative value creation scenarios, however, there are no
assurances that the Partnership will realize any future proceeds from the
ultimate disposition of its interests in these three properties.
During the current quarter, The Meadows on the Lake joint venture
completed the final phase of the repair work on the construction defects at the
property using the proceeds from the insurance settlement originally escrowed
with the lender plus excess cash flow from property operations. As discussed in
the Annual Report, the venture recognized a loss of $300,000 in fiscal 1995
equal to the amount by which the total repair costs exceeded the total
settlement proceeds. With the completion of the repair work, the entire first
mortgage loan obligation will become non-recourse to the joint venture and to
the partners of the joint venture.
As previously reported, on August 1, 1995 the $16.75 million non-recourse
wraparound mortgage note secured by the Colony Apartments property was
refinanced with a new $17.4 million non-recourse mortgage note at a fixed
interest rate of 7.6% per annum. The new note requires monthly principal and
interest payments of approximately $130,000 until maturity on August 1, 2002. As
a condition of the new loan, the Colony Apartments joint venture was required to
establish an escrow account in the amount of $685,000 for the completion of
agreed upon repairs, $156,600 for capital replacement reserves and $600,000 for
real estate taxes. As a result of the refinancing, the venture's monthly debt
service decreased by approximately $28,000. In the near term, a portion of this
debt service savings will be reinvested in the Colony Apartments property, in
addition to the reserves set aside from the refinancing transaction, to complete
planned capital improvements aimed at preserving the property's competitive
position and enhancing the long-term value of this 20-year old investment
property.
The Colony Apartments joint venture continues to generate significant excess
cash flow which, over the past several years, has represented the Partnership's
only consistent source of liquidity. The Partnership received cash flow
distributions of $1,242,000 from the Colony Apartments joint venture during the
nine-month period ended June 30, 1996. In the first nine months of fiscal 1996,
the Partnership also received distributions of $258,000 from the Meadows joint
venture. With the repair work at The Meadows on the Lake Apartments completed,
the venture has begun to generate regular distributions of excess cash flow to
the Partnership. Future distributions from the Colony Apartments and Meadows
joint ventures are expected to be more than sufficient to fund the Partnership's
operating costs and provide adequate liquidity to fund the capital needs which
may exist at the other joint venture investment properties.
At June 30, 1996 the Partnership and its consolidated venture had cash and
cash equivalents of approximately $4,696,000. Such cash and cash equivalents
will be utilized as needed for Partnership requirements such as the payment of
operating expenses and the funding of operating deficits, refinancing expenses
or capital improvements of the joint ventures, in accordance with the terms of
the respective joint venture agreements. The source of future liquidity and
distributions to the partners is expected to be from available net cash flow
generated by the operations of the Partnership's investment properties and from
net proceeds from the sale or refinancing of such properties.
Results of Operations
Three Months Ended June 30, 1996
The Partnership reported net income of $19,000 for the three months ended
June 30, 1996, as compared to a net loss of $290,000 for the same period in the
prior year. This favorable change in the Partnership's net operating results for
the third quarter was caused by an increase in consolidated revenues, a decrease
in Partnership general and administrative expenses and a favorable change in the
Partnership's share of unconsolidated ventures' operations. Rental income and
expense recoveries from the consolidated Concourse Retail Plaza increased
slightly when compared to the same period in the prior year. Interest income
increased by $22,000 as a result of an increase in the average outstanding
balance of the Partnership's cash reserves. General and administrative expenses
decreased by $104,000 for the current three-month period mainly due to certain
incremental expenses incurred in the prior year related to the annual
independent valuation of the Partnership's operating properties. The
Partnership's share of unconsolidated ventures' operations improved by $169,000
in the third quarter of fiscal 1996, when compared to the same period in the
prior year, primarily due to a decrease in combined interest expense. Interest
expense at the Colony Apartments joint venture decreased by $143,000 in the
current period due to the lower interest rate obtained by the joint venture upon
refinancing its mortgage note in August of 1995, as discussed further above.
Nine Months Ended June 30, 1996
The Partnership reported a net loss of $200,000 for the nine months ended
June 30, 1996, as compared to a net loss of $249,000 for the same period in the
prior year. This $49,000 decrease in the Partnership's net operating loss was
caused by a decrease in the Partnership's share of unconsolidated ventures'
losses of $419,000 and a decrease in operating loss of $148,000 for the current
nine-month period. An extraordinary gain of $518,000 realized in the first
quarter of fiscal 1995 from the discounted payoff of the Concourse second
mortgage loan, as more fully discussed in the Partnership's Annual Report,
partially offset the impact of these favorable changes in the Partnership's net
operating results.
The Partnership's share of unconsolidated ventures' losses decreased by
$419,000 for the nine months ended June 30, 1996, when compared to the same
period in the prior year, primarily due to a decrease in combined interest
expense, which was partially offset by an increase in combined real estate
taxes. Interest expense decreased by $456,000 in the current period primarily
due to the lower interest rate obtained by the Colony Apartments joint venture
upon refinancing its mortgage note in August of 1995, as discussed further
above. Real estate taxes increased by $123,000 mainly due to higher assessed
values on the properties owned by HMF Associates as well as increases in the tax
rates for both Colony Apartments and the Colony Square Shopping Center.
The Partnership's operating loss decreased by $148,000 for the nine months
ended June 30, 1996, when compared to the same period in the prior year,
primarily due to an increase in interest income, along with a decrease in
general and administrative expenses. Interest income improved by $58,000 due to
an increase in the Partnership's average outstanding cash reserve balances.
General and administrative expenses decreased by $56,000 for the current
nine-month period primarily due to certain incremental expenses incurred in the
prior year related to the annual independent valuation of the Partnership's
operating properties.
<PAGE>
PART II
Other Information
Item 1. Legal Proceedings
As discussed in the prior quarterly and annual reports, 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 70 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 Seventh Income Properties Fund, Inc. and Properties Associates 1985,
L.P. ("PA1985"), which are General Partners of the Partnership and affiliates of
PaineWebber. On May 30, 1995, the court certified class action treatment of the
claims asserted in the litigation.
In January 1996, PaineWebber signed a memorandum of understanding with the
plaintiffs in the New York Limited Partnership Actions outlining the terms under
which the parties have agreed to settle the case. Pursuant to that memorandum of
understanding, PaineWebber irrevocably deposited $125 million into an escrow
fund under the supervision of the United States District Court for the Southern
District of New York to be used to resolve the litigation in accordance with a
definitive settlement agreement and plan of allocation. On July 17, 1996,
PaineWebber and the class plaintiffs submitted a definitive settlement agreement
which has been preliminarily approved by the court and provides for the complete
resolution of the class action litigation, including releases in favor of the
Partnership and the General Partners, and the allocation of the $125 million
settlement fund among investors in the various partnerships at issue in the
case. As part of the settlement, PaineWebber also agreed to provide class
members with certain financial guarantees relating to some of the partnerships.
The details of the settlement are described in a notice mailed directly to class
members at the direction of the court. A final hearing on the fairness of the
proposed settlement has been scheduled for October 25, 1996.
In June 1996, approximately 50 plaintiffs filed an action entitled
Bandrowski v. PaineWebber Inc. in Sacramento, California Superior Court against
PaineWebber Incorporated and various affiliated entities concerning the
plaintiff's purchases of various limited partnership interests, including those
offered by the Partnership. The complaint is substantially similar to the
complaint in the Abbate action described in prior reports, and seeks
compensatory damages of $3.4 million plus punitive damages.
The status of the other litigation involving the Partnership and its
General Partners remains unchanged from the description provided in the
Partnership's Quarterly Report on Form 10-Q for the period ended March 31, 1996.
Under certain limited circumstances, pursuant to the Partnership Agreement
and other contractual obligations, PaineWebber affiliates could be entitled to
indemnification for expenses and liabilities in connection with the litigation
discussed above. At the present time, the Managing General Partner cannot
estimate the impact, if any, of the potential indemnification claims on the
Partnership's financial statements, taken as a whole. Accordingly, no provision
for any liability which could result from the eventual outcome of these matters
has been made in the accompanying financial statements of the Partnership.
Item 2. through 5. NONE
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: NONE
(b) Reports on Form 8-K:
No reports on Form 8-K have been filed by the registrant during the quarter
for which this report is filed.
<PAGE>
PAINE WEBBER INCOME PROPERTIES SEVEN LIMITED PARTNERSHIP
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Partnership has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
PAINE WEBBER INCOME PROPERTIES SEVEN
LIMITED PARTNERSHIP
By: SEVENTH INCOME PROPERTIES FUND, INC.
Managing General Partner
By: /s/ Walter V. Arnold
Walter V. Arnold
Senior Vice President and
Chief Financial Officer
Dated: August 13, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Partnership's audited financial statements for the nine months ended June 30,
1996 and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> JUN-30-1996
<CASH> 4696
<SECURITIES> 0
<RECEIVABLES> 128
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4885
<PP&E> 5074
<DEPRECIATION> 1620
<TOTAL-ASSETS> 8495
<CURRENT-LIABILITIES> 96
<BONDS> 1685
0
0
<COMMON> 0
<OTHER-SE> (1,173)
<TOTAL-LIABILITY-AND-EQUITY> 8,495
<SALES> 0
<TOTAL-REVENUES> 572
<CGS> 0
<TOTAL-COSTS> 510
<OTHER-EXPENSES> 112
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 150
<INCOME-PRETAX> (200)
<INCOME-TAX> 0
<INCOME-CONTINUING> (200)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (200)
<EPS-PRIMARY> (5.19)
<EPS-DILUTED> (5.19)
</TABLE>
