PAINEWEBBER INCOME PROPERTIES EIGHT LIMITED PARTNERSHIP
BALANCE SHEETS
December 31, 1994 and September 30, 1994
(Unaudited)
ASSETS
December 31 September 30
Operating investment property:
Land $ 6,664,525 $ 6,664,525
Buildings and improvements 25,790,930 25,790,930
Furniture, fixtures and equipment 3,576,114 3,481,880
36,031,569 35,937,335
Less accumulated depreciation (9,118,255) (8,894,088)
26,913,314 27,043,247
Investments in joint ventures, at equity 727,121 1,058,322
Cash and cash equivalents 1,288,635 1,496,258
Cash reserved for capital expenditures 507,667 757,747
Accounts receivable 333,323 286,022
Due from Marriott Corporation 195,327 -
Inventories 130,857 137,940
Other assets 64,070 50,471
Deferred expenses, net 242,980 260,175
$30,403,294 $31,090,182
LIABILITIES AND PARTNERS' DEFICIT
Accounts payable and accrued expenses $ 236,507 $ 481,014
Accounts payable - affiliates 1,886 1,886
Accrued interest payable 337,473 287,335
Due to Marriott Corporation - 12,365
Loan payable to Marriott Corporation 5,872,222 5,727,829
Mortgage notes payable 35,546,002 35,237,055
Partners' deficit (11,590,796) (10,657,302)
$30,403,294 $31,090,182
STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
For the three months ended December 31, 1994 and 1993
(Unaudited)
General Limited
Partners Partners
Balance at September 30, 1993 $(452,802) $ (6,228,144)
Net loss (12,821) (1,205,912)
BALANCE AT DECEMBER 31, 1993 $(465,623) $ (7,434,056)
Balance at September 30, 1994 $(494,632) $(10,162,670)
Net loss (9,820) (923,674)
BALANCE AT DECEMBER 31, 1994 $(504,452) $(11,086,344)
See accompanying notes.
PAINEWEBBER INCOME PROPERTIES EIGHT LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
For the three months ended December 31, 1994 and 1993
(Unaudited)
1994 1993
REVENUES:
Hotel revenues $ 1,693,650 $ 1,538,624
Interest and other income 22,947 13,277
1,716,597 1,551,901
EXPENSES:
Hotel operating expenses 1,308,028 1,309,158
Interest expense 762,528 729,982
Depreciation and amortization 241,362 379,988
General and administrative 63,222 51,748
2,375,140 2,470,876
Operating loss (658,543) (918,975)
Partnership's share of ventures' losses (274,951) (299,758)
Net loss $ (933,494) $(1,218,733)
Net loss per 1,000 Limited Partnership Units $(25.98) $(33.92)
The above per 1,000 Limited Partnership Units information is based upon the
35,548,976 Limited Partnership Units outstanding during each period.
See accompanying notes.
PAINEWEBBER INCOME PROPERTIES EIGHT LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
For the three months ended December 31, 1994 and 1993
Increase (Decrease) in Cash and Cash Equivalents
(Unaudited)
1994 1993
Cash flows from operating activities:
Net loss $ (933,494)$ (1,218,733)
Adjustments to reconcile net loss
to net cash used for operating activities:
Interest expense on loan payable to
Marriott Corporation 144,393 130,706
Partnership's share of ventures' losses 274,951 299,758
Depreciation and amortization 241,362 379,988
Amortization of deferred gain on forgiveness
of debt (200,655) (187,068)
Changes in assets and liabilities:
Accounts receivable (47,301) 14,343
Due to/from Marriott Corporation (207,692) (180,895)
Inventories 7,083 973
Other assets (13,599) (14,491)
Accounts payable and accrued expenses (244,507) (39,104)
Accounts payable - affiliates - (4,710)
Accrued interest payable 50,138 17,693
Total adjustments 4,173 417,193
Net cash used for operating activities (929,321) (801,540)
Cash flows from investing activities:
Distributions from joint ventures 160,000 197,897
Additional investments in joint ventures (103,750) -
Additions to operating investment property (94,234) -
Net withdrawals from capital expenditure reserve 250,080 -
Net cash provided by investing activities 212,096 197,897
Cash flows from financing activities:
Proceeds from issuance of notes payable 509,602 523,360
Net decrease in cash and cash equivalents (207,623) (80,283)
Cash and cash equivalents, beginning of period 1,496,258 2,292,646
Cash and cash equivalents, end of period $ 1,288,635 $ 2,212,363
Cash paid during the period for interest $ 768,652 $ 768,651
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 accounting
adjustments reflected in the accompanying interim financial statements are
of a normal recurring nature.
2. Operating Investment Property
The Partnership directly owns one operating investment property, the
Newport Beach Marriott Suites Hotel. The Partnership acquired a 100%
interest in the Marriott Suites Hotel located in Newport Beach, California
from the Marriott Corporation on August 10, 1988. The Hotel consists of
254 two-room suites encompassing 201,606 square feet located on
approximately 4.8 acres of land. It is managed by Marriott and its
affiliates. The operating investment property is carried at cost, adjusted
for any guaranty payments received from Marriott (see the Annual Report),
less accumulated depreciation.
The following is a combined summary of Hotel revenues and operating expenses
for the three months ended December 31, 1994 and 1993 respectively.
1994 1993
REVENUES:
Guest rooms $1,234,808 $1,145,428
Food and beverage 412,125 393,196
Other revenues - -
$1,646,933 $1,538,624
OPERATING EXPENSES:
Guest rooms $ 367,748 $ 333,775
Food and beverage 300,250 393,384
Other operating expenses 540,997 452,464
Management fees - Manager 30,804 30,772
Real estate taxes 68,229 98,763
$1,308,028 $1,309,158
The operating expenses of the Hotel noted above include significant
transactions with the Manager. All Hotel employees are employees of
the Manager and the related payroll costs are allocated to the Hotel
operations by the Manager. A majority of the supplies and food purchased
during both periods were purchased from an affiliate of the Manager.
In addition, the Manager also allocates employee benefit costs,
advertising costs and management training costs to the Hotel.
3. Investments in Joint Venture Partnerships
The Partnership has investments in four joint ventures which own five
operating properties as more fully described in the Partnership's Annual
Report. The joint ventures are accounted for under the equity method in
the Partnership's financial statements because the Partnership does not
have a voting control interest in the ventures. Under the equity method,
the investment in a joint venture is carried at cost adjusted for the
Partnership's share of the venture's earnings, losses and distributions.
Summarized operations of the four joint ventures follow:
CONDENSED SUMMARY OF OPERATIONS
For the three months ended December 31, 1994 and 1993
(Unaudited)
1994 1993
Rental revenues $ 946,000 $ 904,000
Other income 41,000 39,000
987,000 943,000
Property operating expenses 613,000 559,000
Interest expense 385,000 390,000
Depreciation and amortization 239,000 268,000
1,237,000 1,217,000
Net loss $ (250,000) $ (274,000)
Net loss:
Partnership's share of income (loss) $ (272,000) $ (297,000)
Co-venturers' share of income (loss) 22,000 23,000
$ (250,000) $ (274,000)
RECONCILIATION OF PARTNERSHIP'S SHARE OF OPERATIONS
Partnership's share of combined
loss, as shown above $ (272,000) $ (297,000)
Amortization of excess basis (3,000) (3,000)
Partnership's share of ventures'
losses $ (275,000) $ (300,000)
4.Related Party Transactions
Included in general and administrative expenses for three months ended
December 31, 1994 and 1993 is $27,915 and $28,656, 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 three months
ended December 31, 1994 and 1993 is $491 and $1,223, respectively,
representing fees earned by Mitchell Hutchins Institutional Investors, Inc.
for managing the Partnership's cash assets.
5.Mortgage Notes Payable
Mortgage notes payable at December 31, 1994 and September 30, 1994 consists
of the following:
December 31 September 30
Permanent mortgage loan secured by the Newport
Beach Marriott Suites Hotel (see Note 2),
bearing interest at 10.09% per annum from
disbursement through August 10, 1992.
Interest accrues at 9.59% per annum from
August 11, 1992 through August 10, 1995 and at
a variable rate of adjusted LIBOR, as defined,
plus 2.5% per annum from August 11, 1995 until
maturity. On August 11, 1996 the balance of
principal together with all accrued but unpaid
interest thereon shall be due. See discussion
regarding default and modification below. $ 32,060,518 $32,060,518
Add: Unamortized deferred gain from
forgiveness of debt 122,842 323,497
32,183,360 32,384,015
Nonrecourse senior promissory notes payable,
bearing interest at a variable rate of
adjusted LIBOR, as defined, plus one percent
per annum. Payments on the loan are to be
made from available cash flow of the Newport
Beach Marriott Suites Hotel (see discussion
below) 3,362,642 2,853,040
$ 35,546,002 $35,237,055
As discussed in the Annual Report, the Partnership was in default under
the terms of the Newport Beach Marriott loan agreement from the second quarter
of fiscal 1991 through the first quarter of fiscal 1993. On January 25, 1993,
the Managing General Partner and the lender finalized an agreement on a
modification of the first mortgage loan secured by the Hotel which was
retroactive to August 11, 1992. Per the terms of the modification, the maturity
date of the loan was extended one year to August 11, 1996. The new loan amount
is $32,060,518 (the original principal of $29,400,000 plus $2,660,518 of unpaid
interest and fees). The new loan amount bears interest at a rate of 9.59%
commencing on August 11, 1992 through August 11, 1995 and at a variable rate of
the adjusted LIBOR index, as defined, plus 2.5% from August 11, 1995 through the
final maturity date. The Partnership will pay to the lender on a monthly basis
as debt service, an amount equal to Hotel Net Cash, as defined in the Hotel
management agreement. In order to increase Hotel Net Cash, Marriott has agreed
to reduce its Base Management Fee by one percent of total revenue through
calendar year 1996. In addition, the reserve for the replacement of equipment
and improvements, which is funded out of a percentage of gross revenues
generated by the Hotel, was reduced to two percent of gross revenues in 1992 and
to three percent of gross revenues thereafter. As part of the modification
agreement, the Partnership agreed to make additional debt service contributions
to the lender of $400,000, of which $50,000 was paid at the closing of the
modification and the balance will be contributed $100,000 per year, payable on a
monthly basis in arrears for forty-two months. Under the terms of the
modification, events of default include payment default with respect to the
Partnership's additional debt service contributions to the lender, failure of
the Hotel to meet certain performance tests, as defined, plus additional default
provisions as specified in the modification agreement.
An additional loan facility from the existing lender of up to $4,000,000
will be used to pay expected debt service shortfalls after August 11, 1992.
This additional loan facility bears interest at a variable rate of adjusted
LIBOR (7.125% at December 31, 1994), as defined, plus one percent per annum.
Interest on the new loan facility is payable currently only to the extent of
available cash flow from Hotel operations. Interest deferred due to the lack of
available cash flow is added to the principal balance of the new loan. At
December 31, 1994, the Partnership has drawn $3,362,642 under this additional
loan facility. The restructuring of the mortgage note payable has been
accounted for in accordance with Statement of Financial Accounting Standards No.
15, "Accounting by Debtors and Creditors for Troubled Debt Restructurings".
Accordingly, the forgiveness of debt aggregating $1,766,609, which represents
the difference between accrued interest and fees recorded under the original
loan agreement and the agreed upon amount of the outstanding interest and fees
of $2,660,518 per the terms of the modification at September 30, 1992, has been
deferred and is being amortized as a reduction of interest expense
prospectively, using the effective interest method, over the remaining term of
the Hotel's indebtedness.
PAINEWEBBER INCOME PROPERTIES EIGHT LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
As previously reported, on January 25, 1993 the Managing General Partner
and the lender on the Newport Beach Marriott Suites Hotel finalized an agreement
on a modification of the first mortgage loan secured by the Hotel which was
retroactive to August 11, 1992. Per the terms of the modification, the maturity
date of the loan was extended one year to August 11, 1996. The principal amount
of the loan was adjusted to $32,060,518 (the original principal of $29,400,000
plus $2,660,518 of unpaid interest and fees). The outstanding balance of the
loan bears interest at a rate of 9.59% through August 11, 1995 and at a variable
rate of the adjusted LIBOR index, as defined, plus 2.5% from August 11, 1995
through the final maturity date. The Partnership will pay to the lender on a
monthly basis as debt service, an amount equal to Hotel Net Cash, as defined in
the Hotel management agreement. In order to increase Hotel Net Cash, Marriott
agreed to reduce its Base Management Fee by one percent of total revenue through
January 3, 1997. In addition, the reserve for the replacement of equipment and
improvements, which is funded out of a percentage of gross revenues generated by
the Hotel, was reduced to two percent of gross revenues in 1992 and is equal to
three percent of gross revenues thereafter through January 3, 1997. As part of
the modification agreement, the Partnership agreed to make additional debt
service contributions to the lender of $400,000, of which $50,000 was paid at
the closing of the modification and the balance will be payable on a monthly
basis in arrears for forty-two months. Under the terms of the modification,
events of default include payment default with respect to the Partnership's
additional debt service contributions to the lender, failure of the Hotel to
meet certain performance tests, as defined, plus additional default provisions
as specified in the modification agreement.
As part of the agreement to modify the Hotel's mortgage debt, an
additional loan facility of up to $4,000,000 was made available from the
existing lender to be used to pay debt service shortfalls. This additional
loan facility bears interest at a variable rate of adjusted LIBOR (7.125% at
December 31, 1994), as defined, plus one percent per annum. Interest on the
new loan facility is payable currently only to the extent of available cash
flow from Hotel operations. Interest deferred due to the lack of available
cash flow is added to the principal balance of the new loan. During fiscal
1994, the net cash flow generated by the Newport Beach Marriott was
approximately $1.6 million. Interest expense payable to the lender under the
terms of the modification agreement for fiscal 1994 totalled approximately $3
million. Accordingly, the Partnership added approximately $1.4 million to the
amounts drawn under the additional loan facility during fiscal 1994. The total
amount owed under this lending arrangement amounted to approximately $3,363,000
as of December 31, 1994. At the current rate, the $4 million limitation on
debt service advances will be reached prior to the end of fiscal 1995, at which
time a further modification of the mortgage obligation will be required.
Management has had preliminary discussions with the lender regarding the
operations of the Hotel and the need for a further modification of the loan
terms. However, it is uncertain at this time whether the lender will agree to
a further modification of the loan. In the event that an agreement with the
lender cannot be reached, the result could be a foreclosure on the operating
investment property. Under any circumstances, the operating results of the
Hotel will have to improve dramatically in order for the Partnership to recover
any of its original investment in the Newport Beach Marriott Suites Hotel. The
eventual outcome of the matter cannot be determined at this time.
The loss of the Atlanta Marriott Suites to foreclosure in fiscal 1992 and
the uncertain prospects for recovery of the Partnership's investment in the
Newport Beach Marriott, as discussed further above, mean that the Partnership
will be unable to return the full amount of the original invested capital to the
Limited Partners. The two hotel investments represented 63% of the
Partnership's original investment portfolio. The amount of capital which will
be returned will depend upon the proceeds received from the disposition of the
Partnership's other investments, which cannot presently be determined. The
Partnership's other investments consist of four multi-family apartment complexes
and one retail shopping center. In October 1993, the sole anchor tenant of the
Norman Crossing property vacated the center to relocate its operations. This
anchor tenant, which occupied 25,000 square feet of the property's 52,000 net
leasable square feet, is still obligated under the terms of its lease which runs
through the year 2007. To date, all rents due from this tenant have been
collected. Nonetheless the significant vacancy has had, and likely will
continue to have, an adverse effect on the ability to retain existing shop space
tenants and to lease other vacant shop space at the center, which had been 100%
occupied prior to the anchor tenant's departure. The center was 46% occupied as
of December 31, 1994. Management has begun an aggressive campaign to fill the
vacant anchor tenant space and to renew other tenant leases. The property
manager is working with the former anchor tenant to find a replacement tenant
for this space, either under a direct lease agreement with the joint venture or
under a sub-lease with the former anchor. However, the timing of any future
leasing of this anchor space is uncertain. The joint venture may have to make
significant tenant improvements and grant further rental concessions in order to
maintain a high occupancy rate. Funding for such improvements, along with any
operating cash flow deficits incurred during this period of re-stabilization for
the shopping center, would be provided primarily by the Partnership. Management
is prepared to fund the Partnership's share of such amounts in the near-term and
believes that the property will re-stabilize once a replacement anchor tenant is
identified. There are no assurances that this will occur in the near future.
Conditions in the markets for multi-family residential properties across the
country continued to show signs of improvement. The recent increase in market
interest rate levels should help further such improvement as it reduces the
competition from the single-family home market and it makes construction of new
multi-family units more expensive to finance. The absence of significant
new construction has allowed the oversupply which existed in many markets as a
result of the overbuilding of the 1980's to be absorbed. The results of this
absorption have been stabilized occupancy levels and a gradual improvement in
rental rates, which have had a positive impact on cash flow levels and,
consequently, property values. Management expects further improvements in
these conditions in fiscal 1995. In addition, significant progress was made
during 1994 toward resolving the remedial repair work and associated litigation
affecting the Partnership's investments in the Meadows, Spinnaker Landing and
Bay Club Apartments. The current status of such matters is discussed in more
detail below.
Management renewed marketing and leasing efforts at the Spinnaker Landing
and Bay Club Apartments during the latter part of fiscal 1993 upon the
completion of the repair work to correct the construction defects, and occupancy
levels had stabilized in the mid-90's as of December 31, 1994. However, the
venture had negative operating cash flow during fiscal 1994, and management
expects a modest cash flow deficit for fiscal 1995, which will be funded from
available recoveries on certain legal claims, as discussed further below.
Management is hopeful that further improvement in market conditions, combined
with further local market acceptance of the improved physical condition and
appearance of the renovated apartment properties, will enable the venture to
achieve above breakeven cash flow levels by the end of fiscal 1995. During
fiscal 1994 and the first quarter of fiscal 1995, the venture settled most of
the outstanding litigation related to the construction defects. In addition to
the net cash proceeds received at the time of the primary settlement between the
venture and the developer of both properties, which was executed in fiscal 1992,
the venture also received a note in the amount of $161,500 from the developer
which was due in 1994. During fiscal 1993, the venture agreed to accept a
discounted payment of $113,050 in full satisfaction of the note if payment was
made by December 31, 1993. The developer made this discounted payment to the
venture in the first quarter of fiscal 1994. In addition, during fiscal 1994
the venture received additional settlement proceeds totalling approximately
$351,000 from its pursuit of claims against certain subcontractors of the
development company and other responsible parties. Additional settlements
totalling approximately $210,000 were collected in the current quarter. Only
one claim against a subcontractor remains outstanding at the present time. A
trial regarding this remaining claim is currently scheduled for March 1995. The
outcome of this litigation cannot be predicted at the present time. Under the
terms of the venture's loan modification agreement, half of the additional
proceeds, if any, received from this remaining claim, after payment of certain
litigation-related expenses, are to be paid to the venture's mortgage lender, up
to the amount of its additional advances.
As part of the initial settlement with the developer of the Spinnaker
Landing and Bay Club Apartments, the venture also negotiated a loan modification
agreement which provided the majority of the additional funds needed to complete
the repairs to the operating properties and extended the maturity date for
repayment of the obligation to December 1996. Under the terms of the loan
modification, which was executed in December 1991, the lender agreed to loan to
the joint venture 80% of the additional amounts necessary to complete the repair
of the properties up to a maximum of $760,000. Advances through the completion
of the repair work totalled approximately $617,000. The loan modification
agreement also required the lender to defer all past due interest and all of the
interest due in calendar 1992. During 1993, the joint venture was not in
compliance with the loan modification agreement with respect to scheduled
payments of principal and interest due to negative cash flow from operations.
However, on November 1, 1993 a second loan modification was reached in which the
lender agreed to an additional deferral of debt service payments, through July
1, 1993, which would be added to the loan principal. The execution of this
second modification agreement cured any defaults on the part of the joint
venture. Additional amounts owed to the lender as a result of the deferred
payments, after the effect of the second modification agreement and including
accrued interest, total approximately $1,073,000 as of September 30, 1994.
These additional amounts owed to the lender, while critical and necessary to the
process of correcting the construction defects, have further subordinated the
equity position of the Partnership in these investment properties. Furthermore,
under the terms of the second modification agreement, beginning in 1993, 100% of
any net cash flow available after the payment of current debt service
requirements will be payable to the lender until all deferred interest has been
paid; thereafter 50% of any net cash flow will be payable to the lender to be
applied against outstanding principal. During the quarter ended December
31,1994, the venture used a portion of the proceeds from the legal claim
settlements described above to repay the Partnership for its prior advances and
accrued interest thereon in the aggregate amount of approximately $207,000.
However, due to the terms of the venture's debt agreement, no additional funds
are expected to be received from this venture for the foreseeable future.
During fiscal 1991, the Partnership discovered that certain materials used
to construct The Meadows in the Park Apartments, in Birmingham, Alabama, were
manufactured incorrectly and would require substantial repairs. During fiscal
1992, the Meadows joint venture engaged local legal counsel to seek recoveries
from the venture's insurance carrier, as well as various contractors and
suppliers, for the venture's claim of damages, which are estimated at between
$1.6 and $2.1 million, not including legal fees and other incidental costs.
During fiscal 1993, the insurance carrier deposited approximately $522,000 into
an escrow account controlled by the venture's mortgage lender in settlement of
the undisputed portion of the venture's claim. During fiscal 1994, the insurer
agreed to enter into non-binding mediation towards settlement of the disputed
claims out of court. On October 3, 1994, the joint venture verbally agreed to
settle its claims against the insurance carrier, architect, general contractor
and the surety/completion bond insurer for $1,714,000, which is in addition to
the $522,000 previously paid by the insurance carrier. These settlement
proceeds were escrowed with the mortgage holder. The nonrecourse mortgage
payable secured by the Meadows' operating property matured on November 1, 1994.
Subsequent to year-end, the venture obtained an extension of the maturity date
from the lender to January 1, 1995. Subsequent to the end of the first quarter,
delays in the closing process for a new loan resulted in the inability to repay
the current mortgage loan upon the expiration of the forbearance period. On
January 3, 1995, the mortgage lender sent a formal default notice to the venture
stating that a default interest rate of 15.5% per annum would be applied to the
loan effective January 1, 1995. On February 7, 1995, the venture closed on a
new loan and fully repaid the prior mortgage debt obligation. The new debt, in
the initial principal amount of $4,850,000, bears interest at a variable rate
equal to the 30-day LIBOR rate plus 2.25%. The loan has a 5-year term and
requires monthly interest and principal payments based on a 25-year amortization
schedule. Under the terms of the new loan, the settlement proceeds will be used
to complete the required repairs. The loan will be fully recourse to the joint
venture and to the partners of the joint venture until the repairs are
completed, at which time the entire obligation will become non-recourse. Now
that the refinancing is completed, these repairs will be made as soon as
possible. There should be minimal disruption to the property's tenants during
this repair process and the situation, once corrected, is not expected to have
an adverse effect on the future market value of the investment property.
At December 31, 1994, the Partnership had available cash and cash
equivalents of approximately $1,289,000. Such cash and cash equivalents will be
utilized as needed for Partnership requirements such as the payment of operating
expenses and the funding of joint venture capital improvements, operating
deficits or refinancing expenses. In addition, the Partnership had a cash
reserve of approximately $508,000 as of December 31, 1994, which is held by
Marriott Corporation and is to be used exclusively for repairs and replacements
related to the Newport Beach Marriott Suites Hotel. The source of future
liquidity and distributions to the partners is expected to be through cash
generated from operations of the Partnership's income-producing investment
properties and proceeds received from the sale or refinancing of 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.
RESULTS OF OPERATIONS
The Partnership had a net loss of approximately $933,000 for the three
months ended December 31, 1994, as compared to a net loss of approximately
$1,219,000 for the same period in the prior year. The primary reason for this
decrease in net loss of approximately $286,000 was a decrease in the
Partnership's operating loss in fiscal 1995. The Partnership's operating loss
decreased by approximately $260,000 mainly due to an increase in net operating
income from the Newport Beach Marriott Suites Hotel, due to the higher occupancy
levels achieved at the Hotel in the current year, and a decrease in depreciation
and amortization expense, due to certain deferred fees being fully amortized in
the prior year. The increase in Hotel net operating income and the decrease in
depreciation and amortization expense were partially offset by an increase in
interest expense, which was the result of the increased advances under the
additional loan facility from the Hotel's mortgage lender to pay debt service
shortfalls and an increase in the variable interest rate on this loan facility.
The decrease in the Partnership's net loss can also be partially attributed to a
small decrease in the Partnership's share of ventures' losses. This decrease of
approximately $25,000 is mainly attributable to an increase in rental income at
the Spinnaker Landing and Bay Club Apartments as a result of renewed leasing
efforts during fiscal 1994, as discussed further above.
PAINEWEBBER INCOME PROPERTIES EIGHT 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.
PAINEWEBBER INCOME PROPERTIES
EIGHT LIMITED PARTNERSHIP
By: Eighth Income Properties, Inc.
Managing General Partner
By: /s/ Walter V. Arnold
Walter V. Arnold
Senior Vice President and Chief
Financial Officer
Dated: February 13, 1995
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Partnerships interim financial statements for the three months ended December
31, 1994 and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> QTR-1
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> DEC-31-1994
<CASH> 1796302
<SECURITIES> 0
<RECEIVABLES> 528650
<ALLOWANCES> 0
<INVENTORY> 130857
<CURRENT-ASSETS> 2455809
<PP&E> 36758690
<DEPRECIATION> (9118255)
<TOTAL-ASSETS> 30403294
<CURRENT-LIABILITIES> 575866
<BONDS> 41418224
<COMMON> 0
0
0
<OTHER-SE> (11590796)
<TOTAL-LIABILITY-AND-EQUITY> 30403294
<SALES> 0
<TOTAL-REVENUES> 1716597
<CGS> 0
<TOTAL-COSTS> 1612612
<OTHER-EXPENSES> 274951
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 762528
<INCOME-PRETAX> (933494)
<INCOME-TAX> 0
<INCOME-CONTINUING> (933494)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (933494)
<EPS-PRIMARY> (0.03)
<EPS-DILUTED> (0.03)
</TABLE>
