[Silver Screen logo]



                                      F-1
<PAGE>


(c)1997 Silver Screen Management Services, Inc.
Design: Pentagram

SILVER SCREEN MANAGEMENT
SERVICES, INC.

Officers:                                      Directors:          
---------                                      ----------          
                                                                   
Roland W. Betts                                Paul Bagley         
President and Chief Executive Officer          New York, New York  
                                                                   
Tom A. Bernstein                               Tom A. Bernstein    
Executive Vice President                       New York, New York  
                                                                   
Barbara Stubenrauch                            Roland W. Betts     
Senior Vice President                          New York, New York  
                                                                   
Richard S. Kasof                               John Tommasini      
First Vice President                           New York, New York  
                                                                   
Dana Thayer                                    William Turchyn, Jr.
First Vice President                           New York, New York  
                                               
Liz A. Brevetti
Vice President

Keith Champagne
Vice President

Evelyn Halley
Vice President

Stuart A. Sheinbaum
Director of Investor Relations

Conchetta S. Mayfield
Director of Operations

Paul Rindone
Director of Operations




                                      F-2
<PAGE>


LETTER TO INVESTORS

Dear Limited Partners:

Silver Screen Partners IV distributed  over $93 million for the four quarters of
1996, bringing total distributions since the Partnership's  inception in 1988 to
over $578 million.  Of the $578 million,  approximately 69% is return of capital
and 31% is income.

     A substantial portion of the Partnership's 1996 revenue came in the form of
Revenue  Shortfall  Payments for eleven films.  Sales of merchandise  related to
"The Little Mermaid" and "Beauty and the Beast" also  contributed to Partnership
revenue during the year.  Our other  animated  film,  "The Rescuers Down Under,"
produced revenue from the foreign home video market.

     During  1996,  two of our films  became  available to appear on USA Network
("An Innocent Man" and "Blaze") and two other films became available to the U.S.
syndicated  television  market ("Pretty Woman" and "Dick Tracy").  In 1997, four
films will become available to the U.S.  syndicated  television  market ("Ernest
Goes to Jail,"  "Taking Care of  Business,"  "The  Rocketeer"  and  "Deceived").
Partnership revenue in the future is also expected to be generated from the only
remaining Revenue Shortfall Payment ("Blame It on the Bellboy"),  the re-release
of "The Little Mermaid"  (scheduled for this fall), as well as from the proceeds
of the Disney buyout of the Silver Screen  IV-Disney  Joint Venture.  As always,
distributions  depend on the amount of revenue generated each quarter,  and will
fluctuate accordingly. There may be quarters when no distributions will be paid.

     Between now and the dissolution of the  Partnership,  current  expectations
are  that,   after   expenses,   Silver  Screen   Partners  IV  will  distribute
approximately  $300 to $330 per unit to  investors  (this  amount  includes  all
anticipated future quarterly distributions and the buyout proceeds from Disney).
The closing of the  purchase  by Disney is  scheduled  to occur on November  30,
1998. The final  distribution  and dissolution of the Partnership is expected to
take place before December 31, 1998.  These figures and dates represent our best
estimates as of today.

     As explained  in previous  correspondence,  a number of private  investment
groups  have sent out  correspondence  relating  to a tender  offer for units in
Silver  Screen  Partners  IV, and there may be other such  offers in the future.
Silver Screen Partners IV and Silver Screen  Management  Services,  Inc. are not
affiliated in any way with these firms and can make no  recommendation as to the
merits  of any  past or  future  tender  offer.  If and when  you  receive  such
solicitations, if you are not interested in selling your units, no action by you
is required.  We hope this  information  will help you in evaluating the various
bids from the tender offer groups.

     Tax  information  for preparing your 1996 income tax returns will be mailed
to you by March  15. In the  meantime,  our  Investor  Relations  Department  is
available  to assist you with any  questions  you may have.  Please note our new
telephone  number  and  address  listed on the back of this  report.

Sincerely,


/s/ Roland W. Betts
--------------------
Roland W. Betts
President


/s/ Tom S. Bernstein
--------------------
Tom S. Bernstein
Executive Vice President

January 24, 1997


                                      F-3
<PAGE>


              REPORT OF INDEPENDENT AUDITOR'S FINANCIAL STATEMENTS

To the Partners
Silver Screen Partners IV, L.P.

     We have audited the  accompanying  balance sheets of Silver Screen Partners
IV,  L.P. (a limited  partnership)  as of  December  31, 1996 and 1995,  and the
related  statements of operations,  partners' equity, and cash flows for each of
the  three  years  in the  period  ended  December  31,  1996.  These  financial
statements  are  the  responsibility  of  the  Partnership's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

     We conducted  our audits in accordance  with  generally  accepted  auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

     In our opinion,  the financial statements referred to above present fairly,
in all material  respects,  the financial position of Silver Screen Partners IV,
L.P. (a limited  partnership)  at December 31, 1996 and 1995, and the results of
its  operations  and its cash  flows for each of the three  years in the  period
ended  December  31,  1996 in  conformity  with  generally  accepted  accounting
principles. 

                                       /s/ Ernst & Young LLP


New York, New York

January 24, 1997

                                      F-4
<PAGE>


                                 BALANCE SHEETS

December 31, 1996 and 1995                               1996             1995
--------------------------                        ------------      ------------
ASSETS

CURRENT ASSETS:

Cash .......................................      $    314,835      $    392,505
Temporary investments (at cost plus
  accrued interest,
  which approximates market) ...............        25,794,708        42,422,608
                                                  ------------      ------------
Total current assets .......................        26,109,543        42,815,113
Investment in Joint Venture ................        74,211,904        95,691,312
                                                  ------------      ------------
                                                  $100,321,447      $138,506,425
                                                  ============      ============
LIABILITIES AND PARTNERS' EQUITY

CURRENT LIABILITIES:
Due to managing general partner ............      $      4,960      $     60,728
Accrued unincorporated business tax ........           153,419              --
Overhead fees payable ......................        23,839,420        25,542,750
                                                  ------------      ------------
Total current liabilities ..................        23,997,799        25,603,478
Other liabilities ..........................              --             100,000
                                                  ------------      ------------

Total liabilities ..........................        23,997,799        25,703,478
                                                  ------------      ------------
Partners' equity:
General partners ...........................              --                --
Limited partners ...........................        76,323,648       112,802,947
                                                  ------------      ------------
Total partners' equity .....................        76,323,648       112,802,947
                                                  ------------      ------------
                                                  $100,321,447      $138,506,425
                                                  ============      ============



                       See notes to financial statements.


                                      F-5
<PAGE>


                            STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Years ended December 31, 1996, 1995 and 1994       1996          1995         1994
--------------------------------------------     --------      --------     --------
<S>                                          <C>            <C>            <C>         
Revenues:

Income from Joint Venture .................  $ 77,285,458   $ 9,531,277    $ 23,023,577
Interest income ...........................     2,633,888     2,604,893       1,927,300
                                             ------------   -----------    ------------
                                               79,919,346    12,136,170      24,950,877
Costs and expenses:

General and administrative ................     3,209,723     4,078,150       3,592,351
                                             ------------   -----------    ------------
Income before income taxes ................    76,709,623     8,058,020      21,358,526
Unincorporated business tax ...............     1,148,519         --              --
                                             ------------   -----------    ------------
Net income ................................  $ 75,561,104   $ 8,058,020     $21,358,526
                                             ============   ===========    ============
Net income allocated to:

General partners ..........................   $ 2,908,830   $    80,580    $    213,585
Limited partners ..........................    72,652,274     7,977,440      21,144,941
                                             ------------   -----------    ------------
                                             $ 75,561,104   $ 8,058,020    $ 21,358,526
                                             ============   ===========    ============
Net income per $500 limited
  partnership unit
  (based on 800,000 units outstanding) ....  $      90.82   $      9.97 $         26.43
                                             ============   ===========    ============
Cash distribution per $500 limited
  partnership unit ........................  $     131.50 $       75.00 $         70.00
                                             ============   ===========    ============

</TABLE>

                       See notes to financial statements.



                         STATEMENTS OF PARTNERS' EQUITY
<TABLE>
<CAPTION>
                                                  General          Limited
Years ended December 31, 1996, 1995 and 1994      Partners         Partners             Total
--------------------------------------------    -----------      -----------      ------------
<S>                       <C>                   <C>            <C>               <C>         
Partners' equity, January 1, 1994 ..........   $        --      $ 200,558,118    $ 200,558,118
Net income, 1994 ...........................         213,585       21,144,941       21,358,526
Distributions, 1994 ........................        (565,657)     (56,000,000)     (56,565,657)
Allocation under Treasury Regulation Section
   1.704-1(b) ..............................         352,072         (352,072)            --
                                                 -----------      -----------     ------------
Partners' equity, December 31, 1994 ........            --        165,350,987      165,350,987
Net income, 1995 ...........................          80,580        7,977,440        8,058,020
Distributions, 1995 ........................        (606,060)     (60,000,000)     (60,606,060)
Allocation under Treasury Regulation Section
   1.704-1(b) ..............................         525,480         (525,480)            --
                                                 -----------      -----------     ------------
Partners' equity, December 31, 1995 ........            --        112,802,947      112,802,947
Net income, 1996 ...........................       2,908,830       72,652,274       75,561,104
Distributions, 1996 ........................      (6,840,403)    (105,200,000)    (112,040,403)
Allocation under Treasury Regulation Section
   1.704-1(b) ..............................       3,931,573       (3,931,573)            --
                                                 -----------      -----------     ------------
Partners' equity, December 31, 1996 ........   $        --      $  76,323,648    $  76,323,648
                                                 ===========      ===========     ============
</TABLE>

                       See notes to financial statements.


                                      F-6
<PAGE>


                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Years ended December 31, 1996, 1995 and 1994              1996            1995            1994
--------------------------------------------          ----------      ---------      -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                 <C>             <C>             <C>         
Net income ....................................   $  75,561,104    $   8,058,020    $  21,358,526

Adjustments to reconcile net income to net cash
  provided by operating activities:

(Increase) decrease in accrued interest
  receivable ..................................         (10,131)         245,769         (234,429)
Charge on overhead fee payable ................       2,296,670        2,646,998        2,659,778
Net change in operating assets and liabilities:
(Decrease) increase in due to managing
   general partner ............................         (55,768)          53,013          (58,421)
Increase in accrued unincorporated business tax         153,419             --               --
Decrease in other liabilities .................        (100,000)            --               --
Increase in overhead fee payable ..............            --              9,308           68,379
Drawing on overhead fee .......................      (4,000,000)      (5,050,000)            --
                                                  -------------    -------------    -------------
Net cash provided by operating activities .....      73,845,294        5,963,108       23,793,833
                                                  -------------    -------------    -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in Joint Venture ..................            --            (78,566)        (669,832)
Distributions received from Joint Venture in
  excess of equity in income ..................            --         34,920,896       35,073,101
Decrease in investment in Joint Venture .......      21,479,408             --               --
Net sales of temporary investments with
  maturities of three months or less, net .....      16,638,031       16,913,875        1,543,813
                                                  -------------    -------------    -------------
Net cash provided by investing activities .....      38,117,439       51,756,205       35,947,082
                                                  -------------    -------------    -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to partners .....................    (112,040,403)     (60,606,060)     (56,565,657)
                                                  -------------    -------------    -------------
Net cash used in financing activities .........    (112,040,403)     (60,606,060)     (56,565,657)
                                                  -------------    -------------    -------------
Net (decrease) increase in cash ...............         (77,670)      (2,886,747)       3,175,258
Cash, beginning of year .......................         392,505        3,279,252          103,994
                                                  -------------    -------------    -------------
Cash, end of year .............................   $     314,835    $     392,505    $   3,279,252
                                                  =============    =============    =============

</TABLE>
                       See notes to financial statements.


                                      F-7
<PAGE>

NOTES TO FINANCIAL STATEMENTS

1.  ORGANIZATION

Silver Screen Partners IV, L.P. ("the  Partnership")  was formed on December 16,
1987 as a Delaware  limited  partnership and began  operations on June 16, 1988.
The Partnership  formed a Joint Venture with The Walt Disney Company  ("Disney")
for the purpose of financing  (in whole or in part),  producing,  acquiring  and
exploiting all feature-length theatrical motion pictures selected for production
by Disney until the  Partnership's  funds were fully committed.  The Partnership
was  obligated to use its best efforts to provide to the Joint  Venture funds in
an amount equal to 150% of the gross proceeds of the offering.  The  Partnership
met this  obligation  through the use of a  revolving  credit  facility  and the
reinvestment of Partnership  funds. The Partnership  provided  financing for the
Joint  Venture's  films,  while Disney was  responsible  for the development and
production or acquisition decisions on behalf of the Joint Venture in connection
with the films.

     Silver Screen Management  Services,  Inc., a Delaware  corporation,  is the
managing   general   partner  ("MGP")  of  the  Partnership  and  has  exclusive
responsibility  for  the  management  of the  business  and the  affairs  of the
Partnership.  Roland W. Betts,  the President and principal  shareholder  of the
MGP, is the individual general partner of the Partnership.

     The   Partnership   Agreement   provides  that  all  profits,   losses  and
distributable cash  ("Proceeds"),  are allocated 99% to the limited partners and
1% to the general  partners until the Partnership  has satisfied  certain tests.
Thereafter,  all Proceeds will be allocated 90% to the limited  partners and 10%
to the general partners until additional tests have been satisfied.  Thereafter,
Proceeds  will be allocated  80% to the limited  partners and 20% to the general
partners.  Cash  generated by net gain from sale, as defined,  will be allocated
85% to the limited  partners  and 15% to the general  partners  once the general
partners have  recovered an aggregate of 15% of the total cash  generated by net
gain from sale. The Partnership Agreement provides for the special allocation of
income and gain, in accordance with Treasury Regulation Section  1.704-1(b),  to
eliminate any capital account deficit created through cash  distributions to the
general  partners.  This special  allocation in 1996,  1995 and 1994 amounted to
$3,931,573, $525,480 and $352,072,  respectively,  which represents $4.91, $.66,
and $.44 per $500 limited partnership unit, respectively.  Cash distributions to
the limited partners are allocated pro rata according to the capital accounts of
the respective limited partners.


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Income taxes: No provision has been made for income taxes except for the City of
New York unincorporated business tax since the income or loss of the Partnership
is  required  to be reported  by the  respective  partners  on their  income tax
returns (see Note 7).


3.  TEMPORARY INVESTMENTS

Temporary investments consisted of the following:

                         1996           1995
                     --------      ---------
Commercial
  paper ........  $25,794,708    $42,422,608
                  ===========    ===========

All  commercial  paper is rated by Standard & Poor's A1 or A1+.

1996  commercial  paper matured  between  January 2 and January 23, 1997 and had
interest rates ranging from 5.25% to 5.38%.

1995  commercial  paper matured  between  January 4 and January 29, 1996 and had
interest rates ranging from 5.6% to 5.8%.


4.  INVESTMENT IN JOINT VENTURE

The Partnership  entered into a Letter  Agreement (the "Buyout  Agreement") with
Disney dated  September 11, 1995  providing for the sale to Disney of all of the
Partnership's  interest in the Joint Venture.  The Buyout Agreement provides for
the payment of the purchase price of  $330,000,000,  in cash (subject to certain
adjustments with respect to revenues  received from the exploitation of animated
films).  Closing  is  scheduled  to  occur  on  November  30,  1998  subject  to
satisfaction of certain customary conditions. In addition to the purchase price,
the Buyout  Agreement  provides  that Buena Vista  Pictures  Distribution,  Inc.
("BV") will continue to account for and make payments to the Joint  Venture,  as
required by the Distribution  Agreement for all revenues  received by BV through
April 30, 1998. 




                                      F-8
<PAGE>


As a result of the Buyout Agreement, the Partnership is using the cost method of
accounting  starting  January  1,  1996.  Under the cost  method,  distributions
received are recognized as income and investments  will be reduced in proportion
to the actual cash received to ultimate revenues expected to be received.

     The  investment  in the  Disney-Silver  Screen IV Joint Venture (the "Joint
Venture") was accounted  for using the equity  method of  accounting.  Under the
equity method, the investment was initially recorded at cost, and was thereafter
increased by additional investments,  adjusted by the Partnership's share of the
Joint Venture's  results of operations,  and reduced by  distributions  received
from the Joint Venture. The Joint Venture's fiscal year ends September 30, while
the Partnership's  fiscal year ends December 31. The 1995 and 1994 statements of
operations  reflect the Joint  Venture's  results of  operations  for its fiscal
years ended September 30, 1995, and 1994. The investment in the Joint Venture on
January 1, 1996 totalled $95,691,312.

The investment in Joint Venture at December 31, 1995 was as follows:

                                                                         1995
                                                                  -------------
Balance, January 1 .........................................      $ 130,533,642
Investments, January 1 to December 31 ......................             78,566
Income from the Joint Venture for the
   fiscal year ended September 30 ..........................          9,531,277
Distributions received, January 1 to December 31 ...........        (44,452,173)
                                                                  -------------
Balance, December 31 .......................................      $  95,691,312
                                                                  =============

For each Joint  Venture  film,  all revenues  received by the Joint  Venture are
allocated and  distributed  first to the Partnership and Disney in proportion to
their  respective  investments in the budgeted or acquisition  cost of each film
until each has recovered  its  investment;  second,  net of  participations,  to
Disney until it recovers any amounts paid for cost overruns; and thereafter, net
of  participations,  75% to the Partnership and 25% to Disney  (adjusted for any
Disney  investment in the film other than cost overruns)  until the  Partnership
has received an amount equal to 150% of its investment; and thereafter,  62-1/2%
to the Partnership and 37-1/2% to Disney (adjusted for any Disney  investment in
the film other than cost overruns).

The  condensed  balance sheet for the Joint Venture at September 30, 1995 was as
follows:

                                                                         1995
                                                                    ------------
ASSETS
Receivable from Buena Vista Pictures Distribution, Inc. .......     $ 23,252,574
Receivable from Silver Screen Partners IV, L.P. ...............            2,348
Film production costs, net of accumulated amortization
  of $622,097,592 .............................................      132,457,711
                                                                    ------------
                                                                    $155,712,633
                                                                    ============
LIABILITIES AND VENTURERS' CAPITAL
Accounts and distributions payable to:
 The Walt Disney Company ......................................     $  9,922,090
 Silver Screen Partners IV, L.P. ..............................       10,066,542
Deferred revenue ..............................................        2,037,668
Venturers' capital:
 The Walt Disney Company ......................................       34,993,634
 Silver Screen Partners IV, L.P. ..............................       98,692,699
                                                                    ------------
                                                                    $155,712,633
                                                                    ============


The  condensed  statements  of income for the Joint  Venture for the years ended
September 30, 1995 and 1994 were as follows:

                                                    1995                1994
                                              -------------       -------------
Revenues ...............................      $  83,979,513       $ 105,260,918
Amortization of film production
  costs ................................        (57,665,111)        (50,583,867)
Participation expense ..................         (7,594,341)        (13,902,997)
                                              -------------       -------------
Net income .............................      $  18,720,061       $  40,774,054
                                              =============       =============
                                 
The  Partnership's  share of the  September  30,  1995 and 1994 net  income  was
$9,531,277 and $23,023,577, respectively.


                                      F-9
<PAGE>


     Film  costs  include  production  costs,  a 17.5%  overhead  charge  on the
budgeted  film cost  (payable  13.5% to Disney and 4% to the MGP), a development
fee of $500,000  for each film payable to Disney,  and  interest on  development
costs, as contractually  defined,  payable to Disney.  Film production costs are
charged to  earnings on an  individual  film basis in the ratio that the current
year's revenues bear to Joint Venture management's estimate of ultimate revenues
to be received from all sources.  See Note 6 with respect to the Joint Venture's
distribution agreement.

     Film  costs are  stated at the lower of cost or  estimated  net  realizable
value on an individual film basis. Revenue forecasts for all motion pictures are
continually  reviewed by Joint Venture  management and revised when warranted by
changing conditions. When estimates of ultimate revenues to be received indicate
that a motion picture will result in an ultimate loss,  additional  amortization
is provided to reduce the film to its net realizable value.

     All of the  Joint  Venture's  motion  pictures  are  completed,  have  been
released,  and are currently in secondary  markets (home video,  pay television,
free television, and syndication).  Based on Joint Venture management's ultimate
revenue  estimates at September 30, 1995, all unamortized  film production costs
will be amortized during the next two years.

     Participations  represent  a  participant's  share  of a  motion  picture's
profits  as  contractually   defined.  An  ultimate   participation  expense  is
determined for each motion picture using ultimate  revenues.  Revenue  forecasts
for all motion pictures are continually reviewed by Joint Venture management and
ultimate participation expense is revised when warranted. Ultimate participation
expense is charged to  earnings  on an  individual  film basis in the ratio that
current  year's  revenues  bear to Joint  Venture  management's  estimate of the
ultimate revenues to be received from all sources. Pursuant to the Joint Venture
agreement,  Disney is entitled to a participation in the profits of all animated
films.


5.  OVERHEAD FEES PAYABLE

The  Partnership   Agreement   provides  that  overhead  fees  received  by  the
Partnership  for the benefit of the MGP (see Note 4) will remain on account with
the Partnership with the  understanding  that the MGP may draw from such account
from  time to time,  in  order  to  cover  its  actual  operating  expenses  not
reimbursed  from other  sources.  Such  amounts are  included  in the  temporary
investments  and  earn  interest  which  accrues  to the  Partnership.  The fees
remaining on account will earn 10% per annum (compounded quarterly) for the MGP.
The amount included in general and  administrative  expenses for the years ended
December 31,  1996,  1995 and 1994 is  $2,296,670,  $2,646,997  and  $2,659,778,
respectively.  The  balance  of  $23,852,664  of such  overhead  fee was paid on
January 2, 1997.


6.  AGREEMENT WITH RELATED PARTIES

The Joint  Venture  entered  into a  distribution  agreement  with  Buena  Vista
Pictures  Distribution,  Inc.  ("Buena  Vista"),  a  wholly-owned  subsidiary of
Disney.  The  agreement  provides  that the Joint  Venture  grant  Buena Vista a
license to distribute all the Joint Venture's films in all media  throughout the
world through December 31, 1998. The distribution agreement provides that if the
revenues  received by the Joint  Venture for a Joint Venture film were less than
100% of the film's budgeted film cost or acquisition cost, as defined,  actually
expended,  then, five years after the release of that film,  Buena Vista, to the
extent it  retained  revenues  from that  film,  would pay the Joint  Venture an
additional  amount (the "Revenue  Shortfall  Payment")  sufficient to return the
budgeted film cost or acquisition cost actually  expended.  If revenues retained
by  Buena  Vista  are  not  sufficient  to  return  the  budgeted  film  cost or
acquisition cost, then the Joint Venture will receive 100% of the gross receipts
(net of certain  distribution  costs)  until the Joint  Venture has  received an
amount equal to the unreimbursed  portion of the revenue shortfall.  Buena Vista
will be  entitled  to  recoup  any  Revenue  Shortfall  Payments  from the Joint
Venture's  share of film  revenue  from such film  after the Joint  Venture  has
recouped its investment.  The Partnership  received Revenue  Shortfall  Payments
during the years ended  December  31,  1996 and 1995 of $87.0  million and $26.0
million,  respectively.  Disney  guaranteed  Buena  Vista's  obligation  to make
Revenue Shortfall Payments.


7.  UNINCORPORATED BUSINESS TAX

On September 30, 1996, the Partnership received an assessment from New York City
regarding  unincorporated  business  tax  covering  all periods  from  inception
through December 31, 1995 of $1,095,100 (including interest). This liability was
paid on the date of assessment. The Unincorporated Business Tax Expense reflects
the  excess  of  this  payment  over  an  amount  previously  established  as  a
contingency reserve plus a provision for 1996.

                                      F-10
<PAGE>


================================================================================
                                                                       Unaudited

Value per unit based on annual appraisal
----------------------------------------

The appraised  value per unit based upon  projected cash flow as of December 31,
1996 is $341. The appraised value does not consider the time value of money.


Cash distributions
------------------

The Partnership  made four  distributions  in 1996 totalling  $131.50 or 26% per
$500 unit.  Cumulative  distributions through December 31, 1996 totalled $726 or
145% per unit.


Availability of Form 10-K
-------------------------

A copy  of the  Partnership's  Annual  Report  to the SEC on  Form  10-K  may be
obtained  without  charge by  writing  to the  Partnership,  c/o  Silver  Screen
Management Services, Inc., Chelsea Piers-Pier 62, Suite 300, New York, N.Y.
10011.



                                      F-11
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Silver Screen Management Services, Inc.
Chelsea Piers-Pier 62
Suite 300 New York, NY 10011
(212) 336-6700


                                  Bulk Rate
                                U. S. Postage
                                     PAID
                                  Permit #9
                                  Boston, MA