UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark one)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 0-11176
NTS-PROPERTIES III
(Exact name of registrant as specified in its charter)
Georgia 61-1017240
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) No.)
10172 Linn Station Road
Louisville, Kentucky 40223
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number,
including area code (502) 426-4800
Not Applicable
Former name, former address and former fiscal year,
if changed since last report
Indicate by check mark whether the registrant (l) 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, and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
<PAGE>
TABLE OF CONTENTS
Pages
PART I
Item 1. Financial Statements
Balance Sheets and Statement of Partners' Equity
as of September 30, 1995 and December 31, 1994 3
Statements of Operations
For the three months and nine months ended
September 30, 1995 and 1994 4
Statements of Cash Flows
For the three months and nine months ended
September 30, 1995 and 1994 5
Notes To Financial Statements 6-7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8-13
PART II
1. Legal Proceedings 14
2. Changes in Securities 14
3. Defaults upon Senior Securities 14
4. Submission of Matters to a Vote of Security Holders 14
5. Other Information 14
6. Exhibits and Reports on Form 8-K 14
Signatures 15
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
NTS-PROPERTIES III
BALANCE SHEETS AND STATEMENT OF PARTNERS' EQUITY
<CAPTION>
As of As of
September 30, 1995 December 31, 1994*
<S> <C> <C>
ASSETS
Cash and equivalents $ 777,783 $ 734,203
Cash and equivalents - restricted 410,325 293,623
Accounts receivable, net of
allowance for doubtful accounts
of $85,240 (1995), and $53,828
(1994) 272,506 339,477
Land, buildings and amenities, net 9,789,877 10,242,936
Other assets 265,307 252,047
----------- -----------
$ 11,515,798 $ 11,862,286
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Mortgages payable $ 6,989,407 $ 7,060,479
Accounts payable - operations 83,654 75,234
Accounts payable - construction 19,642 152,093
Distributions payable 39,000 39,000
Security deposits 91,607 84,044
Other liabilities 119,600 16,190
----------- -----------
7,342,910 7,427,040
Partners' equity 4,172,888 4,435,246
----------- -----------
$ 11,515,798 $ 11,862,286
=========== ===========
</TABLE>
<TABLE>
<CAPTION>
Limited General
Partners Partner Total
<S> <C> <C> <C>
PARTNERS' EQUITY
Initial equity $ 15,600,000 $ 8,039,710 $ 23,639,710
Adjustment to historical
basis -- (5,455,030) (5,455,030)
----------- ---------- -----------
15,600,000 2,584,680 18,184,680
Net loss - prior years (362,006) (2,092,741) (2,454,747)
Net loss - current year (67,558) (77,800) (145,358)
Cash distributions
declared to date (11,204,702) (206,985) (11,411,687)
----------- ---------- -----------
Balances at September 30,
1995 $ 3,965,734 $ 207,154 $ 4,172,888
=========== ========== ===========
* Reference is made to the audited financial statements in the Form 10-K as
filed with the Commission on March 31, 1995.
</TABLE>
<PAGE>
<TABLE>
NTS-PROPERTIES III
STATEMENTS OF OPERATIONS
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
REVENUES:
Rental income, net of provision
for doubtful accounts of $62,788
(1995) and $-0- (1994) $ 680,406 $ 658,693 $ 2,027,124 $ 1,957,034
Rental income - affiliated 78,165 78,165 234,495 236,585
Interest and other income 10,508 8,982 32,155 15,381
---------- ---------- ---------- ----------
769,079 745,840 2,293,774 2,209,000
EXPENSES:
Operating expenses 185,219 191,649 491,692 522,273
Operating expenses - affiliated 78,055 52,834 243,234 230,726
Write-off of unamortized tenant
and building improvements 15,420 3,936 56,693 4,384
Interest expense 143,037 146,509 440,558 438,360
Management fees 40,308 37,852 118,558 111,933
Real estate taxes 54,295 58,703 162,835 162,305
Professional and administrative
expenses 15,322 13,143 42,663 39,648
Professional and administrative
expenses - affiliated 36,879 37,790 109,491 104,103
Depreciation and amortization 262,733 252,949 773,408 754,535
---------- ---------- ---------- ----------
831,268 795,365 2,439,132 2,368,267
---------- ---------- ---------- ----------
Net loss $ (62,189) $ (49,525) $ (145,358) $ (159,267)
========== ========== ========== ==========
Net loss allocated to limited
partners $ (35,694) $ (24,438) $ (67,558) $ (83,710)
========== ========== ========== ==========
Net loss per limited partnership
unit $ (2.29) $ (1.57) $ (4.33) $ (5.37)
========== ========== ========== ==========
Weighted average number of units 15,600 15,600 15,600 15,600
========== ========== ========== ==========
</TABLE>
<PAGE>
<TABLE>
NTS-PROPERTIES III
STATEMENTS OF CASH FLOWS
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES
Net loss $ (62,189) $ (49,525) $ (145,358) $ (159,267)
Adjustments to reconcile net loss
to net cash provided by operating
activities:
Provision for doubtful accounts 21,224 (14,813) 62,788 --
Accrued interest on investment
securities 3,884 -- -- --
Write-off of unamortized tenant
improvements 15,420 3,936 56,693 4,384
Depreciation and amortization 262,733 252,949 773,408 754,535
Change in assets and liabilities:
Cash and equivalents - restricted (17,775) (13,659) (51,953) (40,977)
Accounts receivable 20,834 34,328 4,183 10,305
Other assets 6,793 12,485 (28,622) (11,915)
Accounts payable - operations (5,487) (29,468) 8,420 22,937
Security deposits 869 57 7,563 (1,165)
Other liabilities 5,688 4,157 103,410 108,298
--------- --------- --------- --------
Net cash provided by operating
activities 251,994 200,447 790,532 687,135
--------- --------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES
Additions to land, buildings and
amenities (36,510) (94,460) (361,680) (292,188)
Increase in cash and equivalents -
restricted (21,192) (24,170) (64,749) (67,258)
Decrease in accounts payable
- construction (85,454) (50,530) (132,451) (5,646)
Purchase of investment securities -- -- (299,808) --
Maturity of investment securities 299,808 -- 299,808 --
--------- --------- --------- --------
Net cash provided by (used in)
investing activities 156,652 (169,160) (558,880) (365,092)
--------- --------- --------- --------
CASH FLOWS FROM FINANCING
ACTIVITIES
Principal payments on mortgage
payable (24,231) (22,125) (71,072) (64,896)
Cash distributions (39,000) -- (117,000) --
--------- -------- -------- --------
Net cash used in financing
activities (63,231) (22,125) (188,072) (64,896)
--------- -------- -------- --------
Net increase in cash and
equivalents 345,415 9,162 43,580 257,147
CASH AND EQUIVALENTS, beginning of
period 432,368 692,480 734,203 444,495
--------- -------- -------- --------
CASH AND EQUIVALENTS, end of
period $ 777,783 $ 701,642 $ 777,783 $ 701,642
========= ======== ======== ========
Interest paid on a cash basis $ 143,634 $ 146,227 $ 443,161 $ 438,403
========= ======== ======== ========
</TABLE>
<PAGE>
NTS-PROPERTIES III
NOTES TO FINANCIAL STATEMENTS
The financial statements included herein should be read in conjunction with
the Partnership's 1994 Annual Report. In the opinion of the general
partner, all adjustments (only consisting of normal recurring accruals)
necessary for a fair presentation have been made to the accompanying
financial statements for the three months and nine months ended September
30, 1995 and 1994.
1. Cash and Equivalents - Restricted
Cash and equivalents - restricted represents escrow funds which are to
be released as the HVAC system and asphalt paving at Peachtree Corporate
Center are replaced and funds which have been escrowed with a mortgage
company for NTS Plainview Plaza II's 1995 property taxes in accordance
with the loan agreements.
2. Investment Securities
Investment securities represent investments in Certificates of Deposit
or securities issued by the U. S. Government with initial maturities of
greater than three months. The investments are carried at cost which
approximates market value. The Partnership intends to hold the
securities until maturity. As of September 30, 1995 and December 31,
1994, the Partnership held no investments with initial maturities
greater than three months.
3. Mortgages Payable
Mortgages payable consist of the following:
September 30, December 31,
1995 1994
Mortgage payable to an insurance
company bearing interest at 9.125%,
maturing November 1, 1998, secured
by land and building $ 2,489,407 $ 2,560,479
Mortgage payable to an insurance
company maturing June 1, 2001,
secured by land and buildings,
bearing a variable interest rate
based on the 10-year treasury bill
rate plus 60 basis points. The rate
is adjusted quarterly (not to exceed
11.65% or be less than 7.65%). The
current rate at September 30, 1995
is 7.65% 4,500,000 4,500,000
---------- ----------
$ 6,989,407 $ 7,060,479
========== ==========
4. Related Party Transactions
Property management fees of $118,558 and $111,933 for the nine months
ended September 30, 1995 and 1994, respectively, were paid to NTS
Development Company, an affiliate of the general partner, pursuant to an
<PAGE>
4. Related Party Transactions - Continued
agreement with the Partnership. The fee is equal to 5% of gross
revenues from the Partnership's properties. Also, as permitted by the
partnership agreement, NTS Development Company will receive a repair and
maintenance fee equal to 5.9% of costs incurred which relate to capital
improvements. The Partnership has incurred $22,105 and $16,495 as a
repair and maintenance fee during the nine months ended September 30,
1995 and 1994, respectively, and has capitalized this cost as a part of
land, buildings and amenities. As permitted by the partnership
agreement, the Partnership also was charged the following amounts from
NTS Development Company for the nine months ended September 30, 1995 and
1994. These charges include items which have been expensed as operating
expenses - affiliated or professional and administrative expenses -
affiliated and items which have been capitalized as other assets or as
land, buildings and amenities. These charges were as follows:
1995 1994
Leasing agents $ 107,158 $ 97,399
Administrative 131,388 125,810
Property manager 142,496 133,032
Other 9,710 11,191
-------- --------
$ 390,752 $ 367,432
======== ========
During the nine months ended September 30, 1995 and 1994, NTS
Development Company leased approximately 23,000 square feet of the
available space in the Plainview Plaza II property at a base rent of
approximately $13.50 per square foot. The Partnership has earned
approximately $234,000 in rental payments from NTS Development Company
during the nine months ended September 30, 1995 and 1994. The lease
expires in February 1996.
5. Reclassification of 1994 Financial Statements
Certain reclassifications have been made to the September 30 and
December 31, 1994 financial statements to conform with the September 30,
1995 classifications. These reclassifications have no effect on
previously reported operations.
6. Subsequent Event
On October 3, 1995, the Partnership established an Interest Repurchase
Reserve in the amount of $156,000 pursuant to Section 16.4 of the
Partnership's Amended and Restated Agreement of Limited Partnership.
Under Section 16.4, limited partners may request the Partnership to
repurchase their respective interests (Units) in the Partnership. With
this Interest Repurchase Reserve, the Partnership will be able to
repurchase up to 750 Units at a currently contemplated price of $208 per
Unit. The Partnership notified the limited partners of the
establishment of the Interest Repurchase Reserve and the opportunity to
request that the Partnership repurchase Units at the established price
pursuant to a letter dated October 3, 1995. Repurchased Units will be
retired by the Partnership, thereby reducing the total number of Units
outstanding. The Interest Repurchase Reserve was funded from cash
reserves.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
The occupancy levels at the Partnership's properties as of September 30 were
as follows:
1995 1994
Plainview Plaza II 86% 83%
Plainview Triad North 95% 92%
Peachtree Corporate Center 92% 86%
The rental and other income generated by the Partnership's properties for
the three months and nine months ended September 30 was as follows:
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
Plainview Plaza II $276,913 $260,789 $829,970 $792,433
Plainview Triad North $238,297 $236,262 $708,827 $690,239
Peachtree Corporate Center $245,110 $240,065 $731,279 $713,128
Plainview Plaza II's occupancy increased 3% from September 30, 1994 to
September 30, 1995 as a result of three new leases totalling approximately
9,300 square feet. Partially offsetting the new leases are three tenants,
who had occupied approximately 5,700 square feet, vacating at the end of the
lease terms. Average occupancy at Plainview Plaza II increased from 83%
(1994) to 86% (1995) for the nine months ended September 30 and from 83%
(1994) to 86% (1995) for the three month period. The increase in rental and
other income at Plainview Plaza II for the three months and nine months
ended September 30, 1995 as compared to the same periods in 1994 is due to
the increase in average occupancy.
Plainview Triad North's occupancy increased 3% from September 30, 1994 to
September 30, 1995 as a result of one new lease totalling approximately
4,900 square feet. Partially offsetting this new lease are three tenants,
who had occupied approximately 2,300 square feet, vacating at the end of the
lease terms. Average occupancy at Plainview Triad North increased from 92%
(1994) to 94% (1995) for the nine month period ended September 30. Average
occupancy was 93% for both the 1994 and 1995 three month periods. Rental
and other income at Plainview Triad North increased for the nine months
ended September 30, 1995 as compared to the same period in 1994 due to the
increase in average occupancy partially offset by an increase in the
provision for doubtful accounts. Rental and other income remained fairly
constant for the three month period.
Peachtree Corporate Center's occupancy increased 6% from September 30, 1994
to September 30, 1995 due to 19 new leases totalling approximately 44,000
square feet. Of this total, approximately 12,000 square feet represents
expansions by six current tenants. Partially offsetting the new leases are
13 tenant move-outs totalling approximately 34,000 square feet.
Approximately 22,000 square feet of this total represents eight tenants who
<PAGE>
Results of Operations - Continued
vacated and ceased making rental payments in breach of the lease terms due
principally to bankruptcies. Accrued income associated with these leases
of approximately $10,000 was written off as uncollectible. The remaining
12,000 square feet represents six tenants who vacated at the end of the
lease terms.
Rental and other income at Peachtree Corporate Center increased for the
three months and nine months ended September 30, 1995 as compared to the
same periods in 1994 as a result of an increase in average occupancy - 91%
(1995) compared to 86% (1994) for the three month period and 88% (1995)
compared to 84% (1994) for the nine month period. Peachtree Corporate
Center receives rental income from the leasing of both office space and
warehouse space. Office space rents for approximately $7.00 to $9.00 per
square foot compared to $3.50 to $4.50 per square foot for warehouse space.
Rental and other income also increased for both periods due to the fact that
office space occupied as a percentage of the total square feet occupied has
increased in 1995 compared to 1994. The increase in rental and other income
is partially offset by an increase in the provision for doubtful accounts
and a decrease in the average rental rate realized from office space leased.
In cases of tenants abandoning the premises, the Partnership pursues
collection through the use of collection agencies or other remedies
available by law when practical.
Current occupancy levels are considered adequate to continue the operation
of the Partnership's properties without the need for any additional
financing.
Interest and other income includes interest income earned from short-term
investments made by the Partnership with excess cash and from funds escrowed
for the replacement of the HVAC system and asphalt paving at Peachtree
Corporate Center (Cash and equivalents - restricted). Interest income
increased for the three months and nine months ended September 30, 1995 as
compared to the same periods in 1994 as a result of an increase in interest
earned on the Escrow Funds and an increase in excess cash available for
investment.
Operating expenses decreased for the nine months ended September 30, 1995
as compared to the same period in 1994 as a result of decreased snow
removal, janitorial and landscaping costs at Plainview Plaza II and
Plainview Triad North, decreased utility costs at Plainview Plaza II and
decreased security service expense at Peachtree Corporate Center. Partially
offsetting the decrease in operating expenses for the nine month period is
an increase in utility costs and landscaping costs at Peachtree Corporate
Center. Operating expenses decreased for the three month period as a result
of decreased landscaping and janitorial costs at Plainview Plaza II and
Plainview Triad North and decreased repair and maintenance costs at all the
Partnership's properties. The decreases in operating expenses for the three
month period are partially offset by increased landscaping costs at
Peachtree Corporate Center.
The increase in operating expenses - affiliated for the three months and
nine months ended September 30, 1995 as compared to the same periods in 1994
is due to an increase in leasing and property management salaries at all of
the Partnership's properties.
<PAGE>
Results of Operations - Continued
The 1995 write-off of unamortized tenant and building improvements can be
attributed to Peachtree Corporate Center (tenant and building improvements)
and Plainview Plaza II (building improvements). Changes to current tenant
improvements are a typical part of any lease negotiation. Improvements
generally include a revision to the current floor plan to accommodate a
tenant's needs, new carpeting and paint and/or wallcovering. In order to
complete the renovation, it is sometimes necessary to replace improvements
which have not been fully depreciated. This results in a write-off of
unamortized tenant improvements. The write-off of unamortized building
improvements at Peachtree Corporate Center is the result of exterior
building renovations. The write-off of unamortized building improvements
at Plainview Plaza II is the result of a common area lobby renovation. The
renovation included an upgrade of current restroom facilities, improvement
of handicap restroom facilities, new carpet and wallcoverings. The write-
off represents the cost of previous renovations which had not been fully
depreciated.
The overall change in interest expense for the three month and nine month
periods ended September 30 was not significant. See Note 3 of the
Partnership's financial statements for details regarding the Partnership's
debt.
Management fees are calculated as a percentage of cash collections; however,
revenue for reporting purposes is on the accrual basis. As a result, the
fluctuations of revenues between periods will differ from the fluctuations
of management fee expense.
Real estate taxes remained fairly constant for the nine months ended
September 30, 1995 as compared to the same period in 1994. Current year
real estate taxes are based on the prior year's actual expense until current
year rates and assessments are received at which time any necessary
adjustments are made. Assessments and tax rates were fairly constant from
1994 to 1995. The decrease in real estate taxes for the three months ended
September 30, 1995 as compared to the same period in 1994 is due to an
adjustment in 1994 which resulted from an increase in the 1994 assessment
of Plainview Triad North and an increase in 1994 tax rates over 1993 rates
at all of the Partnership's properties. The 1994 adjustment was partially
offset by a decrease in the 1994 assessment for Plainview Plaza II. The
assessment at Peachtree Corporate Center remained fairly constant from 1993
to 1994.
Professional and administrative expenses remained fairly constant for the
three months and nine months ended September 30, 1995 as compared to the
same periods in 1994.
The increase in professional and administrative expenses - affiliated for
the nine months ended September 30, 1995 as compared to the same periods in
1994 is primarily due to increased accounting salaries. Professional and
administrative expenses - affiliated remained fairly constant for the three
months ended September 30, 1995 as compared to the same period in 1994.
The increase in depreciation and amortization for the three months and nine
months ended September 30, 1995 as compared to the same periods in 1994 is
due to approximately $525,000 of new assets placed in service since
September 30, 1994. The increase in depreciation and amortization is
partially offset by the fact that a portion of the Partnership's assets have
become fully depreciated.
<PAGE>
Liquidity and Capital Resources
The Partnership had cash flow from operations of $790,532 and $687,135 for
the nine months ended September 30, 1995 and 1994, respectively. These
funds, in conjunction with cash on hand, were used to make a 1% (annualized)
distribution of $117,000 (1995). The annualized distribution rate is
calculated as a percent of the initial equity. The limited partners
received 100% of these distributions. The Partnership did not make a cash
distribution during the nine months ended September 30, 1994. The
Partnership determined it necessary to temporarily suspend cash
distributions until adequate cash reserves for future leasing costs, tenant
finish and other capital improvements were established, and sufficient cash
was being generated from operations which, in management's opinion,
warranted a cash distribution.
As of September 30, 1995, the Partnership had a mortgage payable to an
insurance company in the amount of $4,500,000. The mortgage bears a
variable interest rate which adjusts quarterly to 60 basis points over the
10-year treasury bill rate. At no time will the rate exceed 11.65% or be
less than 7.65% per annum. The current rate at September 30, 1995 was
7.65%. The loan is secured by a first mortgage on Plainview Triad North and
Peachtree Corporate Center with a second position behind the holder of the
permanent mortgage on Plainview Plaza II. The unpaid balance of the loan
is due June 1, 2001.
As of September 30, 1995, the Partnership also had a mortgage payable to an
insurance company in the amount of $2,489,407. The mortgage bears a fixed
interest rate of 9.125% and is due November 1, 1998. The outstanding
balance at maturity based on the current rate of amortization will be
$2,140,539.
The primary source of future liquidity and distributions is expected to be
derived from cash generated by the Partnership's properties after adequate
cash reserves are established for future leasing and tenant finish costs.
The majority of the Partnership's cash flow is derived from operating
activities. Cash flows used in investing activities are for tenant finish
improvements and reductions in accounts payable - construction and are
funded by operating activities. Changes to current tenant improvements are
a typical part of any lease negotiation. Improvements generally include a
revision to the current floor plan to accommodate a tenant's needs, new
carpeting and paint and/or wallcovering. The extent and cost of these
improvements are determined by the size of the space and whether the
improvements are for a new tenant or incurred because of a lease renewal.
Cash flows used in investing activities also include cash which is being
escrowed for the replacement of the HVAC system and asphalt paving at
Peachtree Corporate Center and purchases of investment securities. As part
of its cash management activities, the Partnership has purchased
Certificates of Deposit or securities issued by the U.S. Government with
initial maturities of greater than three months to improve the return on its
excess cash. The Partnership intends to hold the securities until maturity.
Cash flows provided by investing activities are from the maturity of
investment securities. Cash flows used in financing activities include cash
distributions and principal payments on the $2.5 million mortgage payable.
The Partnership does not expect any material changes in the mix and relative
cost of capital resources.
In the next 12 months, the General Partner expects a demand on future
liquidity as a result of 85,042 square feet in leases expiring from October
1, 1995 through September 30, 1996 (Plainview Plaza II - 37,371 square feet,
<PAGE>
Liquidity and Capital Resources - Continued
Plainview Triad North - 7,968 square feet and Peachtree Corporate Center -
39,703 square feet). At this time, the future leasing and tenant finish
costs which will be required to renew the current leases or obtain new
tenants are unknown. It is anticipated that the cash flow from operations
and cash reserves will be sufficient to meet the needs of the Partnership.
The General Partner also anticipates a demand on future liquidity in the
next 12 months, as a result of the Partnership's plans to complete the
renovation of the common area lobbies at Plainview Plaza II. The project
is to include an upgrade of current restroom facilities, improvement of
handicap restroom facilities, new carpet and wallcoverings. The project is
anticipated to cost approximately $190,000. A portion of this project was
completed during the first and second quarter of 1995 at a cost of
approximately $93,000. The cost of this project will be funded from cash
reserves and cash flow from operations. As of September 30, 1995, the
Partnership had no material commitments for the remaining renovations.
A demand on future liquidity is also anticipated as the General Partner
expects to renovate and update the exterior of the NTS Plainview Plaza II
property during 1996. The renovation is designed to make the property more
competitive and enhance its value. The project will be funded from cash
reserves and cash flow from operating activities. As of September 30, 1995,
no commitments had been made in connection with this project.
Future liquidity in the amount of $150,000 will be required to fund the
Interest Repurchase Reserve which the Partnership established on October 3,
1995 pursuant to Section 16.4 of the Partnership's Amended and Restated
Agreement of Limited Partnership. Under Section 16.4, limited partners may
request the Partnership to repurchase their respective interests (Units) in
the Partnership. With this Interest Repurchase Reserve, the Partnership
will be able to repurchase up to 750 Units at a currently contemplated price
of $208 per Unit. The Partnership notified the limited partners by letter
dated October 3, 1995 of the establishment of the Interest Repurchase
Reserve and the opportunity to request that the Partnership repurchase Units
at the established price. Repurchased Units will be retired by the
Partnership, thereby reducing the total number of Units outstanding. The
Interest Repurchase Reserve was funded from cash reserves.
The table below presents that portion of the distributions that represent
a return of capital on a Generally Accepted Accounting Principle basis for
the nine months ended September 30, 1995 and 1994. The General Partner did
not receive a distribution during these periods. Distributions were funded
by cash flow derived from operating activities.
Net Income Return
(Loss) Cash of
Allocated Distributions Capital
Limited Partners:
1995 $ (67,558) $ 117,000 $ 117,000
1994 (83,710) -- --
The following describes the efforts being taken by the Partnership to
increase the occupancy levels at the Partnership's properties. At Peachtree
Corporate Center in Norcross, Georgia, the Partnership has an on-site
leasing agent, an employee of NTS Development Company (an affiliate of the
general partner), who makes calls to potential tenants, negotiates lease
renewals with current tenants and manages local advertising with the
<PAGE>
Liquidity and Capital Resources - Continued
assistance of NTS Development Company's marketing staff. The leasing and
renewal negotiations for Plainview Plaza II and Plainview Triad North are
handled by leasing agents, employees of NTS Development Company, located in
Louisville, Kentucky. The leasing agents are located in the same city as
both commercial properties. All advertising for the Louisville properties
is also coordinated by NTS Development Company's marketing staff located in
Louisville, Kentucky.
Leases at all the Partnership's properties provide for tenants to contribute
toward the payment of increases in common area maintenance expenses,
insurance, utilities and real estate taxes. This lease provision should
protect the Partnership's operations from the impact of inflation and
changing prices.
<PAGE>
PART II. OTHER INFORMATION
1. Legal Proceedings
None
2. Changes in Securities
None
3. Defaults upon Senior Securities
None
4. Submission of Matters to a Vote of Security Holders
None
5. Other Information
None
6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27. Financial Data Schedule
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the three months
ended September 30, 1995.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NTS-PROPERTIES III
(Registrant)
BY:NTS-Properties Associates
BY:NTS Capital Corporation,
General Partner
/s/ John W. Hampton
John W. Hampton
Senior Vice President
Date: November 10, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE SHEET AS OF SEPTEMBER 30, 1995 AND FROM THE STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 1,188,108
<SECURITIES> 0
<RECEIVABLES> 272,506
<ALLOWANCES> 85,240
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 9,789,877
<DEPRECIATION> 0<F2>
<TOTAL-ASSETS> 11,515,798
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 6,989,407
<COMMON> 0
0
0
<OTHER-SE> 4,172,888
<TOTAL-LIABILITY-AND-EQUITY> 11,515,798
<SALES> 2,261,619
<TOTAL-REVENUES> 2,293,774
<CGS> 0
<TOTAL-COSTS> 1,846,420
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 62,788
<INTEREST-EXPENSE> 440,558
<INCOME-PRETAX> (145,358)
<INCOME-TAX> 0
<INCOME-CONTINUING> (145,358)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (145,358)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>THE PARTNERSHIP HAS AN UNCLASSIFIED BALANCE SHEET; THEREFORE, THE VALUE
IS $0.
<F2>THIS INFORMATION IS NOT DISCLOSED IN THE PARTNERSHIP'S FORM 10-Q FILING.
</FN>
</TABLE>
