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 March 31, 1996
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 No.)
incorporation or organization)
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
Exhibit Index: See page 13
Total Pages: 14
<PAGE>
TABLE OF CONTENTS
Pages
PART I
Item 1. Financial Statements
Balance Sheets and Statement of Partners' Equity
as of March 31, 1996 and December 31, 1995 3
Statements of Operations
For the three months ended March 31, 1996 and 1995 4
Statements of Cash Flows
For the three months ended March 31, 1996 and 1995 5
Notes To Financial Statements 6-7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8-12
PART II
1. Legal Proceedings 13
2. Changes in Securities 13
3. Defaults upon Senior Securities 13
4. Submission of Matters to a Vote of Security Holders 13
5. Other Information 13
6. Exhibits and Reports on Form 8-K 13
Signatures 14
- 2 -
<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
March 31, 1996 December 31, 1995*
-------------- ------------------
ASSETS
<S> <C> <C>
Cash and equivalents $ 810,054 $ 626,884
Cash and equivalents - restricted 443,631 387,796
Investment securities -- 103,055
Accounts receivable, net of allowance
for doubtful accounts of $39,294 (1996)
and $90,332 (1995) 247,000 176,811
Land, buildings and amenities, net 9,371,505 9,585,286
Other assets 254,982 241,022
----------- -----------
Total assets $11,127,172 $11,120,854
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Mortgages payable $ 6,939,261 $ 6,964,619
Accounts payable - operations 117,058 72,807
Accounts payable - construction 30,429 1,907
Distributions payable 36,430 37,125
Security deposits 94,928 95,494
Other liabilities 81,759 13,171
----------- -----------
7,299,865 7,185,123
Partners' equity 3,827,307 3,935,731
----------- -----------
$11,127,172 $11,120,854
=========== ===========
</TABLE>
<TABLE>
<CAPTION>
Limited General
Partners Partner Total
-------- ------- -----
PARTNERS' EQUITY
<S> <C> <C> <C>
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 (448,502) (2,195,635) (2,644,137)
Net income (loss) - current year 10,381 (24,551) (14,170)
Cash distributions declared to
date (11,278,257) (206,985) (11,485,242)
Repurchase of limited partnership
units (213,824) -- (213,824)
------------ ------------ ------------
Balances at March 31, 1996 $ 3,669,798 $ 157,509 $ 3,827,307
============ ============ ============
</TABLE>
*Reference is made to the audited financial statements in the Form 10-K as filed
with the Commission on March 29, 1996.
- 3 -
<PAGE>
<TABLE>
NTS-PROPERTIES III
STATEMENTS OF OPERATIONS
<CAPTION>
Three Months Ended
March 31,
---------
1996 1995
---- ----
<S> <C> <C>
Revenues:
Rental income, net of provision for
doubtful accounts of $11,958 (1996)
and $24,474 (1995) $ 713,201 $ 681,690
Rental income - affiliated 80,004 78,165
Interest and other income 10,867 11,839
--------- ---------
804,072 771,694
Expenses:
Operating expenses 186,877 157,409
Operating expenses - affiliated 85,569 87,826
Write-off of unamortized tenant
improvements -- 8,242
Interest expense 141,902 152,697
Management fees 35,736 38,490
Real estate taxes 53,793 54,298
Professional and administrative
expenses 18,431 15,117
Professional and administrative
expenses - affiliated 38,937 36,338
Depreciation and amortization 256,997 252,198
--------- ---------
818,242 802,615
--------- ---------
Net loss $ (14,170) $ (30,921)
========= =========
Net income (loss) allocated to the
limited partners $ 10,381 $ (6,020)
========= =========
Net income (loss) per limited
partnership unit $ .70 $ (.39)
========= =========
Weighted average number of limited
partnership units 14,733 15,600
========= =========
</TABLE>
- 4 -
<PAGE>
<TABLE>
NTS-PROPERTIES III
STATEMENTS OF CASH FLOWS
<CAPTION>
Three Months Ended
March 31,
---------
1996 1995
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (14,170) $ (30,921)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Accrued interest on investment securities 1,402 --
Provision for doubtful accounts 11,958 24,474
Write-off of unamortized building and tenant
improvements -- 8,242
Depreciation and amortization 256,997 252,198
Change in assets and liabilities:
Cash and equivalents - restricted (15,615) (16,403)
Accounts receivable (82,147) 33,591
Other assets (19,082) (32,168)
Accounts payable - operations 44,251 34,878
Security deposits (566) 10,408
Other liabilities 68,589 46,331
--------- ---------
Net cash provided by operating activities 251,617 330,630
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to land, buildings and amenities (9,573) (180,626)
Increase in cash and equivalents - restricted (23,044) (21,625)
Maturities of investment securities 101,653 --
---------- ---------
Net cash provided by (used in) investing
activities 69,036 (202,251)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on mortgage payable (25,358) (23,154)
Cash distributions (37,125) (39,000)
Repurchase of limited partnership units (57,824) --
Increase in cash and equivalents - restricted (17,176) --
--------- ---------
Net cash used in financing activities (137,483) (62,154)
--------- ---------
Net increase in cash and equivalents 183,170 66,225
CASH AND EQUIVALENTS, beginning of period 626,884 734,203
--------- ---------
CASH AND EQUIVALENTS, end of period $ 810,054 $ 800,428
========= =========
Interest paid on a cash basis $ 142,095 $ 152,085
========= =========
</TABLE>
- 5 -
<PAGE>
NTS-PROPERTIES III
NOTES TO FINANCIAL STATEMENTS
The financial statements included herein should be read in conjunction with the
Partnership's 1995 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 ended March 31, 1996 and 1995.
1. Cash and Equivalents - Restricted
---------------------------------
Cash and equivalents - restricted represent 1) escrow funds which are to be
released as the heating, ventilating and air conditioning system and
asphalt paving at Peachtree Corporate Center are replaced, 2) funds which
have been escrowed with a mortgage company for Plainview Plaza II's
property taxes in accordance with the loan agreement and 3) funds which the
Partnership has reserved for the repurchase of limited partnership units
pursuant to Section 16.4 of the Partnership's Amended and Restated
Agreement of Limited Partnership.
2. Mortgages Payable
-----------------
Mortgages payable consist of the following:
March 31, December 31,
1996 1995
---- ----
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 March 31, 1996
is 7.65% $ 4,500,000 $ 4,500,000
Mortgage payable to an insurance
company bearing interest at 9.125%,
maturing November 1, 1998, secured
by land and building 2,439,261 2,464,619
---------- ----------
$ 6,939,261 $ 6,964,619
========== ==========
Based on the borrowing rates currently available to the Partnership
for mortgages with similar terms and average maturities, the fair value of
long term debt is approximately $7,450,000.
3. Related Party Transactions
--------------------------
Property management fees of $35,736 and $38,490 for the three months ended
March 31, 1996 and 1995, respectively, were paid to NTS Development
Company, an affiliate of the general partner, pursuant to an agreement with
the Partnership. The fee is equal to 5% of gross revenues from the
Partnership's properties. Also 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
incurred $1,416 and $5,533 as a repair and maintenance fee during the three
months ended March 31, 1996 and 1995, respectively, and has capitalized
this cost as a part of land,
- 6 -
<PAGE>
3. Related Party Transactions - Continued
--------------------------------------
buildings and amenities. As permitted by the partnership agreement, the
Partnership also was charged the following amounts from NTS Development
Company for the three months ended March 31, 1996 and 1995. 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:
1996 1995
---- ----
Leasing agents $ 33,375 $ 39,184
Administrative 47,163 44,132
Property manager 51,764 50,325
Other 1,833 2,623
------- -------
$134,135 $136,264
======= =======
During the three months ended March 31, 1996 and 1995, NTS Development
Company occupied 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 received approximately $80,000 in rental
payments from NTS Development Company during the three months ended March
31, 1996 and 1995. The lease expired in February 1996. The Partnership is
currently negotiating a lease renewal with NTS Development Company which it
expects to complete in the near term.
4. Reclassification 1995 Financial Statements
------------------------------------------
Certain reclassifications have been made to the March 31, 1995 financial
statements to conform with March 31, 1996 classifications. These
reclassifications have no effect on previously reported operations.
5. New Accounting Pronouncement
----------------------------
In March 1995, the Financial Accounting Standards Board issued Statement
No. 121 (the "Statement") on accounting for the impairment of long-lived
assets, certain identifiable intangibles, and goodwill related to assets to
be held and used. The Statement also establishes accounting standards for
long-lived assets and certain identifiable intangibles to be disposed of.
The Partnership adopted the Statement as of January 1, 1996 as required. No
adjustments were required.
6. Interest Repurchase Reserve
---------------------------
On January 3, 1996, the Partnership funded an additional $100,000 to its
Interest Repurchase Reserve which was established in 1995. With these
funds, the Partnership will be able to repurchase 480 Units at a price of
$208 per Unit.
- 7 -
<PAGE>
Item 7. 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 March 31 were as
follows:
1996 1995
---- ----
Plainview Plaza II 82% 85%
Plainview Triad North 93% 95%
Peachtree Corporate Center 93% 85%
The rental and other income generated by the Partnership's properties for the
three months ended March 31 were as follows:
1996 1995
---- ----
Plainview Plaza II $ 272,322 $ 285,163
Plainview Triad North $ 240,325 $ 226,513
Peachtree Corporate Center $ 282,482 $ 254,475
The 3% decrease in occupancy from March 31, 1995 to March 31, 1996 at Plainview
Plaza II can be attributed to three tenants, who had occupied a total of
approximately 7,900 square feet, vacating at the end of the lease terms.
Partially offsetting the tenant move-outs is one new lease totalling
approximately 3,800 square feet. The new tenant took occupancy in June of 1995.
Average occupancy decreased from 85% in 1995 to 81% in 1996. The decrease in
rental and other income at Plainview Plaza II for the three months ended March
31, 1996 as compared to the same period in 1995 can be attributed to the
decrease in average occupancy during the period.
During 1995, the Partnership negotiated a five-year lease renewal and expansion
with The Kroger Company, a major tenant at Plainview Plaza II. The renewal
extends the lease to December 31, 2004 and the expansion is for 5,417 square
feet. When The Kroger Company takes occupancy of the additional space (expected
during the second quarter of 1996), Plainview Plaza II will be 86% occupied.
Plainview Triad North's occupancy decreased 2% from March 31, 1995 to March 31,
1996 as a result of move-outs by three tenants (occupied a total of
approximately 2,900 square feet) and the downsizing (3,900 square feet) of one
tenant. Partially offsetting the tenant move-outs and downsizing is a new lease
totalling approximately 4,900 square feet. Average occupancy decreased from 95%
in 1995 to 93% in 1996. Rental and other income increased for the three months
ended March 31, 1996 as compared to the same period in 1995 due to a decrease in
the provision for doubtful accounts and an increase in pass through expense
reimbursements. Leases at Plainview Triad North provide for tenants to
contribute toward the payment of increases in common area maintenance expenses,
insurance, utilities and real estate taxes. Partially offsetting the increase in
rental and other income at Plainview Triad North is the slight decrease in
average occupancy.
Peachtree Corporate Center's occupancy increased 8% from March 31, 1995 to March
31, 1996 due to 16 new leases totalling approximately 39,000 square feet. Of
this total, approximately 11,000 square feet represents expansions
- 8 -
<PAGE>
Results of Operations - Continued
- ---------------------------------
by five current tenants. Partially offsetting the new leases are 8 tenant
move-outs totalling approximately 23,000 square feet. Approximately 11,000
square feet of this total represents three tenants who vacated and ceased making
rental payments in breach of the lease terms due to bankruptcies. Accrued income
associated with these leases of approximately $11,000 was written off as
uncollectible. The remaining 12,000 square feet represents four tenants
(occupied a total of approximately 10,800 square feet) who vacated at the end of
the lease terms and the downsizing (1,200 square feet) of one tenant. Average
occupancy at Peachtree Corporate Center increased for the three months ended
March 31 from 82% in 1995 to 92% in 1996.
The increase in rental and other income at Peachtree Corporate Center for the
three months ended March 31, 1996 as compared to the same period in 1995 is due
to an increase in average occupancy during the period and a decrease in the
provision for doubtful accounts.
In cases of tenants who cease making rental payments or abandon the premises in
breach of their lease, the Partnership pursues collection through the use of
collection agencies or other remedies available by law when practical. In the
case of tenants who vacated Peachtree Corporate Center as a result of
bankruptcy, the Partnership has taken legal action when it was thought there
could be a possible collection. There have been no funds recovered as a result
of these actions. As of March 31, 1996, there were no on-going cases.
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 investments made
by the Partnership with cash reserves and from funds escrowed for the
replacement of the heating, ventilating and air conditioning ("HVAC") system and
asphalt paving at Peachtree Corporate Center. The change in interest and other
income for the three months ended March 31, 1996 as compared to the same period
in 1995 was not significant.
Operating expenses increased for the three months ended March 31, 1996 as
compared to the same period in 1995 as a result of increased landscape
replacement costs and exterior building repairs at Peachtree Corporate Center
and increased heating and air conditioning repair costs at Plainview Plaza II.
Partially offsetting the increase in operating expenses during the three month
period is a decrease in heating and air conditioning repair costs at Peachtree
Corporate Center. Operating expenses remained fairly constant for the three
month period at Plainview Triad North.
The change in operating expenses - affiliated for the three months ended March
31, 1996 as compared to the same period in 1995 was not significant. Operating
expenses - affiliated are expenses incurred for services performed by employees
of NTS Development Company, an affiliate of the General Partner.
The 1995 write-off of unamortized tenant improvements can be attributed to
Peachtree Corporate Center. 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.
- 9 -
<PAGE>
Results of Operations - Continued
- ---------------------------------
Interest expense has decreased for the three months ended March 31, 1996 as
compared to the same period in 1995 due to a decrease in the interest rate on
the Partnership's $4,500,000 mortgage payable - 7.65% (1996) compared to 8.41%
(1995). The interest rate on this note adjusts quarterly to 60 basis points over
the 10-year treasury bill rate (not to exceed 11.65% or be less than 7.65%). See
the Liquidity and Capital Resources section of this item 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 years will differ from the fluctuations of
management fee expense.
The changes in professional and administrative expenses and professional and
administrative expenses - affiliated for the three months ended March 31, 1996
as compared to the same period in 1995 were not significant. Professional and
administrative expenses - affiliated are expenses incurred for services
performed by employees of NTS Development Company, an affiliate of the General
Partner.
The change in depreciation and amortization for the three months ended March 31,
1996 as compared to the same period in 1995 was not significant. Depreciation is
computed using the straight-line method over the estimated useful lives of the
assets which are 5 - 30 years for land improvements, 30 years for buildings, 5 -
30 years for building improvements and 3 - 30 years for amenities. The aggregate
cost of the Partnership's properties for Federal tax purposes is approximately
$24,000,000.
Liquidity and Capital Resources
- -------------------------------
The Partnership had cash flow from operations of $251,617 (1996) and $330,630
(1995) for the three months ended March 31. These funds, in conjunction with
cash on hand, were used to make a 1% (annualized) distribution of $36,430 in
1996 and $39,000 in 1995. The annualized distribution rate is calculated as a
percent of the initial equity. The limited partners received 100% of these
distributions. 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. Cash reserves (which are unrestricted cash and equivalents as shown on
the Partnership's balance sheet as of March 31) were $810,054 and $800,428 at
March 31, 1996 and 1995, respectively.
As of March 31, 1996, 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 March 31, 1996 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 March 31, 1996, the Partnership also had a mortgage payable to an
insurance company in the amount of $2,439,261. 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.
- 10 -
<PAGE>
Liquidity and Capital Resources - Continued
- -------------------------------------------
As previously discussed in the Partnership's Form 10-K for the year ended
December 31, 1995, the General Partner of the Partnership was exploring the
possibility of refinancing the current mortgages payable encumbering the
Partnership's properties. As a result of an increase in current interest rates,
the Partnership has suspended inquiries into alternative financings.
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 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. Cash flows provided by investing activities are from the maturity 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 has held the securities until
maturity. Cash flows used in financing activities include cash distributions,
principal payments on the $2.4 million mortgage payable, repurchases of limited
partnership Units and cash reserved by the Partnership for the repurchase of
limited partnership units. 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 91,699 square feet in leases expiring from April 1, 1996 to March
31, 1997 (Plainview Plaza II - 31,400 square feet, Plainview Triad North -
10,499 square feet and Peachtree Corporate Center - 49,800 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. As of March 31, 1996, the Partnership had no material
commitments for tenant finish improvements.
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
$250,000. A portion of this project was completed during the first and second
quarter of 1995 at a cost of approximately $93,000. The remaining cost of this
project is expected to be funded from cash reserves and cash flow from
operations. As of March 31, 1996, the Partnership had no 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 is anticipated to cost approximately
$900,000. The General Partner of the Partnership anticipates the project will be
funded with a combination of debt financing, cash reserves and cash flow from
operating activities. As of March 31, 1996, no commitments had been made in
connection with this project.
During 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. With these funds, the Partnership was
able to repurchase 750 Units at a price of $208 per Unit. On January 3, 1996,
the Partnership funded an additional $100,000 to its
- 11 -
<PAGE>
Liquidity and Capital Resources - Continued
- -------------------------------------------
Interest Repurchase Reserve. With these funds, the Partnership will be able to
repurchase an additional 480 Units at a price of $208 per Unit. As of March 31,
1996, the Partnership had repurchased a total of 1,028 units. Repurchased Units
are retired by the Partnership, thus increasing the share of ownership of each
remaining investor. The Interest Repurchase Reserve was funded from cash
reserves. The Partnership is currently contemplating an additional funding to
its Interest Repurchase Reserve in the near term.
As of March 31, 1996, the Partnership has a commitment for approximately $95,000
of tenant finish improvements at Plainview Plaza II as a result of the lease
renewal and expansion with The Kroger Company. The expansion increases the
tenant's current leased space of approximately 48,000 square feet by
approximately 5,400 square feet and the renewal extends the lease for five
years. The project is expected to be completed during the second quarter of
1996. The source of funds for this project is expected to be cash flow from
operations and/or 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
three months ended March 31, 1996 and 1995. The General Partner did not receive
a distribution during these periods. Distributions were funded by cash flow
derived from operating activities.
Net Income Cash
(Loss) Distributions Return of
Allocated Declared Capital
--------- -------- -------
Limited Partners:
1996 $ 10,381 $ 36,430 $ 26,049
1995 (6,020) 39,000 39,000
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 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.
- 12 -
<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
Form 8-K was filed January 3, 1996 to report in Item 5 the
funding by the Partnership of an additional $100,000 to its
Interest Repurchase Reserve.
- 13 -
<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,
General Partner,
BY: NTS Capital Corporation,
General Partner
/s/ John W. Hampton
John W. Hampton
Senior Vice President
Date: May 14 , 1996
- 14 -
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE SHEET AS OF MARCH 31, 1996 AND FROM THE STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 1,253,685
<SECURITIES> 0
<RECEIVABLES> 247,000
<ALLOWANCES> 39,294
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 9,371,505
<DEPRECIATION> 0<F2>
<TOTAL-ASSETS> 11,127,172
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 6,939,261
0
0
<COMMON> 0
<OTHER-SE> 3,827,307
<TOTAL-LIABILITY-AND-EQUITY> 11,127,172
<SALES> 793,205
<TOTAL-REVENUES> 804,072
<CGS> 0
<TOTAL-COSTS> 618,972
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 11,958
<INTEREST-EXPENSE> 141,902
<INCOME-PRETAX> (14,170)
<INCOME-TAX> 0
<INCOME-CONTINUING> (14,170)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (14,170)
<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>
