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, 1999
--------------------------------------------------
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 0-13400
----------------------------------------------------------
NTS-PROPERTIES V, a Maryland Limited Partnership
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Maryland 61-1051452
- ------------------------------- ------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification 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
----- -----
Exhibit Index: See page 22
Total Pages: 23
<PAGE>
TABLE OF CONTENTS
-----------------
Pages
-----
PART I
Item 1. Financial Statements
Balance Sheets and Statement of Partners' Equity
as of September 30, 1999 and December 31, 1998 3
Statements of Operations
For the three months and nine months ended
September 30, 1999 and 1998 4
Statements of Cash Flows
For the nine months ended September 30, 1999 and 1998 5
Notes To Financial Statements 6-12
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 13-20
Item 3. Quantitative and Qualitative Disclosures About Market Risk 21
PART II
Item 1. Legal Proceedings 22
Item 2. Changes in Securities 22
Item 3. Defaults upon Senior Securities 22
Item 4. Submission of Matters to a Vote of Security Holders 22
Item 5. Other Information 22
Item 6. Exhibits and Reports on Form 8-K 22
Signatures 23
2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
NTS-PROPERTIES V,
-----------------
A Maryland Limited Partnership
------------------------------
BALANCE SHEETS AND STATEMENT OF PARTNERS' EQUITY
------------------------------------------------
<CAPTION>
As of As of
September 30, December 31,
1999 1998*
------- -------
ASSETS
<S> <C> <C>
Cash and equivalents $ 3,208,147 $ 4,543,666
Cash and equivalents - restricted 841,169 208,682
Accounts receivable, net of allowance for
doubtful accounts of $318 for 1999 and $4,678
for 1998 69,162 77,560
Land, buildings and amenities, net 15,874,212 14,847,989
Asset held for development or sale 1,026,793 1,953,868
Other assets 462,185 409,580
------- -------
Total assets $21,481,668 $22,041,345
========== ==========
LIABILITIES AND PARTNERS= EQUITY
Mortgages and note payable $11,917,886 $11,450,225
Accounts payable - operations 163,059 116,056
Accounts payable - construction 31,581 47,150
Security deposits 152,380 124,309
Other liabilities 422,846 111,897
------- -------
12,687,752 11,849,637
Commitments and contingencies
Partners' equity 8,793,916 10,191,708
--------- ----------
Total liabilities and partners' equity $21,481,668 $22,041,345
========== ==========
</TABLE>
<TABLE>
<CAPTION>
Limited General
Partners Partner Total
--------- --------- ---------
PARTNERS' EQUITY
<S> <C> <C> <C>
Capital contributions, net of
offering costs $ 30,582,037 $ 100 $ 30,582,137
Net income (loss) - prior years (4,598,435) 67,349 (4,531,086)
Net loss - current year (9,769) (99) (9,868)
Cash distributions declared to
date (16,641,480) (168,177) (16,809,657)
Repurchase of limited
partnership Units (437,610) -- (437,610)
--------- --------- ---------
Balances at September 30, 1999 $ 8,894,743 $ (100,827) $ 8,793,916
========= ========= =========
</TABLE>
* Reference is made to the audited financial statements in the Form 10-K as
filed with the Commission on April 15, 1999.
3
<PAGE>
<TABLE>
NTS-PROPERTIES V,
-----------------
A Maryland Limited Partnership
------------------------------
STATEMENTS OF OPERATIONS
------------------------
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- --------------------
1999 1998 1999 1998
------- ------- ------- --------
Revenues:
<S> <C> <C> <C> <C>
Rental income $ 967,234 $ 1,495,037 $ 2,831,209 $4,737,423
Gain on sale of assets 122,876 -- 122,876 --
Interest and other income 38,772 7,017 138,316 28,597
------- ------- ------- ---------
1,128,882 1,502,054 3,092,401 4,766,020
Expenses:
Operating expenses 248,587 315,735 650,227 904,203
Operating expenses - affiliated 124,312 135,470 362,735 404,965
Loss on disposal of assets 6,014 13,157 30,913 13,452
Interest expense 232,738 415,727 671,626 1,265,288
Management fees 59,335 90,123 166,909 281,015
Real estate taxes 92,445 134,821 280,710 402,735
Professional and administrative
expenses 80,199 30,173 185,489 93,872
Professional and administrative
expenses - affiliated 42,481 49,820 128,697 159,794
Depreciation and amortization 225,488 373,908 624,963 1,168,263
------- ------- ------- ---------
1,111,599 1,558,934 3,102,269 4,693,587
--------- --------- --------- ---------
Net income (loss) $ 17,283 $ (56,880) $ (9,868) $ 72,433
====== ======== ======= ======
Net income (loss) allocated to
the limited partners $ 17,110 $ (56,311) $ (9,769) $ 71,709
====== ======== ======= ======
Net income (loss) per limited
partnership unit $ 0.51 $ (1.66) $ (0.29) $ 2.07
==== ====== ====== ====
Weighted average number of
limited partnership Units 33,394 33,994 33,486 34,581
====== ====== ====== ======
</TABLE>
4
<PAGE>
<TABLE>
NTS-PROPERTIES V,
-----------------
A Maryland Limited Partnership
------------------------------
STATEMENTS OF CASH FLOWS
------------------------
<CAPTION>
Nine Months Ended
September 30,
------------------------
1999 1998
----------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES*
<S> <C> <C>
Net income (loss) $ (9,868) $ 72,433
Gain on sale of assets (122,876) --
Adjustments to reconcile net loss to net
cash used for operating activities:
Provision for doubtful accounts 318 --
Loss on disposal of assets 30,913 13,452
Depreciation and amoritization 624,963 1,168,263
Changes in assets and liabilities:
Cash and equivalents - restricted (238,272) (399,245)
Accounts receivable 8,080 54,799
Other assets (46,073) 61,405
Accounts payable - operations 31,434 (83,119)
Security deposits 28,071 12,527
Other liabilities 310,949 405,656
----------- ----------
Net cash provided by operating activities 617,639 1,306,171
----------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to land, buildings and amenities (488,501) (323,604)
Sale of land, buildings and amenities 1,235,105 --
Change in ownership of Joint Venture (Note 11) (368,723) --
----------- --------
Net cash provided by (used in) investing activities 377,881 (323,604)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Increases in mortgages and notes payable -- 200,000
Principal payments on mortgages and notes payable (528,952) (904,538)
Decrease (increase) in loan costs (19,947) 8,438
Cash distributions (1,264,925) --
Repurchase of limited partnership Units (123,000) (177,930)
Cash and equivalents - restricted (394,215) --
----------- --------
Net cash used in financing activities (2,331,039) (874,030)
----------- -----------
Net increase (decrease) in cash and equivalents (1,335,519) 108,537
----------- ----------
CASH AND EQUIVALENTS, beginning of period 4,543,666 473,362
----------- ----------
CASH AND EQUIVALENTS, end of period $ 3,208,147 $ 581,899
=========== ==========
Interest paid on a cash basis $ 675,224 $ 1,264,981
=========== ===========
</TABLE>
* Cash flows from operating activities exclude the effects of the change in
the Partnership's percentage ownership in the Lakeshore/University II Joint
Venture (Note 11).
5
<PAGE>
NTS-PROPERTIES V,
-----------------
A Maryland Limited Partnership
------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
The financial statements included herein should be read in conjunction with the
Partnership's 1998 Form 10-K as filed with the Commission on April 15, 1999. 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, 1999 and 1998.
1. Use of Estimates in the Preparation of Financial Statements
-----------------------------------------------------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
2. Concentration of Credit Risk
----------------------------
NTS-Properties V owns and operates or has a joint venture investment in
commercial properties in Kentucky (Louisville) and Florida (Ft.
Lauderdale). Substantially all of the tenants are local businesses or are
businesses which have operations in the location in which they lease
space. The Partnership also has a joint venture investment in a
residential property in Louisville, Kentucky. The apartment unit is
generally the principal residence of the tenant.
3. Cash and Equivalents - Restricted
---------------------------------
Cash and equivalents - restricted represents 1) funds received for
residential security deposits, 2) funds which have been escrowed with
mortgage companies for property taxes in accordance with the loan
agreements with said mortgage companies and 3) funds reserved by the
Partnership for the repurchase of limited partnership Units.
4. Interest Repurchase Reserve
---------------------------
Pursuant to Section 16.4 of the Partnership's Amended and Restated
Agreement of Limited Partnership, the Partnership established an Interest
Repurchase Reserve in June 1996. During the years ended December 31, 1998,
1997 and 1996, the Partnership funded $177,930, $0, and $99,900,
respectively, to the Reserve. Through October 25, 1998 (the commencement
date of the First Tender Offer), the Partnership had repurchased a total
of 1,882 Units for $277,830 at a price ranging from $135 to $160 per Unit.
The offering price per Unit was established by the General Partner in its
sole discretion and does not purport to represent the fair market value or
liquidation value of the Units at that date. Repurchased Units are retired
by the Partnership, thus increasing the percentage of ownership of each
remaining limited partner investor. The Interest Repurchase Reserve was
funded from cash reserves. The balance in the Reserve at September 30,
1999 was $0.
5. Tender Offers
-------------
On October 25, 1998, the Partnership and ORIG, LLC, an affiliate of the
Partnership, (the "bidders") commenced a tender offer (the "First Tender
Offer") to purchase up to 1,200 of the Partnership's limited Partnership
Units at a price of $205 per Unit as of the date of the First Tender
Offer. The offering price per Unit was established by the General Partner
in its sole discretion and does not purport to represent the fair market
value or liquidation value of the Units at that date. The initial
expiration date of the First Tender Offer was January 11, 1999 and this
expiration date was subsequently extended through February 5, 1999. A
total of 2,458 Units were tendered and the bidders accepted all Units
tendered. The Partnership repurchased 600 Units and ORIG, LLC purchased
1,858 Units at a total cost of $503,890 plus offering expenses.
6
<PAGE>
5. Tender Offers - Continued
-------------------------
On June 25, 1999, the Partnership commenced a second tender offer (the
"Second Tender Offer") to purchase up to 1,000 of the Partnership's
limited partnership Units at a price of $167.50 per Unit as of the date of
the Second Tender Offer. The offering price per Unit was established by
the General Partner in its sole discretion and does not purport to
represent the fair market value or liquidation value of the Units at that
date. The initial expiration date of the Second Tender Offer was August
31, 1999. On August 18, 1999, the price was increased to $180 per Unit and
the expiration date was extended to September 30, 1999. On August 24, 1999
the price was increased to $205 per Unit.
As of September 30, 1999, a total of 2,523 Units were tendered and the
Partnership accepted all Units tendered. The Partnership purchased all
2,523 Units at a cost of $517,215. The expenses associated with
administering the Second Tender Offer are estimated to be $25,000. See
Note 12 Subsequent Events for further information regarding the tender
offers.
6. Mortgages and Note Payable
--------------------------
Mortgages and note payable consist of the following:
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
------------- -------------
<S> <C> <C>
Mortgage payable with an insurance company,
bearing interest at a fixed rate of
8.125%, due August 1, 2008,
secured by land and building $ 3,960,301 $ 3,642,952
Mortgage payable with an insurance company,
bearing interest at a fixed rate of
8.125%, due August 1, 2008,
secured by land and building 3,680,943 3,385,979
Mortgage payable with an insurance company,
bearing interest at a fixed rate of 7.2%
due January 5, 2013, secured by land,
buildings and amenities 2,677,513 2,768,077
Mortgage payable with an insurance company,
bearing interest at a fixed rate of 7.2%
due January 5, 2013, secured by land,
buildings and amenities 1,599,129 1,653,217
--------- ---------
$11,917,886 $11,450,225
========== ==========
</TABLE>
Based on the borrowing rates currently available to the Partnership for
mortgages with similar terms, the fair value of long-term debt is
approximately $11,638,000.
7. Basis of Property
-----------------
Statement of Financial Accounting Standards (SFAS) No. 121, Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed of, specifies circumstances in which certain long-lived assets
must be reviewed for impairment. If such review indicates that the
carrying amount of an asset exceeds the sum of its expected future cash
flows, the asset's carrying value must be written down to fair value.
Application of this standard during the periods ended September 30, 1999
and 1998 did not result in an impairment loss.
7
<PAGE>
8. Reclassification of 1998 Financial Statements
---------------------------------------------
Certain reclassifications have been made to the September 30, 1998
financial statements to conform to the September 30, 1999 classifications.
These reclassifications have no effect on previously reported operations.
9. Related Party Transactions
--------------------------
Pursuant to an agreement with the Partnership, property management fees of
$59,335 and $90,123 and $166,909 and $281,015 for the three months and
nine months ended September 30, 1999 and 1998, respectively, were paid to
NTS Development Company, an affiliate of the General Partner of the
Partnership. The fee is equal to 5% of gross revenues from residential
properties and 6% of gross revenues from commercial properties. Also
pursuant to an 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 $8,035 and $3,631 as a
repair and maintenance fee for the three months ended September 30, 1999
and 1998, respectively, and $18,957 and $22,136 as a repair and
maintenance fee for the nine months ended September 30, 1999 and 1998,
respectively, and has capitalized this cost as part of land, buildings and
amenities.
As permitted by an agreement, the Partnership also was charged the
following amounts from NTS Development Company for the three months and
nine months ended September 30, 1999 and 1998. 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.
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------- -------------------------
1999 1998 1999 1998
--------- --------- ---------- ---------
Administrative $ 72,004 $ 63,201 $ 196,496 $ 199,930
Leasing 91,107 43,087 209,063 144,138
Property manager 58,610 86,102 164,659 255,366
Other (8,803) 8,841 6,548 16,498
--------- --------- ---------- ---------
$ 212,918 $ 201,231 $ 576,766 $ 615,932
========= ========= ========== =========
10. Sale of Asset Held for Sale or Development
------------------------------------------
On March 17, 1999, NTS-Properties V sold a portion of the University Phase
III vacant land to Orange County Florida for $216,648. Pursuant to a
contract executed on September 8, 1998, Silver City Properties, Ltd. (the
Purchaser) received net condemnation proceeds of $145,824 at the closing
of the Phase III vacant land on September 17, 1999.
On September 17, 1999, NTS-Properties V closed on the sale of University
Phase III vacant land to Silver City Properties, Ltd. (the Purchaser) for
a purchase price of $801,000.
11. Transactions Affecting the Investment in Lakeshore/University II Joint
--------------------------------------------------------------------------
Venture
-------
On July 1, 1999, NTS-Properties V contributed $1,737,000 to the
Lakeshore/University II Joint Venture (L/U II Joint Venture). The other
partners in the Joint Venture did not make capital contributions at that
time. Accordingly, the ownership percentages of the other partners in the
Joint Venture decreased. Effective July 1, 1999, NTS-Properties V's
percentage of ownership in the Joint Venture increased from 69% to 79%.
On July 23, 1999, the L/U II Joint Venture closed on the sale of 2.4 acres
of land adjacent to the Lakeshore Business Center for a purchase price of
$528,405.
The proceeds from both of the transactions discussed above will be used to
fund the construction of Lakeshore Business Center Phase III.
8
<PAGE>
12. Commitments and Contingencies
-----------------------------
The L/U II Joint Venture intends to use the remaining 3.8 acres of the
land it owns at the Lakeshore Business Center Development to construct
Lakeshore Business Center Phase III. Construction is expected to begin
during the fourth quarter of 1999. The construction cost is currently
estimated to be $4,000,000 and will be funded by a capital contribution
from the Partnership and debt financing. Construction will not begin
until, in the opinion of the General Partner, financing on favorable terms
has been obtained.
13. Subsequent Events
-----------------
On November 5, 1999, the Partnership and ORIG, LLC, an affiliate of the
Partnership, (the "bidders") commenced a third tender offer (the "Third
Tender Offer") to purchase up to 500 of the Partnership's limited
partnership Units at a price of $215 per Unit as of the date of the Third
Tender Offer. Although the bidders believe that this price is appropriate,
the price of $215 per Unit may not equate to the fair market value or the
liquidation value of the Units as of the offering date. Approximately
$132,500 ($107,500 to purchase 500 Units, plus approximately $25,000 for
expenses associated with the Third Tender Offer) is required to purchase
all 500 Units. The Third Tender Offer stated that the Partnership will
purchase the first 250 Units tendered and will fund its purchase and its
portion of the expenses from cash reserves. If more than 250 Units are
tendered, ORIG, LLC, will purchase up to an additional 250 Units. If more
than 500 Units are tendered, the bidders may choose to acquire the
additional Units on a pro rata basis. Units that are acquired by the
Partnership will be retired. Units that are acquired by ORIG, LLC, will be
held by it. The General Partner, NTS- Properties Associates V, does not
intend to participate in the Third Tender Offer. The Third Tender Offer
will expire on December 23, 1999 unless extended.
14. Segment Reporting
-----------------
The Partnership's reportable operating segments include residential and
commercial real estate operations. The residential operations represent
the Partnership's ownership and operating results relative to an apartment
complex known as the Willows of Plainview Phase II. The commercial
operations represent the Partnership's ownership and operating results
relative to suburban commercial office space known as Commonwealth
Business Center Phase II and Lakeshore Business Center Phase I and II.
Commercial operations for the period ending September 30, 1998 also
include University Business Centers Phases I and II which were sold
October 6, 1998.
The financial information of the operating segments has been prepared
using a management approach, which is consistent with the basis and manner
in which the Partnership's management internally disaggregates financial
information for the purposes of assisting in making internal operating
decisions. The Partnership evaluates performance based on stand-alone
operating segment net income.
NINE MONTHS ENDED SEPTEMBER 30, 1999
------------------------------------------
RESIDENTIAL COMMERCIAL TOTAL
------------ ---------- ----------
Rental income $ 926,345 $1,904,864 $2,831,209
Other income 1,736 4,334 6,070
----- ----- -----
Total net revenues $ 928,081 $1,909,198 $2,837,279
======= ========= =========
Operating expenses 296,426 704,953 1,001,379
Loss on disposal of
assets 30,383 530 30,913
Interest expense 235,470 -- 235,470
Management fees 49,589 117,320 166,909
Real estate taxes 39,083 199,489 238,572
Depreciation expense 144,467 433,158 577,625
------- ------- -------
Net income (loss) $ 132,663 $ 453,748 $ 586,411
======= ======= =======
9
<PAGE>
14. Segment Reporting - Continued
-----------------------------
NINE MONTHS ENDED SEPTEMBER 30, 1998
----------------------------------------------
RESIDENTIAL COMMERCIAL TOTAL
----------- ---------- -----------
Rental income $ 892,778 $ 3,844,645 $ 4,737,423
Other income 4,661 13,879 18,540
----- ------ ------
Total net revenues $ 897,439 $ 3,858,524 $ 4,755,963
======= ========= =========
Operating expenses 354,594 948,768 1,303,362
Loss on disposal of
assets 13,171 281 13,452
Interest expense 250,164 -- 250,164
Management fees 44,872 236,143 281,015
Real estate taxes 39,545 314,936 354,481
Depreciation expense 139,402 853,344 992,746
------- ------- -------
Net income (loss) $ 55,691 $ 1,505,052 $ 1,560,743
====== ========= =========
THREE MONTHS ENDED SEPTEMBER 30, 1999
----------------------------------------------
RESIDENTIAL COMMERCIAL TOTAL
----------- ---------- -----------
Rental income $ 307,528 $ 659,705 $ 967,233
Other income 598 (11,094) (10,496)
--- -------- --------
Total net revenues $ 308,126 $ 648,611 $ 956,737
======= ======= =======
Operating expenses 101,628 271,697 373,325
Loss on disposal of
assets 5,484 530 6,014
Interest expense 78,025 -- 78,025
Management fees 16,642 42,693 59,335
Real estate taxes 13,028 71,641 84,669
Depreciation expense 48,416 160,107 208,523
------ ------- -------
Net income (loss) $ 44,903 $ 101,943 $ 146,846
====== ======= =======
THREE MONTHS ENDED SEPTEMBER 30, 1998
----------------------------------------------
RESIDENTIAL COMMERCIAL TOTAL
----------- ---------- -----------
Rental income $ 312,007 $ 1,183,030 $ 1,495,037
Other income 1,355 2,832 4,187
----- ----- -----
Total net revenues $ 313,362 $ 1,185,862 $ 1,499,224
======= ========= =========
Operating expenses 125,283 323,884 449,167
Loss on disposal of
Assets 13,157 -- 13,157
Interest expense 81,063 -- 81,063
Management fees 15,668 74,455 90,123
Real estate taxes 13,081 105,656 118,737
Depreciation expense 47,281 268,120 315,401
------ ------- -------
Net income (loss) $ 17,829 $ 413,747 $ 431,576
====== ======= =======
10
<PAGE>
14. Segment Reporting - Continued
-----------------------------
A reconciliation of the totals reported for the operating segments to the
applicable line items in the consolidated financial statements for the
three months and the nine months ended September 30, 1999 and 1998 is
necessary given amounts recorded at the Partnership level and not
allocated to the operating properties for internal reporting purposes.
Nine Months Ended
September 30,
---------------------------
1999 1998
------------ -----------
NET REVENUES
Total revenues for reportable segments $ 2,837,279 $ 4,755,963
Other income for Partnership 350,426 188,806
Gain on sale of assets 52,051 --
Eliminations (147,355) (178,749)
------------ -----------
Total consolidated net revenues $ 3,092,401 $ 4,766,020
============ ===========
OPERATING EXPENSES
Operating expenses for reportable segments $ 1,001,379 $ 1,303,362
Operating expenses for Partnership 11,583 5,806
Eliminations -- --
------------ -----------
Total operating expenses $ 1,012,962 $ 1,309,168
============ ===========
INTEREST EXPENSE
Interest expense for reportable segments $ 235,470 $ 250,164
Interest expense for Partnership 436,156 1,015,124
Eliminations -- --
------------ -----------
Total interest expense $ 671,626 $ 1,265,288
============ ===========
REAL ESTATE TAXES
Real estate taxes for reportable segments $ 238,572 $ 354,481
Real estate taxes for Partnership 42,138 48,254
Eliminations -- --
------------ -----------
Total real estate taxes $ 280,710 $ 402,735
============ ===========
DEPRECIATION AND AMORTIZATION
Depreciation and amortization for reportable
segments $ 577,625 $ 992,746
Depreciation and amortization for Partnership 24,101 166,299
Eliminations 23,237 9,218
------------ -----------
Total depreciation and amortization $ 624,963 $ 1,168,263
============ ===========
NET INCOME (LOSS)
Total net income (loss) for reportable segments $ 586,411 $ 1,560,743
Net income (loss) for Partnership (425,687) (1,300,343)
Eliminations (170,592) (187,967)
------------ -----------
Total net income (loss) $ (9,868) $ 72,433
============ ===========
11
<PAGE>
14. Segment Reporting - Continued
Three Months Ended
September 30,
---------------------------
1999 1998
------------ -----------
NET REVENUES
Total revenues for reportable segments $ 956,737 $ 1,499,224
Other income for Partnership 189,622 (536)
Gain on sale of assets 52,051 --
Eliminations (69,528) 3,366
------------ -----------
Total consolidated net revenues $ 1,128,882 $ 1,502,054
============ ===========
OPERATING EXPENSES
Operating expenses for reportable segments $ 373,325 $ 449,167
Operating expenses for Partnership (426) 2,038
Eliminations -- --
------------ -----------
Total operating expenses $ 372,899 $ 451,205
============ ===========
INTEREST EXPENSE
Interest expense for reportable segments $ 78,025 $ 81,063
Interest expense for Partnership 154,713 334,664
Eliminations -- --
------------ -----------
Total interest expense $ 232,738 $ 415,727
============ ===========
REAL ESTATE TAXES
Real estate taxes for reportable segments $ 84,669 $ 118,737
Real estate taxes for Partnership 7,776 16,084
Eliminations -- --
------------ -----------
Total real estate taxes $ 92,445 $ 134,821
============ ===========
DEPRECIATION AND AMORTIZATION
Depreciation and amortization for reportable
segments $ 208,523 $ 315,401
Depreciation and amortization for Partnership 9,220 55,434
Eliminations 7,745 3,073
------------ -----------
Total depreciation and amortization $ 225,488 $ 373,908
============ ===========
NET INCOME (LOSS)
Total net income (loss) for reportable segments $ 146,846 $ 431,576
Net income (loss) for Partnership (52,289) (488,749)
Eliminations (77,274) 293
------------ -----------
Total net income (loss) $ 17,283 $ (56,880)
============ ===========
12
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
-----------------------------------------------------------------------
OF OPERATIONS
-------------
Management's Discussion and Analysis of Financial Condition and Results of
Operations ("MD&A") is structured in four major sections. The first section
provides information related to occupancy levels and rental and other income
generated by the Partnership's properties. The second analyzes results of
operations on a consolidated basis. The final sections address consolidated cash
flows and financial condition. Discussion of certain market risks also follows.
MD&A should be read in conjunction with the financial statements in Item 1 and
the cautionary statements below.
Cautionary Statements
- ---------------------
Some of the statements included in this Item 2 may be considered to be
"forward-looking statements" since such statements relate to matters which have
not yet occurred. For example, phrases such as "the Partnership anticipates,"
"believes" or "expects," indicate that it is possible that the event
anticipated, believed or expected may not occur. Should such event not occur,
then the result which the Partnership expected also may not occur or occur in a
different manner, which may be more or less favorable to the Partnership. The
Partnership does not undertake any obligations to publicly release the results
of any revisions to these forward-looking statements that may be made to reflect
any future events or circumstances.
Any forward-looking statements included in MD&A, or elsewhere in this report,
which reflect management's best judgment based on factors known, involve risks
and uncertainties. Actual results could differ materially from those anticipated
in any forward-looking statements as a result of a number of factors, including
but not limited to those discussed below. Any forward-looking information
provided by the Partnership pursuant to the safe harbor established by recent
securities legislation should be evaluated in the context of these factors.
The Partnership's principal activity is the leasing and management of commercial
office buildings, business centers and an apartment complex. If a major
commercial tenant or a large number of apartment lessees default on their
leases, the Partnership's ability to make payments due under its debt
agreements, payment of operating costs and other partnership expenses would be
directly impacted. A lessee's ability to make payments are subject to risks
generally associated with real estate, many of which are beyond the control of
the Partnership, including general or local economic conditions, competition,
interest rates, real estate tax rates, other operating expenses and acts of God.
Results of Operations
- ---------------------
The occupancy levels at the Partnership's properties as of September 30 were as
follows:
1999 (1) 1998
--------- --------
Wholly-owned Properties
- -----------------------
Commonwealth Business Center Phase II 76% 77%
University Business Center Phase I (2) N/A 100%
Property Owned in Joint Venture with
- ------------------------------------
NTS-Properties IV (Ownership% at
- --------------------------------
September 30, 1999)
- -------------------
The Willows of Plainview Phase II (90%) 93% 89%
Properties Owned Through Lakeshore/
- -----------------------------------
University II Joint Venture
- ---------------------------
(L/U II Joint Venture)
- ----------------------
Lakeshore Business Center Phase I (3)(4) 74% 82%
Lakeshore Business Center Phase II (4) 86% 86%
University Business Center Phase II (5) N/A 88%
(1) Current occupancy levels are considered adequate to continue the operation
of the Partnership's properties.
(2) University Business Center Phase I was sold on October 6, 1998.
(3) In the opinion of the General Partner of the Partnership, the decrease in
period ending occupancy is only a temporary fluctuation and does not
represent a permanent downward occupancy trend.
(4) Ownership percentage was 69% as of September 30, 1998 and 79% as of
September 30, 1999. See Note 11.
(5) Ownership percentage of University Business Center II was 69% as of
September 30, 1998. On October 6, 1998, University Business Center Phase
II was sold.
13
<PAGE>
Results of Operations - Continued
- ---------------------------------
Average occupancy levels at the Partnership's properties during the three months
and nine months ended September 30, were as follows:
Three Months Nine Months
Ended Ended
September 30, September 30,
------------- ------------
1999 1998 1999 1998
---- ---- ---- ----
Wholly-owned Properties
- -----------------------
Commonwealth Business Center Phase II 79% 77% 79% 80%
University Business Center Phase I (1) N/A 100% N/A 100%
Property Owned in Joint Venture with
- ------------------------------------
NTS-Properties IV (Ownership % at
- ---------------------------------
September 30, 1999)
- -------------------
The Willows of Plainview Phase II (90%) 93% 88% 95% 85%
Property Owned Through Lakeshore/
- ---------------------------------
University II Joint Venture
- ---------------------------
(L/U II Joint Venture)
- ----------------------
Lakeshore Business Center Phase I (2)(3) 73% 81% 75% 90%
Lakeshore Business Center Phase II (2)(3) 86% 90% 86% 95%
University Business Center Phase II (4) N/A 86% N/A 91%
(1) University Business Center Phase I was sold on October 6, 1998.
(2) In the opinion of the General Partner of the Partnership, the decrease in
average occupancy is only a temporary fluctuation and does not represent a
permanent downward occupancy trend.
(3) Ownership percentage was 69% as of September 30, 1998 and 79% as of
September 30, 1999. See Note 11.
(4) Ownership percentage of University Business Center II was 69% as of
September 30, 1998. On October 6, 1998, University Business Center Phase
II was sold.
The rental and other income generated by the Partnership's properties for the
three months and nine months ended September 30, 1999 and 1998 was as follows:
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
1999 1998 1999 1998
---- ---- ---- ----
Wholly-owned Properties
- -----------------------
Commonwealth Business Center Phase II $147,542 $141,937 $442,890 $ 455,396
University Business Center Phase I (1) N/A $389,410 N/A $1,171,585
Property Owned in Joint Venture with
- ------------------------------------
NTS-Properties IV (Ownership % at
- ---------------------------------
September 30, 1999)
- -------------------
The Willows of Plainview Phase II (90%) $308,126 $313,362 $928,083 $ 897,439
Property Owned Through Lakeshore/
- ---------------------------------
University II Joint Venture
- ---------------------------
(L/U II Joint Venture)
- ----------------------
Lakeshore Business Center Phase I (2) $236,583 $217,657 $700,682 $ 794,834
Lakeshore Business Center Phase II (2) $264,487 $243,970 $765,625 $ 906,648
University Business Center Phase II (3) N/A $192,889 N/A $ 530,061
(1) University Business Center Phase I was sold on October 6, 1998.
(2) Represents ownership percentage of 69% for the three months and nine
months ended September 30, 1998. Ownership percentage is 69% for the six
months ended June 30, 1999 and 79% for the three months ended September
30, 1999.
(3) Ownership percentage of University Business Center II was 69% for the
three months and nine months ended September 30, 1998. On October 6, 1998,
University Business Center Phase II was sold.
14
<PAGE>
Results of Operations - Continued
- ---------------------------------
Revenues shown in the table on the previous page for properties owned through a
joint venture represent only the Partnership's percentage interest in those
revenues.
The following is an analysis of material changes in results of operations for
the periods ending September 30, 1999 and 1998. Items that did not have a
material impact on operations for the periods listed above have been eliminated
from this discussion.
Rental income decreased approximately $527,800 or 35% and $1,906,000 or 40% for
the three months and nine months ended September 30, 1999 as compared to the
same periods in 1998. The decrease is due primarily to the sale of University
Business Center Phase I and University Business Center Phase II in October 1998.
Approximately $388,761 and $1,168,753 of revenues from University Business
Center Phase I and $192,469 and $528,709 from University Business Center Phase
II, respectively, were generated during the three months and nine months ended
September 30, 1998. Also contributing to the decrease is a decrease in average
occupancy at Lakeshore Business Center Phases I and II. An increase in income at
the Willows of Plainview Phase II resulting from an increase in average
occupancy partially offsets the decreases.
Period ending occupancy percentages represent occupancy only on a specific date;
therefore, the above analysis considers average occupancy percentages, which are
representative of the entire period's results.
The 1999 gain on sale of assets is the result of the sale of University III
vacant land to Silver City Properties, Ltd. on September 17, 1999 and the result
of the Partnership's share of the Lakeshore/University II Joint Venture sale of
2.4 acres of land on July 23, 1999 (See Note 10 to the Financial Statements).
Interest and other income includes interest income earned from short-term
investments made by the Partnership with cash reserves. Interest and other
income increased approximately $31,755 and $109,719 for the three months and
nine months ended September 30, 1999 as compared to the same periods in 1998 as
a result of an increase in cash reserves available for investment due to
proceeds from the sale of University Business Center Phases I and II.
Operating expenses decreased approximately $67,000 or 21% and $250,000 or 27%
for the three months and nine months ended September 30, 1999 as compared to the
same periods in 1998 due primarily to the sale of University Business Center
Phase I and II in October 1998. The decrease is partially offset by increased
landscape activity and exterior repairs at Lakeshore Business Center Phases I
and II.
Operating expenses - affiliated decreased $11,000 or 8% and $42,000 or 10% for
the three months and nine months ended September 30, 1999 as compared to the
same periods in 1998. These decreases are primarily due to the sale of
University Business Center Phases I and II, offset by increased leasing and
property management salaries and architectural and administrative expenses at
Commonwealth Business Center Phase II and Lakeshore Business Center Phases I and
II. Operating expenses - affiliated are expenses incurred for services performed
by NTS Development Company, an affiliate of the General Partner.
The 1999 and 1998 loss on disposal of assets can be attributed to the write-off
of amenities and land improvements at the Willows of Plainview II. The
write-offs are the result of signage replacements, updating the model
apartments, pool renovations, clubhouse remodeling and new alarm system
installations. The write-offs represent the costs of unamortized assets which
were replaced as a result of the renovations.
15
<PAGE>
Results of Operations - Continued
- ---------------------------------
Interest expense decreased approximately $183,000 or 44% and $594,000 or 47% for
the three months and nine months ended September 30, 1999 as compared to the
same periods in 1998 as a result of the reduction in debt from the sale of
University Business Center Phases I and II and from regular principal payments.
Management fees are calculated as a percentage of cash collections; however,
revenue for reporting purposes is recorded on the accrual basis. As a result,
the fluctuations of revenues between periods will differ from the fluctuations
of management fee expense. The 34% and 41% decreases in management fees for the
three months and nine months ended September 30, 1999 as compared to the same
periods in 1998 are primarily due to the sale of University Business Center
Phases I and II in October 1998.
Real estate taxes decreased approximately $42,000 or 31% and $122,000 or 30% for
the three months and nine months ended September 30, 1999 as compared to the
same periods in 1998 as a result of the sale of University Business Center
Phases I and II in October 1998.
Professional and administrative expenses increased approximately $50,000 and
$91,600 for the three months and nine months ended September 30, 1999 as
compared to the same periods in 1998 primarily as a result of increased legal
fees relating to the Tender Offers discussed in Note 5.
Professional and administrative expenses - affiliated decreased $7,000 or 15%
and $31,000 or 19% for the three months and nine months ended September 30, 1999
as compared to the same periods in 1998. These decreases are primarily due to
the decreased salary expenses allocated from NTS Development Company following
the sales of University Business Center Phases I and II. Professional and
administrative expenses - affiliated are expenses incurred for services
performed by employees of NTS Development Company, an affiliate of the General
Partner, on behalf of the Partnership.
Depreciation and amortization decreased approximately $148,000 or 40% and
$543,300 or 47% for the three months and nine months ended September 30, 1999 as
compared to the same periods in 1998. The decrease is the result of the sale of
University Business Center Phases I and II in October 1998. 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 5-30 years for amenities. The aggregate cost
of the Partnership's properties for Federal tax purposes is approximately
$27,526,096.
Partially offsetting all of the decreases discussed above is an increase in
ownership of the Lakeshore/University II Joint Venture from 69% to 79% effective
July 1, 1999. See Note 11 for details of a capital contribution made to the
Joint Venture by NTS-Properties V affecting the change in ownership.
16
<PAGE>
Consolidated Cash Flows and Financial Condition
- -----------------------------------------------
In the next 12 months, the Partnership expects the demand on future liquidity to
increase as a result of future leasing activity at Commonwealth Business Center
Phase II and Lakeshore Business Center Phases I and II. 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.
Cash flow provided by (used in):
1999 1998
------------ ------------
Operating activities $ 617,639 $ 1,306,171
Investing activities 377,881 (323,604)
Financing activities (2,331,039) (874,030)
------------ ------------
Net increase (decrease) in
cash and equivalents $ (1,335,519) $ 108,537
============ ===========
Net cash provided by operating activities decreased approximately $688,000 or
52% for the nine months ended September 30, 1999 as compared to the same period
in 1998. The decrease was primarily driven by a decrease in net income from
operations as a result of the sale of University Business Center Phases I and II
in October 1998 and by changes in working capital accounts.
Net cash provided by (used in) investing activities totaled $377,881 and
$(323,604) for the nine months ended September 30, 1999 and 1998, respectively.
The increase in cash from investing activities in 1999 is the result of the sale
of assets (Note 10) offset by increased capital spending and a change in
ownership of the Lakeshore/University II Joint Venture (See Note 11 to the
Financial Statements).
Net cash used in financing activities totaled $2,331,039 and $874,030 for the
nine months ended September 30, 1999 and 1998, respectively. The increase in net
cash used in financing activities in 1999 was primarily the result of a
$1,252,000 cash distribution paid to the Limited Partners in March 1999. Cash
used for this distribution came from the proceeds of the sale of University
Business Center Phases I and II in October of 1998. Also contributing to the
increase is an increase in funds reserved for the purchase of limited
partnership Units, offset partially by decreased principal payments on debt as a
result of the sale of University Business Center Phases I and II.
17
<PAGE>
Consolidated Cash Flows and Financial Condition - Continued
- -----------------------------------------------------------
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, 1999. No distributions were made during the nine
months ended September 30, 1998. These were funded by cash flow derived from
operating activities.
Net Income Cash
(Loss) Distributions Return of
Allocated Declared Capital
---------- --------- -------
Limited Partners
1999 $ (9,769) $1,252,275 $1,252,275
1998 -- -- --
General Partners
1999 $ (99) $ 12,649 $ 12,649
1998 -- -- --
Currently, the Partnership's plans for renovations and other major capital
expenditures include tenant improvements at the Partnership's properties as
required by lease negotiations and beginning construction on Lakeshore Business
Center Phase III as described later in this section. Changes to current tenant
finish 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 the
improvements are determined by the size of the space being leased and whether
the improvements are for a new tenant or incurred because of a lease renewal.
The tenant finish improvements will be funded by cash flow from operations and
cash reserves.
Pursuant to Section 16.4 of the Partnership's Amended and Restated Agreement of
Limited Partnership, the Partnership established an Interest Repurchase Reserve
in June 1996. During the years ended December 31, 1998, 1997 and 1996, the
Partnership funded $177,930, $0, and $99,900, respectively, to the Reserve.
Through October 25, 1998 (the commencement date of the First Tender Offer), the
Partnership had repurchased a total of 1,882 Units for $277,830 at a price
ranging from $135 to $160 per Unit. The offering price per Unit was established
by the General Partner in its sole discretion and does not purport to represent
the fair market value or liquidation value of the Units at that date.
Repurchased Units are retired by the Partnership, thus increasing the percentage
of ownership of each remaining limited partner investor. The Interest Repurchase
Reserve was funded from cash reserves. The balance in the Reserve at September
30, 1999 was $0.
On October 25, 1998, the Partnership and ORIG, LLC, an affiliate of the
Partnership, (the "bidders") commenced a tender offer (the "First Tender Offer")
to purchase up to 1,200 of the Partnership's limited Partnership Units at a
price of $205 per Unit as of the date of the First Tender Offer. The initial
expiration date of the First Tender Offer was January 11, 1999 and this
expiration date was subsequently extended through February 5, 1999. A total of
2,458 Units were tendered and the bidders accepted all Units tendered. The
Partnership repurchased 600 Units and ORIG, LLC purchased 1,858 Units at a total
cost of $503,890 plus offering expenses.
18
<PAGE>
Consolidated Cash Flows and Financial Condition - Continued
- -----------------------------------------------------------
On June 25, 1999, the Partnership commenced a second tender offer (the "Second
Tender Offer") to purchase up to 1,000 of the Partnership's limited partnership
Units at a price of $167.50 per Unit as of the Second Tender Offer. The initial
expiration date of the Second Tender Offer was August 31, 1999. On August 18,
1999, the price was increased to $180 per Unit and the expiration date was
extended to September 30, 1999. On August 24, 1999 the price was increased to
$205 per Unit.
On September 17, 1999, the Partnership closed on the sale of University III
vacant land to Silver City Properties, Ltd. for a purchase price of $801,000.
On July 23, 1999, the L/U II Joint Venture closed on the sale of 2.4 acres of
land adjacent to the Lakeshore Business Center for a purchase price of $528,405.
The Partnership had a 79.45% interest in the Joint Venture at that date. The
Partnership expects to use the net proceeds from the land sales to help fund the
construction of Lakeshore Business Center Phase III as described below.
As of September 30, 1999 the L/U II Joint Venture intends to use the remaining
3.8 acres of the land it owns at the Lakeshore Business Center Development to
construct Lakeshore Business Center Phase III. Construction is expected to begin
during the fourth quarter of 1999. The construction cost is currently estimated
to be $4,000,000 and will be funded by a capital contribution from the
Partnership and debt financing. Construction will not begin until, in the
opinion of the General Partner, financing on favorable terms has been obtained.
On July 1, 1999, NTS-Properties V contributed capital of $1,737,000 to the L/U
II Joint Venture for the construction of the Lakeshore Business Center Phase
III. At that time, NTS-Properties Plus and NTS-Properties IV, were not in a
position to contribute additional capital required for the construction of
Lakeshore Business Center Phase III. NTS-Properties Plus and NTS-Properties IV
agreed that NTS-Properties V would make a capital contribution to the L/U II
Joint Venture with the knowledge that their Joint Venture interests would, as a
result, decrease.
The following describes the efforts being taken by the Partnership to increase
the occupancy levels at the Partnership's properties. At Commonwealth Business
Center Phase II, the leasing and renewal negotiations are handled by leasing
agents, employees of NTS Development Company, located in Louisville, Kentucky.
The leasing agents are located in the same city as the property. All advertising
is coordinated by NTS Development Company's marketing staff located in
Louisville, Kentucky. A leasing agent, an employee of NTS Development Company,
located at the Lakeshore Business Center development, handles the leasing and
renewal negotiations at Lakeshore Business Center Phases I and II. At The
Willows of Plainview Phase II, the Partnership has an on-site leasing staff,
employees of NTS Development Company, who handle all on-site visits from
potential tenants, make visits to local companies to promote fully furnished
units, negotiate lease renewals with current residents and coordinate all local
advertising with NTS Development Company's marketing staff.
Leases at the Partnership's commercial properties provide for tenants to
contribute toward the payment of common area expenses, insurance and real estate
taxes. Leases at the Partnership's Florida commercial properties also provide
for rent increases which are based upon increases in the consumer price index.
These lease provisions, along with the fact that residential leases are
generally for a period of one year, should protect the Partnership's operations
from the impact of inflation and changing prices.
19
<PAGE>
Year 2000
- ---------
All divisions of NTS Corporation, including NTS-Properties Associates V, the
General Partner of the Partnership, are reviewing the effort necessary to
prepare NTS' information systems (IT) and non-information technology with
embedded technology (ET) for the Year 2000. The information technology solutions
have been addressed separately for the Year 2000 since the Partnership saw the
need to move to more advanced management and accounting systems made available
by new technology and software developments during the decade of the 1990's.
The PILOT software system, purchased in the early 1990's, is being replaced by a
Windows based network system both for NTS' headquarters functions and other
locations. The real estate accounting system developed, sold, and supported by
the Yardi Company of Santa Barbara, California will replace PILOT. The Yardi
system has been tested and is compatible with Year 2000 and beyond. This system
is being implemented with the help of third party consultants and is fully
operational as of September 30, 1999. NTS' system for multi-family apartment
locations was converted to GEAC's Power Site System earlier in 1998 and is Year
2000 compliant.
The few remaining systems not addressed by these conversions are being modified
by NTS' in-house staff of programmers. The Hewlett Packard 3000 system, used for
PILOT and custom applications, was purchased in 1997 and will be part of the new
network. It will be retained as long as necessary to assure smooth operations
and has been upgraded to meet Year 2000 requirements.
All risks identified with information technology are believed to be addressed by
these plans.
The costs of these advances in NTS' systems technology are not all attributable
to the Year 2000 issue since NTS had already identified the need to move to a
network based system regardless of the Year 2000. The Partnership's share of the
costs involved will be approximately $50,000 during 1999. Costs incurred through
December 31, 1998 were approximately $10,000. These costs include primarily
hardware and software.
NTS property management staff has been surveying its vendors to evaluate
embedded technology in its alarm systems, HVAC controls, telephone systems and
other computer associated facilities. In a few cases, equipment is being
replaced. In some cases circuitry is being upgraded. The cost involved is still
being evaluated. There are no known significant risks that are currently without
solutions. Management anticipates that applications involving ET will be Year
2000 compliant by the fourth quarter of 1999.
NTS is also currently addressing the Year 2000 readiness of third parties whose
business interruption could have a material negative impact on its business. All
significant vendors and tenants have indicated that they will be compliant by
the end of 1999. Such assurances are being evaluated and documented.
Management has determined that at its current state of readiness, the need does
not presently exist for a contingency plan. NTS will continue to evaluate the
need for such a plan.
Despite diligent preparation, unanticipated third-party failures, inability of
NTS tenants to pay rent when due, more general public infrastructure failures or
failure to successfully conclude NTS' remediation efforts as planned could have
a material adverse impact on NTS results of operations, financial conditions
and/or cash flows in 1999 and beyond.
20
<PAGE>
Item 3. Quantitative and Qualitative Disclosures About Market Risk
----------------------------------------------------------
Our primary market risk exposure with regards to financial instruments is
changes in interest rates. All of the Partnership's debt bears interest at a
fixed rate. At September 30, 1999, a hypothetical 100 basis point increase in
interest rates would result in an approximately $524,000 decrease in the fair
value of the debt.
21
<PAGE>
PART II. OTHER INFORMATION
Item 3. Defaults upon Senior Securities
-------------------------------
None
Item 5. Other Information
-----------------
Mr. Richard L. Good, who was the Vice Chairman and former President
of NTS Capital Corporation and NTS Development Company, retired
effective September 3, 1999.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
Exhibit 27. Financial Data Schedule
(b) Reports on Form 8-K
None
Items 1, 2 and 4 are not applicable and have been omitted.
22
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, NTS-Properties V has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
NTS-PROPERTIES V, a Maryland Limited Partnership
------------------------------------------------
(Registrant)
By: NTS-Properties Associates V,
General Partner
By: NTS Capital Corporation,
General Partner
/s/ Gregory A. Wells
-------------------------------------------------
Gregory A. Wells
Senior Vice President of
NTS Capital Corporation
Date: November 15, 1999
23
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AS OF SEPTEMBER 30, 1999 AND FROM THE STATEMENT OF OPERATIONS FOR THE NINE
MONTHS ENDED SEPTEMBER 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 4,049,316
<SECURITIES> 0
<RECEIVABLES> 69,162
<ALLOWANCES> 318
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 15,874,212
<DEPRECIATION> 0<F2>
<TOTAL-ASSETS> 21,481,668
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 11,917,886
0
0
<COMMON> 0
<OTHER-SE> 8,793,916
<TOTAL-LIABILITY-AND-EQUITY> 21,481,668
<SALES> 2,954,085
<TOTAL-REVENUES> 3,092,401
<CGS> 0
<TOTAL-COSTS> 2,430,643
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 671,626
<INCOME-PRETAX> (9,868)
<INCOME-TAX> 0
<INCOME-CONTINUING> (9,868)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (9,868)
<EPS-BASIC> 0
<EPS-DILUTED> 0
<FN>
<F1>THE PARTNERSHIP HAS AN UNCLASSSIFIED BALANCE SHEET, THEREFORE THE VALUE IS
$0.
<F2>THIS INFORMATION IS NOT DISCLOSED IN THE PARTNERSHIP'S FORM 10-Q FILING.
</FN>
</TABLE>
