UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K/A (Amendment Number 1)
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
-- SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 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
--------------------
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Interests
--------------------------------------------------------------------------------
(Title of Class)
Indicate by check mark whether the registrant (1) 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 (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
---- ----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [X]
<PAGE>
In the Statements of Operations, as filed on March 31, 2000, for the Years Ended
December 31, 1999, 1998 and 1997, brackets were inadvertently omitted on the
line items "Income (loss) before extraordinary item" and "Net income (loss)" for
the period ended December 31, 1999, under the heading "Net income (loss) per
Limited Partnership Unit." This submission corrects that omission.
Item 8. Financial Statements and Supplementary Data.
-------------------------------------------
2
<PAGE>
Item 8. Financial Statements and Supplementary Data
-------------------------------------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To NTS-Properties V, a Maryland Limited Partnership:
We have audited the accompanying balance sheets of NTS-Properties V, a Maryland
Limited Partnership, as of December 31, 1999 and 1998, and the related
statements of operations, partners' equity and cash flows for each of the three
years in the period ended December 31, 1999. These financial statements and the
schedules referred to below are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements and schedules based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of NTS-Properties V as of December
31, 1999 and 1998, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 1999 in conformity with
accounting principles generally accepted in the United States.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedules included on pages 48
through 50 are presented for purposes of complying with the Securities and
Exchange Commission's rules and regulations and are not a required part of the
basic financial statements. These schedules have been subjected to the auditing
procedures applied in our audits of the basic financial statements and, in our
opinion, fairly state in all material respects the financial data required to be
set forth therein in relation to the basic financial statements taken as a
whole.
ARTHUR ANDERSEN LLP
Louisville, Kentucky
March 24, 2000
3
<PAGE>
<TABLE>
NTS-PROPERTIES V
----------------
BALANCE SHEETS
--------------
AS OF DECEMBER 31, 1999 AND 1998
--------------------------------
<CAPTION>
1999 1998
---- ----
ASSETS
------
<S> <C> <C>
Cash and equivalents $2,807,198 $4,543,666
Cash and equivalents - restricted 117,220 208,682
Accounts receivable, net of allowance
for doubtful accounts of $0 (1999) and
$4,678 (1998) 103,245 77,560
Land, buildings and amenities, net 17,008,482 16,801,857
Other assets 439,664 409,580
------------ -----------
$20,475,809 $22,041,345
============ ===========
LIABILITIES AND PARTNERS' EQUITY
--------------------------------
Mortgages and notes payable $11,726,240 $11,450,225
Accounts payable - operations 154,958 116,056
Accounts payable - construction 125,833 47,150
Security deposits 159,642 124,309
Other Liabilities 159,337 111,897
------------ ------------
12,326,010 11,849,637
Commitments and contingencies (Note 12)
Partners' equity 8,149,799 10,191,708
------------ -----------
$20,475,809 $22,041,345
============ ===========
</TABLE>
The accompanying notes to financial statements are an integral part of these
statements.
4
<PAGE>
<TABLE>
NTS-PROPERTIES V
----------------
STATEMENTS OF OPERATIONS
------------------------
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
----------------------------------------------------
<CAPTION>
1999 1998 1997
---- ---- ----
Revenues:
---------
<S> <C> <C> <C>
Rental income, net of provision for
doubtful accounts of $0 (1999 and 1998)
and $3,045 (1997) $3,783,946 $5,665,370 $5,831,544
Gain on sale of assets 52,051 5,004,628 --
Interest and other income 248,027 87,607 74,742
----------- ----------- ----------
4,084,024 10,757,605 5,906,286
Expenses:
---------
Operating expenses 920,334 1,147,506 1,189,163
Operating expenses - affiliated 491,956 518,742 566,492
Write-off of unamortized land
improvements & amenities 30,913 14,390 --
Interest expense 901,591 1,497,171 1,753,841
Management fees 221,467 332,161 352,933
Real estate and income taxes 378,628 498,318 576,997
Professional and administrative
expenses 209,046 129,066 117,016
Professional and administrative
expenses - affiliated 174,341 203,157 221,034
Depreciation and amortization 835,018 1,378,613 1,687,488
----------- ----------- ----------
4,163,294 5,719,124 6,464,964
----------- ----------- ----------
Income (loss) before extraordinary item (79,270) 5,038,481 (558,678)
Extraordinary item - early extinguishment
of debt -- (1,042,438) (49,346)
----------- ----------- -----------
Net income (loss) $(79,270) $3,996,043 $(608,024)
=========== =========== ===========
Net income (loss) allocated to the limited partners:
Income (loss) before extraordinary item $(78,477) $4,988,096 $(553,091)
Extraordinary item -- (1,032,014) (48,853)
----------- ----------- -----------
Net income (loss) $(78,477) $3,956,082 $(601,944)
=========== =========== ===========
Net income (loss) per limited partnership
Unit:
Income (loss) before extraordinary item $(2.39) $144.86 $(15.74)
Extraordinary item -- (29.97) (1.39)
----------- ----------- -----------
Net income (loss) $(2.39) $114.89 $(17.13)
=========== =========== ===========
Weighted average number of limited
partnership Units 32,861 34,433 35,136
=========== =========== ==========
</TABLE>
The accompanying notes to financial statements are an integral part of these
statements.
5
<PAGE>
<TABLE>
NTS-PROPERTIES V
----------------
STATEMENTS OF PARTNERS' EQUITY (1)
----------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
----------------------------------------------------
<CAPTION>
Limited General
Partners Partners Total
-------- -------- -----
<S> <C> <C> <C>
Balances at December 31, 1996 $7,103,578 $(121,959) $6,981,619
Net loss (601,944) (6,080) (608,024)
----------- ----------- -----------
Balances at December 31, 1997 6,501,634 (128,039) 6,373,595
Net income 3,956,082 39,961 3,996,043
Repurchase of Limited Partnership
Units (177,930) -- (177,930)
----------- ----------- -----------
Balances at December 31, 1998 10,279,786 (88,078) 10,191,708
Net loss (78,477) (793) (79,270)
Cash distributions (1,252,275) (12,649) (1,264,924)
Repurchase of Limited Partnership
Units (697,715) -- (697,715)
----------- ----------- -----------
Balances at December 31, 1999 $8,251,319 $(101,520) $8,149,799
=========== =========== ==========
</TABLE>
The accompanying notes to financial statements are an integral part of these
statements.
(1) For the periods presented, there are no elements of other comprehensive
income as defined by the Financial Accounting Standards Board, Statement of
Financial Accounting Standards Statement No. 130, Reporting Comprehensive
Income.
6
<PAGE>
<TABLE>
NTS-PROPERTIES V
----------------
STATEMENTS OF CASH FLOWS
------------------------
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
----------------------------------------------------
<CAPTION>
1999 1998 1997
---- ---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
-------------------------------------
<S> <C> <C> <C>
Net income (loss) $(79,270) $3,996,043 $(608,024)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Gain on sale of assets (52,051) (5,004,628) --
Extraordinary item-early extinguishment of
debt -- 1,042,438 49,346
Provision for doubtful accounts -- -- 3,045
Write-off of unamortized land improvements
& amenities 30,913 14,390 --
Depreciation and amortization 835,018 1,378,613 1,687,488
Changes in assets and liabilities:
Cash and equivalents - restricted 25,961 (15,924) 15,134
Accounts receivable (25,685) 213,944 222,718
Other assets 66,672 126,932 104,065
Accounts payable - operations 117,585 (168,773) 28,378
Security deposits 35,333 (43,288) 14,666
Other liabilities 47,441 (77,709) 149,706
------------ ------------ ----------
Net cash provided by operating activities 1,001,917 1,462,038 1,666,522
------------ ------------ ----------
CASH FLOWS FROM INVESTING ACTIVITIES
------------------------------------
Proceeds from sale of land 1,149,317 -- --
Proceeds from sale of building before payment
of debt -- 13,279,721 --
Additions to land, buildings and amenities (762,629) (482,942) (431,992)
Asset held for development -- 1,179,268 --
Change in ownership of Joint Venture (502,905) -- --
Other -- 14,776 --
------------ ------------ ----------
Net cash provided by (used in) investing
activities (116,217) 13,990,823 (431,992)
------------ ------------ ----------
CASH FLOWS FROM FINANCING ACTIVITIES
------------------------------------
Increase in mortgages payable -- 200,000 4,585,920
Principal payments on mortgages and notes
payable (725,029) (10,412,596) (5,611,430)
Early principal payment penalty -- (877,569) --
Decrease (increase) in loan costs -- 8,438 (51,474)
Cash distributions (1,264,924) -- --
Repurchase of limited partnership Units (697,715) (177,930) --
Decrease (increase) in cash and
equivalents - restricted 65,500 (122,900) --
------------ ------------ ----------
Net cash used in financing activities (2,622,168) (11,382,557) (1,076,984)
------------ ------------ ----------
Net increase in cash and equivalents (1,736,468) 4,070,304 157,546
============ =========== ==========
CASH AND EQUIVALENTS, beginning of year 4,543,666 473,362 315,816
============ =========== ==========
CASH AND EQUIVALENTS, end of year $2,807,198 $4,543,666 $473,362
============ =========== ==========
Interest paid on a cash basis $906,179 $1,545,240 $1,865,183
============ =========== ==========
</TABLE>
The accompanying notes to financial statements are an integral part of these
statements.
7
<PAGE>
NTS-PROPERTIES V
----------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
----------------------------------------------------
1. Significant Accounting Policies
-------------------------------
A) Organization
------------
NTS-Properties V, a Maryland limited partnership, (the
"Partnership") is a limited partnership organized on April 30,
1984. The General Partner is NTS-Properties Associates V, a
Kentucky limited partnership. The Partnership is in the
business of developing, constructing, owning and operating
residential apartments and commercial real estate.
B) Properties
----------
The Partnership owns and operates the following properties:
- Commonwealth Business Center Phase II, a business
center with approximately 66,000 net rentable square
feet located in Louisville, Kentucky.
- A 90% joint venture interest in The Willows of
Plainview Phase II, a 144-unit luxury apartment
complex located in Louisville, Kentucky.
- A 79% joint venture interest in the
Lakeshore/University II Joint Venture. A description
of the properties owned by the Joint Venture appears
below:
- Lakeshore Business Center Phase I - a
--------------------------------------
business center with approximately 103,000
net rentable square feet located in Fort
Lauderdale, Florida.
- Lakeshore Business Center Phase II - a
--------------------------------------
business center with approximately 97,000
net rentable square feet located in Fort
Lauderdale, Florida.
- Outparcel Building Site - approximately 3.8
------------------------
acres of undeveloped land adjacent to the
Lakeshore Business Center development upon
which construction of Lakeshore Business
Center Phase III has commenced.
C) Allocation of Net Income (Loss) and Cash Distributions
------------------------------------------------------
Operating Net Cash Receipts, as defined in the partnership
agreement and which are made available for distribution, will
be distributed 1) 99% to the limited partners and 1% to the
General Partner until the limited partners have received their
8% Preferred Return as defined in the partnership agreement;
2) to the General Partner in an amount equal to approximately
10% of the limited partners 8% Preferred Return; 3) the
remainder, 90% to the limited partners and 10% to the General
Partner. Net operating income (loss), exclusive of
depreciation, is allocated to the limited partners and the
General Partner in proportion to their respective cash
distributions. Net operating income, exclusive of
depreciation, in excess of cash distributions shall be
allocated as follows: (1) pro rata to all partners with a
negative capital account in an amount to restore their
respective negative capital account to zero; (2) 99% to the
limited partners and 1% to the General Partner until the
limited partners have received cash distributions from all
sources equal to their original capital; (3) the balance, 75%
to the limited partners and 25% to the General Partner.
Depreciation expense is allocated 99% to the limited partners
and 1% to the General Partner for all periods presented in the
accompanying Financial Statements.
8
<PAGE>
1. Significant Accounting Policies - Continued
-------------------------------------------
D) Tax Status
----------
The Partnership has received a ruling from the Internal
Revenue Service stating that the Partnership is classified as
a limited partnership for federal income tax purposes. As
such, the Partnership makes no provision for income taxes. The
taxable income or loss is passed through to the holders of the
partnership interests for inclusion on their individual income
tax returns.
A reconciliation of net income (loss) for financial statement
purposes versus that for income tax reporting is as follows:
1999 1998 1997
---- ---- ----
Net income (loss) $(79,270) $3,996,043 $(608,024)
Items handled differently for
tax purposes:
Gain/loss on sale of
assets (1,765,152) (982,892) --
Depreciation and
amortization (177,825) 421,204 342,809
Capitalized leasing
costs 2,622 11,930 14,484
Rental income (32,996) 44,212 353,677
Allowance for doubtful
accounts (4,698) (8,626) (2,596)
Write-off of unamortized
tenant improvements (24,787) (6,314) (39,966)
Other 36,379 -- --
----------- ----------- -------
Taxable income (loss) $(2,045,727) $3,475,557 $60,384
=========== =========== =========
E) 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.
F) Joint Venture Accounting
------------------------
The Partnership has adopted the proportionate consolidation
method of accounting for joint venture properties. The
Partnership's proportionate interest in the venture's assets,
liabilities, revenues, expenses and cash flows are combined on
a line-by-line basis with the Partnership's own assets,
liabilities, revenues, expenses and cash flows. All
intercompany accounts and transactions have been eliminated in
consolidation.
Proportionate consolidation is utilized by the Partnership due
to the fact that the ownership of the joint venture
properties, in substance, is not subject to joint control. The
managing General Partners of the sole General Partner of the
NTS sponsored partnerships which have formed joint ventures
are substantially the same. As such, decisions regarding
financing, development, sale or operations do not require the
approval of different partners. Additionally, the joint
venture properties are in the same business/industry as their
respective joint venture partners and their asset, liability,
revenue and expense accounts correspond with
9
<PAGE>
1. Significant Accounting Policies - Continued
-------------------------------------------
F) Joint Venture Accounting - Continued
------------------------------------
the accounts of such partner. It is the belief of the General
Partner of the Partnership that the financial statement
disclosures resulting from proportionate consolidation
provides the most meaningful presentation of assets,
liabilities, revenues, expenses and cash flows for the years
presented given the commonality of the Partnership operations.
G) 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.
H) Basis of Property and Depreciation
----------------------------------
Land, buildings and amenities are stated at cost to the
Partnership. Costs directly associated with the acquisition,
development and construction of a project are capitalized.
Depreciation is computed using the straight-line method over
the estimated useful lives of the assets which are 5-30 years
for land improvements, 5-30 years for building and
improvements, 5-30 years for amenities and the life of lease
for tenant improvements.
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 by management during the years
ended December 31, 1999, 1998 and 1997 did not result in an
impairment loss.
I) Rental Income and Capitalized Leasing Costs
-------------------------------------------
Certain of the Partnership's lease agreements for the
commercial properties are structured to include scheduled and
specified rent increases over the lease term. For financial
reporting purposes, the income from these leases is being
recognized on a straight-line basis over the lease term.
Accrued income connected with these leases is included in
accounts receivable and totaled $24,534 and $34,901 as of
December 31, 1999 and 1998, respectively.
All commissions paid to commercial leasing agents and
incentives paid to tenants are deferred and amortized on a
straight-line basis over the applicable lease term.
J) Advertising
-----------
The Partnership expenses advertising-type costs as incurred.
Advertising expense was immaterial to the Partnership during
the years ended December 31, 1999, 1998 and 1997.
K) Statements of Cash Flows
------------------------
For purposes of reporting cash flows, cash and equivalents
include cash on hand and short-term, highly liquid investments
with initial maturities of three months or less.
L) Reclassification of 1998 and 1997 Financial Statements
------------------------------------------------------
Certain reclassifications have been made to the December 31,
1998 and 1997 financial statements to conform with December
31, 1999 classifications. These classifications have no
material effect on previously reported operations.
10
<PAGE>
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. 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 December 31, 1999 was $0.
4. Tender Offers
-------------
On October 13, 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, pursuant to the First Tender Offer, 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.
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 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 31, 1999, the price was increased to $205
per Unit and the expiration date remained September 30, 1999. A total
of 2,523 Units were tendered, pursuant to the Second Tender Offer, and
the Partnership accepted all Units at a total cost of $517,215 plus
offering expenses. ORIG, LLC did not participate in the Second Tender
Offer.
On November 5, 1999, the Partnership and ORIG, LLC (the "bidders"),
commenced a third tender offer (the "Third Tender Offer") to purchase
up to 500 limited partnership Units at a price of $215 per Unit as of
the date of the Third Tender Offer. The initial expiration date of the
offer was December 23, 1999. On December 22, 1999, the price was
increased to $230 per Unit and the expiration date was extended to
December 31, 1999. A total of 1,196 Units were tendered, pursuant to
the Third Tender Offer, and the bidders accepted all Units tendered.
The Partnership repurchased 250 Units and ORIG, LLC repurchased 946
Units at a total costs of $275,080 plus offering expenses.
5. Investment in Joint Ventures
----------------------------
A) NTS Willows Phase II Joint Venture
----------------------------------
In 1984, the Partnership entered into a joint venture
agreement with NTS-Properties IV, an affiliate of the General
Partner of the Partnership, to develop and construct a 144
unit luxury apartment complex on an 8.29-acre site in
Louisville, Kentucky known as The Willows of Plainview Phase
II. NTS-Properties IV contributed land
11
<PAGE>
5. Investment in Joint Ventures - Continued
----------------------------------------
A) NTS Willows Phase II Joint Venture - Continued
----------------------------------------------
valued at $800,000 and the Partnership contributed
approximately $7,455,000, the construction and carrying costs
of the apartment complex. The project was completed in August
1985. Net income or net loss is allocated each calendar
quarter based on the respective partnership's contribution.
The Partnership's ownership share was 90% at December 31,
1999. The Partnership's share of the joint venture's revenues
was $1,211,534 (1999), $1,211,384 (1998) and $1,283,576
(1997). The Partnership's share of the joint venture's
expenses was $1,212,171 (1999), $1,207,379 (1998) and
$1,260,767 (1997).
B) NTS Ft. Lauderdale Office Joint Venture
---------------------------------------
In 1985, the Partnership entered into a joint venture
agreement with NTS-Properties IV to develop an approximately
103,000 square-foot commercial business center known as
Lakeshore Business Center Phase I, located in Fort Lauderdale,
Florida.
NTS-Properties IV contributed land valued at $1,752,982 and
the Partnership contributed approximately $9,170,000, the
construction and carrying costs of the business center. The
net income or net loss is allocated each calendar quarter
based on the respective partnership's contribution.
On January 23, 1995, the partners of the NTS Ft. Lauderdale
Office Joint Venture contributed Lakeshore Business Center
Phase I to the newly formed Lakeshore/University II (L/U II)
Joint Venture. Refer to Note 5D for a further discussion of
the new joint venture.
C) NTS University Boulevard Joint Venture
--------------------------------------
In 1989, the Partnership entered into a joint venture
agreement with NTS-Properties Plus Ltd., an affiliate of the
General Partner of the Partnership, to develop an
approximately 88,000 square foot commercial business center
(includes 10,000 square feet of mezzanine space) known as
University Business Center Phase II, located in Orlando,
Florida. The Partnership contributed land valued at $1,460,000
and NTS-Properties Plus Ltd. contributed development and
carrying costs of approximately $8,000,000. In connection with
the construction of University Business Center Phase I, the
Partnership incurred the cost of developing certain common
areas which are used by both University Business Center Phase
I and Phase II. In 1989, NTS-Properties Plus Ltd. paid
approximately $747,000 to the Partnership for Phase II's share
of the common area costs. The net income or net loss is
allocated each calendar quarter based on the respective
partnership's contribution.
On January 23, 1995, the partners of the NTS University
Boulevard Joint Venture contributed University Business Center
Phase II to the newly formed L/U II Joint Venture. Refer to
Note 5D for a further discussion of the new joint venture.
D) Lakeshore/University II Joint Venture
-------------------------------------
On January 23, 1995, a joint venture known as the
Lakeshore/University II Joint Venture (L/U II Joint Venture)
was formed among the Partnership and NTS-Properties IV,
NTS-Properties Plus Ltd. and NTS/Fort Lauderdale, Ltd.,
affiliates of the General Partner of the Partnership, for
purposes of owning Lakeshore Business Center Phases I and II,
University Business Center Phase II (sold October 1998 - see
Note 11) and certain undeveloped tracts adjacent to the
Lakeshore Business Center development. The table below
identifies which properties were contributed to the L/U II
Joint Venture and the respective owners of such properties
prior to the formation of the joint venture.
12
<PAGE>
5. Investment in Joint Ventures - Continued
----------------------------------------
D) Lakeshore/University II Joint Venture - Continued
-------------------------------------------------
Property (Net Asset Contributed) Contributing Owner
------------------------------- ------------------
Lakeshore Business Center NTS-Properties IV and
Phase I ($6,249,667) NTS-Properties V
Lakeshore Business Center NTS-Properties Plus Ltd.
Phase II (-$1,023,535)
Undeveloped land adjacent to the NTS - Properties Plus Ltd.
Lakeshore Business Center
Development (3.8 acres)(-$670,709)
Undeveloped land adjacent to the NTS/Fort Lauderdale, Ltd.
Lakeshore Business Center
Development (2.4 acres)($27,104)
University Business Center NTS-Properties V and
Phase II ($953,236)(Note 11) NTS-Properties Plus Ltd.
Each of the properties were contributed to the L/U II Joint
Venture subject to existing indebtedness, except for Lakeshore
Business Center Phase I which was contributed to the joint
venture free and clear of any mortgage liens, and all such
indebtedness was assumed by the L/U II Joint Venture.
Mortgages were recorded on University Business Center Phase II
in the amount of $3,000,000, in favor of the banks which held
the indebtedness on University Business Center Phase II,
Lakeshore Business Center Phase II and the undeveloped tracts
prior to the formation of the joint venture and on Lakeshore
Business Center Phase I in the amount of $5,500,000 subsequent
to the formation of the L/U II Joint Venture. In addition to
the above, NTS/Properties IV contributed $750,000 to the L/U
II Joint Venture. The Partnership's ownership share was 79% at
December 31, 1999. The Partnership's share of the joint
ventures revenues was $2,122,444 (1999), $3,521,941 (1998) and
($2,539,973) (1997). The Partnership's share of the joint
ventures expenses was $2,157,058 (1999), $3,219,909 (1998) and
$3,066,313 (1997).
On July 1, 1999, NTS-Properties V contributed $1,737,000 to
the 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%.
6. Land, Buildings and Amenities
-----------------------------
The following schedule provides an analysis of the Partnership's
investment in property held for lease as of December 31:
1999 1998
---- ----
Land and improvements $8,721,304 $8,994,279
Buildings, improvements
and amenities 23,406,278 21,215,905
----------- -----------
32,127,582 30,210,184
Less accumulated depreciation 15,119,100 13,408,327
----------- -----------
$17,008,482 $16,801,857
=========== ===========
13
<PAGE>
7. Asset Held for Development
--------------------------
As of December 31, 1999, the L/U II Joint Venture intends to use the
3.8 acres of the land it owns at the Lakeshore Business Center
Development to construct Lakeshore Business Center Phase III. See Note
12 for discussion of a contract for the construction of Lakeshore
Business Center Phase III signed December 6, 1999.
8. Mortgages Payable
-----------------
Mortgages payable as of December 31 consist of the following:
1999 1998
---- ----
Mortgage payable with an insurance
company bearing interest at
fixed rate of 8.125%,
due August 1, 2008,
secured by land and building $3,883,797 $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 3,609,836 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 2,649,944 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 1,582,663 1,653,217
------------ -----------
$11,726,240 $11,450,225
============ ===========
For the Years Ended December 31, Amount
-------------------------------- ------
2000 $ 823,462
2001 890,911
2002 963,900
2003 1,042,884
2004 1,128,358
Thereafter 6,876,725
---------
$11,726,240
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 $11,400,000.
9. Rental Income Under Operating Leases
------------------------------------
The following is a schedule of minimum future rental income on
noncancellable operating leases as of December 31, 1999:
For the Years Ended December 31, Amount
-------------------------------- ------
2000 $ 1,715,418
2001 1,247,913
2002 790,675
2003 428,288
2004 266,709
Thereafter 34,467
---------
$ 4,483,470
14
<PAGE>
10. Related Party Transactions
--------------------------
Pursuant to an agreement with the Partnership, property management fees
of $221,467 (1999), $332,161 (1998) and $352,933 (1997) were paid to
NTS Development Company, an affiliate of the General Partner. 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 $39,684 and $29,004 as a
repair and maintenance fee during the years ended December 31, 1999 and
1998, respectively, and has capitalized this cost as part of land,
building and amenities.
As permitted by an agreement, the Partnership was also charged the
following amounts from NTS Development Company for the years ended
December 31, 1999, 1998 and 1997. These charges included 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, building and amenities.
1999 1998 1997
---- ---- ----
Leasing $261,757 $254,266 $216,100
Administrative 266,390 184,283 279,933
Property manager 226,104 324,439 353,002
Other 7,211 22,230 5,752
-------- -------- --------
$761,462 $785,218 $854,787
======== ======== ========
11. Sale of Assets
--------------
On October 6, 1998 pursuant to a contract executed on September 8,
1998, the Lakeshore/University II Joint Venture ("L/U II Joint
Venture") and NTS Properties V sold University Business Center Phases I
and II office buildings to Silver City Properties, Ltd. ("the
Purchaser") for an aggregate purchase price of $17,950,000 ($8,975,000
for Phase I and $8,975,000 for Phase II). University Business Center
Phase II was owned by the L/U II Joint Venture of which the Partnership
owned a 69% interest as of the date of sale. Portions of the proceeds
from this sale were immediately used to pay the remainder of the
outstanding debt (including interest and prepayment penalties) of
approximately $10,672,643 ($4,739,261 for Phase I and $5,933,382 for
Phase II) on these properties. During October 1998, a portion of the
proceeds was also used to pay the outstanding debt balance of
$1,447,195 on Commonwealth Business Center Phase II. NTS-Properties V
reflected a gain of approximately $5,000,000 associated with this sale
in the fourth quarter of 1998. NTS-Properties V used a portion of the
remaining proceeds after pay down of mortgages to make a $37.50 per
unit distribution totaling $1,252,275 paid to the limited partners
during the first quarter of 1999.
On September 17, 1999, NTS-Properties V closed on the sale of
University Phase III vacant land to Silver City Properties Ltd. for a
purchase price of $801,000. In March 1999, NTS-Properties V sold a
portion of the University Phase III land to Orange County Florida for
$216,648 for which Silver City Properties, Ltd. received net
condemnation proceeds of $145,824. The Partnership reflects a loss of
approximately $23,000 associated with this sale in the third quarter of
1999.
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 sales
price of $528,405. The Partnership reflects a gain of approximately
$75,000 associated with this sale in the third quarter of 1999.
15
<PAGE>
12. Commitments and Contingencies
-----------------------------
Pursuant to a contract signed on December 6, 1999, the
Lakeshore/University II Joint has a commitment to construct a building
to be known as Lakeshore Business Center Phase III on the 3.8 acres of
land it owns at the Lakeshore Business Center Development. The
construction costs are currently estimated to be $4,000,000 and will be
funded by a $1,737,000 capital contribution from the Partnership made
in July 1999 and approximately $2,680,000 debt financing obtained
subsequent to December 31, 1999. NTS-Properties Plus and NTS-Properties
IV, which prior to July 1, 1999 had a 12% and 18% interest
respectively, in the L/U II Joint Venture were not in a position to
contribute additional capital required for the construction of
Lakeshore Business Center Phase III. NTS- Properties Plus, together
with NTS-Properties IV agreed that NTS- Properties V would make the
capital contribution to the L/U II Joint Venture with the knowledge
that their Joint Venture interest would, as a result, decrease to 8%
and 12% respectively. See Item 8 Note 14 for information of debt
financing obtained for the construction of Lakeshore Business Center
Phase III subsequent to December 31, 1999.
13. 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
Phases I and II. In addition, the table below includes the properties
known as University Business Center Phases I and II up until their
disposition in October 1998 (see Note 11 for details of this
transaction).
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 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.
<TABLE>
1999
Residential Commercial TOTAL
----------- ---------- -----
<S> <C> <C> <C>
Rental income $1,209,798 $2,574,148 $3,783,946
Other income 1,736 7,278 9,014
------------ ------------ ----------
Total net revenues $1,211,534 $2,581,426 $3,792,960
============ ============ ==========
Operating expenses $417,294 $994,996 $1,412,290
Write-off of unamortized land
improvements and amenities 30,383 530 30,913
Interest expense 312,631 -- 312,631
Management fees 64,756 156,711 221,467
Real estate taxes 59,221 297,248 356,469
Professional and administrative 135,450 -- 135,450
Depreciation expense 192,436 578,272 770,708
------------ ------------ ----------
Net income (loss) $(637) $553,669 $553,032
============ ============ ==========
Net income (loss)
Land, buildings and amenities,
net $3,654,867 $13,094,688 $16,749,555
============ ============ ==========
Expenditures for land,
buildings and amenities $70,835 $679,602 $750,437
============ ============ ==========
Segment liabilities $4,429,124 $405,911 $4,835,035
============ ============ ==========
</TABLE>
16
<PAGE>
13. Segment Reporting - Continued
-----------------------------
<TABLE>
1998
Residential Commercial TOTAL
----------- ---------- -----
<S> <C> <C> <C>
Rental income $1,204,762 $4,460,608 $5,665,370
Other income 6,622 20,733 27,355
Gain on sale of assets - (3,099,716) (3,099,716)
----------- ------------ -----------
Total net revenues $1,211,384 $1,381,625 $2,593,009
============ ============ ==========
Operating expenses $481,674 $1,184,574 $1,666,248
Write Off of unamortized land
improvements and amenities 14,109 281 14,390
Interest expense 330,418 813,525 1,143,943
Management fees 60,350 271,811 332,161
Real estate taxes 52,701 420,086 472,787
Professional and administrative 81,270 -- 81,270
Depreciation expense 186,857 1,026,857 1,213,714
------------ ------------ ----------
Net income (loss) before
extraordinary item $4,005 $(2,335,509) $(2,331,504)
Extraordinary item - early
extinguishment of debt -- (597,188) (597,188)
------------ ------------ -----------
Net income (loss) $4,005 $(2,932,697) $(2,928,692)
============ ============ ===========
Land, buildings and amenities,
net $3,866,398 $12,919,052 $16,785,450
============ ============ ==========
Expenditures for land,
buildings and amenities $138,231 $328,304 $466,535
============ ============ ==========
Segment liabilities $4,568,302 $7,355,004 $11,923,306
============ ============ ==========
</TABLE>
<TABLE>
1997
Residential Commercial TOTAL
----------- ---------- -----
<S> <C> <C> <C>
Rental income $1,228,350 $4,603,194 $5,831,544
Other income 55,226 8,968 64,194
------------ ------------ ----------
Total net revenues $1,283,576 $4,612,162 $5,895,738
============ ============ ==========
Operating expenses $450,118 $1,305,537 $1,755,655
Interest expense 341,390 934,842 1,276,232
Management fees 61,217 291,716 352,933
Real estate taxes 52,436 497,924 550,360
Professional and administrative 117,390 -- 117,390
Depreciation expense 188,962 1,287,372 1,476,334
------------ ------------ ----------
Net income (loss) before
extraordinary item $72,063 $294,771 $366,834
Extraordinary item - early
extinguishment of debt (49,346) -- (49,346)
------------ ------------ -----------
Net income (loss) $22,717 $294,771 $317,488
============ ============ ==========
Land, buildings and amenities,
net $3,920,638 $23,108,249 $27,028,887
============ ============ ==========
Expenditures for land,
buildings and amenities $28,892 $403,100 $431,992
============ ============ ==========
Segment liabilities $4,758,365 $11,773,240 $16,531,605
============ ============ ==========
</TABLE>
17
<PAGE>
13. Segment Reporting- Continued
----------------------------
A reconciliation of the totals reported for the operating segments to
the applicable line items in the consolidated financial statements is
necessary given amounts recorded at the Partnership level and not
allocated to the operating properties for internal reporting purposes:
<TABLE>
1999 1998 1997
---- ---- ----
NET REVENUES
------------
<S> <C> <C> <C>
Total revenues for reportable
segments $3,792,960 $2,593,009 $5,895,738
Other income for partnership 239,013 60,252 10,548
Gain (loss) on sale of assets 52,051 8,104,344 --
----------- ----------- -------
Total consolidated net revenues $4,084,024 $10,757,605 $5,906,286
=========== =========== ==========
INTEREST EXPENSE
----------------
Interest expense for reportable
segments $312,631 $1,143,943 $1,276,232
Interest expense for partnership
level 588,960 353,228 477,609
----------- ----------- ----------
Total interest expense $901,591 $1,497,171 $1,753,841
=========== =========== ==========
REAL ESTATE AND INCOME TAXES
----------------------------
Total real estate taxes for
reportable segments $356,469 $472,787 $550,360
Real estate and income taxes for
partnership 22,159 25,531 26,637
----------- ----------- ----------
Total real estate taxes $378,628 $498,318 $576,997
=========== =========== ==========
PROFESSIONAL AND ADMINISTRATIVE
-------------------------------
Total professional and admin for
reportable segments $135,450 $81,270 $117,390
Professional and admin for
partnership level 247,937 250,953 220,660
----------- ----------- ----------
Total professional and administrative $383,387 $332,223 $338,050
=========== =========== ==========
DEPRECIATION AND AMORTIZATION
-----------------------------
Total depreciation and amortization
for reportable segments $770,708 $1,213,714 $1,476,334
Depreciation and amortization for
partnership level 33,329 152,608 198,863
Eliminations 30,981 12,291 12,291
----------- ----------- ----------
Total depreciation and amortization $835,018 $1,378,613 $1,687,488
=========== =========== ==========
NET INCOME (LOSS) BEFORE
------------------------
EXTRAORDINARY ITEM
------------------
Net income (loss) before
extraordinary item for reportable
segments $553,032 $(2,331,504) $366,834
Net income (loss) before
extraordinary item for partnership (636,575) 6,822,212 (1,416,751)
Eliminations 4,273 547,773 491,239
----------- ----------- ----------
Total net income (loss) before
extraordinary item $(79,270) $5,038,481 $(558,678)
=========== =========== ===========
EXTRAORDINARY ITEM-EARLY
------------------------
EXTINGUISHMENT OF DEBT
----------------------
Total extraordinary item for
reportable segments $ -- $(597,188) $(49,346)
Extraordinary item for partnership -- (445,250) --
----------- ----------- -------
Total extraordinary item-early
extinguishment of debt $ -- $(1,042,438) $(49,346)
=========== =========== ===========
TOTAL NET INCOME (LOSS) $(79,270) $3,996,043 $(608,024)
=========== =========== ===========
(Continued on next page)
18
<PAGE>
13. Segment Reporting - Continued
-----------------------------
1999 1998 1997
---- ---- ----
LAND, BUILDINGS AND AMENITIES
-----------------------------
Total land, buildings and amenities
for reportable segments $16,749,555 $16,785,450 $27,028,887
Partnership level 258,927 16,407 --
----------- ----------- ------
Total land, buildings and amenities,
net $17,008,482 $16,801,857 $27,028,887
========== =========== ==========
TOTAL EXPENDITURES
------------------
Total expenditures for land,
buildings and amenities for
reportable segments $750,437 $466,535 $431,992
Expenditures for land, buildings and
amenities for partnership level 12,192 16,407 --
----------- ----------- ------
Total expenditures for land,
buildings and amenities $762,629 $482,942 $431,992
=========== =========== ==========
LIABILITIES
-----------
Total liabilities for reportable
segments $4,835,035 $11,923,306 $16,531,605
Liabilities for partnership 7,490,975 (73,669) 5,807,698
----------- ----------- ----------
Total liabilities $12,326,010 $11,849,637 $22,339,303
=========== =========== ==========
</TABLE>
14. Subsequent Events
-----------------
Subsequent to December 31, 1999, ORIG, LLC., an affiliate of the
partnership purchased Interests in the Partnership pursuant to an
Agreement, Bill of Sale and Assignment dated February 7, 2000, by and
among the Affiliate and four investors in the Partnership (the "Purchase
Agreement"). The Affiliate purchased 1,604 Interests in the Partnership
from one of the investors for total consideration of $425,949 or an
average price of $265.55 per Interest. The Affiliate paid these
investors a premium above the purchase price previously offered for
Interests pursuant to prior tender offer because this purchase allowed
the Affiliate to purchase substantial numbers of Interests without
incurring the significant expenses involved with a tender offer and
multiple transfers.
Subsequent to December 31, 1999, NTS-Properties Plus, with the
Lakeshore/University II Joint Venture, serving as guarantor has obtained
a commitment from a bank for an amount not exceeding $2,680,000 to fund
the construction of Lakeshore Business Center Phase III. The funds will
be used by the Lakeshore/University II Joint Venture to construct
Lakeshore Business Center Phase III. The loan bears a variable interest
rate equal to a daily floating LIBOR rate as quoted for 30-day
investments, plus 230 basis points and is secured by 3.8 acres of land
located at the Lakeshore Business Center Development and the
improvements now and hereafter located on the land.
19
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, NTS-Properties V, a Maryland Limited Partnership, 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
------------------------------------
Senior Vice President and
Chief Financial Officer of
NTS Capital Corporation
Date: July 14, 2000
Pursuant to the requirements of the Securities and Exchange Act of 1934, this
Form 10-K has been signed below by the following persons on behalf of the
registrant in their capacities and on the date indicated above.
Signature Title
--------- -----
/s/ J.D. Nichols
----------------------------------- General Partner of NTS-Properties
J. D. Nichols Associates V and Chairman of the
Board and Sole Director of
NTS Capital Corporation
/s/ Brian F. Lavin
----------------------------------- President and Chief Operating Officer
Brian F. Lavin of NTS Capital Corporation
/s/ Gregory A. Wells
----------------------------------- Senior Vice President and
Gregory A. Wells Chief Financial Officer of
NTS Capital Corporation
The Partnership is a limited partnership and no proxy material has been sent to
the limited partners.
20
<PAGE>
