<PAGE>
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 June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to ______________
Commission File Number 0-17589
NTS-PROPERTIES VII, LTD.
(Exact name of registrant as specified in its charter)
Florida 61-1119232
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
10172 Linn Station Road
Louisville, Kentucky 40223
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number,
including area code (502) 426-4800
Not Applicable
-------------------------------------------------------------------------------
Former name, former address and former fiscal year,
if changed since last report
Indicate by check mark whether the registrant (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, and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
Exhibit Index: See page 13
Total Pages: 14
<PAGE>
TABLE OF CONTENTS
Pages
PART I
Item 1. Financial Statements
Balance Sheets and Statement of Partners' Equity
As of June 30, 1996 and December 31, 1995 3
Statements of Operations
For the three months and six months ended
June 30, 1996 and 1995 4
Statements of Cash Flows
For the three months and six months ended
June 30, 1996 and 1995 5
Notes to Financial Statements 6-7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8-12
PART II
1. Legal Proceedings 13
2. Changes in Securities 13
3. Defaults upon Senior Securities 13
4. Submission of Matters to a Vote of Security Holders 13
5. Other Information 13
6. Exhibits and Reports on Form 8-K 13
Signatures 14
-2-
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
NTS-PROPERTIES VII, LTD.
BALANCE SHEETS AND STATEMENT OF PARTNERS' EQUITY
<CAPTION>
As of As of
June 30, 1996 December 31, 1995*
------------- ------------------
ASSETS
<S> <C> <C>
Cash and equivalents $ 248,310 $ 377,212
Cash and equivalents - restricted 120,077 55,014
Investment securities 208,669 103,908
Accounts receivable 13,893 8,098
Land, buildings and amenities, net 11,136,811 11,405,597
Other assets 159,562 159,119
------------- -----------
$ 11,887,322 $12,108,948
============= ===========
LIABILITIES AND PARTNERS' EQUITY
Mortgages payable $ 5,435,439 $ 5,509,479
Accounts payable 91,968 53,878
Distributions payable 62,398 64,471
Security deposits 38,035 33,480
Other liabilities 54,779 3,323
------------- -----------
5,682,619 5,664,631
Partners' equity 6,204,703 6,444,317
------------- -----------
$ 11,887,322 $12,108,948
============= ===========
</TABLE>
<TABLE>
<CAPTION>
Limited General
Partners Partner Total
-------- ------- -----
<S> <C> <C> <C>
PARTNERS' EQUITY
Capital contributions,
net of offering costs $ 10,935,700 $ 100 $ 10,935,800
Net loss - prior years (2,553,698) (25,794) (2,579,492)
Net loss - current year (31,378) (317) (31,695)
Cash distributions
declared to date (2,017,436) (20,378) (2,037,814)
Repurchase of limited
partnership units (82,096) -- (82,096)
------------ ------------ ------------
Balances at June 30, 1996 $ 6,251,092 $ (46,389) $ 6,204,703
============ ============ ============
</TABLE>
* Reference is made to the audited financial statements in the Form 10-K as
filed with the Commission on March 29, 1996.
-3-
<PAGE>
<TABLE>
NTS-PROPERTIES VII, LTD.
STATEMENTS OF OPERATIONS
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
REVENUES:
<S> <C> <C> <C> <C>
Rental income $ 486,778 $ 488,963 $ 993,630 $ 955,251
Interest and other income 4,369 3,885 9,346 7,100
------------- ------------ ----------- -----------
491,147 492,848 1,002,976 962,351
EXPENSES:
Operating expenses 153,380 123,657 242,086 213,188
Operating expenses - affiliated 50,496 60,380 106,637 122,573
Amortization of initial leasing
costs -- 1,932 196 4,440
Interest expense 114,460 117,615 229,529 235,950
Management fees 24,993 25,285 51,138 49,553
Real estate taxes 25,677 26,148 51,455 52,717
Professional and administrative
expenses 13,905 13,452 26,488 27,702
Professional and administrative
expenses - affiliated 21,350 24,838 53,739 49,456
Depreciation and amortization 136,673 135,724 273,403 287,685
------------- ------------ ----------- -----------
540,934 529,031 1,034,671 1,043,264
------------- ------------ ----------- -----------
Net loss $ (49,787) $ (36,183) $ (31,695) $ (80,913)
============= ============= =========== ===========
Net loss allocated to the
limited partners $ (49,289) $ (35,821) $ (31,378) $ (80,104)
============= ============= =========== ===========
Net loss per limited partnership
unit $ (0.08) $ (0.05) $ (0.05) $ (0.12)
============= ============= =========== ===========
Weighted average number of units 621,982 638,265 629,117 638,265
============= ============= =========== ===========
</TABLE>
-4-
<PAGE>
<TABLE>
NTS-PROPERTIES VII, LTD.
STATEMENTS OF CASH FLOWS
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
1996 1995 1996 1995
---- ---- ---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C> <C> <C>
Net loss $ (49,787) $ (36,183) $ (31,695) $ (80,913)
Adjustments to reconcile net loss to
net cash provided by operating
activities:
Accrued interest on investment
securities (1,230) (1,323) 178 (1,323)
Amortization of capitalized leasing
costs -- 1,932 196 4,440
Depreciation and amortization 136,673 135,724 273,403 287,685
Changes in assets and liabilities:
Cash and equivalents - restricted (24,327) (22,028) (47,159) (42,957)
Accounts receivable (150) (433) (5,795) 2,756
Other assets 7,585 8,110 (4,651) (5,944)
Accounts payable 22,809 8,202 38,090 (2,259)
Security deposits 3,025 125 4,555 (852)
Other liabilities 25,678 26,150 51,456 52,298
------------ ---------- ---------- ----------
Net cash provided by operating
activities 120,276 120,276 278,578 212,931
------------ ---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to land, buildings and
amenities (158) (38,660) (603) (68,382)
Purchase of investment securities (207,439) (99,863) (207,439) (99,863)
Maturity of investment securities -- -- 102,500 --
------------ ---------- ---------- ----------
Net cash used in investing
activities (207,597) (138,523) (105,542) (168,245)
------------ ---------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Cash and equivalents - restricted (9,284) -- (17,904) --
Principal payments on mortgages
payable (37,410) (34,387) (74,040) (68,059)
Cash distributions (63,427) (64,471) (127,898) (128,942)
Repurchase of limited partnership
units (40,716) -- (82,096) --
------------ ---------- ---------- ----------
Net cash used in financing
activities (150,837) (98,858) (301,938) (197,001)
------------ ---------- ---------- ----------
Net decrease in cash and equivalents (238,158) (117,105) (128,902) (152,315)
CASH AND EQUIVALENTS, beginning of
period 486,468 480,166 377,212 515,376
------------ ---------- ---------- ----------
CASH AND EQUIVALENTS, end of period $ 248,310 $ 363,061 $ 248,310 $ 363,061
============ ========== ========== ==========
Interest paid on a cash basis $ 114,759 $ 117,781 $ 230,297 $ 236,279
============ ========== ========== ==========
</TABLE>
-5-
<PAGE>
NTS-PROPERTIES VII, LTD.
NOTES TO FINANCIAL STATEMENTS
The financial statements included herein should be read in conjunction with the
Partnership's 1995 Annual Report. In the opinion of the general partner, all
adjustments (only consisting of normal recurring accruals) necessary for a fair
presentation have been made to the accompanying financial statements for the
three months and six months ended June 30, 1996 and 1995.
1. Cash and Equivalents - Restricted
- ------------------------------------
Cash and equivalents - restricted represents funds received for
residential security deposits, funds which have been escrowed with
mortgage companies for property taxes in accordance with the loan
agreements, and funds reserved by the partnership for the repurchase of
limited partnership units.
2. Investment Securities
- ------------------------
Investment securities represent investments in Certificates of Deposit or
securities issued by the U.S. Government and its agencies with initial
maturities of greater than three months. The investments are carried at
cost which approximates market value. The Partnership intends to hold the
securities until maturity. During the six months ended June 30, 1996 and
1995, the Partnership sold no investment securities. The following
provides details regarding the investments held at June 30, 1996:
Amortized Maturity Value At
Type Cost Date Maturity
---- ---- ---- --------
FHLMC Discount Note $ 104,569 08/01/96 $ 105,000
FNMA Discount Note 104,100 09/03/96 105,000
----------- -----------
$ 208,669 $ 210,000
=========== ===========
3. Mortgages Payable
- -----------------------
Mortgages payable consist of the following:
June 30, December 31,
1996 1995
---- ----
Mortgage payable to an insurance company
bearing interest at a fixed rate of
8.375%, due October 5, 2002, secured by
land and buildings $3,113,437 $3,134,609
Mortgage payable to an insurance
company bearing interest at a fixed rate
of 8.375%, due October 5, 2002, secured by
land and buildings 957,981 964,495
Mortgage payable to an insurance
company bearing interest at a fixed rate
of 8.5%, due November 15, 2005, secured by land
and building 1,364,021 1,410,375
---------- ----------
$5,435,439 $5,509,479
========== ==========
Based on the borrowing rates currently available to the Partnership for
mortgages with similar terms and average maturities, the fair value of
long term debt is approximately $7,000,000.
-6-
<PAGE>
4. Interest Repurchase Reserve
- ---------------------------------
As of December 31, 1995, the Partnership had established an Interest
Repurchase Reserve in the amount of $127,653 pursuant to Section 16.4 of
the Partnership's Amended and Restated Agreement of Limited Partnership.
On May 24, 1996, the Partnership elected to fund an additional amount of
$121,270 to its Interest Repurchase Reserve. With these funds, the
Partnership will be able to repurchase up to 62,230 Units at a price of
$4.00 per Unit. As of June 30, 1996, the Partnership had repurchased a
total of 20,524 Units. Repurchased Units are retired by the Partnership,
thus increasing the share of ownership of each remaining investor.
5. New Accounting Pronouncement
- ----------------------------------
In March 1995, the Financial Accounting Standards Board issued Statement
No. 121 (the "Statement") on accounting for the impairment of long-lived
assets, certain identifiable intangibles, and goodwill related to assets
to be held and used. The Statement also establishes accounting standards
for long-lived assets and certain identifiable intangibles to be disposed
of. The Partnership adopted the Statement as of January 1, 1996 as
required. No adjustments were required.
6. Related Party Transactions
- --------------------------------
Property management fees of $51,138 and $49,553 were paid to NTS
Development Company, an affiliate of the general partner, during the six
months ended June 30, 1996 and 1995, respectively. The fee is paid monthly
in an amount equal to 5% of the gross revenues from the residential
properties and 6% of the gross revenues from the commercial property
pursuant to an agreement with the Partnership. Also permitted by the
partnership agreement, NTS Development Company will receive a repair and
maintenance fee equal to 5.9% of costs incurred which relate to capital
improvements. The Partnership has incurred $2,570 as a repair and
maintenance fee during the six months ended June 30, 1995, and has
capitalized this cost as a part of land, buildings and amenities. There
was no similar fee incurred during the six months ended June 30, 1996.
The Partnership was also charged the following amounts from NTS
Development Company for the six months ended June 30, 1996 and 1995. These
charges include items which have been expensed as operating expenses -
affiliated or professional and administrative expenses - affiliated and
items which have been capitalized as other assets or as land, buildings
and amenities.
1996 1995
---- ----
Leasing $ 18,328 $ 30,128
Administrative 66,784 61,856
Property manager 75,192 79,482
Other 72 561
---------- ----------
$ 160,376 $ 172,027
========== ==========
7. Reclassification 1995 Financial Statements
- ------------------------------------------------
Certain reclassifications have been made to the June 30, 1995 financial
statements to conform with the June 30, 1996 classifications. These
reclassifications have no effect on previously reported operations.
-7-
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
- ---------------------
The occupancy levels at the Partnership's properties as of June 30 were as
follows:
1996 1995
---- ----
Wholly-owned Properties
- -----------------------
The Park at the Willows 85% 98%
Park Place Apartments Phase II 89% 89%
Property Owned in Joint Venture with
NTS-Properties IV and NTS-Properties
Plus Ltd. (ownership % at June 30,
1996)
- ------------------------------------
Blankenbaker Business Center 1A (31%) 100% 100%
Rental and other income generated by the Partnership's properties for the three
months and six months ended June 30, 1996 and 1995 was as follows:
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
1996 1995 1996 1995
---- ---- ---- ----
Wholly-owned Properties
- -----------------------
The Park at the Willows $ 74,801 $ 82,702 $ 155,694 $ 156,064
Park Place Apartments
Phase II $ 339,170 $ 333,682 $ 691,823 $ 656,855
Property owned in Joint
Venture with NTS- Properties
IV and NTS-Properties Plus
Ltd. (ownership % at June 30,
1996)
- -----------------------------
Blankenbaker Business Center
1A (31%)(1) $ 73,478 $ 73,478 $ 146,914 $ 144,439
(1) Revenues shown in this table represent the Partnership's share of
revenues generated by Blankenbaker Business Center 1A. The Partnership's
percentage interest in the joint venture was 31% during the three months
and six months
ended June 30, 1996 and 1995.
The Park at the Willows' occupancy decreased from 98% at June 30, 1995 to 85% at
June 30, 1996. Average occupancy for the six month period ended June 30
increased from 91% in 1995 to 93% in 1996. Average occupancy for the three month
period ended June 30 decreased from 98% in 1995 to 89% in 1996. Occupancy at
residential properties fluctuate on a continuous basis. Period ending occupancy
percentages represent occupancy only on a specific date; therefore, it is more
meaningful to look at average occupancy percentages which are more
representative of the entire period's results. In the opinion of the General
Partner of the Partnership, the decrease in second quarter 1996
-8-
<PAGE>
Results of Operations - Continued
- ---------------------------------
occupancy is only a temporary fluctuation and does not represent a downward
occupancy trend. Large changes in occupancy at The Park at the Willows are due
to the fact that the complex has only 48 units. One vacant apartment in this
complex equates to a 2% decrease in occupancy; therefore, occupancy percentage
changes may appear distorted on a percentage basis when compared to other
residential properties. In residential properties, it is not uncommon for
multiple residents to vacate at month-end with new residents taking occupancy
within a few days. When this occurs at The Park at the Willows, the changes in
occupancy will be much greater than at other residential properties because of
its small size. The Park at the Willows rental and other income remained fairly
constant for the six months ended June 30, 1996 as compared to the six months
ended June 30, 1995. The decrease in rental and other income at The Park at the
Willows for the three months ended June 30, 1996 as compared to the same period
in 1995 was due to the 9% decrease in average occupancy.
Park Place Apartments Phase II's occupancy was 89% at June 30, 1995 and 1996.
Average occupancy for the three months and six months ended June 30 increased
from 89% in 1995 to 92% in 1996. Rental and other income at Park Place
Apartments Phase II increased for the three months and six months ended June 30,
1996 as compared to the same periods in 1995 as a result of the increase in
average occupancy, increased rental rates and increased income from fully
furnished units as a result of an increased number of fully furnished units
being leased. Fully furnished units are apartments which rent at an additional
premium above base rent.
A wholly-owned subsidiary of The Prudential Insurance Company of America
(Prudential Service Bureau, Inc.) has leased 100% of Blankenbaker Business
Center 1A through July 2005. In addition to monthly rent payments, Prudential
Service Bureau, Inc. is obligated to pay substantially all of the operating
expenses attributable to its space. Blankenbaker Business Center 1A's rental and
other income remained fairly constant for the three months and six months ended
June 30, 1996 as compared to the three months and six months ended June 30,
1995.
If present trends continue, the Partnership will be able to continue at its
current level of operations without the need of any additional financing.
Current occupancy levels are considered adequate to continue the operation of
the Partnership's properties. See the Liquidity and Capital Resources section of
Item 2 for a discussion regarding the cash requirements of the Partnership's
current debt financings.
Interest and other income includes interest income from investments made by the
Partnership with cash reserves. The increase in interest income for the three
months and six months ended June 30, 1996 as compared to the same periods in
1995 is a result of increased cash reserves being available for investment.
Operating expenses increased for the three months and six months ended June 30,
1996 as compared to the same periods in 1995 as a result of increased
replacement costs (carpet and wallcovering), increased exterior building repair
costs and increased utility costs at Park Place Apartments Phase II. Operating
expenses at Blankenbaker Business Center 1A and The Park at the Willows remained
fairly constant for the three months and six months ended June 30, 1996 as
compared to the same periods in 1995.
Operating expenses - affiliated decreased for the three months and six months
ended June 30, 1996 as compared to the same periods in 1995 as a result of
decreased leasing costs at Blankenbaker Business Center 1A. Operating expenses
affiliated remained fairly constant at the Partnership's residential properties
for both the three month and six month periods. Operating expenses - affiliated
are expenses incurred for services performed by employees of NTS Development
Company, an affiliate of the General Partner.
-9-
<PAGE>
Results of Operations - Continued
- ---------------------------------
Amortization of capitalized leasing costs represents the amortization of various
costs which were capitalized during the initial leasing and start-up period of
Park Place Apartments Phase II. The amortization of capitalized leasing costs
has decreased for the three months and six months ended June 30, 1996 as
compared to the same periods in 1995 as a result of the costs capitalized during
start-up having become fully amortized during the first quarter of 1996.
The decrease in interest expense for the three months and six months ended June
30, 1996 as compared to the same periods in 1995 is the result of the
Partnership's decreasing debt level as a result of principal payments made. See
the Liquidity and Capital Resources section of this item for details regarding
the Partnership's debt.
Management fees are calculated as a percentage of cash collections, however;
revenue for reporting purposes is on the accrual basis. As a result, the
fluctuations of revenues between periods will differ from the fluctuations of
management fee expense.
Real estate taxes and professional and administrative expenses have remained
fairly constant for the three months and six months ended June 30, 1996 as
compared to the three months and six months ended June 30, 1995.
The change in professional and administrative expenses - affiliated for the
three months and six months ended June 30, 1996 as compared to the same periods
in 1995 was not significant. Professional and administrative expenses -
affiliated are expenses incurred for services performed by employees of NTS
Development Company, an affiliate of the General Partner.
Depreciation and amortization decreased for the six months ended June 30, 1996
as compared to the six months ended June 30, 1995 as a result of a portion of
the original tenant improvements at Blankenbaker Business Center 1A becoming
fully depreciated. Depreciation and amortization have remained fairly constant
for the three months ended June 30, 1996 as compared to the three months ended
June 30, 1995. Depreciation is computed using the straight-line method over the
estimated useful lives of the assets which are 10 - 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 $13,800,000.
Liquidity and Capital Resources
- -------------------------------
Cash provided by operations was $278,578 and $212,931 for the six months ended
June 30, 1996 and 1995, respectively. These funds in conjunction with cash on
hand were used to make a 2% (annualized) cash distribution of $125,825 and
$128,942 for the six months ended June 30, 1996 and 1995, respectively. The
annualized distribution rate is calculated as a percent of the original capital
contribution. The limited partners received 99% and the general partner received
1% of these distributions. The primary source of future liquidity and
distributions is expected to be derived from cash generated by the Partnership's
properties after adequate cash reserves are established for future leasing and
tenant finish costs. Cash reserves (which are unrestricted cash and equivalents
and investment securities as shown on the Partnership's balance sheet as of June
30) were $456,979 and $464,247 at June 30, 1996 and 1995, respectively.
As of June 30, 1996, the Partnership had two mortgage loans each with an
insurance company in the amount of $3,113,437 and $957,981. Both mortgages
currently bear a fixed interest rate of 8.375%, are secured by a first mortgage
on Park Place Apartments Phase II and are due October 5, 2002. Current monthly
principal payments on both mortgages are based upon a 27-year amortization
schedule. The outstanding principal balance at maturity based on the current
rate of amortization would be $3,607,560 ($2,758,723 and $848,837).
-10-
<PAGE>
Liquidity and Capital Resources - Continued
- -------------------------------------------
As of June 30, 1996, Blankenbaker Business Center 1A, a joint venture between
the Partnership, NTS-Properties IV and NTS-Properties Plus Ltd., affiliates of
the General Partner of the Partnership, had a mortgage payable with an insurance
company in the amount of $4,352,334. The mortgage is recorded as a liability of
the Joint Venture and is secured by the assets of the Joint Venture. The
Partnership's proportionate interest in the mortgage at June 30, 1996 is
$1,364,021. The mortgage bears interest at a fixed rate of 8.5% and is due
November 15, 2005. Current monthly principal payments are based upon an 11-year
amortization schedule. At maturity, the mortgage will have been repaid based on
the current rate of amortization.
As of December 31, 1995, the Partnership had established an Interest Repurchase
Reserve in the amount of $127,653 pursuant to Section 16.4 of the Partnership's
Amended and Restated Agreement of Limited Partnership. On May 24, 1996, the
Partnership elected to fund an additional amount of $121,270 to its Interest
Repurchase Reserve. With these funds, the Partnership will be able to repurchase
up to 62,230 Units at a price of $4.00 per Unit. As of June 30, 1996, the
Partnership had repurchased a total of 20,524 Units. Repurchased Units are
retired by the Partnership, thus increasing the share of ownership of each
remaining investor. The Interest Repurchase Reserve was funded from cash
reserves.
The majority of the Partnership's cash flow is derived from operating
activities. Cash flows used in investing activities are for capital improvements
at the Partnership's properties. These improvements are funded by cash flow from
operations. Cash flows used in investing activities are also for the purchase of
investment securities. Cash flows provided by investing activities are derived
from the maturity of investment securities. As part of its cash management
activities, the Partnership has purchased Certificates of Deposit or securities
issued by the U. S. Government with initial maturities of greater than three
months to improve the return on its cash reserves. The Partnership held the
securities until maturity. Cash flows used in financing activities are for cash
distributions, principal payments on mortgages payable and repurchases of
limited partnership Units. Cash flows used in financing activities also include
cash which has been reserved by the Partnership for the repurchase of limited
partnership Units. The Partnership does not expect any material changes in the
mix and relative cost of capital resources from those in 1995.
The primary source of future liquidity and distributions is expected to be
derived from cash generated by the Partnership's operating properties after
adequate cash reserves are established for future leasing, renovations and
tenant finish costs. It is anticipated that the cash flow from operations and
cash reserves will be sufficient to meet the needs of the Partnership. The
Partnership had no material commitments for renovations or capital improvements
at June 30, 1996.
The table below presents that portion of the distributions that represent a
return of capital on a Generally Accepted Accounting Principle basis for the six
months ended June 30, 1996 and 1995.
Cash
Net Loss Distributions Return of
Allocated Declared Capital
--------- -------- -------
Limited Partners:
1996 $ (31,378) $ 124,566 $ 124,566
1995 (80,104) 127,652 127,652
General Partner:
1996 $ (317) $ 1,258 $ 1,258
1995 (809) 1,290 1,290
-11-
<PAGE>
Liquidity and Capital Resources - Continued
- -------------------------------------------
In an effort to continue to improve occupancy at the Partnership's residential
properties, the Partnership has an on-site leasing staff, employees of NTS
Development Company, at each of the apartment communities. The staff handles all
on-site visits from potential tenants, coordinates local advertising with NTS
Development Company's marketing staff, makes visits to local companies to
promote fully furnished units and works with current residents on lease
renewals.
The lease at Blankenbaker Business Center 1A provides for the tenant to
contribute toward the payment of common area expenses, insurance and real estate
taxes. This lease provision, 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.
-12-
<PAGE>
PART II. OTHER INFORMATION
1. Legal Proceedings
None
2. Changes in Securities
None
3. Defaults upon Senior Securities
None
4. Submission of Matters to a Vote of Security Holders
None
5. Other Information
None
6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27. Financial Data Schedule
(b) Reports on Form 8-K
Form 8-K, dated May 24, 1996 was filed to report in Item 5 that
the Partnership has elected to fund an additional amount of
$121,270 to its Interest Repurchase Reserve.
-13-
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
NTS-PROPERTIES VII, LTD.
(Registrant)
BY: NTS-Properties Associates VII
BY: NTS Capital Corporation,
General Partner
/s/John W. Hampton
John W. Hampton
Senior Vice President
Date: August 13 , 1996
-14-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE SHEET AS OF JUNE 30, 1996 AND FROM THE STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 368,387
<SECURITIES> 208,669
<RECEIVABLES> 13,893
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 11,136,811
<DEPRECIATION> 0<F2>
<TOTAL-ASSETS> 11,887,322
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 5,435,439
0
0
<COMMON> 0
<OTHER-SE> 6,204,703
<TOTAL-LIABILITY-AND-EQUITY> 11,887,322
<SALES> 993,630
<TOTAL-REVENUES> 1,002,976
<CGS> 0
<TOTAL-COSTS> 724,915
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 229,529
<INCOME-PRETAX> (31,695)
<INCOME-TAX> 0
<INCOME-CONTINUING> (31,695)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (31,695)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>THE PARTNERSHIP HAS AN UNCLASSIFIED BALANCE SHEET; THEREFORE, THE VALUE IS $0.
<F2>THIS INFORMATION IS NOT DISCLOSED IN THE PARTNERSHIP'S FORM 10-Q FILING.
</FN>
</TABLE>
