UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark one)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
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 (l) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days.
YES X NO
Exhibit Index: See page 13
Total Pages: 14
<PAGE>
TABLE OF CONTENTS
Pages
PART I
Item 1. Financial Statements
Balance Sheets and Statement of Partners' Equity
as of March 31, 1998 and December 31, 1997 3
Statements of Operations
For the three months ended March 31, 1998 and 1997 4
Statements of Cash Flows
For the three months ended March 31, 1998 and 1997 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>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
NTS-PROPERTIES VII, LTD.
BALANCE SHEETS AND STATEMENT OF PARTNERS' EQUITY
<CAPTION>
As of As of
March 31, 1998 December 31, 1997*
-------------- ------------------
ASSETS
<S> <C> <C>
Cash and equivalents $ 409,240 $ 164,714
Cash and equivalents - restricted 153,032 176,636
Investment securities 100,388 338,129
Accounts receivable 1,299 858
Land, buildings and amenities, net 10,269,042 10,361,786
Other assets 150,355 137,022
----------- -----------
$11,083,356 $11,179,145
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Mortgages payable $ 5,250,594 $ 5,303,947
Accounts payable 40,978 38,815
Distributions payable 58,524 60,426
Security deposits 32,550 36,325
Other liabilities 32,564 6,787
----------- -----------
5,415,210 5,446,300
Partners' equity 5,668,146 5,732,845
----------- -----------
$11,083,356 $11,179,145
=========== ===========
</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 income (loss) - prior years (2,615,475) (26,418) (2,641,893)
Net income - current year 18,804 190 18,994
Cash distributions declared to
date (2,434,803) (24,594) (2,459,397)
Repurchase of limited
partnership Units (185,358) -- (185,358)
------------ ------------ ------------
Balances at March 31, 1998 $ 5,718,868 $ (50,722) $ 5,668,146
============ ============ ============
</TABLE>
* Reference is made to the audited financial statements in the Form 10-K as
filed with the Commission on March 30, 1998.
- 3 -
<PAGE>
<TABLE>
NTS-PROPERTIES VII, LTD.
STATEMENTS OF OPERATIONS
<CAPTION>
Three Months Ended
March 31,
------------------
1998 1997
--------- ---------
<S> <C> <C>
Revenues:
Rental income $ 462,189 $ 484,230
Interest and other income 6,784 3,953
--------- ---------
468,973 488,183
Expenses:
Operating expenses 84,127 112,037
Operating expenses - affiliated 61,274 61,558
Interest expense 98,878 111,902
Management fees 24,200 25,051
Real estate taxes 25,778 24,894
Professional and administrative expenses 11,536 13,835
Professional and administrative expenses
- affiliated 22,282 20,314
Depreciation and amortization 121,904 129,148
--------- ---------
449,979 498,739
--------- ---------
Net income (loss) $ 18,994 $ (10,556)
========= =========
Net income (loss) allocated to the limited
partners $ 18,804 $ (10,450)
========= =========
Net income (loss) per limited partnership
unit $ .03 $ (.02)
========= =========
Weighted average number of limited
partnership units 596,493 599,466
========= =========
</TABLE>
- 4 -
<PAGE>
<TABLE>
NTS-PROPERTIES VII, LTD.
STATEMENTS OF CASH FLOWS
<CAPTION>
Three Months Ended
March 31,
------------------
1998 1997
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 18,994 $ (10,556)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Accrued interest on investment securities 1,349 --
Depreciation and amortization 121,904 129,148
Changes in assets and liabilities:
Cash and equivalents - restricted (1,566) (22,215)
Accounts receivable (441) 3,157
Other assets (9,848) (17,377)
Accounts payable 2,163 336
Security deposits (3,775) 815
Other liabilities 25,777 24,894
--------- ---------
Net cash provided by operating activities 154,557 108,202
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to land, buildings and amenities (27,472) (1,880)
Purchase of investment securities (300,000) --
Maturity of investment securities 536,392 --
--------- ---------
Net cash provided by (used in) investing
activities 208,920 (1,880)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Cash and equivalents - restricted 25,170 8,648
Principal payments on mortgages payable (53,353) (39,850)
Cash distributions (60,426) (60,645)
Repurchase of limited partnership Units (25,170) (8,648)
Addition to loan costs (5,172) --
--------- ---------
Net cash used in financing activities (118,951) (100,495)
--------- ---------
Net increase in cash and equivalents 244,526 5,827
CASH AND EQUIVALENTS, beginning of period 164,714 278,620
--------- ---------
CASH AND EQUIVALENTS, end of period $ 409,240 $ 284,447
========= =========
Interest paid on a cash basis $ 99,789 $ 112,320
========= =========
</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 1997 Annual Report. In the opinion of the General Partner, all
adjustments (only consisting of normal recurring accruals) necessary for a fair
presentation have been made to the accompanying financial statements for the
three months ended March 31, 1998 and 1997.
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 with initial maturities of greater
than three months. The Partnership intends to hold the securities until
maturity. During the three months ended March 31, 1998 and 1997, the
Partnership sold no investment securities.
The following provides details regarding the investments held at March 31,
1998:
Amortized Maturity Value at
Type Cost Date Maturity
------ ---------- -------- ---------
Certificate of Deposit $ 100,388 06/15/98 $ 101,467
========== =========
The following provides details regarding the investments held at December
31, 1997:
Amortized Maturity Value at
Type Cost Date Maturity
------ ------ -------- ---------
Certificate of Deposit $ 112,348 02/04/98 $ 112,908
Certificate of Deposit 100,543 03/05/98 101,492
Certificate of Deposit 125,238 03/30/98 127,336
---------- ---------
$ 338,129 $ 341,736
========== =========
- 6 -
<PAGE>
3. Mortgages Payable
-----------------
Mortgages payable consist of the following:
March 31, December 31,
1998 1997
---- ----
Mortgage payable to an insurance
company, bearing interest at a fixed
rate of 7.37%, due October 15, 2012,
secured by land and buildings $ 4,065,180 $ 4,091,369
Mortgage payable to an insurance
company, bearing interest at a fixed
rate of 8.5%, due November 15, 2005,
secured by land and building 1,185,414 1,212,578
---------- ----------
$ 5,250,594 $ 5,303,947
========== ==========
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 $6,200,000.
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. Through March 1998, the Partnership has funded a total
amount of $287,841 to the Reserve. As of March 31, 1998 the Partnership has
repurchased a total of 44,242 Units for $185,358. Repurchased Units will be
retired by the Partnership, thus increasing the share of ownership of each
remaining investor. The Interest Repurchase Reserve was funded from cash
reserves. The amount remaining in the Interest Repurchase Reserve at March
31, 1998 was $102,483. With these remaining funds, the Partnership will be
able to repurchase 17,080 Units at a price of $6.00 per Unit. The above
offering price per Unit was established by the General Partner in its sole
discretion and does not purport to represent the fair market or liquidation
value of the Unit.
5. Related Party Transactions
--------------------------
Property management fees of $24,200 and $25,051 were paid to NTS
Development Company, an affiliate of the General Partner, during the three
months ended March 31, 1998 and 1997, 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. The Partnership also was
charged the following amounts from NTS Development Company for the three
months ended March 31, 1998 and 1997. 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.
1998 1997
-------- --------
Leasing $ 7,989 $ 11,328
Administrative 28,213 27,049
Property manager 47,325 43,408
Other 28 88
-------- --------
$ 83,555 $ 81,873
======== ========
- 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 March 31 were as
follows:
1998 1997
---- ----
Wholly-owned Properties
- -----------------------
The Park at the Willows 96% 79%
Park Place Apartments Phase II 80% 88%
Property Owned in Joint Venture with
NTS-Properties IV and NTS-Properties
Plus Ltd. (Ownership % at March 31,
1998)
- ------------------------------------
Blankenbaker Business Center 1A (31%) 100% 100%
Rental and other income generated by the Partnership's properties for the three
months ended March 31, 1998 and 1997 was as follows:
1998 1997
--------- ---------
Wholly-owned Properties
- -----------------------
The Park at the Willows $ 85,033 $ 75,050
Park Place Apartments Phase II $ 303,579 $ 336,458
Property owned in Joint Venture with
NTS-Properties IV and NTS-Properties
Plus Ltd. (Ownership % at March 31,
1998)
- ------------------------------------
Blankenbaker Business Center 1A (31%)(1) $ 74,436 $ 73,478
(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
ended March 31, 1998 and 1997.
The Park at the Willows' occupancy increased from 79% at March 31, 1997 to 96%
at March 31, 1998. Average occupancy for the three month period ended March 31
increased from 85% in 1997 to 92% in 1998. 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. 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 change in
occupancy will be much greater than at other residential properties because of
its small size. The increase in rental and other income at The Park at the
Willows for the three months ended March 31, 1998 as compared to the same period
in 1997 is due to the increase in average occupancy and an increase in income
from fully furnished units. Fully furnished units are apartments which rent at
an additional premium above base rent.
- 8 -
<PAGE>
Results of Operations - Continued
- ---------------------------------
Park Place Apartments Phase II's occupancy decreased from 88% at March 31, 1997
to 80% at March 31, 1998. Average occupancy for the three month period ended
March 31 at Park Place Apartments Phase II decreased from 88% in 1997 to 84% in
1998. In the opinion of the General Partner of the Partnership, the decrease in
occupancy at Park Place Apartments Phase II is only a temporary fluctuation and
does not represent a downward occupancy trend. Rental and other income at Park
Place Apartments Phase II decreased for the three months ended March 31, 1998 as
compared to the same period in 1997 as a result of the decrease in average
occupancy.
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 ended March 31, 1998
as compared to the three months ended March 31, 1997.
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 short-term investments
made by the Partnership with cash reserves. The increase in interest income for
the three months ended March 31, 1998 as compared to the same period in 1997 is
a result of increased cash reserves being available for investment.
Operating expenses decreased for the three months ended March 31, 1998 as
compared to the same period in 1997 as a result of decreased interior painting,
roof repair and replacement (carpet and wallcovering) costs at Park Place
Apartments Phase II. Operating expenses at The Park at the Willows and
Blankenbaker Business Center 1A remained fairly constant for the three month
period.
Operating expenses - affiliated remained fairly constant for the three months
ended March 31, 1998 as compared to the same period in 1997. Operating expenses
- - affiliated are expenses incurred for services performed by employees of NTS
Development Company, an affiliate of the General Partner.
The decrease in interest expense for the three months ended March 31, 1998 as
compared to the same period in 1997 is the result of a lower interest rate on
the new debt obligation obtained October 1997 (7.37% versus 8.375%) and a 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, professional and administrative expenses and professional and
administrative expenses - affiliated have remained fairly constant for the three
months ended March 31, 1998 as compared to the three months ended March 31,
1997. Professional and administrative 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
- ---------------------------------
Depreciation and amortization decreased for the three months ended March 31,
1998 as compared to the three months ended March 31, 1997 as a result of a
portion of the assets with shorter lives at Park Place Apartments Phase II
becoming fully depreciated. 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 $12,200,000.
Liquidity and Capital Resources
- -------------------------------
Cash provided by operations was $154,557 and $108,202 for the three months ended
March 31, 1998 and 1997, respectively. These funds in conjunction with cash on
hand were used to pay a 2% (annualized) cash distribution of $58,524 (1998) and
a 2% (annualized) cash distribution of $60,427 (1997). 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
March 31) were $509,628 and $284,447 at March 31, 1998 and 1997, respectively.
As of March 31, 1998, the Partnership had a mortgage payable with an insurance
company in the amount of $4,065,180. The mortgage bears interest at a fixed rate
of 7.37% and matures October 15, 2012 and is secured by the land, buildings and
amenities of Park Place Apartments Phase II. Current monthly payments are based
upon a 19-year amortization. The outstanding principal balance at maturity based
on the current rate of amortization will be $1,414,978.
As of March 31, 1998, Blankenbaker Business Center Joint Venture, in which the
Partnership has a joint venture interest, had a mortgage payable with an
insurance company in the amount of $3,782,431. 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 March 31,
1998 is $1,185,414. 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.
Pursuant to Section 16.4 of the Partnership's Amended and Restated Agreement of
Limited Partnership, the Partnership has established an Interest Repurchase
Reserve. Through March 1998, the Partnership has funded a total amount of
$287,841 to the Reserve. As of March 31, 1998, the Partnership has repurchased a
total of 44,242 Units for $185,358. Repurchased Units will be retired by the
Partnership, thus increasing the share of ownership of each remaining investor.
The Interest Repurchase Reserve was funded from cash reserves. The amount
remaining in the Interest Repurchase Reserve at March 31, 1998 was $102,483.
With these remaining funds, the Partnership will be able to repurchase 17,080
Units at a price of $6.00 per Unit. The above offering price per Unit was
established by the General Partner in its sole discretion and does not purport
to represent the fair market or liquidation value of the Unit.
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. 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
its return on its cash reserves. The
- 10 -
<PAGE>
Liquidity and Capital Resources - Continued
- -------------------------------------------
Partnership held the securities until maturity. Cash flows provided by investing
activities are a result of the maturity of these investment securities. Cash
flows used in financing activities are for cash distributions, principal
payments on mortgages payable and repurchases of limited partnership Units. Cash
flows provided by financing activities represents the utilization of 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 1997.
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 March 31, 1998.
The Partnership has conducted a comprehensive review of its computer systems to
identify the systems that could be affected by the Year 2000 Issue and is
developing an implementation plan to resolve the issue. The Year 2000 Issue, a
worldwide problem, is the result of computer programs being written using two
digits rather than four to define the applicable year. Any of the Partnership's
programs that have time-sensitive software may recognize a date using "00" as
the year 1900 rather than the year 2000. This could result in major systems
failures or miscalculations. The Partnership presently believes that, with
modifications to existing software and conversions to new software, the Year
2000 problem will not pose significant operational problems for the
Partnership's computer systems. The Partnership continues to evaluate
appropriate courses of corrective action, including replacement of certain
systems whose associated costs would be recorded as assets and amortized. The
Partnership does not expect the costs associated with the resolution of the Year
2000 Issue to have a material effect on its financial position or results of
operations. The associated costs will be funded by cash flow from operations or
cash reserves. The amount expensed in 1998 was immaterial.
The table below presents that portion of the distributions that represent a
return of capital on a Generally Accepted Accounting Principle basis for the
three months ended March 31, 1998 and 1997.
Net Income Cash
(Loss) Distributions Return of
Allocated Declared Capital
--------- -------- -------
Limited Partners:
1998 $ 18,804 $ 57,939 $ 39,135
1997 (10,450) 59,823 59,823
General Partner:
1998 $ 190 $ 585 $ 395
1997 (106) 604 604
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.
- 11 -
<PAGE>
Liquidity and Capital Resources - Continued
- -------------------------------------------
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.
Some of the statements included in Item 2, Management's Discussion and Analysis
of Financial Condition and Results of Operations, 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 result 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 Management's Discussion and Analysis
of Financial Condition and Results of Operations, or elsewhere in this report,
which reflect management's best judgement 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 a
commercial business center and apartment complexes. If Prudential, the tenant
that occupies 100% of the business center, or a large number of apartment
lessees default on their lease, 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.
- 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:
There were no reports on Form 8-K for the three months ended March
31, 1998.
- 13 -
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, NTS-Properties VII, Ltd. 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,
General Partner
By: NTS Capital Corporation,
General Partner
/s/ John W. Hampton
-------------------
John W. Hampton
Senior Vice President
Date: May 14, 1998
------------
- 14 -
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AS OF MARCH 31, 1998 AND FROM THE STATEMENT OF OPERATIONS FOR THE QUARTER
ENDED MARCH 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 562,272
<SECURITIES> 100,388
<RECEIVABLES> 1,299
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 10,269,042
<DEPRECIATION> 0<F2>
<TOTAL-ASSETS> 11,083,356
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5,668,145
<TOTAL-LIABILITY-AND-EQUITY> 11,083,356
<SALES> 462,189
<TOTAL-REVENUES> 468,973
<CGS> 0
<TOTAL-COSTS> 351,101
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 98,878
<INCOME-PRETAX> 18,994
<INCOME-TAX> 0
<INCOME-CONTINUING> 18,994
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 18,994
<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>
