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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For Quarter Ended March 31, 2001
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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: 0-18444
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YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
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(Exact name of registrant as specified in its charter)
North Carolina 56-1560476
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(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
1300 Altura Road Fort Mill, South Carolina 29708
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(Address of principal executive office) (Zip code)
(803) 547-9100
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(Registrant's telephone number, including area code)
(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 (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 [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PAST FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
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PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
CONDENSED BALANCE SHEETS
March 31, December 31,
2001 2000
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ASSETS (Unaudited) (Note)
CURRENT ASSETS
Cash and cash equivalents $ 43,446 $ 72,209
Accounts receivable, tenant 46,189 54,159
Prepaid expenses 1,537 --
Securities available for sale 63,828 59,113
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Total current assets 155,000 185,481
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INVESTMENTS AND NONCURRENT RECEIVABLES
Properties on operating leases and properties held
for lease, net of accumulated depreciation
2001 $705,480; 2000 $705,480 2,295,107 2,287,569
OTHER ASSETS
Deferred charges, net of accumulated amortization
2001 $12,190; 2000 $12,190 2,810 2,810
Deferred leasing commissions, net of accumulated
amortization 2001 $19,265; 2000 $19,265 33,122 33,122
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$ 2,486,039 $ 2,508,982
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LIABILITIES AND PARTNERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 60,000 $ 60,000
Accounts payable 5,889 5,994
Accrued expenses 24,049 53,902
Deferred revenue 2,179 --
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Total current liabilities 92,117 119,896
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LONG-TERM DEBT, less current maturities 1,437,000 1,452,000
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COMMITMENT AND CONTINGENCY (Note 4)
PARTNERS' EQUITY
General partners (13,676) (13,840)
Limited partners 973,786 957,563
Unrealized gain on investment securities (3,188) (6,637)
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956,922 937,086
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$ 2,486,039 $ 2,508,982
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Note: The Condensed Balance Sheet at December 31, 2000 has been taken from
the audited financial statements at that date. See Notes to Condensed
Financial Statements.
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YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF OPERATIONS
Three Months Ended
March 31,
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2001 2000
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(Unaudited) (Unaudited)
Rental income $ 143,671 $ 136,366
Operating expenses:
Wages and contract labor 1,500 1,500
Depreciation and amortization -- --
Repairs and maintenance 38,509 30,019
Management fees 4,284 4,148
Utilities 22,132 23,102
Professional fees 19,566 17,766
Property taxes 9,621 9,621
Miscellaneous 922 935
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96,534 87,091
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Operating income 47,137 49,275
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Nonoperating income (expense):
Interest and dividend income 1,947 2,259
Interest expense (32,697) (34,832)
Other -- (906)
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(30,750) (33,479)
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Net income $ 16,387 $ 15,796
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Net income per limited
partnership unit $ 2.56 $ 2.47
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See Notes to Condensed Financial Statements.
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YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF CASH FLOWS
Three Months Ended
March 31,
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2001 2000
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(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 16,387 $ 15,796
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization -- --
Loss on sale of securities available for sale -- 906
Change in assets and liabilities:
(Increase) Decrease in prepaids, deferrals and 6,433 (950)
other receivables
Increase (Decrease) in accounts payable and accrued expenses (27,779) (4,522)
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Net cash provided by (used in) operating activities (4,959) 11,230
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CASH FLOWS FROM INVESTING ACTIVITIES
Sale of securities available for sale -- 36,094
Purchase of securities available for sale (1,266) (625)
Improvements in investment property (7,538) --
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Net cash provided by (used in) investing activities (8,804) 35,469
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on long-term borrowings (15,000) (24,000)
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Net cash (used in) financing activities (15,000) (24,000)
Net increase (decrease) in cash and cash equivalents (28,763) 22,699
Cash and cash equivalents:
Beginning 72,209 11,928
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Ending $ 43,446 $ 34,627
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See Notes to Condensed Financial Statements.
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YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. Nature of Business:
The Partnership was formed in July 1986 to acquire, operate, hold for
investment and sell real estate. The Partnership currently owns the
EastPark Executive Center in Charlotte, North Carolina. On April 24, 1998,
the Partnership sold its only other real property holding, the BB&T
building facilities (formerly the UCB building) located in Greenville,
South Carolina.
2. Opinion of Management:
In the opinion of management, the accompanying unaudited condensed
financial statements contain all adjustments (all of which were normal
recurring accruals) necessary for a fair presentation. The results of
operations for the interim periods are not necessarily indicative of the
results which may be expected for an entire year.
3. Statement of Cash Flows:
For purposes of reporting the statements of cash flows, the Limited
Partnership includes all cash accounts, which are not subject to
withdrawal restrictions or penalties, and all highly liquid debt
instruments purchased with a maturity of three months or less as cash and
cash equivalents on the accompanying condensed balance sheets.
4. Priority Return:
At December 31, 2000, the cumulative unpaid priority return to the unit
holders was $2,895,185 compared to $2,652,401 one year prior. This
increase resulted from no distributions being made to partners during the
year. Based on the current and projected commercial real estate market
conditions, the General Partners believe that it is reasonably unlikely
that a sale of the remaining Partnership property would produce net sale
proceeds sufficient to pay any of such priority return. Furthermore, the
General Partners believe that it is reasonably unlikely that the
Partnership's operating income or any refinancing of Partnership debt
would generate sufficient funds to pay any portion of the priority return.
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YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Changes in Financial Condition
There have not been any significant changes in financial condition from December
31, 2000 to March 31, 2001. Accrued expenses, as well as cash and cash
equivalents, have decreased from year end due to the payment of the 2000 real
property taxes in January 2001 of approximately $37,000. The Partnership
continues to accrue for the 2001 real property taxes to be paid in January 2002;
therefore accrued expenses will continue to increase each quarter of 2002.
Liquidity and Capital Resources
During the quarter ended March 31, 2001, the Partnership operations continued to
meet working capital requirements, although the working capital was decreased by
approximately $2,700 from December 31, 2000. Working capital as of March 31,
2001 was $62,883.
Results of Operations
Operations for the three months ended March 31, 2001 are comparable to the same
period of the prior year. Rental income is up approximately 5% due to escalation
increases for the current tenants and increased occupancy. The major tenant, the
General Services Administration ("GSA"), began leasing an additional 2,200
square feet on February 1, 2001. Operating expenses are up approximately $9,000
as compared to the same period of the prior year, generally due to the increase
in repairs and maintenance and professional fees. Interest expense is down by
approximately $2,000.
Status of EastPark Executive Center
The General Partners continue to focus on selling the EastPark facility and
continue to have it listed with a commercial real estate broker. As previously
reported, the General Partners entered into two separate sales contracts for
such facility during 1999. Both of these contracts were terminated by the
prospective buyers under their respective terms of such contracts after due
diligence by the buyers. At this time, the facility is not under contract with
any potential buyers. The General Partners are also working towards extending
the leases with the current tenants. Although the facility is 93% leased, all
current tenants have the option to terminate their leases within the next 2
years. The GSA, which has the election to terminate its lease in October 2002
and accounts for 86% of the total rental income, will be the main focus of such
efforts. The General Partners will continue to search for the best offer for the
property and manage it at acceptable standards until such time it can sell the
property to a qualified buyer.
Forward-Looking Statements
This report contains certain forward-looking statements with respect to the
financial condition, results of operations, plans, objectives, future
performance and business of the Partnership. These forward-looking statements
involve certain risks and uncertainties. Actual results may differ materially
from those contemplated by such forward-looking statements.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Partnership is not engaged in any legal
proceedings of a material nature at the present time.
Item 6. Exhibit Index
(a) Exhibits:
Designation
Number Under
Exhibit Item 601 of
Number Regulation S-K Exhibit Description
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1* 4 Instrument defining rights of security holders - set
forth in the Limited Partnership Agreement
2* 10 Limited Partnership Agreement
3** 10.1 Exclusive Leasing and Management Agreement dated
October 1, 1994 (EastPark Executive Center)
4*** 10.2 Listing Agreement of Property For Lease and/or Sale
(EastPark Executive Center)
(b) Reports on Form 8-K:
No reports on Form 8-K have been filed during the
three months ended March 31, 2001.
* Incorporated by reference to Exhibit A of the Partnership's Prospectus dated
December 1, 1987, Registration Number 33-07056-A.
** Incorporated by reference to Exhibit 3 of the Partnership's Form 10-K for the
year ended December 31, 1995.
*** Incorporated by reference to Exhibit 4 of the Partnership's Form 10-Q for
the quarter ended December 31, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
YAGER/KUESTER PUBLIC FUND
LIMITED PARTNERSHIP
(Registrant)
By: DRY Limited Partnership,
General Partner of Registrant
Date 05/11/01 By: /s/ Dexter R. Yager, Sr.
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Dexter R. Yager, Sr.
General Partner
Date 05/11/01 By: /s/ Thomas K.Emery
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Thomas K. Emery
Chief Financial Officer
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