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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 June 30, 2000
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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 (I.R.S. Employer Identification Number)
of 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
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
----------- ----------
(Unaudited) (Note)
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 57,262 $ 11,928
Accounts receivable, tenant 39,016 38,530
Prepaid expenses 1,083 --
Securities available for sale 62,183 116,065
---------- ----------
Total current assets 159,544 166,523
---------- ----------
INVESTMENTS AND NONCURRENT RECEIVABLES
Properties on operating leases and properties held
for lease, net of accumulated depreciation
2000 $705,480; 1999 $705,480 2,287,569 2,287,569
OTHER ASSETS
Deferred charges, net of accumulated amortization
2000 $12,190; 1999 $12,190 4,308 2,810
Deferred leasing commissions, net of accumulated
amortization 2000 $19,265; 1999 $19,265 33,122 33,122
---------- ----------
$2,484,543 $2,490,024
========== ==========
LIABILITIES AND PARTNERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 60,000 $1,585,000
Accounts payable 2,408 10,206
Accrued expenses 42,420 26,955
Deferred revenue 2,179 --
---------- ----------
Total current liabilities 107,007 1,622,161
---------- ----------
LONG-TERM DEBT, less current maturities 1,477,000 --
---------- ----------
COMMITMENT AND CONTINGENCY (Note 4)
PARTNERS' EQUITY
General partners (14,265) (14,492)
Limited partners 915,411 892,933
Unrealized gain on investment securities (610) (10,578)
---------- ----------
Total partner's equity 900,536 867,863
---------- ----------
$2,484,543 $2,490,024
========== ==========
</TABLE>
Note: The Condensed Balance Sheet at December 31, 1999 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
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ ------------------------
2000 1999 2000 1999
-------- -------- -------- --------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Rental income $137,965 $140,200 $274,331 $275,132
Operating expenses:
Wages and contract labor 1,500 2,004 3,000 3,504
Depreciation and amortization -- -- -- --
Repairs and maintenance 33,711 28,436 63,730 55,852
Management fees 4,133 4,122 8,281 8,277
Utilities 22,569 21,962 45,671 43,559
Professional fees 18,517 28,025 35,567 43,345
Property taxes 9,621 8,994 19,242 17,989
Miscellaneous 1,587 2,328 3,238 3,228
-------- -------- -------- --------
91,638 95,871 178,729 175,754
-------- -------- -------- --------
Operating income 46,327 44,329 95,602 99,378
-------- -------- -------- --------
Nonoperating income (expense):
Interest and dividend income 1,798 2,269 4,057 4,923
Interest expense (36,242) (39,201) (71,074) (78,695)
Other (4,974) (1,494) (5,880) (1,494)
-------- -------- -------- --------
(39,418) (38,426) (72,897) (75,266)
-------- -------- -------- --------
Net income $ 6,909 $ 5,903 $ 22,705 $ 24,112
======== ======== ======== ========
Net income per limited
partnership unit $ 1.08 $ 0.93 $ 3.56 $ 3.79
======== ======== ======== ========
</TABLE>
See Notes to Condensed Financial Statements.
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YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended
June 30,
-----------------------
2000 1999
-------- --------
(Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 22,705 $ 5,903
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization -- --
Loss on sale of securities available for sale 5,880 --
Change in assets and liabilities:
(Increase) Decrease in prepaids, deferrals and (1,569) 729
other receivables
Increase in accounts payable and accrued expenses 9,846 26,892
-------- --------
Net cash provided by operating activities 36,862 33,524
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Sale of securities available for sale 91,120 --
Purchase of securities available for sale (33,150) (896)
Improvements in investment property -- (35,482)
Disbursements for deferred charges (1,498) --
Disbursements for deferred leasing commissions -- (3,452)
-------- --------
Net cash provided (used) in investing activities 56,472 (39,830)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on long-term borrowings (48,000) (14,990)
-------- --------
Net (used) in financing activities (48,000) (14,990)
Net increase (decrease) in cash and cash equivalents 45,334 (21,296)
Cash and cash equivalents:
Beginning 11,928 45,738
-------- --------
Ending $ 57,262 $ 24,442
======== ========
</TABLE>
See Notes to Condensed Financial Statements.
4
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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 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, 1999, the cumulative unpaid priority return to the unit
holders was $2,652,401 compared to $2,409,617 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, 1999 to June 30, 2000. All items are comparable.
Liquidity and Capital Resources
During the quarter ended June 30, 2000, the Partnership operations continued to
meet working capital requirements, and working capital was improved to a surplus
of $52,537. The approximate $1,500,000 improvement in working capital was due to
the reclassification of a portion of the debt to long-term liabilities. The
First Union National Bank loan on the EastPark facility matured on June 30,
2000. The General Partners refinanced this loan with the same institution. Under
the terms of the new loan, the monthly payment will consist of a $5,000
principal payment and a interest payment calculated at the bank's prime rate
(currently 9.5%). The loan will mature on June 30, 2002.
Results of Operations
Operations for the six months ended June 30, 2000 are comparable to the same
period of the prior year. Rental income is down slightly due to increased
vacancy in the current year. Escalation increases for the current tenants have
diminished the effects of this increased vacancy. Operating expenses are up
approximately $3,000 as compared to the same period of the prior year. Repairs
and maintenance is the main cause for this increase. Interest expense is down by
approximately $7,600 due to a lower rate and outstanding loan balance.
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. Each contract included a sales price of $2,525,000.
Both of these contracts were terminated by the prospective buyers under their
respective terms of such contracts after due diligence by the buyers. The
General Partners have also received lower offers which were declined. The
General Partners will continue to search for the best offer for the property and
manage it at acceptable standards until such time as the Partnership 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
------ -------------- -------------------
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)
5 10.3 Promissory Note with First Union
National Bank (EastPark Executive
Center)
6 27 Financial Data Schedule
(b) Reports on Form 8-K:
No reports on Form 8-K have been filed during the
three months ended June 30, 2000.
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* 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 September 30,1997.
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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 08/11/00 By: /s/ Dexter R. Yager, Sr.
---------------------------------- ----------------------------------
Dexter R. Yager, Sr.
General Partner
Date 08/11/00 By: /s/ Jerry R. Haynes
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Jerry R. Haynes
Chief Financial Officer
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