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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 September 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 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
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
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ASSETS (Unaudited) (Note)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 69,999 $ 11,928
Accounts receivable, tenant 39,016 38,530
Prepaid expenses 839 --
Securities available for sale 64,200 116,065
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Total current assets 174,054 166,523
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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 $19,265 33,122 33,122
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$ 2,499,053 $ 2,490,024
============= ===========
LIABILITIES AND PARTNERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 60,000 $ 1,585,000
Accounts payable 1,239 10,206
Accrued expenses 49,270 26,955
Deferred revenue -- --
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Total current liabilities 110,509 1,622,161
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LONG-TERM DEBT, less current maturities 1,467,000 --
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COMMITMENT AND CONTINGENCY (Note 4)
PARTNERS' EQUITY
General partners (14,064) (14,492)
Limited partners 935,341 892,933
Unrealized gain (loss) on investment securities 267 (10,578)
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Total partner's equity 921,544 867,863
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$ 2,499,053 $ 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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<PAGE> 3
YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------- --------------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Rental income $ 137,965 $ 140,199 $ 412,296 $ 415,331
Operating expenses:
Wages and contract labor 1,500 1,500 4,500 5,004
Depreciation and amortization -- -- -- --
Repairs and maintenance 36,420 28,656 100,150 84,508
Management fees 4,073 4,177 12,354 12,454
Utilities 23,206 25,732 68,877 69,291
Professional fees 7,815 17,566 43,382 60,911
Property taxes 9,621 8,995 28,863 26,984
Miscellaneous 1,858 1,126 5,096 4,354
------------ ------------ ------------ ------------
84,493 87,752 263,222 263,506
------------ ------------ ------------ ------------
Operating income 53,472 52,447 149,074 151,825
------------ ------------ ------------ ------------
Nonoperating income (expense):
Interest and dividend income 2,713 2,453 6,770 7,376
Interest expense (37,225) (33,508) (108,299) (112,203)
Other 1,171 1,494 (4,709) (1,494)
------------ ------------ ------------ ------------
(33,341) (29,561) (106,238) (106,321)
------------ ------------ ------------ ------------
Net income $ 20,131 $ 22,886 $ 42,836 $ 45,504
============ ============ ============ ============
Net income per limited
partnership unit $ 3.16 $ 3.59 $ 6.72 $ 7.14
============ ============ ============ ============
</TABLE>
See Notes to Condensed Financial Statements.
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YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-------------------------------------
2000 1999
--------------- --------------
(Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 42,836 $ 22,886
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 (1,325) 729
other receivables
Increase in accounts payable and accrued expenses 13,348 26,892
--------------- --------------
Net cash provided by operating activities 60,739 50,507
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CASH FLOWS FROM INVESTING ACTIVITIES
Sale of securities available for sale 91,120 --
Purchase of securities available for sale (34,290) (896)
Improvements in investment property -- (35,482)
Disbursements for deferred charges (1,498) --
Disbursements for deferred leasing commissions -- (3,452)
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Net cash provided (used) in investing activities 55,332 (39,830)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on long-term borrowings (58,000) (14,990)
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Net (used) in financing activities (58,000) (14,990)
Net increase (decrease) in cash and cash equivalents 58,071 (4,313)
Cash and cash equivalents:
Beginning 11,928 45,738
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Ending $ 69,999 $ 41,425
=============== ==============
</TABLE>
See Notes to Condensed Financial Statements.
4
<PAGE> 5
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 September 30, 2000. All items are comparable.
Liquidity and Capital Resources
During the quarter ended September 30, 2000, the Partnership operations
continued to meet working capital requirements, and working capital was improved
to a surplus of $63,545. 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 an 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 nine months ended September 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. Total operating expenses are
comparable to the same period of the prior year, although repairs and
maintenance are up approximately $16,000 and professional fees are down
approximately $17,000.
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. 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. The Partnership is currently in negotiations
with the major tenant at the EastPark facility, the IRS, for an additional 2,200
square feet at a lease rate of $14.83 per square foot. Estimated upfit costs
associated with this lease are approximately $10,000. The EastPark facility will
be 93% occupied upon execution of this lease.
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 27 Financial Data Schedule
(b) Reports on Form 8-K:
No reports on Form 8-K have been filed during
the three months ended September 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 11/15/00 By: /s/ Dexter R. Yager, Sr.
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Dexter R. Yager, Sr.
General Partner
Date 11/15/00 By: /s/ Thomas K. Emery
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Thomas K. Emery
Chief Financial Officer
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