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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549
 FORM 10-QSB (Mark one)x     QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2005 or o 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 YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP  North Carolina
    
    56-1560476(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification Number)1300 Altura Road      Fort Mill, South Carolina
    
    29708(Address of principal executive office)
    
    (Zip code)
 (803) 547-9100   (Former name, former address and former fiscal year, if changed since last report) Check whether the issuer (1) filed all reports required to be filed by section 13 or 15 (d) of the
Exchange Act during the past 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 o




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YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP INDEX PAGEPART I. FINANCIAL INFORMATIONITEM 1. Financial StatementsCondensed Balance Sheets as of March 31, 2005 and
December 31, 2004
    
    
    3Condensed Statements of Operations for the three months ended
March 31, 2005 and 2004
    
    
    4Condensed Statements of Cash Flows for the three months
ended March 31, 2005 and 2004
    
    
    5Notes to Condensed Financial Statements
    
    
    6ITEM 2. Managements Discussion and Analysis or Plan of Operation
    
    
    7ITEM 3. Controls and Procedures
    
    
    8PART II. OTHER INFORMATIONITEM 1. Legal Proceedings
    
    
    8ITEM 6. Exhibits and Reports on Form 8-K
    
    
    8Signatures
    
    
    9
 2




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PART I  FINANCIAL INFORMATION
Item 1. Financial Statements YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
CONDENSED BALANCE SHEETS March 31,
    
    
    December 31,2005
    
    
    2004(Unaudited)
    
    
    (Note)ASSETSCURRENT ASSETS
    
    
    
    
    
    $Cash and cash equivalents
    
    $
    302,625
    
    
    
    295,689Accounts receivable, tenant
    
    
    42,852
    
    
    
    42,852Prepaid expenses
    
    
    3,670
    
    
    
    Total current assets
    
    
    349,147
    
    
    
    338,541Leased property held for sale, net
    
    
    2,323,501
    
    
    
    2,323,501Total assets
    
    $
    2,672,648
    
    
    $
    2,662,042LIABILITIES AND PARTNERS EQUITYCURRENT LIABILITIESCurrent maturities of long-term debt
    
    $
    1,198,000
    
    
    $
    84,000Accounts payable
    
    
    17,084
    
    
    
    18,990Accrued expenses
    
    
    13,401
    
    
    
    2,179Total current liabilities
    
    
    1,228,485
    
    
    
    105,169Long-term debt, less current maturities
    
    
    
    
    
    
    1,135,000Total liabilities
    
    
    1,228,485
    
    
    
    1,240,169Commitment and ContingencyPARTNERS EQUITYGeneral partners
    
    
    (8,614
    )
    
    
    (9,016
    )Limited partners
    
    
    1,452,777
    
    
    
    1,430,889Total partners equity
    
    
    1,444,163
    
    
    
    1,421,873Total liabilities and partners equity
    
    $
    2,672,648
    
    
    $
    2,662,042
 Note: The Condensed Balance Sheet at December 31, 2004 has been taken from the audited
financial statements at that date. See Notes to Condensed Financial Statements. 3




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YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF OPERATIONS Three Months EndedMarch 31,2005
    
    
    2004(Unaudited)Rental income
    
    $
    156,410
    
    
    $
    154,980Operating expenses:Repairs and maintenance
    
    
    29,733
    
    
    
    32,840Utilities
    
    
    23,732
    
    
    
    22,814Professional fees
    
    
    29,016
    
    
    
    28,254Property taxes
    
    
    10,770
    
    
    
    10,575Management fees
    
    
    4,524
    
    
    
    4,662Contract labor
    
    
    1,500
    
    
    
    1,500Miscellaneous
    
    
    1,363
    
    
    
    1,611100,638
    
    
    
    102,256Operating income
    
    
    55,772
    
    
    
    52,724Nonoperating income (expense):Interest and dividend income
    
    
    862
    
    
    
    13Interest expense
    
    
    (16,461
    )
    
    
    (13,104
    )(15,599
    )
    
    
    (13,091
    )Net income
    
    $
    40,173
    
    
    $
    39,633Deduct net income applicable to limited
partners (per limited partner unit for the
quarter ended March 31, 2005 $6.22; 2004 $6.14)
    
    $
    39,771
    
    
    $
    39,237Net income applicable to general partners
    
    $
    402
    
    
    $
    396
 See Notes to Condensed Financial Statements. 4




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YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF CASH FLOWS Three Months EndedMarch 31,2005
    
    
    2004(Unaudited)CASH FLOWS FROM OPERATING ACTIVITIESNet income
    
    $
    40,173
    
    
    $
    39,633Adjustments to reconcile net income to net cash
provided by operating activities:Change in operating assets and liabilities:Accounts receivable, tenants and prepaids
    
    
    (3,670
    )
    
    
    (4,797
    )Accounts payable and accrued expenses
    
    
    9,316
    
    
    
    54,001Net cash provided by operating activities
    
    
    45,819
    
    
    
    88,837CASH FLOWS FROM INVESTING ACTIVITIES
    
    
    
    
    
    
    CASH FLOWS FROM FINANCING ACTIVITIESPrincipal payments on long-term borrowings
    
    
    (21,000
    )
    
    
    (21,000
    )Cash distributions
    
    
    (17,883
    )
    
    
    Net cash used in financing activities
    
    
    (38,883
    )
    
    
    (21,000
    )Net increase in cash and cash equivalents
    
    
    6,936
    
    
    
    67,837Cash and cash equivalents:Beginning
    
    
    295,689
    
    
    
    208,237Ending
    
    $
    302,625
    
    
    $
    276,074
 See Notes to Condensed Financial Statements. 5




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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.
    Basis of Presentation:In the opinion of management, the accompanying unaudited condensed financial statements contain
all adjustments (all of which were normal recurring adjustments) 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.Leased property held for sale has been recorded following the Statement of Financial Accounting
Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. Statement
No. 144 requires assets held for sale to be recorded at the lower of their carrying value or
estimated fair value less cost to sell. The fair market value of the property is subject to
potential significant change based on market conditions.3.
    Statement of Cash Flows:For purposes of reporting the statements of cash flows, the 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, 2004, the cumulative unpaid priority return to the unit holders was $3,861,957
compared to $3,619,173 one-year prior. This increase resulted from no distributions being made
to partners during the year. Although no distributions were paid to partners on the priority
return, the Partnership did make distributions in the first quarter of 2005 in the amount of
$17,883 representing tax owed on behalf of foreign and non-resident partners. 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. 6




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Item 2. Managements Discussion and Analysis or Plan of Operations Changes in Financial Condition There have not been any significant changes in financial condition from December 31, 2004 to March
31, 2005. Liquidity and Capital Resources During the three months ended March 31, 2005, the Partnership operations continued to meet working
capital requirements, although working capital was decreased by approximately $1,113,000 since
year-end. The working capital deficit as of March 31, 2005 was $879,338. The large decrease in
working capital is due to the reclassification of the long-term debt to short-term debt due to the
current loan maturing on January 31, 2006. If this reclassification had not been made, working
capital would have been approximately $235,000. When the loan is closer to maturity the General
Partners will seek refinancing with Wachovia Bank, N.A. for the loan on EastPark; however, no
assurances can be given that such refinancing will occur. Cash distributions in the amount of
$17,883 were paid during the quarter. These distributions represented the 2004 Federal and North
Carolina tax paid on behalf of the foreign and non-resident partners. Results of Operations Operating income for the three months ended March 31, 2005 was comparable to the same period of the
prior year, only increasing slightly less than 6%. Rental income increased less than 1% and
operating expenses decreased less than 2%. Interest expense is about 26% higher than last year as
the rate on the floating rate loan has increased. The rate at March 31, 2005 was 5.75% as compared
to 4% on March 31, 2004. Status of EastPark Executive Center The General Partners remain committed on selling the EastPark facility and continue to have it
listed with a commercial real estate broker. At this time, the facility is not under contract with
any potential buyers. During the first quarter of 2005, the General Partners were able to
negotiate a 20-month lease with Management Systems Designers, Inc. (MSD) that was previously
under a month-to-month tenancy. This lease will expire October 31, 2006, but MSD may terminate
this lease with a ninety (90) day written notice after one year if the primary tenant, the General
Services Administration (GSA), either vacates or terminates its engagement contract with MSD.
The General Partners will continue discussions with the GSA to determine if the GSA will be
terminating its lease after October 31, 2005. However, no assurances can be given that a
replacement tenant could be found if the GSA decides to terminate its lease. 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. Factors that may
cause actual results to differ materially from those contemplated by such forward-looking
statements include, among others, the following possibilities:  
    Inability to sell the building due to current market conditions
    Inability to extend the lease on a long-term basis to its major tenant 7




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Item 3. Controls and Procedures The Partnerships General Partner and Principal Accounting Officer have conducted an evaluation of
the Partnerships disclosure procedures as of March 31, 2005. Based on their evaluation, the
General Partner and Principal Accounting Officer have concluded that the Partnerships disclosure
controls and procedures are effective to ensure that information required to be disclosed by the
Partnership in reports that it files or submits under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported within the time periods specified in the applicable
Securities and Exchange Commission rules and forms. There were no significant changes in the
Partnerships internal controls or in other factors that could significantly affect these controls
subsequent to the date of the most recent evaluation of these controls by the Partnerships General
Partner and Principal Accounting Officer, including any corrective actions with regard to
significant deficiencies and material weaknesses. PART II. OTHER INFORMATION Item 1.
    
    Legal ProceedingsThe Partnership is not engaged in any legal proceedings of a material nature
at the present time.Item 6.
    
    Exhibits and Reports on Form 8-K(a) Exhibits:
 DesignationNumber UnderExhibit
    
    Item 601 ofNumber
    
    Regulation S-K
    
    Exhibit Description
    
    
    1*
    
    
    
    4
    
    
    Instrument defining rights of security holders  set forth in the
Limited Partnership Agreement

2*
    
    
    
    10
    
    
    Limited Partnership Agreement3**
    
    
    
    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 dated
February 2, 2004 (EastPark Executive Center)5
    
    
    
    31.1
    
    
    Certification required by Section 31 of Item 601 of Regulation S-K6
    
    
    
    31.2
    
    
    Certification required by Section 31 of Item 601 of Regulation S-K7
    
    
    
    32.1
    
    
    Certification pursuant to Section 1350 of Chapter 63 of
Title 18 of the United States Code (Sarbanes-Oxley Act of 2002.)
 (b) Reports on Form 8-K:No reports on Form 8-K have been filed during the three months ended March
31, 2005.
   *
    
    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 10.3 of the Partnerships Form 10-K for the year ended
December 31, 2003. 8




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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 RegistrantBy:
    
    YFP, LLC
General PartnerDate
    
    05/16/05
    
    
    
    By:
    
    /s/ Jeffrey S. YagerJeffrey S. Yager
ManagerDate
    
    05/16/05
    
    
    
    By:
    
    /s/ Thomas K. EmeryThomas K. Emery
(Serving in the function of Principal Financial Officer)
 9