SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 26, 2003
-----------------
KOGER EQUITY, INC.
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(Exact Name of Registrant as Specified in Its Charter)
FLORIDA
---------------------------------------------
(State or Other Jurisdiction of Incorporation)
1-9997 59-2898045
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(Commission File Number) (IRS Employer
Identification No.)
225 NE MIZNER BOULEVARD, SUITE 200
BOCA RATON, FLORIDA 33432
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(Address of Principal Executive Offices) (Zip Code)
(561) 395-9666
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(Registrant's Telephone Number, Including Area Code)
NA
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(Former Name or Former Address, if Changed Since Last Reports)
Item 9. Regulation FD Disclosure
Koger Equity, Inc. announced results for the fourth quarter and year ended
December 31, 2002, as more particularly described in its News Release, dated
February 26, 2003, and its Supplemental Information, dated December 31, 2002,
copies of which are attached hereto as Exhibits 99(a) and 99(b) and by this
reference made a part hereof.
For more information on Koger Equity, Inc., contact the company at
866-321-0712 or visit its Web site at www.koger.com.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
Exhibit
Number Description of Exhibit
------ ----------------------
99(a) Koger Equity, Inc. News Release, dated February 26, 2003.
99(b) Koger Equity, Inc. Supplemental Information, dated December
31, 2002.
2
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.
KOGER EQUITY, INC.
Dated: February 26, 2003 By: /S/ Todd J. Amara
---------------------------------
Todd J. Amara
Title: Vice President
3
EXHIBIT INDEX
The following designated exhibits are filed herewith:
Exhibit
Number Description of Exhibit
------ ----------------------
99(a) Koger Equity, Inc. News Release, dated February 26, 2003.
99(b) Koger Equity, Inc. Supplemental Information, dated December 31, 2002.
4
Exhibit 99(a)
Koger Equity Announces Fourth Quarter 2002 and Year End 2002 Financial
Results
BOCA RATON, Fla.--(BUSINESS WIRE)--Feb. 26, 2003--Koger Equity,
Inc. (NYSE:KE):
-- 2002 Funds From Operations of $2.05 Per Share
-- Reiterates Full Year 2003 Funds From Operations Guidance
Koger Equity, Inc. (NYSE:KE) today reported results for the fourth
quarter 2002 and year ended December 31, 2002.
Certain of the Company's 2002 results, as compared to 2001, have
been affected by the Company's December 2001 sale of 75 office
buildings and one retail center to AP-Knight LP, an affiliate of
Apollo Real Estate Advisors, LP. At the time of sale, these assets
represented approximately 36% of the Company's portfolio of operating
properties, based on rentable square feet.
Fourth Quarter 2002 Highlights
-- Acquired The Lakes on Post Oak, a three building, 1.2 million
square foot development located in the Galleria/West Loop area of
Houston, Texas.
-- Secured $85 million, five year fixed rate financing for Three
Ravinia Drive.
-- Amended the Company's secured revolving credit facility.
Other Highlights for 2002
-- Increased same store net operating income ("NOI") 1.4% to $70.3
million compared to $69.3 million for 2001.
-- Acquired Three Ravinia Drive, an 803,000 square foot, 31 story
office building in the Central Perimeter area of Atlanta, Georgia.
-- Paid dividend of $1.40 per share.
Fourth Quarter 2002 and Year End 2002 Operating Results
Funds from operations (FFO) for the fourth quarter 2002 totaled
$10.4 million or $0.49 per share on a fully diluted basis, compared
with $16.6 million or $0.62 per share on a fully diluted basis for the
fourth quarter 2001. For the quarter ended December 31, 2002, Koger
reported total operating revenues of $32.9 million compared to total
operating revenues of $40.7 million for the fourth quarter 2001.
Certain of the Company's 2002 operating results, as compared to 2001,
have been affected by the December 2001 sale of operating properties
as more fully described above. Operating margins declined to 62.6% in
the fourth quarter 2002 versus 63.0% in the fourth quarter 2001.
Net income for the three months ended December 31, 2002 was $2.5
million or $0.12 per diluted share compared to $47.9 million or $1.86
per diluted share for the fourth quarter 2001. The fourth quarter 2001
net income includes $1.52 per diluted share of gain from the sale of
operating properties to AP-Knight LP. For purposes of FFO and earnings
per share, the weighted average number of common shares on a fully
diluted basis totaled 21,332,000 for the fourth quarter 2002.
For the year ended December 31, 2002, FFO totaled $43.8 million or
$2.05 per share on total operating revenues of $129.8 million compared
with FFO of $69.7 million or $2.52 per share on total operating
revenues of $169.7 million for 2001. Net income for 2002 was $16.4
million or $0.77 per diluted share compared to net income of $73.2
million or $2.75 per diluted share in 2001. As stated above, certain
of the Company's operating results, as compared to 2001, have been
affected by the December 2001 sale of operating properties to
AP-Knight LP. Operating margins for 2002 improved to 63.4% from 62.8%
for the year ended December 31, 2001.
Same Store Results
Fourth quarter 2002 same store NOI decreased approximately 4.5% to
$16.7 million from $17.5 million for the fourth quarter 2001. Same
store NOI for 2002 increased approximately 1.4% to $70.3 million
compared to $69.3 million for 2001. Same store occupancy was 86.9% at
December 31, 2002 compared to 89.9% at December 31, 2001.
Leasing Activity
Leasing activity during the fourth quarter 2002 totaled 632,000
rentable square feet encompassing 81 leases at an average cost of
$1.26 per square foot per year. The weighted average net rental rate
on new leases signed, excluding first generation space and renewals,
decreased 6.9% to $10.07 per square foot as compared to $10.82 per
square foot on expiring leases. For leases that renewed during the
fourth quarter 2002, the weighted average net rental rate decreased
2.4% to $11.11 per square foot from $11.38 per square foot.
For properties owned on December 31, 2001, the Company signed
1,799,000 square feet of leases in 308 transactions during 2002 at an
average cost of $1.20 per square foot. The weighted average net rental
rate on leasing activity for fiscal 2002 was flat at $11.40 per square
foot on new leases compared to $11.39 per square foot on expiring
leases.
The tenant retention rate was 52% for the fourth quarter 2002 and
64% for all of 2002.
In the fourth quarter 2002, Koger filled significant vacancies in
its portfolio with the signing of a 46,000 square foot lease and a
36,000 square foot lease with TRW, Inc. and the Georgia Medical
Foundation, respectively. Both leases are expected to commence no
later than April 2003, and will encompass all of Koger's Harvard
building at its Atlanta Chamblee center, and a portion of Koger's
Lincoln Parkway building in Atlanta.
Property Activity
During the fourth quarter 2002, Koger acquired, through a
subsidiary partnership, The Lakes on Post Oak, a 1.2 million square
foot, Class A, three office building development located in the
prestigious Galleria/West Loop area in Houston, Texas, for
approximately $102 million (or approximately $85.00 per square foot).
The funds required for this acquisition were drawn from a $77 million
mortgage secured by the property and from the Company's secured
revolving credit facility. The Lakes on Post Oak resides within a
28-acre park-like development located adjacent to the Galleria Mall,
which is undergoing a 700,000 square foot retail expansion. In
addition, the Texas Department of Transportation and local development
associations are in the middle of extensive infrastructure changes
that according to management will enhance The Lakes on Post Oak's
long-term positioning as one of the best located projects in the
Galleria/West Loop area.
Koger anticipates creating considerable value by implementing a
$12 million capital spending program on the three buildings. The
program will refurbish and modernize the entire development and will
be followed by an aggressive marketing and leasing program. In 2003,
Koger selected Trammell Crow Company to provide management and leasing
services for The Lakes on Post Oak.
Financing
During the fourth quarter 2002 Koger secured an $85 million
non-recourse loan from Metropolitan Life Insurance Company
collateralized by its Three Ravinia Drive property in Atlanta,
Georgia. This loan has a five year term expiring on January 1, 2008
with a fixed interest rate of 5.26%. Koger used the proceeds from this
loan to pay down a substantial portion of the existing balance on its
secured revolving credit facility.
Concurrently, Koger amended its secured revolving credit facility
to lower the commitment amount to $100 million from $125 million and
modified certain debt covenant definitions and other requirements.
Thomas Crocker, Chief Executive Officer of Koger Equity commented,
"Despite the economic uncertainty in our core markets, we are
satisfied with our results. While we expect the economic challenges to
persist in 2003, we believe Koger is properly positioned to overcome
adversity and prosper when the economy turns. Koger used 2002 to
create a platform for improved performance in the future. To that
point, we made two important acquisitions as part of a portfolio
repositioning that will serve as the core foundation for improved
financial results over the long-term. These acquisitions were Three
Ravinia, a 31-story, Class A trophy office building in the Central
Perimeter area of Atlanta, Georgia and The Lakes on Post Oak, a 1.2
million square foot, three building complex located in the heart of
the Galleria/West Loop area of Houston, Texas."
"Both properties have 'suburban in-fill' characteristics and were
purchased at a significant discount to replacement cost, two
parameters that we see as critical to our long-term investment
strategy." Mr. Crocker concluded, "We are very excited about these
traditional real estate transactions and believe they will generate
considerable value in the future for our shareholders."
Dividend
The level of Koger's dividend will continue to be determined each
quarter, based upon the operating results of that quarter, economic
conditions, and other operating trends. For the fourth quarter 2002,
Koger paid a $0.35 dividend per share, and for all of 2002, Koger paid
a dividend of $1.40 per share.
FFO Guidance
Based on the current outlook, Koger is reiterating its FFO
guidance range of $1.75-$1.80 per share for 2003.
The Company's significant assumptions for 2003 include:
-- Continued deterioration in rental markets.
-- No acquisitions or dispositions.
-- Termination of the management agreement for the assets sold to
AP-Knight LP in 2001.
-- Termination of the asset management agreement for Crocker
Realty Trust, Inc.
-- Same store occupancy declining from 87% at year end 2002 to 81%
by the end of 2003.
-- Negative absorption in Atlanta, Georgia and Charlotte, North
Carolina.
-- LIBOR rate of 1.80%.
During the scheduled February 26, 2003 conference call, management
will further discuss FFO guidance for 2003.
Safe Harbor
Estimates of future FFO per share are by definition, and certain
other matters discussed in this press release may be, forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Although Koger Equity, Inc. believes the
expectations reflected in such forward-looking statements are based on
reasonable assumptions; there can be no assurance that its
expectations will be attained. Certain factors that could cause actual
results to differ materially from the Company's expectations are set
forth as risk factors in the company's SEC reports and filings,
including its annual report on Form 10-K. Included among these factors
are changes in general economic conditions, including changes in the
economic conditions affecting industries in which its principal
tenants compete; its ability to timely lease or re-lease space to
credit worthy tenants at current or anticipated rents; its ability to
achieve economies of scale over time; the demand for tenant services
beyond those traditionally provided by landlords; changes in interest
rates; changes in operating costs; its ability to attract and retain
high-quality personnel at a reasonable cost in a highly competitive
labor environment; future demand for its debt and equity securities;
its ability to refinance its debt on reasonable terms at maturity; and
its ability to complete current and future development projects on
schedule and on budget. Many of these factors are beyond the Company's
ability to control or predict. Forward-looking statements are not
guarantees of performance. For forward-looking statements contained or
incorporated by reference herein, the Company claims the protection of
the safe harbor for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995. The Company assumes
no obligation to update or supplement forward-looking statements that
become untrue because of subsequent events.
Koger Equity, Inc. owns and operates 124 office buildings,
containing 8.93 million rentable square feet, primarily located within
16 suburban office projects in nine cities in the Southeastern United
States and Houston, Texas.
Additional information about Koger is available upon request to
Investor Relations, 225 NE Mizner Blvd., Suite 200, Boca Raton,
Florida 33432-3945, or call 1-800-850-2037.
Additionally, the Fourth Quarter 2002 Supplemental Disclosure
package and further information about Koger Equity can be found on the
Company's web site at www.koger.com .
KOGER EQUITY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands except per Share Data)
For the For the
Three Months Year
Ended Ended
12/31/02 12/31/01 12/31/02 12/31/01
-------------------------------------
Operating Revenues
Rental and other rental
services $32,065 $40,161 $126,351 $165,623
Management fees 757 550 3,347 4,080
Other 51 -- 53 --
-------------------------------------
Total operating revenues 32,873 40,711 129,751 169,703
-------------------------------------
Operating Expenses
Property operations 12,002 14,859 46,235 61,608
Depreciation and amortization 7,993 7,945 27,908 35,099
General and administrative 2,953 2,264 11,381 8,412
Direct cost of management fees 705 720 3,335 3,378
Other 18 18 143 189
-------------------------------------
Total operating expenses 23,671 25,806 89,002 108,686
-------------------------------------
Operating Income 9,202 14,905 40,749 61,017
-------------------------------------
Other Income and Expense
Interest income 76 180 405 776
Mortgage and loan interest (7,281) (6,053) (25,145) (26,112)
-------------------------------------
Total other income and
expense (7,205) (5,873) (24,740) (25,336)
-------------------------------------
Income Before Gain on Sale or
Disposition of
Assets, Income Taxes and
Minority Interest and Equity
in Earnings of Unconsolidated
Subsidiary 1,997 9,032 16,009 35,681
Gain on sale or disposition of
assets 19 39,189 21 39,189
-------------------------------------
Income Before Income Taxes and
Minority Interest and
Equity in Earnings of
Unconsolidated Subsidiary 2,016 48,221 16,030 74,870
Income taxes (525) 235 (413) 684
-------------------------------------
Income Before Minority Interest
and Equity in Earnings
of Unconsolidated Subsidiary 2,541 47,986 16,443 74,186
Minority interest -- (107) (20) (1,044)
Equity in earnings of
unconsolidated subsidiary -- -- -- 81
-------------------------------------
Net Income $2,541 $47,879 $16,423 $73,223
=====================================
Earnings Per Share:
Basic $0.12 $1.87 $0.77 $2.76
=====================================
Diluted $0.12 $1.86 $0.77 $2.75
=====================================
Weighted Average Shares:
Basic 21,300 25,641 21,269 26,517
=====================================
Diluted 21,332 25,785 21,378 26,610
=====================================
KOGER EQUITY, INC.
FUNDS FROM OPERATIONS
(In Thousands except per Share Data)
For the For the
Three Months Year
Ended Ended
12/31/02 12/31/01 12/31/02 12/31/01
-------------------------------------
Net income $2,541 $47,879 $16,423 $73,223
Depreciation - real estate 7,396 7,270 25,889 32,261
Amortization - deferred tenant
costs 444 514 1,523 2,172
Amortization - goodwill -- 42 -- 170
Minority interest -- 107 20 1,044
Loss (gain) on sale or
disposition:
Operating properties -- (39,189) -- (39,189)
Non-operating assets (19) -- (21) --
-------------------------------------
Funds from operations $10,362 $16,623 $43,834 $69,681
=====================================
Weighted average shares/units
outstanding - diluted 21,332 26,785 21,378 27,610
=====================================
Funds from operations, per
diluted share/unit $0.49 $0.62 $2.05 $2.52
=====================================
KOGER EQUITY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands) December 31, December 31,
2002 2001
-----------------------------
ASSETS
Real estate investments:
Operating properties:
Land $110,653 $91,919
Buildings 783,185 568,285
Furniture and equipment 3,320 3,082
Accumulated depreciation (149,830) (123,999)
-------- --------
Operating properties, net 747,328 539,287
Undeveloped land held for investment 9,995 13,779
Undeveloped land held for sale,
net of allowance 3,831 76
Cash and cash equivalents 4,627 113,370
Restricted cash 13,340 --
Accounts receivable, net of allowance
for uncollectible accounts
of $1,280 and $1,114 12,183 11,574
Cost in excess of fair value of net assets
acquired, net of accumulated amortization
of $683 and $683 595 595
Other assets 13,186 11,904
-------- --------
TOTAL ASSETS $805,085 $690,585
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgages and loans payable $431,698 $248,683
Accounts payable 3,801 4,962
Accrued real estate taxes payable 147 1,007
Other accrued liabilities 13,435 9,206
Dividends payable 7,453 44,159
Advance rents and security deposits 5,483 5,103
--------------------------
Total Liabilities 462,017 313,120
--------------------------
Minority interest -- 22,923
--------------------------
Shareholders' equity:
Common stock 298 297
Capital in excess of par value 472,156 469,779
Notes receivable from stock sales to related
parties (5,266) (5,066)
Accumulated other comprehensive loss (212) --
Retained earnings 7,813 21,180
Treasury stock, at cost (131,721) (131,648)
-------------------------
Total Shareholders' Equity 343,068 354,542
-------------------------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $805,085 $690,585
=========================
CONTACT: Koger Equity, Inc.
Tom Brockwell, 561/395-9666
or
Integrated Corporate Relations, Inc.
Brad Cohen, 203/222-9013
Exhibit 99(b)
Koger Equity, Inc.
Supplemental
Information
December 31, 2002
Koger Equity, Inc.
Supplemental Information
Table of Contents
December 31, 2002
Schedule Page
----------------------------------------------------------------------- ---------------------
Consolidated Balance Sheets 2, 3
Consolidated Statement of Operations 4, 5
Funds from Operations 6, 7
Net Operating Income 8, 9
Summary of Outstanding Debt 10
Operating Property Acquisitions 11
Building Completions 12
Buildings Under Construction 13
Twenty-Five Largest Tenants 14
Regional Summary of MSAs 15
Occupancy Summary 16
Lease Distribution 17
Lease Expirations 18
Net Effective Rents 19
Same Suite Analysis 20
1
KOGER EQUITY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Dollars in thousands
-------------------------------------------------------------------------------------------------------
(Unaudited) (Unaudited) (Unaudited)
12/31/02 9/30/02 6/30/02 3/31/02 12/31/01
--------- ------------ ------------ ------------ ----------
ASSETS
Real Estate Investments:
Operating properties:
Land $110,653 $98,253 $98,253 $110,084 $91,919
Buildings 783,185 688,363 685,975 670,895 568,285
Furniture and equipment 3,320 3,120 2,987 2,933 3,082
Accumulated depreciation (149,830) (142,295) (136,010) (129,617) (123,999)
--------- ------------ ------------ ------------ ----------
Operating properties - net 747,328 647,441 651,205 654,295 539,287
Properties under construction:
Land 0 0 0 0 0
Buildings 0 0 0 0 0
Undeveloped land held for investment 9,995 11,015 13,779 13,779 13,779
Undeveloped land held for sale 3,831 2,840 76 76 76
Cash and temporary investments 4,627 10,930 14,564 16,461 113,370
Restricted
cash 13,340 0 0 0 0
Accounts receivable, net 12,183 10,744 9,802 10,441 11,574
Cost in excess of fair value of net assets
acquired, net 595 595 595 595 595
Other assets 13,186 11,939 11,809 11,722 11,904
--------- ------------ ------------ ------------ ----------
TOTAL ASSETS $805,085 $695,504 $701,830 $707,369 $690,585
========= ============ ============ ============ ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgages and loan payable $431,698 $314,994 $321,217 $327,415 $248,683
Accounts payable 3,801 3,236 1,837 2,046 4,962
Accrued real estate taxes payable 147 6,336 6,358 3,273 1,007
Accrued liabilities - other 13,435 9,929 8,903 8,607 9,206
Dividends payable 7,453 7,453 7,452 7,433 44,159
Advance rents and security deposits 5,483 5,137 4,656 4,876 5,103
--------- ------------ ------------ ------------ ----------
Total
Liabilities 462,017 347,085 350,423 353,650 313,120
--------- ------------ ------------ ------------ ----------
Minority
interest 0 0 0 0 22,923
--------- ------------ ------------ ------------ ----------
Shareholders' Equity:
Common stock 298 298 298 298 297
Capital in excess of par value 472,156 472,012 471,974 471,205 469,779
Notes receivable from stock sales to
related parties (5,266) (5,066) (5,066) (5,066) (5,066)
Other comprehensive loss (212) 0 0 0 0
Retained earnings 7,813 12,726 15,784 18,898 21,180
Treasury stock, at cost (131,721) (131,551) (131,583) (131,616) (131,648)
--------- ------------ ------------ ------------ ----------
Total Shareholders' Equity 343,068 348,419 351,407 353,719 354,542
--------- ------------ ------------ ------------ ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $805,085 $695,504 $701,830 $707,369 $690,585
========= ============ ============ ============ ==========
2
KOGER EQUITY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Dollars in thousands
--------------------------------------------------------------------------------------------------
12/31/02 12/31/01 12/31/00 12/31/99 12/31/98
--------- --------- --------- --------- ----------
ASSETS
Real Estate Investments:
Operating properties:
Land $110,653 $91,919 $138,214 $140,061 $137,047
Buildings 783,185 568,285 805,935 784,769 731,558
Furniture and equipment 3,320 3,082 2,631 2,693 3,578
Accumulated depreciation (149,830) (123,999) (155,817) (137,452) (129,682)
--------- --------- --------- --------- ----------
Operating properties - net 747,328 539,287 790,963 790,071 742,501
Properties under construction:
Land 0 0 2,128 8,347 11,318
Buildings 0 0 12,023 41,912 31,562
Undeveloped land held for investment 9,995 13,779 13,899 16,034 19,272
Undeveloped land held for sale 3,831 76 76 1,103 1,263
Cash and temporary investments 4,627 113,370 1,615 0 4,827
Restricted cash 13,340 0 0 0 0
Accounts receivable, net 12,183 11,574 13,232 10,512 6,158
Investment in Koger Realty Services, Inc. 0 0 2,533 2,319 1,661
Cost in excess of fair value of net assets
acquired, net 595 595 1,360 1,530 1,700
Other assets 13,186 11,904 13,193 13,911 14,733
--------- --------- --------- --------- ----------
TOTAL ASSETS $805,085 $690,585 $851,022 $885,739 $834,995
========= ========= ========= ========= ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgages and loans payable $431,698 $248,683 $343,287 $351,528 $307,903
Accounts payable 3,801 4,962 4,961 12,716 12,139
Accrued real estate taxes payable 147 1,007 4,175 1,383 4,407
Accrued liabilities - other 13,435 9,206 10,562 13,162 9,288
Dividends payable 7,453 44,159 9,392 9,370 7,971
Advance rents and security deposits 5,483 5,103 7,014 6,570 5,432
--------- --------- --------- --------- ----------
Total Liabilities 462,017 313,120 379,391 394,729 347,140
--------- --------- --------- --------- ----------
Minority interest 0 22,923 23,138 23,184 23,092
--------- --------- --------- --------- ----------
Shareholders' Equity:
Common stock 298 297 296 288 286
Capital in excess of par value 472,156 469,779 468,277 457,945 454,988
Notes receivable from stock sales (5,266) (5,066) (6,250) 0 0
Other comprehensive loss (212) 0 0 0 0
Retained earnings 7,813 21,180 20,261 30,546 30,020
Treasury stock, at cost (131,721) (131,648) (34,091) (20,953) (20,531)
--------- --------- --------- --------- ----------
Total Shareholders' Equity 343,068 354,542 448,493 467,826 464,763
--------- --------- --------- --------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $805,085 $690,585 $851,022 $885,739 $834,995
========= ========= ========= ========= ==========
3
KOGER EQUITY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
In thousands, except per share data
-----------------------------------------------------------------------------------------------
Three Months Ended
-----------------------------------------------------
12/31/02 9/30/02 6/30/02 3/31/02 12/31/01
---------- --------- --------- --------- ------------
REVENUES
Rental and other rental services $32,065 $31,836 $31,855 $30,596 $40,161
Management fees 757 839 963 787 550
Other 51 0 0 3 0
---------- --------- --------- --------- ------------
Total operating revenues 32,873 32,675 32,818 31,386 40,711
---------- --------- --------- --------- ------------
EXPENSES
Property operations 12,002 11,846 11,928 10,459 14,859
Depreciation and amortization 7,993 6,663 6,731 6,522 7,945
General and administrative 2,953 2,971 2,947 2,510 2,264
Direct cost of management fees 705 797 822 1,010 720
Other 18 43 49 33 18
---------- --------- --------- --------- ------------
Total operating expenses 23,671 22,320 22,477 20,534 25,806
---------- --------- --------- --------- ------------
OPERATING INCOME 9,202 10,355 10,341 10,852 14,905
---------- --------- --------- --------- ------------
OTHER INCOME AND EXPENSE
Interest income 76 98 87 145 180
Mortgage and loan interest (7,281) (6,041) (6,029) (5,795) (6,053)
---------- --------- --------- --------- ------------
Total other income and expense (7,205) (5,943) (5,942) (5,650) (5,873)
INCOME BEFORE GAIN (LOSS) ON SALE
OR DISPOSITION OF ASSETS 1,997 4,412 4,399 5,202 9,032
Gain (loss) on sale or disposition of
assets 19 1 0 1 39,189
---------- --------- --------- --------- ------------
INCOME BEFORE INCOME TAXES 2,016 4,413 4,399 5,203 48,221
Income taxes (525) 19 62 32 235
---------- --------- --------- --------- ------------
INCOME BEFORE MINORITY INTEREST 2,541 4,394 4,337 5,171 47,986
Minority interest 0 0 0 20 107
---------- --------- --------- --------- ------------
NET INCOME $2,541 $4,394 $4,337 $5,151 $47,879
========== ========= ========= ========= ============
EARNINGS PER SHARE - Diluted $0.12 $0.21 $0.20 $0.24 $1.86
========== ========= ========= ========= ============
WEIGHTED AVERAGE SHARES - Diluted 21,332 21,410 21,469 21,283 25,785
========== ========= ========= ========= ============
OPERATING MARGIN 62.6% 62.8% 62.6% 65.8% 63.0%
========== ========= ========= ========= ============
4
KOGER EQUITY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
In thousands, except per share data
---------------------------------------------------------------------------------------------------
2002 2001 2000 1999 1998
---------- ---------- ---------- ---------- ----------
REVENUES
Rental and other rental services $126,351 $165,623 $164,733 $156,153 $133,663
Management fees 3,347 4,080 1,793 2,384 2,277
Other Income 53 0 0 0 0
---------- ---------- ---------- ---------- ----------
Total operating revenues 129,751 169,703 166,526 158,537 135,940
---------- ---------- ---------- ---------- ----------
EXPENSES
Property operations 46,235 61,608 61,868 60,582 53,719
Depreciation and amortization 27,908 35,099 35,133 32,314 28,381
General and administrative 11,381 8,412 20,217 8,633 6,953
Direct cost of management fees 3,335 3,378 898 1,432 1,368
Other 143 189 217 1,143 383
---------- ---------- ---------- ---------- ----------
Total operating expenses 89,002 108,686 118,333 104,104 90,804
---------- ---------- ---------- ---------- ----------
OPERATING INCOME 40,749 61,017 48,193 54,433 45,136
---------- ---------- ---------- ---------- ----------
OTHER INCOME AND EXPENSE
Interest income 405 776 703 457 446
Mortgage and loan interest (25,145) (26,112) (27,268) (21,893) (16,616)
---------- ---------- ---------- ---------- ----------
Total other income and expense (24,740) (25,336) (26,565) (21,436) (16,170)
---------- ---------- ---------- ---------- ----------
INCOME BEFORE GAIN ON SALE
OR DISPOSITION OF ASSETS 16,009 35,681 21,628 32,997 28,966
Gain on sale or disposition of assets 21 39,189 6,015 3,851 35
---------- ---------- ---------- ---------- ----------
INCOME BEFORE INCOME TAXES 16,030 74,870 27,643 36,848 30,697
Income taxes (413) 684 (21) 187 956
---------- ---------- ---------- ---------- ----------
INCOME BEFORE MINORITY INTEREST 16,443 74,186 27,664 36,661 29,741
Minority interest (20) (1,044) (1,156) (1,174) (139)
Equity in earnings of unconsolidated
subsidiary 0 81 645 1,099 1,696
---------- ---------- ---------- ---------- ----------
INCOME BEFORE EXTRAORDINARY ITEM 16,423 73,223 27,153 36,586 31,298
Extraordinary loss on early retirement of
debt 0 0 0 0 0
---------- ---------- ---------- ---------- ----------
NET INCOME $16,423 $73,223 $27,153 $36,586 $29,602
========== ========== ========== ========== ==========
EARNINGS PER SHARE - Diluted $0.77 $2.75 $1.01 $1.35 $1.10
========== ========== ========== ========== ==========
WEIGHTED AVERAGE SHARES - Diluted 21,378 26,610 26,962 27,019 26,901
========== ========== ========== ========== ==========
OPERATING MARGIN 63.4% 62.8% 62.4% 61.2% 59.8%
========== ========== ========== ========== ==========
5
KOGER EQUITY, INC. AND SUBSIDIARIES
FUNDS FROM OPERATIONS
(Unaudited)
In thousands, except per share data
----------------------------------------------------------------------------------------------------
Three Months Ended
------------------------------------------------------------
12/31/02 9/30/02 6/30/02 3/31/02 12/31/01
--------- --------- ------------ --------- ---------
Funds from Operations:
Net income $2,541 $4,394 $4,337 $5,152 $47,879
Depreciation - real estate 7,396 6,174 6,277 6,041 7,270
Amortization - deferred tenant costs 444 378 338 363 514
Amortization - goodwill 0 0 0 0 42
Minority
interest 0 0 0 20 107
Loss (gain) on sale of operating
properties 0 0 0 (1) (39,189)
Loss (gain) on sale of non-operating
assets (19) (1) 0 (1) 0
--------- --------- ------------ --------- ---------
Funds from Operations 10,362 10,945 10,952 11,574 16,623
Cash Available for Distribution:
Add (Deduct):
Rental income from straight-line rents (404) (730) (534) (460) (338)
Amortization of deferred financing
costs 1,002 303 299 289 228
Building improvements (2,091) (332) (1,285) (965) (1,032)
2nd generation tenant improvements (1,464) (1,767) (1,070) (906) (1,625)
2nd generation leasing commissions (569) (205) (479) (88) (614)
--------- --------- ------------ --------- ---------
Cash Available for Distribution $6,836 $8,214 $7,883 $9,444 $13,242
========= ========= ============ ========= =========
Weighted average common shares/units
outstanding - diluted 21,332 21,410 21,469 21,350 26,785
========= ========= ============ ========= =========
Per share/unit - diluted:
Funds from operations $0.49 $0.51 $0.51 $0.54 $0.62
========= ========= ============ ========= =========
Cash available for distribution $0.32 $0.38 $0.37 $0.44 $0.49
========= ========= ============ ========= =========
Dividends paid $0.35 $0.35 $0.35 $2.09 (a) $0.35
========= ========= ============ ========= =========
Dividend payout ratio:
Funds from operations 72.1% 68.5% 68.6% 64.8% 56.5%
========= ========= ============ ========= =========
Cash available for distribution 109.2% 91.2% 95.3% 79.5% 71.4%
========= ========= ============ ========= =========
(a) Amount includes a special dividend of $1.74 per share paid in January 2002.
6
KOGER EQUITY, INC. AND SUBSIDIARIES
FUNDS FROM OPERATIONS
(Unaudited)
In thousands, except per share data
--------------------------------------------------------------------------------------------
2002 2001 2000 1999 1998
--------- --------- --------- --------- -------
Funds from Operations:
Net income $16,423 $73,223 $27,153 $36,586 29,602
Depreciation - real estate 25,888 32,261 31,720 28,800 25,146
Amortization - deferred tenant costs 1,523 2,172 1,923 2,132 1,464
Amortization - goodwill 0 170 170 170 170
Minority interest 20 1,044 1,156 1,174 139
Gain on sale of operating properties 0 (39,189) (5,963) (3,846) 0
Gain on sale of non-operating assets (21) 0 (52) (5) (35)
--------- --------- --------- --------- -------
Funds from Operations 43,833 69,681 56,107 65,011 56,486
Cash Available for Distribution:
Add (Deduct):
Rental income from straight-line rents (2,128) (1,470) (1,897) (1,764) (1,335)
Amortization of deferred financing costs 1,893 908 888 836 1,069
Building improvements (4,673) (3,049) (2,804) (3,741) (2,883)
2nd generation tenant improvements (5,207) (6,604) (8,362) (13,204) 11,057)
2nd generation leasing commissions (1,341) (1,389) (1,712) (1,736) (1,649)
--------- --------- --------- --------- -------
Cash Available for Distribution $32,377 $58,077 $42,220 $45,402 40,631
========= ========= ========= ========= =======
Weighted average common shares/units
outstanding - diluted 21,378 27,610 27,962 28,019 27,093
========= ========= ========= ========= =======
Per share/unit - diluted:
Funds from operations $2.05 $2.52 $2.01 $2.32 $2.08
========= ========= ========= ========= =======
Cash available for distribution $1.51 $2.10 $1.51 $1.62 $1.50
========= ========= ========= ========= =======
Dividends paid $1.40 $1.40 $1.40 $1.30 $1.10
========= ========= ========= ========= =======
Dividend payout ratio:
Funds from operations 68.3% 55.6% 69.7% 56.0% 52.9%
========= ========= ========= ========= =======
Cash available for distribution 92.4% 66.7% 92.7% 80.2% 73.3%
========= ========= ========= ========= =======
7
KOGER EQUITY, INC. AND SUBSIDIARIES
NET OPERATING INCOME
2002
Year Year
Three Months Ended To Date To Date
------------------------------------------
3/31/02 6/30/02 9/30/02 12/31/02 12/31/02 12/31/01 Change
--------- ---------- --------- ----------- --------- --------- --------
$(000) $(000) $(000) $(000) $(000) $(000) $(000)
Same Store Sales:
Revenues 27,580 27,619 27,343 26,507 109,049 109,059 (10)
Expenses 9,178 9,657 10,104 9,807 38,746 39,732 (986)
--------- ---------- --------- ----------- --------- --------- --------
Net Operating Income 18,402 17,962 17,239 16,700 70,303 69,327 976
--------- ---------- --------- ----------- --------- --------- --------
2001 and 2002 Acquisitions:
Revenues 2,206 3,305 3,583 4,741 13,835 0 13,835
Expenses 1,011 1,665 1,575 1,962 6,213 0 6,213
--------- ---------- --------- ----------- --------- --------- --------
Net Operating Income 1,195 1,640 2,008 2,779 7,622 0 7,622
--------- ---------- --------- ----------- --------- --------- --------
Building Completions (1):
Revenues 782 823 795 846 3,246 2,138 1,108
Expenses 236 266 265 231 998 585 413
--------- ---------- --------- ----------- --------- --------- --------
Net Operating Income 546 557 530 615 2,248 1,553 695
--------- ---------- --------- ----------- --------- --------- --------
2001 Property Sales:
Revenues 27 108 115 (29) 221 54,426 (54,205)
Expenses 33 340 (97) 2 278 21,291 (21,013)
--------- ---------- --------- ----------- --------- --------- --------
Net Operating Income (6) (232) 212 (31) (57) 33,135 (33,192)
--------- ---------- --------- ----------- --------- --------- --------
Total Company:
Revenues 30,595 31,855 31,836 32,065 126,351 165,623 (39,272)
Expenses 10,458 11,928 11,847 12,002 46,235 61,608 (15,373)
--------- ---------- --------- ----------- --------- --------- --------
Net Operating Income 20,137 19,927 19,989 20,063 80,116 104,015 (23,899)
========= ========== ========= =========== ========= ========= ========
(1) Includes buildings completed after 12/31/00.
8
KOGER EQUITY, INC. AND SUBSIDIARIES
NET OPERATING INCOME
2001
Year
Three Months Ended To Date
--------------------------------------------
3/31/01 6/30/01 9/30/01 12/31/01 12/31/01
--------- ---------- ---------- ------------ --------------------
$(000) $(000) $(000) $(000) $(000)
Same Store Sales:
Revenues 27,140 27,010 27,543 27,367 109,060
Expenses 9,833 10,035 9,993 9,872 39,733
--------- ---------- ---------- ------------ --------------------
Net Operating Income 17,307 16,975 17,550 17,495 69,327
--------- ---------- ---------- ------------ --------------------
2001 Acquisitions:
Revenues 0 0 0 0 0
Expenses 0 0 0 0 0
--------- ---------- ---------- ------------ --------------------
Net Operating Income 0 0 0 0 0
--------- ---------- ---------- ------------ --------------------
Building Completions (1):
Revenues 171 495 742 731 2,139
Expenses 88 182 248 67 585
--------- ---------- ---------- ------------ --------------------
Net Operating Income 83 313 494 664 1,554
--------- ---------- ---------- ------------ --------------------
2001 Property Sales:
Revenues 14,280 14,123 13,958 12,063 54,424
Expenses 5,471 5,549 5,350 4,920 21,290
--------- ---------- ---------- ------------ --------------------
Net Operating Income 8,809 8,574 8,608 7,143 33,134
--------- ---------- ---------- ------------ --------------------
Total Company:
Revenues 41,591 41,628 42,243 40,161 165,623
Expenses 15,392 15,766 15,591 14,859 61,608
--------- ---------- ---------- ------------ --------------------
Net Operating Income 26,199 25,862 26,652 25,302 104,015
========= ========== ========== ============ ====================
(1) Includes buildings completed after 12/31/00.
9
KOGER EQUITY, INC. AND SUBSIDIARIES
SUMMARY OF OUTSTANDING DEBT
AS OF DECEMBER 31, 2002
Monthly
Interest Debt Outstanding Balance
-------------------
Description Rate Maturity Service 12/31/02 12/31/01
-------------------------------------- ---------- ----------- -------- --------- ---------
$(000) $(000) $(000)
Fixed Rate:
Northwestern Mutual - Tranche A 8.19% 01/02/07 789 91,394 93,292
Northwestern Mutual - Tranche B 8.33% 01/02/09 710 81,331 83,006
Northwestern Mutual - Tranche C 7.10% 01/02/07 105 13,942 14,200
Northwestern Mutual - Tranche D 7.10% 01/02/09 216 28,738 29,270
New York Life 8.00% 12/10/02 68 7,718 7,903
Allstate Life 8.20% 12/01/06 165 19,066 19,468
-------- --------- ---------
Total Fixed Rate Debt 8.04% 2,053 242,189 247,139
-------- --------- ---------
Variable Rate:
GE Capital 7.38% 06/30/21 12 1,509 1,544
Column Financial 4.29% 12/09/04 239 77,000 0
Metropolitan Life 5.26% 12/17/07 373 85,000 0
Secured Revolving Credit Facility -
$100 Million 3.87% 12/27/2004 266 26,000 0
-------- --------- ---------
Total Variable Rate Debt 4.69% 890 189,509 1,544
-------- --------- ---------
Total Debt 6.57% 2,943 431,698 248,683
======== ========= =========
Market Capitalization:
Total Debt 431,698 248,683
Common Stock 332,200 360,696
--------- ---------
Total Market Capitalization 763,898 609,379
========= =========
------------------------------------------------------------------------------------------
Amount
---------
$(000)
Schedule of Mortgage Maturities by
Year (1):
2003 12,920
2004 82,631
2005 6,112
2006 23,706
2007 98,098
Thereafter 182,231
---------
Total 405,698
=========
(1) Does not include Secured Revolving Credit Facility.
10
KOGER EQUITY, INC. AND SUBSIDIARIES
OPERATING PROPERTY ACQUISITIONS
1999, 2000, 2001 AND 2002
Percent
Square Date Purchase Leased
Property Location Feet Purchased Price (1) 12/31/02
---------------------- ---------------------- ------------ ----------- ------------- -----------
1999
----------------------
Charlotte University Charlotte, NC 190,600 11/01/99 $23,100,000 96%
Orlando Lake Mary Orlando, FL 318,000 11/01/99 41,000,000 75%
------------ -------------
508,600 $64,100,000 84%
============ ============= ===========
2000
----------------------
None
2001
----------------------
None
2002
----------------------
Three Ravinia Atlanta, GA 845,000 01/31/02 $125,000,000 63%
The Lakes on Post Oak Houston, TX 1,205,000 12/06/02 101,900,000 79%
------------ -------------
2,050,000 $226,900,000 73%
============ ============= ===========
(1) Purchase price consists of the contract price only and does not include
closing costs.
11
KOGER EQUITY, INC. AND SUBSIDIARIES
BUILDING COMPLETIONS
1999, 2000, 2001 and 2002
Percent
Square Month Leased
Property Location Feet Completed Total Cost
(1) 12/31/02
----------------------- ----------------------- ---------- ----------- ------------- ------------------------------------
1999
-----------------------
Glenridge Building Orlando, FL 75,800 01/1999 $6,251,000 97%
Wingate Building (3) Greensboro, NC 98,300 01/1999 7,143,000 NA
Chisholm Building (3) San Antonio, TX 141,500 02/1999 9,888,000 NA
Coventry III Building El Paso, TX NA
(2) 21,900 07/1999 2,001,000
Carlton Building Jacksonville, FL 112,000 09/1999 10,849,000 100%
Landstar Building Jacksonville, FL 180,900 12/1999 16,057,000 100%
---------- -------------
630,400 $52,189,000 99%
========== ============= ====================================
2000
-----------------------
3500 Building (3) Birmingham, AL 144,900 01/2000 $13,272,000 NA
Columbia Building Atlanta, GA 90,200 01/2000 9,384,000 100%
Stuart Building Memphis, TN 83,700 01/2000 7,551,000 91%
Dover Building Orlando, FL 67,400 05/2000 5,867,000 100%
Duluth Building Atlanta, GA 103,200 05/2000 10,098,000 100%
Pasco Building St. Petersburg, FL 89,800 05/2000 7,662,000 84%
---------- -------------
579,200 $53,834,000 94%
========== ============= ====================================
2001
-----------------------
Collier Building Jacksonville, FL 113,500 02/2001 $10,575,000 100%
Rosemont Building Orlando, FL 67,400 06/2001 5,859,000 88%
---------- -------------
180,900 $16,434,000 96%
========== ============= ====================================
2002
-----------------------
None.
(1) Includes land and building construction costs. Does not include tenant
improvement costs.
(2) The El Paso Center was sold on August 11, 2000.
(3) These buildings were sold on December 12, 2001.
12
KOGER EQUITY, INC. AND SUBSIDIARIES
BUILDINGS UNDER CONSTRUCTION
DECEMBER 31, 2002
Square Expected Projected Pre-Leasing
Property Location Feet Completion Cost (1) to Date
---------------------- ------------------ --------- ----------- ---------------- ------------
None.
--------- ----------------
- $-
========= ================ ============
(1) Includes land and building construction costs. Does not include tenant
improvement costs.
13
KOGER EQUITY, INC. AND SUBSIDIARIES
TWENTY-FIVE LARGEST TENANTS
BASED ON ANNUALIZED GROSS RENTS
AS OF DECEMBER 31, 2002
Remaining Annualized
Number Leased Term Percent Gross Percent
Tenant (a) of Leases Square Feet (Months) of Leased Rent (b) of Rent
--------------------------- ---------------------------------- ------------------------- ---------
U S Government 43 927,311 88 12.4% $16,865,325 12.3%
State of Florida 43 688,447 34 9.2% 12,626,232 9.2%
Blue Cross Blue Shield 11 565,925 28 7.6% 9,224,889 6.7%
Six Continents Hotels 1 344,389 75 4.6% 9,129,306 6.7%
Bechtel Corporation 1 370,997 78 5.0% 6,681,235 4.9%
CitiFinancial 1 159,827 56 2.1% 2,722,577 2.0%
Landstar Systems Holding,
Inc. 1 176,000 143 2.4% 2,633,842 1.9%
Siemens 5 114,028 23 1.5% 1,939,282 1.4%
Zurich Insurance Company 2 97,913 49 1.3% 1,858,389 1.4%
Hanover Insurance 1 89,500 0 1.2% 1,815,992 1.3%
Texaco Inc. 1 86,458 3 1.2% 1,717,135 1.3%
Hoechst Celanese Corp. 1 92,376 6 1.2% 1,667,620 1.2%
Ford Motor Company 5 64,412 40 0.9% 1,367,540 1.0%
Homeside Lending, Inc. 1 69,020 10 0.9% 1,198,038 0.9%
ACS State Healthcare, LLC 1 52,689 74 0.7% 1,159,836 0.8%
Dynamic Healthcare Tech Inc. 1 53,761 26 0.7% 1,094,419 0.8%
BellSouth 4 66,526 38 0.9% 988,700 0.7%
Sara Lee Corp. 1 51,188 30 0.7% 922,664 0.7%
Enovia Corporation 1 44,095 20 0.6% 838,571 0.6%
Best Software, Inc. 1 47,110 72 0.6% 793,803 0.6%
Navision Software US, Inc. 1 37,783 56 0.5% 750,545 0.5%
Check Solutions Company 1 40,307 73 0.5% 735,396 0.5%
Peerless Insurance Co. 1 36,306 35 0.5% 715,098 0.5%
Sungard Trust Systems Inc. 2 43,569 42 0.6% 714,490 0.5%
Mergent- FIS Inc. 1 45,040 56 0.6% 698,120 0.5%
---------- ------------ ---------------
Total 132 4,364,977 58.4% $80,859,044 59.1%
========== ============ ========= =============== =========
Weighted Average 56
=========
(a) Actual tenant may be a subsidiary of, or an entity affiliated with, the
named tenant.
(b) Annualized Gross Rent is the monthly contractual base rent and current
reimbursements under existing leases as of December 31, 2002 multiplied by
12.
14
KOGER EQUITY, INC. AND SUBSIDIARIES
REGIONAL SUMMARY OF MSAs
AS OF DECEMBER 31, 2002
# of Age % Square %
MSA State Bldgs (yrs) Square Feet Feet NOI (a)
--------------------- --------- ------- ------- ------------------------- ---------------------------
Atlanta GA 26 15 2,361,389 26.5% 32.5%
Orlando FL 28 18 1,303,828 14.6% 19.3%
Jacksonville FL 11 8 1,166,560 13.1% 15.6%
Charlotte NC 15 15 709,029 7.9% 7.8%
St. Petersburg FL 19 19 669,040 7.5% 7.5%
Tallahassee FL 15 20 833,786 9.3% 7.0%
Memphis TN 6 9 531,506 6.0% 4.6%
Houston TX 3 22 1,205,728 13.5% 3.5%
Richmond VA 1 14 145,127 1.6% 2.2%
------- ------------- ----------- ---------------------------
Total 124 16 8,925,993 100.0% 100.0%
======= ======= ============= =========== ===========================
(a) Based on net operating income for the fourth quarter of 2002.
15
KOGER EQUITY, INC. AND SUBSIDIARIES
OCCUPANCY SUMMARY
AS OF DECEMBER 31, 2002
Square Footage Percentage
-------------------------------------------- ---------------------------------------------
Occupied Leased, Not Vacant Total Occupied Leased, Vacant Total
Occupied Not
Occupied
--------------------------------- ---------- --------------------------- -----------------
Atlanta 1,921,055 54,748 385,586 2,361,389 81.4% 2.3% 16.3% 100.0%
Orlando 1,158,989 2,450 142,389 1,303,828 88.9% 0.2% 10.9% 100.0%
Jacksonville 1,156,395 5,181 4,984 1,166,560 99.1% 0.4% 0.4% 100.0%
Charlotte 571,548 0 137,481 709,029 80.6% 0.0% 19.4% 100.0%
St. Petersburg 571,967 6,759 90,314 669,040 85.5% 1.0% 13.5% 100.0%
Tallahassee 595,144 0 238,642 833,786 71.4% 0.0% 28.6% 100.0%
Memphis 416,116 833 114,557 531,506 78.3% 0.2% 21.6% 100.0%
Houston 941,411 8,562 255,755 1,205,728 78.1% 0.7% 21.2% 100.0%
Richmond 141,752 0 3,375 145,127 97.7% 0.0% 2.3% 100.0%
---------- ---------- ----------- ----------
Total 7,474,377 78,533 1,373,083 8,925,993 83.7% 0.9% 15.4% 100.0%
========== ========== =========== ========== ========= ========= ======= =================
16
KOGER EQUITY, INC. AND SUBSIDIARIES
LEASE DISTRIBUTION
AS OF DECEMBER 31, 2002
Tenant
Occupied Percent Annualized Average Percent
Number ofPercent Square of Square Gross Annualized of Remaining
of Total
Category Leases Leases Feet (2) Feet Rent (3) Rent PSF Rents Term
(1)
------------------- ----------------- ----------- -------- ------------- ----------------- ---------
2,500 or Less 460 49.8% 558,946 7.5% $10,018,224 $17.92 7.3% 22
2,501 - 5,000 208 22.5% 745,713 10.0% 13,921,482 18.67 10.2% 27
5,001 - 7,500 72 7.8% 448,457 6.0% 8,288,860 18.48 6.1% 27
7,501 - 10,000 43 4.7% 372,135 5.0% 6,678,232 17.95 4.9% 32
10,001 - 20,000 59 6.4% 838,604 11.3% 15,654,114 18.67 11.4% 32
20,001 - 40,000 45 4.9% 1,311,131 17.7% 22,747,678 17.35 16.6% 54
40,001 - 60,000 18 2.0% 889,078 12.0% 16,661,327 18.74 12.2% 51
60,001 - 100,000 13 1.4% 1,048,970 14.1% 19,574,168 18.66 14.3% 46
100,001 or Greater 5 0.5% 1,211,221 16.3% 23,271,064 19.21 17.0% 77
-------- -------- ----------- -------- ------------- -------
Total / Weighted
Average 923 100.0% 7,424,255 100.0% $136,815,149 $18.43 100.0% 46
======== ======== =========== ======== ============= ======= ======= =========
Square Feet % of Total
------------------------
Square footage occupied by tenants 7,424,255 83.2%
Square footage attributable to
vending/antenna 1,859 0.0%
Square footage occupied by
owner/building use 48,263 0.5%
------------- -------
Total Occupied Square Footage 7,474,377 83.7%
------------- -------
Leased square footage 78,533 0.9%
Vacant square footage 1,373,083 15.4%
------------- -------
Total Net Rentable Square Footage 8,925,993 100.0%
============= =======
(1) Analysis does not include owner occupied space, vending leases and antenna leases.
(2) Total net rentable square feet represented by existing leases.
(3) Annualized Gross Rent is the monthly contractual base rent and current reimbursements under
existing leases as of December 31, 2002 multiplied by 12.
17
KOGER EQUITY, INC. AND SUBSIDIARIES
LEASE EXPIRATIONS
AS OF DECEMBER 31, 2002
City Item 2002 2003 2004 2005 2006
--------- ----------- ---------- ----------- ----------- ----------- -----------
Atlanta Square Feet
(1) 136,895 101,845 93,183 185,896 72,131
% Square
Feet (2) 5.80% 4.31% 3.95% 7.87% 3.05%
Annualized
Rent (3) 2,510,181 2,043,792 1,916,459 3,581,541 1,210,429
Number of
Leases (4) 7 49 37 32 22
Rent PSF $18.34 $20.07 $20.57 $19.27 $16.78
Orlando Square Feet
(1) 62,637 242,882 232,474 191,762 160,886
% Square
Feet (2) 4.80% 18.63% 17.83% 14.71% 12.34%
Annualized
Rent (3) 995,840 4,493,529 4,460,419 3,495,802 2,817,140
Number of
Leases (4) 9 67 58 45 18
Rent PSF $15.90 $18.50 $19.19 $18.23 $17.51
JacksonvilleSquare Feet
(1) 1,602 213,971 92,737 177,190 179,867
% Square
Feet (2) 0.14% 18.34% 7.95% 15.19% 15.42%
Annualized
Rent (3) 30,582 3,689,700 1,750,033 2,431,068 2,870,906
Number of
Leases (4) 1 10 7 5 5
Rent PSF $19.09 $17.24 $18.87 $13.72 $15.96
Charlotte Square Feet
(1) 28,889 200,139 119,771 42,473 57,568
% Square
Feet (2) 4.07% 28.23% 16.89% 5.99% 8.12%
Annualized
Rent (3) 565,094 3,599,955 2,181,217 734,168 934,931
Number of
Leases (4) 4 24 21 15 6
Rent PSF $19.56 $17.99 $18.21 $17.29 $16.24
St. Square Feet
Petersburg (1) 10,154 102,514 138,580 100,375 56,967
% Square
Feet (2) 1.52% 15.32% 20.71% 15.00% 8.51%
Annualized
Rent (3) 168,684 1,648,487 2,087,944 1,657,576 941,786
Number of
Leases (4) 7 45 21 21 9
Rent PSF $16.61 $16.08 $15.07 $16.51 $16.53
Tallahassee Square Feet
(1) 3,048 196,166 66,654 13,872 138,713
% Square
Feet (2) 0.37% 23.53% 7.99% 1.66% 16.64%
Annualized
Rent (3) 54,286 3,775,693 1,179,060 223,102 2,769,567
Number of
Leases (4) 3 45 10 6 5
Rent PSF $17.81 $19.25 $17.69 $16.08 $19.97
Memphis Square Feet
(1) 0 63,801 40,322 149,374 74,713
% Square
Feet (2) 0.00% 12.00% 7.59% 28.10% 14.06%
Annualized
Rent (3) 0 1,279,673 817,414 2,799,480 1,354,951
Number of
Leases (4) 0 17 12 27 11
Rent PSF $0.00 $20.06 $20.27 $18.74 $18.14
Houston Square Feet
(1) 6,826 198,913 72,659 83,927 39,186
% Square
Feet (2) 0.57% 16.50% 6.03% 6.96% 3.25%
Annualized
Rent (3) 98,342 3,647,780 1,423,773 1,550,262 737,396
Number of
Leases (4) 8 25 21 19 9
Rent PSF $14.41 $18.34 $19.60 $18.47 $18.82
Richmond Square Feet
(1) 0 26,679 13,750 45,704 12,952
% Square
Feet (2) 0.00% 18.38% 9.47% 31.49% 8.92%
Annualized
Rent (3) 0 544,040 272,916 895,447 247,631
Number of
Leases (4) 0 7 4 5 3
Rent PSF $0.00 $20.39 $19.85 $19.59 $19.12
Total Square Feet
(1) 250,051 1,346,910 870,130 990,573 792,983
% Square
Feet (2) 2.80% 15.09% 9.75% 11.10% 8.88%
Annualized
Rent (3) 4,423,009 24,722,649 16,089,235 17,368,446 13,884,737
Number of
Leases (4) 39 289 191 175 88
Rent PSF $17.69 $18.36 $18.49 $17.53 $17.51
(1) Total net rentable square feet represented by expiring leases.
(2) Percentage of total net rentable feet represented by expiring leases.
(3) Annualized Gross Rent is the monthly contractual base rent and current reimbursements under existing leases as of
September 30, 2002 multiplied by 12.
(4) Analysis does not include owner occupied space, vending leases and antenna leases.
KOGER EQUITY, INC. AND SUBSIDIARIES
LEASE EXPIRATIONS
AS OF DECEMBER 31, 2002
City Item 2007 2008 2009 2010 2011 2012 + Total
--------- ----------- ---------------- ---------- ----------- ---------- ---------- ---------- -------------
Atlanta Square Feet
(1) 181,682 178,732 590,900 101,369 26,201 239,422 1,908,256
% Square
Feet (2) 7.69% 7.57% 25.02% 4.29% 1.11% 10.14% 80.81%
Annualized
Rent (3) 3,749,238 3,459,953 14,217,185 1,802,710 649,160 4,284,826 39,425,474
Number of
Leases (4) 19 11 11 2 1 7 198
Rent PSF $20.64 $19.36 $24.06 $17.78 $24.78 $17.90 $20.66
Orlando Square Feet
(1) 140,596 90,204 25,000 635 0 7,299 1,154,375
% Square
Feet (2) 10.78% 6.92% 1.92% 0.05% 0.00% 0.56% 88.54%
Annualized
Rent (3) 2,088,072 1,603,115 459,306 11,573 0 175,088 20,599,884
Number of
Leases (4) 11 6 1 1 0 1 217
Rent PSF $14.85 $17.77 $18.37 $18.23 $0.00 $23.99 $17.85
JacksonvilleSquare Feet
(1) 275,860 0 3,462 0 26,947 176,000 1,147,636
% Square
Feet (2) 23.65% 0.00% 0.30% 0.00% 2.31% 15.09% 98.38%
Annualized
Rent (3) 4,859,623 0 67,821 0 527,622 2,633,842 18,861,197
Number of
Leases (4) 6 0 1 0 1 1 37
Rent PSF $17.62 $0.00 $19.59 $0.00 $19.58 $14.97 $16.43
Charlotte Square Feet
(1) 64,803 14,048 40,307 0 0 0 567,998
% Square
Feet (2) 9.14% 1.98% 5.68% 0.00% 0.00% 0.00% 80.11%
Annualized
Rent (3) 1,088,457 259,546 735,396 0 0 0 10,098,764
Number of
Leases (4) 3 3 1 0 0 0 77
Rent PSF $16.80 $18.48 $18.24 $0.00 $0.00 $0.00 $17.78
St. Square Feet
Petersburg (1) 52,898 77,336 12,709 17,686 0 0 569,219
% Square
Feet (2) 7.91% 11.56% 1.90% 2.64% 0.00% 0.00% 85.08%
Annualized
Rent (3) 960,071 1,457,427 182,883 245,270 0 0 9,350,128
Number of
Leases (4) 9 2 1 1 0 0 116
Rent PSF $18.15 $18.85 $14.39 $13.87 $0.00 $0.00 $16.43
Tallahassee Square Feet
(1) 94,758 48,876 0 0 26,696 0 588,783
% Square
Feet (2) 11.36% 5.86% 0.00% 0.00% 3.20% 0.00% 70.62%
Annualized
Rent (3) 1,633,185 916,425 0 0 347,181 0 10,898,499
Number of
Leases (4) 2 1 0 0 1 0 73
Rent PSF $17.24 $18.75 $0.00 $0.00 $13.00 $0.00 $18.51
Memphis Square Feet
(1) 38,219 47,188 0 0 0 0 413,617
% Square
Feet (2) 7.19% 8.88% 0.00% 0.00% 0.00% 0.00% 77.82%
Annualized
Rent (3) 672,705 907,029 0 0 0 0 7,831,252
Number of
Leases (4) 8 3 0 0 0 0 78
Rent PSF $17.60 $19.22 $0.00 $0.00 $0.00 $0.00 $18.93
Houston Square Feet
(1) 89,051 28,553 378,845 36,000 0 0 933,960
% Square
Feet (2) 7.39% 2.37% 31.42% 2.99% 0.00% 0.00% 77.46%
Annualized
Rent (3) 1,630,926 486,393 6,830,347 598,143 0 0 17,003,362
Number of
Leases (4) 9 6 2 2 0 0 101
Rent PSF $18.31 $17.03 $18.03 $16.62 $0.00 $0.00 $18.21
Richmond Square Feet
(1) 26,372 4,391 10,563 0 0 0 140,411
% Square
Feet (2) 18.17% 3.03% 7.28% 0.00% 0.00% 0.00% 96.75%
Annualized
Rent (3) 494,932 92,509 199,107 0 0 0 2,746,582
Number of
Leases (4) 4 1 2 0 0 0 26
Rent PSF $18.77 $21.07 $18.85 $0.00 $0.00 $0.00 $19.56
Total Square Feet
(1) 964,239 489,328 1,061,786 155,690 79,844 422,721 7,424,255
% Square
Feet (2) 10.80% 5.48% 11.90% 1.74% 0.89% 4.74% 83.18%
Annualized
Rent (3) 17,177,209 9,182,397 22,692,045 2,657,696 1,523,963 7,093,756 136,815,142
Number of
Leases (4) 71 33 19 6 3 9 923
Rent PSF $17.81 $18.77 $21.37 $17.07 $19.09 $16.78 $18.43
(1) Total net rentable square feet represented by expiring leases.
(2) Percentage of total net rentable feet represented by expiring leases.
(3) Annualized Gross Rent is the monthly contractual base rent and current
reimbursements under existing leases as of September 30, 2002 multiplied
by 12.
(4) Analysis does not include owner occupied space, vending leases and antenna leases.
18
KOGER EQUITY, INC. AND SUBSIDIARIES
NET EFFECTIVE RENTS
New & Backfill Leasing
--------------------------------------------------------
12/31/2002 09/30/2002 06/30/2002 03/31/2002 Average
----------- ----------- ----------- ----------- --------
Number of leases 31 29 29 27 29
Rentable square footage leased 217,767 108,050 154,666 40,165 130,162
Average per rentable square foot over the lease term:
Gross Rent $15.84 $17.88 $19.83 $17.66 $17.77
Tenant improvements (2.59) (1.52) (1.96) (1.59) (1.93)
Leasing commissions (0.60) (0.49) (0.98) (0.40) (0.62)
Other/concessions - - - - -
----------- ----------- ----------- ----------- --------
Effective Rent 12.65 15.87 16.89 15.67 15.22
Expense stop (5.34) (5.50) (6.16) (5.26) (5.57)
----------- ----------- ----------- ----------- --------
Equivalent effective net rent $7.31 $10.37 $10.73 $10.41 $9.65
=========== =========== =========== =========== ========
Average term (yrs) 4.9 4.8 6.0 3.8 4.9
Renewal Leasing
--------------------------------------------------------
12/31/2002 09/30/2002 06/30/2002 03/31/2002 Average
----------- ----------- ----------- ----------- --------
Number of leases 50 41 56 45 48
Rentable square footage leased 414,429 260,287 169,543 434,600 319,715
Average per rentable square foot over the lease term:
Gross Rent $17.21 $17.11 $18.53 $16.08 $17.31
Tenant improvements (0.18) (0.40) (0.91) (0.56) (0.53)
Leasing commissions (0.06) (0.05) (0.24) (0.10) (0.12)
Other/concessions - - - - -
----------- ----------- ----------- ----------- --------
Effective Rent 16.97 16.66 17.38 15.42 16.66
Expense stop (5.36) (5.06) (5.55) (4.96) (5.26)
----------- ----------- ----------- ----------- --------
Equivalent effective net rent $11.61 $11.60 $11.83 $10.46 $11.40
=========== =========== =========== =========== ========
Average term (yrs) 2.1 2.7 3.8 4.2 3.2
19
KOGER EQUITY, INC. AND SUBSIDIARIES
SAME SUITE ANALYSIS
YEAR TO DATE DECEMBER 31, 2002
Total Leasing (a)
---------------------------------------------------------------------
RSF New Net Expiring Net Percent
Leased Rent per RSF Rent per RSF Change Change
------------- --------------- --------------- ----------- -----------
Atlanta 286,986 $12.09 $12.19 ($0.10) -0.8%
Orlando 311,705 $12.08 $11.79 $0.29 2.5%
Jacksonville 376,964 $10.65 $10.68 ($0.03) -0.3%
Charlotte 77,639 $10.56 $11.65 ($1.09) -9.4%
St. Petersburg 182,641 $9.98 $9.60 $0.38 4.0%
Tallahassee 236,364 $11.90 $11.76 $0.14 1.2%
Memphis 88,987 $11.33 $11.87 ($0.54) -4.5%
Richmond 55,469 $12.58 $13.27 ($0.69) -5.2%
------------- --------------- --------------- -----------
Total 1,616,755 $11.39 $11.40 ($0.01) -0.1%
============= =============== =============== =========== ===========
(a) Analysis includes leases fully executed from 1/1/02 to 12/31/02 for
buildings owned at 12/31/02. Does not include First Generation space.
20