-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, C2zItfV57XQa7416UtwQ6zd571VTKGCLplJvw2gj1pCWVpebALVMZB8XVzGV2VYo j/6FJwm9Ifu6wTgdJpIWoA== 0000950144-01-510144.txt : 20020413 0000950144-01-510144.hdr.sgml : 20020413 ACCESSION NUMBER: 0000950144-01-510144 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20011212 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20011220 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KOGER EQUITY INC CENTRAL INDEX KEY: 0000835664 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 592898045 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09997 FILM NUMBER: 1818121 BUSINESS ADDRESS: STREET 1: 8880 FREEDOM CROSSING TRAIL CITY: JACKSONVILLE STATE: FL ZIP: 32256 BUSINESS PHONE: 9047321000 MAIL ADDRESS: STREET 1: 8880 FREEDOM CROSSING TRAIL CITY: JACKSONVILLE STATE: FL ZIP: 32256 8-K 1 g73398e8-k.txt KOGER EQUITY INC 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): DECEMBER 12, 2001 ----------------- KOGER EQUITY, INC. ------------------- (Exact Name of Registrant as Specified in Its Charter) FLORIDA -------- State or Other Jurisdiction of Incorporation) 1-9997 59-2898045 - ------------------------------------------------------------------------------- (Commission File Number) (IRS Employer Identification No.) 433 PLAZA REAL, SUITE 335 BOCA RATON, FLORIDA 33432 - ------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) (561) 395-9666 - ------------------------------------------------------------------------------- (Registrant's Telephone Number, Including Area Code) NA - ------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Reports) ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On December 12, 2001, Koger Equity, Inc. (the "Company") closed the sale of select non-core assets to AP-Knight, LP, an affiliate of Apollo Real Estate Investment Fund ("AREIF") for an aggregate price of $303 million, including approximately $206.7 million cash and the exchange of AREIF's 5.73 million shares of Koger Equity, Inc. Common Stock representing 21.4% of the outstanding shares of the Company. This sale represented the disposition of approximately 30% of the Company's consolidated assets. In addition to the above consideration the Company received a membership interest in an AREIF subsidiary. This interest will provide the Company with a 20% participation in the net cash flow from the disposed assets after AREIF has received a 15% internal rate of return on its equity investment. Included in the sale are ten properties comprising 75 suburban office buildings and one retail center, which contained more than 3.9 million rentable square feet, located throughout San Antonio and Austin, Texas; Greensboro and Charlotte, North Carolina; Greenville, South Carolina and Birmingham, Alabama. Koger will continue to manage the disposed assets for which it will receive standard property management fees. The net proceeds from the sale will be used to fund strategic investment opportunities in high growth markets, repay debt and fund a one-time capital gain distribution in the form of a special dividend to the Company's shareholders. In regard to the latter, on December 17, 2001, the Company's Board of Directors declared a $1.74 per share dividend on its Common Stock, par value $.01 per share, payable on January 15, 2002, to the shareholders of record on December 28, 2001. John R. S. Jacobsson currently serves as a Director of the Company and is the partner responsible for investments at Apollo Real Estate Funds, an affiliate of AREIF. Lee S. Neibart who served as a Director of the Company until December 12, 2001, is also a partner in charge of the day-to-day operations of Apollo Real Estate Funds. Morgan Stanley acted as financial advisor to the Company in connection with this transaction and provided a fairness opinion to a committee of the Company Board of Directors whose members were not affiliated with AREIF. The committee approved the terms of the transaction and determined that such terms were similar to those that could be obtained from an unaffiliated third party. The above sale transaction was the subject of a Company News Release, dated December 12, 2001, a copy of which is attached hereto as Exhibit 99 and by this reference made a part hereof. For more information on Koger Equity, Inc., contact the company at 904-732-1000 or visit its Web site at www.koger.com. 2 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. Listed below are the financial statements, pro forma financial information and exhibits, if any, filed as part of this report. (b) Pro Forma Financial Information The following unaudited pro forma financial statements set forth (i) the pro forma balance sheet as of September 30, 2001, as if the sale occurred on September 30, 2001 and (ii) the pro forma statements of operations for the year ended December 31, 2000 and the nine months ended September 30, 2001, as if the sale occurred on January 1, 2000. The pro forma financial statements are based upon assumptions contained in the notes thereto and should be read in conjunction with such notes. The following unaudited pro forma financial statements may not necessarily reflect the results of operations or financial position of the Company which would have actually resulted had the sale occurred as of the date and for the periods indicated, nor should they be taken as indicative of the future results of operations or the future financial position of the Company. Differences would result from various factors, including the ability of the Company to reinvest the proceeds from the sale at returns in excess of those earned on temporary cash investments. The pro forma financial statements should be read in conjunction with the consolidated financial statements and notes of the Company included in its annual report on Form 10-K for the year ended December 31, 2000. 3 KOGER EQUITY, INC. UNAUDITED PRO FORMA BALANCE SHEET SEPTEMBER 30, 2001 (IN THOUSANDS)
Historical Pro Forma 9/30/01 Pro Forma Adjustments 9/30/01 ---------- ---------------------------- --------- ASSETS Real Estate Investments: Operating properties: Land $ 140,448 $ (48,529)(b) $ 91,919 Buildings 831,406 (265,739)(b) 565,667 Furniture and equipment 3,228 3,228 Accumulated depreciation (180,983) 62,385 (b) (118,598) --------- --------- ---------- --------- Operating properties - net 794,099 (251,883) 542,216 Undeveloped land held for investment 13,899 (120)(b) 13,779 Undeveloped land held for sale 76 76 Cash and cash equivalents 9,140 200,814 (a) $ (88,000)(c) 79,525 (5,854)(b) (36,575)(d) Accounts receivable, net 12,338 (1,853)(b) 10,485 Cost in excess of fair value of net assets acquired, net 1,232 1,232 Other assets 13,997 (4,175)(b) 9,822 --------- --------- ---------- --------- TOTAL ASSETS $ 844,781 $ (63,071) $ (124,575) $ 657,135 ========= ========= ========== ========= LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Mortgages and loan payable $ 337,879 $ (88,000)(c) $ 249,879 Accounts payable 3,090 3,090 Accrued real estate taxes payable 9,491 $ (3,551)(a) 5,940 Accrued liabilities - other 8,969 (250)(b) 8,719 Dividends payable 9,381 9,381 Advance rents and security deposits 6,489 (2,324)(a) 4,165 --------- --------- ---------- --------- Total Liabilities 375,299 (6,125) (88,000) 281,174 --------- --------- ---------- --------- Minority interest 23,132 23,132 --------- --------- ---------- --------- Shareholders' Equity: Common stock 296 296 Capital in excess of par value 469,010 469,010 Notes receivable from stock sales (5,066) (5,066) Retained earnings 17,460 303,016(a) (36,575)(d) 20,266 (263,635)(b) Treasury stock, at cost (35,350) (96,327)(a) (131,677) --------- --------- ---------- --------- Total Shareholders' Equity 446,350 (56,946) (36,575) 352,829 --------- --------- ---------- --------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 844,781 $ (63,071) $ (124,575) $ 657,135 ========= ========= ========== =========
See accompanying notes to unaudited pro forma financial statements. 4 KOGER EQUITY, INC. UNAUDITED PRO FORMA STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2000 (IN THOUSANDS)
Historical Pro Forma Pro Forma 2000 Adjustments 2000 ---------- ----------- --------- REVENUES Rental and other rental services $ 164,733 $(55,231)(a) $ 109,502 Management fees 1,793 1,793 Interest 703 3,502(e) 4,205 Income from Koger Realty Services, Inc. 645 208(d) 853 --------- -------- --------- Total revenues 167,874 (51,521) 116,353 --------- -------- --------- EXPENSES Property operations 61,868 (22,456)(a) 39,412 Depreciation and amortization 35,133 (11,789)(b) 23,344 Mortgage and loan interest 27,268 (7,466)(c) 19,802 General and administrative 20,217 20,217 Direct cost of management fees 898 898 Other 217 (8)(a) 209 --------- -------- --------- Total expenses 145,601 (41,719) 103,882 --------- -------- --------- INCOME BEFORE GAIN ON SALE OR DISPOSITION OF ASSETS, INCOME TAXES AND MINORITY INTEREST 22,273 (9,802) 12,471 Gain on sale or disposition of assets 6,015 6,015 --------- -------- --------- INCOME BEFORE INCOME TAXES AND MINORITY INTEREST 28,288 (9,802) 18,486 Income taxes (21) (21) --------- -------- --------- INCOME BEFORE MINORITY INTEREST 28,309 (9,802) 18,507 Minority interest 1,156 1,156 --------- -------- --------- NET INCOME $ 27,153 $ (9,802) $ 17,351 ========= ======== ========= EARNINGS PER SHARE: Basic $ 1.02 $ 0.83 Diluted $ 1.01 $ 0.82 WEIGHTED AVERAGE SHARES: Basic 26,730 (5,734)(f) 20,996 Diluted 26,962 (5,734)(f) 21,228
See accompanying notes to unaudited pro forma financial statements. 5 KOGER EQUITY, INC. UNAUDITED PRO FORMA STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMER 30, 2001 (IN THOUSANDS)
Historical Pro Forma Pro Forma 9/30/01 Adjustments 9/30/01 --------- ----------- -------- REVENUES Rental and other rental services $125,462 $(42,361)(a) $83,101 Management fees 3,530 2,524 (d) 6,054 Interest 596 1,900 (e) 2,496 Income from Koger Realty Services, Inc. 81 81 -------- -------- ------- Total revenues 129,669 (37,937) 91,732 -------- -------- ------- EXPENSES Property operations 46,749 (16,370)(a) 30,379 Depreciation and amortization 27,834 (9,255)(b) 18,579 Mortgage and loan interest 19,379 (4,209)(c) 15,170 General and administrative 6,148 6,148 Direct cost of management fees 2,658 1,775 (d) 4,433 Other 171 (6)(a) 165 -------- -------- ------- Total expenses 102,939 (28,065) 74,874 -------- -------- ------- INCOME BEFORE GAIN ON SALE OR DISPOSITION OF ASSETS, INCOME TAXES AND MINORITY INTEREST 26,730 (9,872) 16,858 Gain on sale or disposition of assets -- -- -------- -------- ------- INCOME BEFORE INCOME TAXES AND MINORITY INTEREST 26,730 (9,872) 16,858 Income taxes 449 255 (d) 704 -------- -------- ------- INCOME BEFORE MINORITY INTEREST 26,281 (10,127) 16,154 Minority interest 937 937 -------- -------- ------- NET INCOME $ 25,344 $(10,127) $15,217 ======== ======== ======= EARNINGS PER SHARE: Basic $ 0.94 $ 0.72 Diluted $ 0.94 $ 0.72 WEIGHTED AVERAGE SHARES: Basic 26,872 (5,734)(f) 21,138 Diluted 26,888 (5,734)(f) 21,154
See accompanying notes to unaudited pro forma financial statements. 6 KOGER EQUITY, INC. NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS 1. Basis of Presentation On December 12, 2001, the Company completed the sale of ten properties comprising 75 suburban office buildings and one retail center (the "2001 Property Sale"). The Company expects to record a gain for financial purposes of approximately $39.4 million on the sale. 2. Unaudited Pro Forma Balance Sheet The unaudited pro forma balance sheet as of September 30, 2001 is based on the historical balance sheet for the Company presented in the Quarterly Report on Form 10-Q for the period ended September 30, 2001. The unaudited pro forma balance sheet includes adjustments assuming this sale occurred as of September 30, 2001. Significant pro forma adjustments in the unaudited pro forma balance sheet include the following: (a) Adjustment for revenue and proceeds from the 2001 Property Sale. The sale proceeds include receipt of 5,733,772 shares of the Company's common stock at $16.80 per share, the closing price on August 23, 2001, the date the agreement was signed and announced. (b) Adjustment for cost of sale for the 2001 Property Sale. This includes $7,112,000 of selling costs. (c) Adjustment for repayment of outstanding balance on the Company's secured revolving credit facility. (d) Adjustment for payment of tax basis capital gain dividend. 3. Unaudited Pro Forma Statement of Operations for the Year Ended December 31, 2000 The unaudited pro forma statement of operations for the year ended December 31, 2000 is based on the historical statement of operations for the Company presented in the Annual Report on Form 10-K for the year ended December 31, 2000. The unaudited pro forma statement of operations includes adjustments assuming that the 2001 Property Sale occurred as of January 1, 2000. Significant pro forma adjustments in the unaudited pro forma statement of operations include the following: (a) Adjustment required for the historical rental revenues and property operations expenses for the properties sold. (b) Adjustment required for the historical depreciation and amortization expense for the properties sold. (c) Adjustment required for the historical interest expense for the secured revolving credit facility. (d) Adjustment required for impact on Income from Koger Realty Services, Inc. due to management contract for the properties sold. (e) Adjustment required for interest earned on investment of unused proceeds from the 2001 Property Sale. (f) Adjustment required for shares of the Company's common stock received as consideration for the 2001 Property Sale. 7 4. Unaudited Pro Forma Statement of Operations for the Nine Months Ended September 30, 2001 The unaudited pro forma statement of operations for the nine months ended September 30, 2001 is based on the historical statement of operations for the Company presented in the Quarterly Report on Form 10-Q for the period ended September 30, 2001. The unaudited pro forma statement of operations includes adjustments assuming that the 2001 Property Sale occurred as of January 1, 2000. Significant pro forma adjustments in the unaudited pro forma statement of operations for the nine months ended September 30, 2001 include the following: (a) Adjustment required for the historical rental revenues and property operations expenses for the properties sold. (b) Adjustment required for the historical depreciation and amortization expense for the properties sold. (c) Adjustment required for the historical interest expense for the secured revolving credit facility. (d) Adjustment required for management fee revenues ($1,694,000) and leasing commissions ($830,000) earned by Koger Realty Services, Inc. from the properties sold. Also includes adjustment for costs incurred due to management contract for properties sold. (e) Adjustment required for interest earned on investment of unused proceeds from the 2001 Property Sale. (f) Adjustment required for shares of the Company's common stock received as consideration for the 2001 Property Sale. 8 (C) EXHIBITS
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT ------ ---------------------- 99 Koger Equity, Inc. News Release, dated December 12, 2001, which is also on the Company's web site.
9 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: December 19, 2001 By: s/ James L. Stephens ------------------------------------ James L. Stephens Title: Vice President and Chief Accounting Officer 10 EXHIBIT INDEX The following designated exhibit is filed herewith:
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT ------ ---------------------- 99 Koger Equity, Inc. News Release, dated December 12, 2001, which is also on the Company's web site.
11 EX-99 3 g73398ex99.txt NEW RELEASE EXHIBIT 99 INVESTOR INQUIRIES: TOM CROCKER MEDIA INQUIRIES: ANDREW MERRILL, DAVID PITTS CHIEF EXECUTIVE OFFICER THE ABERNATHY MACGREGOR GROUP (561) 447-1800 (212) 371-5999
KOGER EQUITY ANNOUNCES NON-CORE ASSET SALE BOCA RATON, FLORIDA - DECEMBER 13, 2001 - Koger Equity, Inc. (NYSE: KE) today announced, in accordance with the previously announced terms, that it had closed the sale of select non-core assets to AP-Knight, LP, an affiliate of Apollo Real Estate Investment Fund (AREIF), for an aggregate price of $303 million, including $207 million cash and the exchange of AREIF's 5.73 million shares of Koger Equity Common Stock (21.4% of the outstanding shares). In addition to the above consideration, Koger will receive a membership interest in an AREIF subsidiary. This interest will provide Koger with a 20% participation in the net cash flow from the disposed assets after AREIF has received a 15% internal rate of return on its equity investment. Included in the sale are ten properties comprising 75 suburban office buildings and one retail center located throughout San Antonio and Austin, Texas; Greensboro and Charlotte, North Carolina; Greenville, South Carolina and Birmingham, Alabama. The net cash proceeds from this sale will be used to fund strategic investment opportunities in high growth markets, repay debt and fund a one-time special gain distribution to Koger shareholders. The amount of, and record and payment dates for, the special distribution are expected to be determined by the Company's Board of Directors next week. Koger will continue to manage the disposed assets for which it will receive standard property management fees. 12 "We are very pleased to have successfully completed this unique transaction with Apollo," said Tom Crocker, Chief Executive Officer of Koger. "Koger is now well positioned to execute on its repositioning program. We have the liquidity and balance sheet strength to pursue investments in select, high-growth markets in the Southeast and Southwest in an environment that the Company believes is well suited for strategic buyers." Morgan Stanley acted as financial advisor to Koger in this transaction. Wachovia Securities acted as financial advisor and placement agent for Apollo. Fleet Securities Inc. provided financing and acted as lead arranger for the transaction. ABOUT KOGER EQUITY With the closing of the above asset sale, Koger Equity, Inc. (NYSE: KE) owns and operates 12 suburban office parks and two freestanding buildings, containing 6.9 million rentable square feet, located in eight cities in the Southeast and manages for others eight suburban office parks and two freestanding buildings, containing 3.96 million rentable square feet, located in six cities in the Southeast and Southwest. CERTAIN 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 KOGER EQUITY'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 13 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 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 KOGER EQUITY'S ABILITY TO CONTROL OR PREDICT. FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF PERFORMANCE. FOR FORWARD-LOOKING STATEMENTS CONTAINED OR INCORPORATED BY REFERENCE HEREIN, KOGER EQUITY 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. 14 -----END PRIVACY-ENHANCED MESSAGE-----