-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, bZm1tUwXwLhO2IEGRV4V6M1/P1XW3aEEPfoRvYL4djpUWld/1jjFa3KP4hfs6hAV 4A20nYx9ZE0qpE7rb1Pjfw== 0000950144-94-002000.txt : 19941117 0000950144-94-002000.hdr.sgml : 19941117 ACCESSION NUMBER: 0000950144-94-002000 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941114 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: KOGER EQUITY INC CENTRAL INDEX KEY: 0000835664 STANDARD INDUSTRIAL CLASSIFICATION: 6798 IRS NUMBER: 592898045 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09997 FILM NUMBER: 94559726 BUSINESS ADDRESS: STREET 1: 3986 BLVD CTR DR STE 101 CITY: JACKSONVILLE STATE: FL ZIP: 32207 BUSINESS PHONE: 9043983403 MAIL ADDRESS: STREET 1: 3986 BLVD CTR DR STREET 2: SUITE 101 CITY: JACKSONVILLE STATE: FL ZIP: 32207 10-Q 1 KOGER EQUITY FORM 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES - - --- EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1994 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES - - --- EXCHANGE ACT OF 1934 For the transition period from to ----------- ----------- Commission File Number 1-9997 KOGER EQUITY, INC. (Exact name of registrant as specified in its charter) FLORIDA 59-2898045 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 3986 BOULEVARD CENTER DRIVE, SUITE 101 JACKSONVILLE, FLORIDA 32207 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (904) 398-3403 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the close of the latest practicable date. Class Outstanding at November 7, 1994 Common Stock, $.01 par value 17,601,582 shares 2 TABLE OF CONTENTS
Page Number ------ PART I. FINANCIAL INFORMATION Independent Accountants' Report . . . . . . . . . . . . . . . . . . . . . . . 2 Item 1. Financial Statements: Condensed Consolidated Balance Sheets September 30, 1994 and December 31, 1993 . . . . . . . . . . . . . . . . . 3 Condensed Consolidated Statements of Operations for the Three and Nine Month Periods Ended September 30, 1994 and 1993 . . . . . . . . . . . . . . . . . . . . . . . 4 Condensed Consolidated Statement of Changes in Shareholders' Equity for the Nine Month Period Ended September 30, 1994 . . . . . . . . . . . . . . . . . . . . . . . . . 5 Condensed Consolidated Statements of Cash Flows for the Nine Month Periods Ended September 30, 1994 and 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Notes to Condensed Consolidated Financial Statements for the Three and Nine Month Periods Ended September 30, 1994 and 1993 . . . . . . . . . . . . . . . . . . . . 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . 10 PART II. OTHER INFORMATION Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . 21 Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
1 3 INDEPENDENT ACCOUNTANTS' REPORT To the Board of Directors and Shareholders of Koger Equity, Inc. Jacksonville, Florida We have reviewed the accompanying condensed consolidated balance sheet of Koger Equity, Inc. and subsidiaries (the "Company") as of September 30, 1994, and the related condensed consolidated statements of operations for the three and nine month periods ended September 30, 1994 and 1993, the condensed consolidated statement of changes in shareholders' equity for the nine month period ended September 30, 1994 and the condensed consolidated statements of cash flows for the nine month periods ended September 30, 1994 and 1993. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and of making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to such condensed consolidated financial statements for them to be in conformity with generally accepted accounting principles. As discussed in Note 7 to the condensed consolidated financial statements and Note 9 to the annual financial statements for the year ended December 31, 1993 (not presented herein), the Company is a defendant in a class action proceeding. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of the Company as of December 31, 1993, and the related consolidated statements of operations, changes in shareholders' equity, and cash flows for the year then ended (not presented herein); and in our report dated March 4, 1994, we expressed an unqualified opinion on those consolidated financial statements and included an explanatory paragraph as to an uncertainty regarding the outcome of a class action proceeding in which the Company is a defendant. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 1993 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. DELOITTE & TOUCHE LLP Jacksonville, Florida November 4, 1994 2 4 PART I. FINANCIAL INFORMATION Item 1. Financial Statements KOGER EQUITY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited - See Independent Accountants' Report) (In thousands)
September 30, December 31, 1994 1993 ------------- ------------ ASSETS Real Estate Investments: Operating properties $573,744 $565,957 Furniture and equipment 1,125 813 Accumulated depreciation (41,761) (30,706) -------- -------- Operating properties - net 533,108 536,064 Undeveloped land held for investment 33,054 33,054 Undeveloped land held for sale, at lower of cost or market value 5,986 6,982 Cash and temporary investments 23,174 18,566 Accounts receivable, net 3,626 3,030 Management fees and other receivables from The Koger Partnership, Ltd. 1,464 634 Cost in excess of fair value of net assets acquired from KPI, net of accumulated amortization of $532 and $23 9,856 11,623 Other assets 7,680 5,136 -------- -------- TOTAL ASSETS $617,948 $615,089 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Mortgages and loans payable $324,862 $330,625 Accounts payable 2,276 3,945 Accrued interest 1,135 294 Accrued real estate taxes payable 5,514 1,201 Accrued liabilities - litigation settlement 2,000 Other liabilities 3,654 3,574 -------- -------- Total Liabilities 339,441 339,639 -------- -------- Contingency (Note 7) - - Shareholders' Equity Common stock 205 205 Capital in excess of par value 318,584 318,574 Warrants 1,366 1,368 Accumulated dividends in excess of net income (16,823) (19,872) Treasury stock (2,874,400 shares, at cost) (24,825) (24,825) -------- -------- Total Shareholders' Equity 278,507 275,450 -------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $617,948 $615,089 ======== ========
See Notes to Condensed Consolidated Financial Statements. 3 5 KOGER EQUITY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited - See Independent Accountants' Report) (In thousands, except per share data)
Three Month Period Nine Month Period Ended September 30, Ended September 30, -------------------- ------------------- 1994 1993 1994 1993 ------ ------- ------- ------- REVENUES Rental $23,781 $ 11,212 $70,742 $33,164 Management fees ($836 and $2,431 from TKPL) 1,368 3,612 Interest 345 53 726 168 ------- -------- ------- ------- Total 25,494 11,265 75,080 33,332 ------- -------- ------- ------- EXPENSES Property operations 10,828 5,115 30,042 13,515 Koger Management, Inc. management fees 565 1,671 Mortgage and loan interest 6,548 2,753 19,348 8,340 Depreciation and amortization 4,201 2,306 11,979 6,582 Settlement of litigation and related attorneys fees 24 2,144 General and administrative 850 460 4,058 1,413 Provision for loss on land held for sale 150 996 Provision for uncollectible rents 55 92 109 276 Direct cost of management contracts 1,087 2,549 Undeveloped land costs 125 551 Loss on sale of assets 6 67 ------- -------- ------- ------- Total 23,874 11,291 71,843 31,797 ------- -------- ------- ------- INCOME (LOSS) BEFORE INCOME TAXES 1,620 (26) 3,237 1,535 Income taxes 188 188 ------- -------- ------- ------- NET INCOME (LOSS) $ 1,432 $ (26) $ 3,049 $ 1,535 ======= ======== ======= ======= EARNINGS PER COMMON SHARE AND COMMON EQUIVALENT SHARE $ 0.08 $ - $ 0.17 $ 0.12 ======= ======== ======= ======= WEIGHTED AVERAGE COMMON SHARES AND COMMON EQUIVALENT SHARES OUTSTANDING 17,978 13,220 17,726 13,220 ======= ======== ======= =======
See Notes to Condensed Consolidated Financial Statements. 4 6 KOGER EQUITY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited - See Independent Accountants' Report) (In thousands)
Accumulated Common Stock Capital Dividends Treasury Stock Total ------------ in Excess in Excess ---------------- Share- Par of Par Of Net holders' Shares Value Value Warrants Income Shares Cost Equity ------ ----- --------- -------- ---------- ------ -------- -------- Balance, January 1, 1994 20,472 $ 205 $318,574 $1,368 $(19,872) 2,874 $(24,825) $275,450 Exercise of Warrants 1 10 (2) 8 Net Income 3,049 3,049 ------ ----- -------- ------ -------- ----- --------- -------- Balance, September 30, 1994 20,473 $ 205 $318,584 $1,366 $(16,823) 2,874 $(24,825) $278,507 ====== ===== ======== ====== ======== ===== ======== ========
See Notes to Condensed Consolidated Financial Statements. 5 7 KOGER EQUITY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited - See Independent Accountants' Report) (In thousands)
Nine Month Period Ended September 30, ----------------------- 1994 1993 ------ ------- OPERATING ACTIVITIES Net income $ 3,049 $ 1,535 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 11,979 6,582 Provision for litigation settlement 2,000 Provision for loss on land held for sale 996 Amortization of mortgage discounts 169 215 Loss on sale of assets 67 Provision for uncollectible rents 109 276 Accrued interest added to principal 1,005 Increase in accounts payable, accrued liabilities and other liabilities 3,192 1,643 Increase in receivables and other assets (3,658) (525) Increase in receivable from TKPL (830) ------- ------- Net cash provided by operating activities 18,078 9,726 ------- ------- INVESTING ACTIVITIES Tenant improvements to existing properties (4,861) (3,274) Building improvements to existing properties (2,926) (928) Deferred tenant costs (489) (432) Merger costs (338) (2,837) Additions to furniture and equipment (311) Proceeds from sale of assets 520 Cash acquired in purchase of assets from KPI 2,135 Payments received on loans to Koger Properties, Inc. - Cash Collateral Order 1,039 ------- ------- Net cash used in investing activities (6,270) (6,432) ------- ------- FINANCING ACTIVITIES Proceeds from exercise of warrants and stock options 8 1 Principal payments on mortgages and loans (7,104) (4,779) Financing costs (104) (152) ------- ------- Net cash used in financing activities (7,200) (4,930) ------- ------- Net increase (decrease) in cash and cash equivalents 4,608 (1,636) Cash and cash equivalents - beginning of period 18,566 9,283 ------- ------- Cash and cash equivalents - end of period $23,174 $ 7,647 ======= ======= SUPPLEMENTAL CASH FLOW INFORMATION Cash paid during the period for interest $17,295 $ 8,798 ======= ======= Cash paid during the period for income taxes $ 188 $ - ======= =======
See Notes to Condensed Consolidated Financial Statements. 6 8 KOGER EQUITY, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 1994 AND 1993 (Unaudited - See Independent Accountants' Report) 1. BASIS OF PRESENTATION. The condensed consolidated financial statements include the accounts of Koger Equity, Inc. and its wholly-owned subsidiaries (the "Company"). All significant intercompany transactions have been eliminated. The financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission related to interim financial statements. The financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 1993, included in the Company's Form 10-K Annual Report for the year ended December 31, 1993. The balance sheet at December 31, 1993, has been derived from the audited financial statements at that date and is condensed. All adjustments of a normal recurring nature which, in the opinion of management, are necessary to present a fair statement of the results for the interim periods have been made. Results of operations for the nine month period ended September 30, 1994, are not necessarily indicative of the results to be expected for the full year. 2. ORGANIZATION. The Company, a Florida corporation, was incorporated in 1988, for the purpose of investing in the ownership of income producing properties, primarily commercial office buildings developed by Koger Properties, Inc. ("KPI"). On December 21, 1993, KPI was merged with and into the Company (the "Merger"). Pursuant to the Merger, Southeast Properties Holding Corporation, Inc. ("Southeast"), a wholly owned subsidiary of the Company, became the managing general partner of The Koger Partnership, Ltd. ("TKPL"). 3. FEDERAL INCOME TAXES. The Company is operated in a manner so as to qualify and has elected tax treatment as a real estate investment trust under the Internal Revenue Code (a "REIT"). As a REIT, the Company is required to distribute annually at least 95 percent of its REIT taxable income to its shareholders. The Company utilized on its 1993 Federal income tax return approximately $5,094,000 of its 1992 net operating loss carryforward to eliminate any REIT taxable income for 1993. The Company's net operating loss carryforward available to offset REIT taxable income for 1994 totals approximately $8,449,000, which can be used to offset REIT taxable income through 2007. Pursuant to the Merger, the Company succeeded to KPI's net operating loss carryforward which, based upon KPI's final Federal income tax return, totals approximately $98,000,000. However, the portion of KPI's net operating loss carryforward which is usable each year by the Company is limited to approximately $7,900,000. The use of net operating loss carryforwards are limited for alternative minimum tax purposes. The Company paid approximately $104,000 of alternative minimum tax when it filed its 1993 Federal income tax return. In addition, the Company recorded a provision for alternative minimum taxes of approximately $76,000 in the quarter ended September 30, 1994. To the extent that the Company pays dividends equal to 100 percent of REIT taxable income, the earnings of the Company are not taxed 7 9 at the corporate level; however, under existing loan covenants the Company may be prohibited from paying dividends in excess of amounts necessary to maintain its status as a REIT, i.e., 95 percent of REIT taxable income. See Note 8, Dividends. 4. STATEMENTS OF CASH FLOWS. Cash in excess of daily requirements is invested in short-term monetary securities. Such temporary cash investments have an original maturity date of less than three months and are deemed to be cash equivalents for purposes of the statements of cash flows. There were no material non-cash investing or financing transactions for the nine month periods ended September 30, 1994 and 1993. 5. EARNINGS PER COMMON SHARE. Earnings per common share have been computed based on the weighted average number of shares of common stock and common stock equivalents outstanding during the applicable periods. 6. MORTGAGES AND LOANS PAYABLE. At September 30, 1994, the Company had $324,862,000 of loans outstanding, which are collateralized by mortgages on certain operating properties. During the quarter ended September 30, 1994, the Company paid the outstanding balances of its two unsecured notes. Annual maturities for mortgages and loans payable, which are gross of $1,121,000 of discounts, are as follows (in thousands):
Year Ending December 31 ----------------------- 1994 $ 1,135 1995 5,228 1996 8,667 1997 14,949 1998 19,115 Thereafter 276,889 -------- $325,983 ========
In addition to reporting and other requirements, the Company's debt agreements contain provisions limiting the amount of annual dividends, limiting additional borrowings, and limiting general and administrative expenses. The Company is also required to maintain certain financial ratios. 7. LEGAL PROCEEDINGS. The Company, certain of its present directors and certain of its former officers and directors, and KPI and certain of its subsidiaries are parties to a class action filed in October, 1990 (the "Securities Action"). On July 21, 1994, the Company entered into a Stipulation and Agreement of Compromise and Settlement (the "Settlement") relating to the Securities Action, which Settlement is subject to the approval of the United States District Court for the Middle District of Florida (the "District Court"). A hearing was held in the District Court on November 3, 1994 and the District Court has the approval of the Settlement under advisement. There were no objections to the Settlement. Under the Settlement, the Company has agreed to pay, in settlement of all claims against all defendants therein, the sum of $800,000 in cash plus 472,131 Warrants (the "Warrants") to purchase 472,131 shares of the Company's common stock. The Warrants are exercisable until June 30, 1999 at $8.00 per share and are subject to redemption at prices ranging from $2.31 to $5.24 per Warrant. Through September 30, 1994, the Company has 8 10 recorded a provision of $2,000,000 relating to the Settlement of the Securities Action. While there can be no assurance that the District Court will approve the Settlement, the Company believes that the outcome of this litigation will not materially adversely affect its operations or financial position. Under the terms of the Settlement, the Company has maintained its position that the claims in the Securities Action are without merit and, if the Settlement is not approved, the Company will vigorously contest the Securities Action. 8. DIVIDENDS. The Company intends that the quarterly dividend payout in the last quarter of each year will be adjusted if necessary to reflect the distribution of at least 95 percent of the Company's REIT taxable income as required by the Federal income tax laws. The terms of the secured debt of the Company provide that the Company will be subject to certain dividend limitations which, however, will not restrict the Company from paying the dividends required to maintain its qualification as a REIT. 9. PROVISION FOR LOSS ON LAND HELD FOR SALE. During the three and nine month periods ended September 30, 1994, the Company has recorded a provision for loss on land held for sale which totals $150,000 and $996,000, respectively. This provision for loss is based upon signed contracts for the sale of two land parcels (approximately 53 acres), which sales had not closed as of September 30, 1994. On October 21, 1994, the Company completed the sale of one of these land parcels (approximately 22.7 acres) at a sales price of $2,982,500. 10. COST IN EXCESS OF FAIR VALUE OF NET ASSETS ACQUIRED FROM KPI. The United States Bankruptcy Court for the Middle District of Florida, Tampa Division, has entered several orders permitting the release of excess funds from the KPI Administrative Claims Reserve which was established to provided funds for the payment of various administrative claims in the KPI Chapter 11 Case. Through September 30, 1994, approximately $2.1 million of excess funds have been released to the Company from the Administrative Claims Reserve. These amounts have been recorded as reductions to cost in excess of fair value of net assets acquired from KPI. 9 11 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with the condensed consolidated financial statements and related notes appearing elsewhere in this Form 10-Q, and the Management's Discussion and Analysis of Financial Condition and Results of Operations included in the Company's December 31, 1993, Annual Report on Form 10-K. RESULTS OF OPERATIONS. Rental revenues totalled $23,781,000 for the quarter ended September 30, 1994, compared to $11,212,000 for the quarter ended September 30, 1993. The increase in rental revenues resulted primarily from the rental revenues from the 93 buildings acquired pursuant to the Merger on December 21, 1993 (totalling approximately $12,880,000). At September 30, 1994, the Company's 219 buildings were on average 89 percent leased with an average effective rental rate of $13.35. Rental revenues increased to $70,742,000 during the nine month period ended September 30, 1994, compared to $33,164,000 during the same period last year, primarily for the same reason mentioned above. During the three and nine month periods ended September 30, 1994, the Company earned $1,368,000 and $3,612,000 of management fees from TKPL and third party management contracts. The Company had no management fees for the same periods in 1993, as it assumed the management contracts from KPI on the date of the Merger. Property operating expenses include such charges as utilities, taxes, janitorial, and maintenance. The amounts of property operating expenses, management costs incurred during 1994, and management fees incurred during 1993 and their percentages of rental revenues for the applicable periods are as follows: % of Rental Period Amount Revenues ------ ------ ----------- [S] [C] [C] September 30, 1994 - Quarter $10,828,000 45.5% September 30, 1993 - Quarter $ 5,680,000 50.7% September 30, 1994 - Nine Months $30,042,000 42.5% September 30, 1993 - Nine Months $15,186,000 45.8% Property operating expenses in 1994 were larger than 1993 primarily due to the operating expenses on the 93 buildings acquired pursuant to the Merger on December 21, 1993 (totalling approximately $5,282,000 and $14,228,000, respectively, for the three and nine month periods ended September 30, 1994). For the three and nine month periods ended September 30, 1994, the reduction in the percent of operating expenses to rental revenues was due primarily to the fact that the 93 buildings acquired pursuant to the Merger are generally newer and, therefore, had a lower percentage of operating expenses to rental revenues than the 126 buildings which the Company owned prior to the Merger. Interest expense increased by $3,795,000 and $11,008,000, respectively, during the three and nine month periods ended September 30, 1994, compared to the same periods last year, primarily due to the interest expense on the KPI restructured debt assumed pursuant to the Merger. 10 12 Depreciation expense has been calculated on the straight line method based upon the useful lives of the Company's depreciable assets, generally 5 to 40 years. Depreciation expense increased $1,722,000 and $4,917,000, respectively, for the three and nine month periods ended September 30, 1994, compared to the same periods last year, due to (i) improvements made to the Company's existing properties during 1993 and 1994 and (ii) the acquisition of 93 buildings during December 1993 pursuant to the Merger. Amortization expense increased $173,000 and $480,000, respectively, for the three and nine month periods ended September 30, 1994, compared to the same periods last year, due to amounts incurred for goodwill related to the Merger during 1993. General and administrative expenses for the three month periods ended September 30, 1994 and 1993, totalled $850,000 and $460,000, respectively, which is 0.6 percent and 0.5 percent (annualized) of average invested assets. General and administrative expenses for the nine month periods ended September 30, 1994 and 1993, totaled $4,058,000 and $1,413,000, respectively, which is 0.9 percent and 0.5 percent of average invested assets. General and administrative expenses increased primarily due to the increased general and administrative functions performed by the Company following the Merger. Following the Merger, the Company became fully self-advised and self-managed. During the three and nine month periods ended September 30, 1994, the Company recorded a provision for loss on land held for sale which totalled $150,000 and $996,000, respectively. This provision for loss is based upon signed contracts for the sale of two land parcels (approximately 53 acres), which sales had not closed as of September 30, 1994. During the three and nine month periods ended September 30, 1994, the Company incurred $1,087,000 and $2,549,000 in direct costs to generate management fees from TKPL and third party management contracts which it assumed from KPI pursuant to the Merger. During the three and nine month periods ended September 30, 1994, real estate taxes and other costs related to the unimproved land acquired from KPI pursuant to the Merger totalled $125,000 and $551,000, respectively. On October 21, 1994, the Company sold a parcel of unimproved land (approximately 22.7 acres). Through September 30, 1994, the Company had accrued $72,000 for real estate taxes on this land parcel. Net income totalled $1,432,000 for the quarter ended September 30, 1994, compared to net loss of $26,000 for the corresponding period of 1993. The increase is due to the positive effect on the current quarter of the acquisition of the 93 buildings, during 1993 pursuant to the Merger. Net income increased $1,514,000 during the nine month period ended September 30, 1994, compared to the same period last year. This increase is due to the fact that the positive effect on this period of the acquisition of the 93 buildings, pursuant to the Merger, was partially offset by the provision recorded for the litigation settlement and the provision recorded for the loss on two land parcels held for sale. LIQUIDITY AND CAPITAL RESOURCES. OPERATING ACTIVITIES - The Company's primary internal sources of cash are the collection of rents and income from management fees with respect to properties managed for TKPL, Centoff Realty Company, Inc., and others. As a real estate investment trust (a 11 13 "REIT") for Federal income tax purposes, the Company is required to pay out annually, as dividends, 95 percent of its REIT taxable income (which, due to non-cash charges, including provision for losses and depreciation, may be substantially less than cash flow). In the past, the Company has paid out dividends in amounts at least equal to its taxable income. However, the Company currently expects that it will not be required to pay any dividends during 1994 to maintain its REIT status. The Company believes that its cash provided by operating activities will be sufficient to cover debt service payments through 1994. The level of cash flow generated by rents depends primarily on the occupancy rates of the Company's buildings and increases in effective rental rates on new and renewed leases and under escalation provisions in existing leases. During the nine months ended September 30, 1994, the Company generated approximately $18.1 million in net cash from operating activities. From December 31, 1993 to September 30, 1994, the Company has increased its balance of cash and cash equivalents by $4,608,000 to $23,174,000. At September 30, 1994, leases representing approximately 7.4 percent of the gross annual rent from the Company's properties, without regard to the exercise of options to renew, were due to expire during the remainder of 1994. This represents 336 leases for space in buildings located in 18 of the 21 centers in which the Company owns buildings. Certain of these tenants may not renew their leases or may reduce their demand for space. During the nine months ended September 30, 1994, leases were renewed on approximately 65 percent of the Company's net rentable square feet which were scheduled to expire during the nine month period. For those leases which renewed during the nine months ended September 30, 1994, the average effective rental rate increased from $12.76 to $12.83. However, current market conditions in certain markets may require that rental rates at which leases are renewed or at which vacated space is leased be lower than rental rates under existing leases. Based upon the significant number of leases which will expire during 1994 and 1995 and the competition for tenants in the markets in which the Company operates, the Company has and expects to continue to offer incentives to new and renewal tenants. These incentives may include the payment of tenant improvements costs and in certain markets reduced rents during initial lease periods. The Company expects capital expenditures to be greater in 1994 than in 1993 due to the fact that the Company acquired 93 buildings pursuant to the Merger. The Company's occupancy rate has increased from 88% on December 31, 1993 to 89% on September 30, 1994. During 1994, the Company has benefitted from improving economic conditions and reduced vacancy levels for office buildings in many of the metropolitan areas in which the Company owns buildings. The Company believes that the southeastern and southwestern regions of the United States provide significant economic growth potential due to their diverse regional economies, expanding metropolitan areas, skilled work force and moderate labor costs. However, the Company cannot predict whether such economic growth will continue. If economic growth was not to continue in the Company's markets and if this resulted in lower occupancy rates for the Company's buildings, cash flow from operations could be reduced. Governmental tenants (including 23 departments or agencies of the State of Florida and 36 departments or agencies of the United States Government) which account for approximately 22 percent of the Company's leased space at September 30, 1994, may be subject to budget reductions in times of recession and governmental austerity; therefore, there can be no assurance that governmental appropriations for rents may not be reduced. Additionally, certain of the private sector tenants which have contributed to the Company's 12 14 rent stream may reduce their current demands or curtail their need for additional office space. INVESTING ACTIVITIES - At September 30, 1994, all of the Company's invested assets were in properties. Improvements to the Company's existing properties have been financed through internal operations. During the nine month period ended September 30, 1994, the Company's expenditures for improvements to existing properties increased by $3,585,000 over the corresponding period of the prior year primarily due to the acquisition of 93 buildings pursuant to the Merger on December 21, 1993. During the nine month period ended September 30, 1994, the Company sold various items of furnishings and equipment which it had acquired pursuant to the Merger for approximately $520,000, net of selling costs. The terms of the Company's existing indebtedness require that a substantial portion of any debt or equity financing achieved by the Company during the foreseeable future be applied to the reduction of the current secured indebtedness of the Company and contain limitations on incurrence of additional debt and other restrictions. FINANCING ACTIVITIES - The Company has no open lines of credit, but has a cash balance at September 30, 1994 of $23,174,000. During the nine month period ended September 30, 1994, the Company fully repaid 17 mortgages which were collateralized by 17 buildings which contain 357,280 net rentable square feet. At September 30, 1994, the Company had 51 buildings which contain 1,387,130 net rentable square feet which are unencumbered. Loan maturities and normal amortization of mortgages and loans payable are expected to total approximately $5.1 million over the next 12 months. The Company believes that these obligations will be paid from cash provided by operations or from current cash balances. Significant maturities of the Company's mortgages and loans payable do not begin to occur until 1998. Depending on market conditions, the Company may seek to raise additional equity capital, the proceeds of which would be used to reduce existing indebtedness. On August 22, 1994, the Company filed a shelf registration statement with respect to the possible issuance of up to $100,000,000 of its common and or preferred stock. 13 15 PART II. OTHER INFORMATION Item 1. Legal Proceedings An action in the U. S. District Court, Middle District of Florida (the "District Court") was filed on October 11, 1990, by Gerald and Althea Best and Jerome Wilem, shareholders of the Company, against the Company, two subsidiaries of KPI (Koger Advisors, Inc. and Koger Management Inc.), Messrs. Allen R. Ransom (a former director of the Company), Ira M. Koger (a former director of the Company), S. D. Stoneburner, and W.F.E. Kienast (a former director of the Company), alleging that various press releases, shareholder reports, and/or securities filings failed to disclose and/or misrepresented the Company's business policies, thereby inflating the market price of the Company's stock, and seeking damages therefore (the "Securities Action"). William L. Coalson, a shareholder of the Company, was subsequently added as an additional plaintiff. On July 21, 1994, the Company entered into a Stipulation and Agreement of Compromise and Settlement (the "Settlement") relating to the Securities Action, which Settlement is subject to the approval of the District Court. A hearing was held in the District Court on November 3, 1994 and the District Court has the approval of the Settlement under advisement. There were no objections to the Settlement. Under the Settlement, the Company has agreed to pay, in settlement of all claims against all defendants therein, the sum of $800,000 in cash plus 472,131 Warrants (the "Warrants") to purchase 472,131 shares of the Company's common stock. The Warrants are exercisable until June 30, 1999 at $8.00 per share and are subject to redemption at prices ranging from $2.31 to $5.24 per Warrant. Through September 30, 1994, the Company has recorded a provision of $2,000,000 relating to the Settlement of the Securities Action. While there can be no assurance that the District Court will approve the Settlement, the Company believes that the outcome of this litigation will not materially adversely affect its operations or financial position. Under the terms of the Settlement, the Company has maintained its position that the claims in the Securities Action are without merit and, if the Settlement is not approved, the Company will vigorously contest the Securities Action. A derivative action in the District Court was commenced on October 29, 1990, by Howard Greenwald and Albert and Phyllis Schlesinger, shareholders of the Company, against the Company, KPI, all of the then current directors of the Company, including: Ira M. Koger, James B. Holderman, Allen R. Ransom, Wallace F. E. Kienast, S. D. Stoneburner, Yank D. Coble, Jr., G. Christian Lantzsch, A. Paul Funkhouser and Stephen D. Lobrano, alleging breach of fiduciary duty by favoring KPI over the interest of the Company and failing to disclose or intentionally misleading the public as to the Company's cash flow, dividend and financing policies and status, and seeking damages therefor (the "Derivative Action"). During the pendency of the litigation a Special Litigation Committee, which was composed of outside independent members of the Company's Board of Directors, was appointed to conduct an extensive investigation of the facts and circumstances surrounding the Derivative Action. Upon completion of its investigation, it was the conclusion of this committee that the ultimate best interests of the Company and its shareholders would not be served in prosecuting this litigation. Subsequently, the Company moved that the Derivative Action be dismissed under the provisions of Florida law. Thereafter, the plaintiffs filed a Second Amended and Supplemental Complaint which realleged the original cause of action ("Count I"); and alleged a new cause of action against Stephen D. Lobrano for legal malpractice ("Count II"); and a new cause of action against 14 16 the members of the Special Litigation Committee for alleged violation of fiduciary duties in conducting their investigation ("Count III"). During 1993, the Company filed further motions seeking dismissal of the Second Amended and Supplemental Complaint. On January 27, 1994, the United States Magistrate issued his Report and Recommendation concerning the Second Amended and Supplemental Complaint and Derivative Action, which recommended that (1) Count I should be dismissed pursuant to the Special Litigation Committee Report, (2) Count III against the Special Litigation Committee members should be dismissed, and (3) Count II against Mr. Lobrano should not be dismissed. The District Court adopted the Report and Recommendations of the United States Magistrate by order entered March 8, 1994. Subsequently, Mr. Lobrano filed his answer denying all of the material allegations of the Second Amended and Supplemental Complaint, and raising affirmative defenses, including, without limitation, the defense that Mr. Lobrano was at all times acting under the direction of the officers and directors of KPI. Mr. Lobrano and his law firm (the "Lobrano Defendants") also filed a counter claim against the Company (the "Counter-Claim"), asserting that, in connection with the matters complained of in the Second Amended and Supplemental Complaint, Mr. Lobrano and his law firm acted under the direction and control of the officers and directors of KPI, that they have suffered out-of-pocket expenses and reputation damage to their business due to the directions of the officers and directors of KPI, and that they are entitled to contribution or indemnity from the Company, as the successor of KPI under the Merger consummated pursuant to the KPI Plan of Reorganization in its Chapter 11 Bankruptcy Case, in respect of such damages. They have brought similar cross claims against Ira M. Koger, Allen R. Ransom and Wallace F. E. Kienast, former officers and directors of KPI. The Company moved to dismiss the Counter-Claim, and moved in the United States Bankruptcy Court for the Middle District (the "Bankruptcy Court") of Florida for an order holding Mr. Lobrano, the other members of his firm and his lawyers in contempt on the grounds that any such claims against KPI were discharged in its Chapter 11 Case and that the filing of the Counter-Claim against the Company is a violation of the confirmation order in the Chapter 11 Case (the "Confirmation Order"). On July 22, 1994, the Bankruptcy Court entered its order finding that the filing of the Counter-Claim was a violation of the Confirmation Order and in contempt of the Bankruptcy Court. The Counter-Claim was then subsequently dismissed. The Lobrano Defendants then filed an amended counter-claim (the "Amended Counter-Claim") against the Company which asserts, among other things, that the Company, through its officers and directors, improperly shaped and influenced the Special Litigation Committee Report so that it contains inaccurate and false statements about the Lobrano Defendants which have, in turn, caused damage to the Lobrano Defendants. The Company has moved to dismiss the Amended Counter-Claim on various grounds and has renewed its motion that Mr. Lobrano, certain other members of his firm and their lawyers be held in contempt of the Confirmation Order by reason of the filing of the Amended Counter-Claim. A hearing on this renewed motion was held in the Bankruptcy Court on September 14, 1994, and the Bankruptcy Court has this matter under advisement. The Company believes that the allegations of the Amended Counter-Claim are without merit and will contest vigorously the Amended Counter-Claim. The Company does not believe that the outcome of this litigation will materially affect its operations or financial position. On March 23, 1993, the Securities and Exchange Commission ("the Commission") entered an Order directing a private investigation with respect to KPI's accounting practices, including the accuracy of financial information included in certain reports filed with the Commission, possible insider trading in KPI's stock, and possible misleading statements 15 17 concerning the financial condition of KPI and its ability to pay dividends to its shareholders. Prior to March 23, 1993, the Commission had been engaged in a confidential investigation without a formal order. As a result of the Merger of KPI with and into the Company, the Company has assumed responsibility for responding to the requests and subpoenas of the Commission staff in connection with this private investigation. Although the staff of the Commission had subpoenaed KPI documents and the former employees of KPI, who are presently employees of the Company, for testimony, on February 8, 1994, the Commission staff advised the Company, through its counsel, that the scheduled depositions of former KPI employees and the review of documents of KPI had been suspended. The Company has received no communication from the Commission staff since the above notice of suspension. Based on the information currently available to the Company, it is unable to determine whether or not the private investigation will lead to formal legal proceedings or administrative actions or whether or not such legal proceedings or administrative actions will involve the Company. 16 18 Item 5. Other Information (a) The following table sets forth, with respect to the Company's centers at September 30, 1994, number of buildings, net rentable square feet, net square feet leased (based upon signed leases), weighted average percent leased, and current average effective rent per net rentable square foot leased.
Avg Eff. Net Net Wtg Avg Rent Per Number Rentable Square Percent Net of Square Feet Leased Rentable Center Buildings Feet Leased (1) Sq Ft (2) ------- --------- -------- -------- ------ ---------- Atlanta Chamblee 22 947,920 856,250 90% $14.06 Austin 12 370,860 342,955 92% 13.34 Charlotte Carmel 1 109,600 108,405 99% 15.50 Charlotte East 11 468,820 381,518 81% 12.51 El Paso 14 251,930 236,068 94% 12.60 Greensboro South 13 610,470 573,517 94% 13.30 Greenville 8 290,560 200,465 69% 13.42 Jacksonville Baymeadows 4 468,000 466,358 100% 14.47 Jacksonville Central 32 677,540 572,128 84% 11.43 Memphis Germantown 3 258,400 235,695 91% 16.23 Miami 1 96,800 95,630 99% 18.59 Norfolk West 1 59,680 43,396 73% 15.97 Orlando Central 22 565,220 490,395 87% 13.34 Orlando University 2 159,600 129,116 81% 16.12 Raleigh Crossroads 1 77,500 76,815 99% 15.43 San Antonio 26 788,670 646,056 82% 10.75 St. Petersburg 15 519,320 455,408 88% 12.84 Tall. Apal. Pkwy 14 408,500 384,155 94% 15.14 Tall. Cap. Circle 4 300,700 300,700 100% 17.40 Tulsa North 2 103,520 92,514 89% 9.84 Tulsa South 11 372,760 311,999 84% 9.11 --- --------- --------- --- ------ TOTAL 219 7,906,370 6,999,543 89% $13.35 === ========= ========= === ======
(1) The percent leased rates have been calculated by dividing total net rentable square feet leased in an office building by net rentable square feet in such building, which excludes public or common areas. (2) Rental rates are computed by dividing annual gross rental revenues for a center by the net rentable square feet applicable to such gross rental revenues. 17 19 (b) The following schedule sets forth for each of the Company's centers (i) the number of leases which will expire during the remainder of calendar year 1994 and calendar years 1995 through 2002, (ii) the total net rentable area in square feet covered by such leases, (iii) the current annual rental represented by such leases, and (iv) the percentage of gross annual rental for such center contributed by such leases. This information is based on the buildings owned by the Company on September 30, 1994 and on the terms of leases in effect as of September 30, 1994, on the basis of then existing base rentals, and without regard to the exercise of options to renew. This table does not include tenants in possession where leases were in the process of execution but were not delivered to the Company at September 30, 1994.
Leases in Effect September 30, 1994, Expiring During the Calendar Years ----------------------------------------------------------------------------------------------------------- 1994 1995 1996 1997 1998 1999 2000 2001 2002 OTHER ---- ---- ---- ---- ---- ---- ---- ---- ---- ----- ATLANTA CHAMBLEE Number of Leases 24 51 32 27 16 13 2 1 1 5 Number of Sq. Ft. 17,457 114,460 130,165 86,717 127,735 103,132 32,964 28,285 39,490 175,845 Annual Rental $ 227,074 1,539,567 2,050,413 1,105,115 1,785,869 1,337,136 647,733 289,976 516,547 2,475,646 % Gross Annual Rent 1.9% 12.9% 17.1% 9.2% 14.9% 11.2% 5.4% 2.4% 4.3% 20.7% AUSTIN Number of Leases 20 63 62 26 6 6 Number of Sq. Ft. 22,500 122,735 116,810 44,002 9,565 27,343 Annual Rental $ 284,961 1,508,531 1,599,148 620,821 130,263 431,630 % Gross Annual Rent 6.2% 33.0% 35.0% 13.6% 2.8% 9.4% 0.0% 0.0% 0.0% 0.0% CHARLOTTE EAST Number of Leases 30 74 34 21 9 6 1 Number of Sq. Ft. 39,667 156,384 74,529 35,975 38,005 28,392 8,566 Annual Rental $ 471,515 2,126,501 928,443 412,237 402,528 311,106 112,896 % Gross Annual Rent 9.9% 44.6% 19.5% 8.7% 8.4% 6.5% 2.4% 0.0% 0.0% 0.0% CHARLOTTE CARMEL Number of Leases 2 1 3 6 1 Number of Sq. Ft. 6,530 1,042 60,930 38,849 1,054 Annual Rental $ 99,643 18,738 826,328 714,958 21,065 % Gross Annual Rent 0.0% 5.9% 1.1% 49.2% 42.5% 0.0% 1.3% 0.0% 0.0% 0.0% EL PASO Number of Leases 22 50 56 46 11 2 1 1 Number of Sq. Ft. 18,250 50,751 67,691 70,221 20,275 2,025 4,806 2,049 Annual Rental $ 206,354 610,052 811,567 907,431 264,027 25,928 101,400 34,732 % Gross Annual Rent 7.0% 20.6% 27.4% 30.6% 8.9% 0.9% 3.4% 1.2% 0.0% 0.0% GREENSBORO SOUTH Number of Leases 17 84 43 20 10 3 2 1 1 Number of Sq. Ft. 18,621 114,101 99,679 129,890 144,007 4,078 15,254 17,366 30,521 Annual Rental $ 268,802 1,659,228 1,326,653 1,813,015 1,708,382 60,985 181,935 201,183 380,743 % Gross Annual Rent 3.5% 21.8% 17.5% 23.9% 22.5% 0.8% 2.4% 2.6% 5.0% 0.0% GREENVILLE Number of Leases 22 71 31 17 8 1 2 Number of Sq. Ft. 24,567 68,536 30,921 45,125 14,287 5,091 11,938 Annual Rental $ 321,872 919,741 388,874 638,794 167,233 62,976 190,797 % Gross Annual Rent 12.0% 34.2% 14.5% 23.7% 6.2% 2.3% 0.0% 0.0% 0.0% 7.1% JACKSONVILLE BAYMEADOWS Number of Leases 0 14 4 6 4 4 1 Number of Sq. Ft. 0 380,621 18,627 8,505 23,681 11,024 23,900 Annual Rental $ 0 5,405,873 318,752 111,811 364,858 165,645 378,160 % Gross Annual Rent 0.0% 80.1% 4.7% 1.7% 5.4% 2.5% 5.6% 0.0% 0.0% 0.0%
18 20
Leases in Effect September 30, 1994, Expiring During the Calendar Years ------------------------------------------------------------------------------------------------------------- 1994 1995 1996 1997 1998 1999 2000 2001 2002 OTHER ---- ---- ---- ---- ---- ---- ---- ---- ---- ----- JACKSONVILLE CENTRAL Number of Leases 31 85 53 45 33 14 2 4 Number of Sq. Ft. 21,472 141,713 135,657 78,833 97,705 70,519 2,912 23,317 Annual Rental $ 272,968 1,746,886 1,270,980 916,047 1,133,090 729,637 35,916 289,134 % Gross Annual Rent 4.3% 27.3% 19.9% 14.3% 17.7% 11.4% 0.6% 0.0% 0.0% 4.5% MEMPHIS GERMANTOWN Number of Leases 8 10 16 16 5 2 1 Number of Sq. Ft. 66,295 14,991 75,552 57,374 16,597 5,416 42,213 Annual Rental $ 1,180,684 250,824 1,255,215 987,346 244,273 81.100 436,368 % Gross Annual Rent 26.6% 5.7% 28.3% 22.3% 5.5% 1.8% 9.8% 0.0% 0.0% 0.0% MIAMI Number of Leases 2 10 5 1 1 Number of Sq. Ft. 21,799 53,874 11,391 820 7,746 Annual Rental $ 368,469 1,029,390 219,154 15,375 145,380 % Gross Annual Rent 20.7% 57.9% 12.3% 0.9% 0.0% 8.2% 0.0% 0.0% 0.0% 0.0% NORFOLK WEST Number of Leases 2 4 3 2 4 1 1 Number of Sq. Ft. 7,315 11,492 5,183 4,822 6,540 3,014 5,030 Annual Rental $ 127,988 216,563 75,224 70,868 90,907 39,182 72,185 % Gross Annual Rent 18.4% 31.3% 10.9% 0.0% 10.2% 13.1% 0.0% 5.7% 0.0% 10.4% ORLANDO CENTRAL Number of Leases 35 53 43 33 13 3 1 1 Number of Sq. Ft. 67,157 86,992 125,396 122,768 60,109 8,314 12,606 7,053 Annual Rental $ 873,108 1,209,570 1,699,510 1,603,956 775,090 102,242 170,522 92,535 % Gross Annual Rent 13.4% 18.5% 26.0% 24.6% 11.9% 1.6% 2.6% 0.0% 0.0% 1.4% ORLANDO UNIVERSITY Number of Leases 3 9 11 11 2 4 1 Number of Sq. Ft. 3,722 30,798 16,794 30,753 7,834 36,044 3,171 Annual Rental $ 64,205 536,327 272,721 448,836 140,596 554,548 60,439 % Gross Annual Rent 3.1% 25.8% 13.1% 21.6% 6.8% 26.7% 0.0% 0.0% 0.0% 2.9% RALEIGH CROSSROADS Number of Leases 2 2 2 1 Number of Sq. Ft. 2,079 2,690 43,794 28,252 Annual Rental $ 33,397 42,203 671,997 437,681 % Gross Annual Rent 2.8% 3.6% 56.7% 0.0% 0.0% 0.0% 36.9% 0.0% 0.0% 0.0% SAN ANTONIO Number of Leases 45 112 61 42 21 16 1 3 Number of Sq. Ft. 90,688 152,603 101,410 73,410 139,353 67,175 2,616 18,801 Annual Rental $ 962,669 1,680,690 1,022,806 780,172 1,443,259 772,070 27,715 213,526 % Gross Annual Rent 13.9% 24.4% 14.8% 11.3% 20.9% 11.2% 0.4% 0.0% 0.0% 3.1% ST. PETERSBURG Number of Leases 19 64 34 27 16 11 2 1 2 Number of Sq. Ft. 53,461 92,400 39,931 114,092 56,064 45,025 17,370 9,695 27,370 Annual Rental $ 726,809 1,329,669 507,297 1,103,728 750,429 584,887 200,870 160,517 348,557 % Gross Annual Rent 12.7% 23.3% 8.9% 19.3% 13.1% 10.3% 3.5% 2.8% 0.0% 6.1% TALLAHASSEE APALACHEE PKWY Number of Leases 14 45 12 10 8 3 1 Number of Sq. Ft. 12,816 190,781 30,692 73,076 59,539 14,905 2,346 Annual Rental $ 181,493 2,942,582 421,357 1,158,983 871,516 212,513 31,593 % Gross Annual Rent 3.1% 50.6% 7.2% 19.9% 15.0% 3.7% 0.0% 0.0% 0.5% 0.0%
19 21
Leases in Effect September 30, 1994, Expiring During the Calendar Years ----------------------------------------------------------------------------------------------------------- 1994 1995 1996 1997 1998 1999 2000 2001 2002 OTHER ---- ---- ---- ---- ---- ---- ---- ---- ---- ----- TALLAHASSEE CAPITAL CIRCLE Number of Leases 8 2 Number of Sq. Ft. 219,700 81,000 Annual Rental $ 3,761,533 1,471,208 % Gross Annual Rent 0.0% 71.9% 0.0% 28.1% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% TULSA NORTH Number of Leases 5 8 8 3 4 1 Number of Sq. Ft. 11,985 11,847 45,885 4,724 16,659 1,414 Annual Rental $ 95,190 111,054 453,060 43,589 193,940 13,433 % Gross Annual Rent 10.5% 12.2% 49.7% 4.8% 21.3% 1.5% 0.0% 0.0% 0.0% 0.0% TULSA SOUTH Number of Leases 35 77 31 15 1 1 Number of Sq. Ft. 24,544 116,229 117,648 24,884 6,051 22,643 Annual Rental $ 227,068 1,036,548 1,062,618 236,623 51,536 229,165 % Gross Annual Rent 8.0% 36.4% 37.4% 8.3% 1.8% 8.1% 0.0% 0.0% 0.0% 0.0% TOTAL OFFICE BUILDINGS Number of Leases 336 896 542 371 175 95 16 5 3 19 Number of Sq. Ft. 524,395 2,140,228 1,288,797 1,143,099 881,137 466,826 192,513 60,409 72,357 272,525 Annual Rental $ 6,894,626 29,762,975 16,374,527 15,201,415 11,212,715 5,911,288 2,752,261 725,590 928,883 3,743,499 % Gross Annual Rent 7.4% 31.8% 17.5% 16.3% 12.0% 6.3% 2.9% 0.8% 1.0% 4.0%
20 22 Item 6. Exhibits and Reports on Form 8-K (a) Exhibits
Exhibit Number Description ------ ----------- 27 Financial Data Schedule (for the SEC use only).
(b) Reports on Form 8-K On August 19, 1994, the Company filed a Form 8-K reporting under Item 5, Other Events, that the Company and TCW Special Credits had signed a letter agreement and providing under Item 7, Financial Statements and Exhibits, a copy of the letter agreement between Koger Equity, Inc. and TCW Special Credits, a California General Partnership, dated August 5, 1994. 21 23 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. Registrant [VICTOR A. HUGHES] ------------------------------ VICTOR A. HUGHES SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER Dated: November 10, 1994 [JAMES L. STEPHENS] ----------------------------- JAMES L. STEPHENS TREASURER AND CHIEF ACCOUNTING OFFICER 22 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF THE KOGER EQUITY, INC. FOR THE PERIOD ENDED SEPTEMBER 30, 1994, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS DEC-31-1994 SEP-30-1994 23,174 0 5,386 296 0 0 613,909 41,761 617,948 0 324,862 205 0 0 278,302 617,948 0 75,080 0 32,591 19,795 109 19,348 3,237 188 3,049 0 0 0 3,049 0.17 0.17 The Company does not file a classified balance sheet, therefore these items are not provided.
-----END PRIVACY-ENHANCED MESSAGE-----