EX-99 3 koger99a.txt EXHIBIT 99(A) Exhibit 99(a) KOGER EQUITY, INC. Koger Equity Announces Fourth Quarter and Year End 2001 Financial Results Boca Raton, Florida--February 21, 2002--Koger Equity, Inc. (NYSE:KE) today reported results for the fourth quarter and year ended December 31, 2001. -- For properties owned on December 31, 2001, leasing activity during the quarter totaled approximately 209,000 rentable square feet encompassing 81 leases. The weighted average net rental rate on leases signed, excluding first generation space and renewals, was $12.23 as compared to $12.19 for the average net rental rate on expiring leases, a 0.3% increase in net rental rates. In addition, the weighted average net rental rate on renewal leases signed was $11.53 as compared to $11.10 for the average net rental rate on expiration, a 3.9% increase in net rental rates. -- For properties owned on December 31, 2001, the Company signed 1,235,000 square feet of leases in 325 transactions during 2001 and did so at an average cost of $1.18 per square foot per year. -- Tenant retention rate was 59% for the quarter and 66% for the year. -- Occupancy for the properties owned on December 31, 2001, was down 1.4% to 90% at December 31, 2001 compared with 91.4% at December 31, 2000. -- Dividend coverage to Funds from operations ("FFO") was 55.6% and Cash Available for Distribution ("CAD") was 66.7% for the year ended December 31, 2001. -- Operating margins and expense control have improved slightly from 62.4% to 62.8% for the years ended December 31, 2000 and 2001. -- For 2001, portfolio wide net operating income ("NOI") was increased to $104.0 compared to $102.9 for the prior year. Funds from operations for the fourth quarter totaled $16.6 million or $0.62 per share on a fully diluted basis, as compared with $16.1 million or $0.58 per share on a fully diluted basis, for the fourth quarter 2000. This represents a 6.9% increase in fully diluted FFO per share between years. Included in the fourth quarter of 2000 was a charge of $2.1 million related to the Company's reorganization. Excluding this reorganization charge, FFO would have been $0.65 per share on a fully diluted basis, representing a 4.6 percent decrease in fully diluted FFO per share between years. Revenues for the fourth quarter 2001 totaled $40.9 million, as compared to revenues of $41.5 million for the same period in 2000, a 1.5% decrease. This decrease was primarily due to the sale of properties which occurred on December 12, 2001. For purposes of FFO, the weighted average number of common shares and units outstanding totaled 26,785,000 for the fourth quarter 2001 on a fully diluted basis. For 2001, FFO totaled $69.7 million on revenues of $170.6 million compared with FFO of $56.1 million on revenues of $167.9 million for the same period in 2000, a 24.2% increase in FFO and a 1.6% increase in revenues. FFO per fully diluted share for 2001 was $2.52 as compared to $2.01 per fully diluted share for the same period in 2000, a 25.4% increase. Included in the year 2000 was a charge of $12.8 million related to the Company's reorganization. Excluding this reorganization charge, FFO would have been $68.9 million or $2.46 per share on a fully diluted basis, representing a 1.1% increase in FFO and a 2.4% increase in fully diluted FFO per share between years. Earnings per share for the three months and year ended December 31, 2001 were $1.86 and $2.75, respectively, per diluted share. Operating earnings per share for the three months and year ended December 31, 2001 were $0.34 and $1.28, respectively, per diluted share. Other year 2001 highlights include: -- Completed construction on two office buildings during the first half of the year, consisting of 181,000 square feet, in two markets. -- Completed the sale of 75 suburban office buildings, one retail center and 3.4 acres of unimproved land for approximately $206.7 million cash and 5.73 million shares of the Company's common stock. -- Obtained a $125 million secured revolving credit facility which matures in December 2004. Earnings Estimates On our scheduled February 22, 2002 conference call, management will discuss earnings guidance for 2002. Based on current market conditions and certain assumptions with regard to rental rates and other projections, our estimate is that fully diluted FFO per share for 2002 will be approximately $2.00 in a tight range. 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 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 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. About Koger Equity Koger Equity, Inc. currently owns and operates 12 suburban office parks and three freestanding buildings, containing 7.7 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. Copies of the Company's December 31, 2001, Fourth Quarter Supplemental Disclosure package are available upon request to Investor Relations, 8880 Freedom Crossing Trail, Suite 101, Jacksonville, Florida, 32256-8280, 904-538-8871. Also, the Fourth Quarter Supplemental Disclosure and additional Koger Equity information 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 Ended Year Ended 12/31/01 12/31/00 12/31/01 12/31/00 -------- -------- -------- -------- Revenues Rental and other rental services revenues $40,161 $40,446 $165,623 $164,733 Management fees 550 538 4,080 1,793 Income from Koger Realty Services, Inc. 0 293 81 645 Interest 180 225 776 703 -------- -------- --------- --------- Total revenues 40,891 41,502 170,560 167,874 -------- -------- --------- --------- Expenses Property operations 14,859 13,904 61,608 61,868 Depreciation and amortization 8,173 9,247 36,007 35,133 Mortgage and loan interest 5,825 6,709 25,204 27,268 General and administrative 2,264 4,129 8,412 20,217 Direct cost of management fees 720 291 3,378 898 Other 18 26 189 217 -------- -------- --------- --------- Total expenses 31,859 34,306 134,798 145,601 -------- -------- --------- --------- Income Before Gain (Loss) on Sale or Disposition of Assets, Income Taxes and Minority Interest 9,032 7,196 35,762 22,273 Gain (loss) on sale or disposition of assets 39,189 (422) 39,189 6,015 -------- -------- --------- --------- Income Before Income Taxes and Minority Interest 48,221 6,774 74,951 28,288 Income taxes 235 (2) 684 (21) -------- -------- --------- --------- Income Before Minority Interest 47,986 6,776 74,267 28,309 Minority interest 107 164 1,044 1,156 -------- -------- --------- --------- Net Income $47,879 $ 6,612 $ 73,223 $ 27,153 ======= ======== ========= ========= Earnings Per Share: Basic $ 1.87 $ 0.25 $ 2.76 $ 1.02 ======== ======== ========= ========= Diluted $ 1.86 $ 0.25 $ 2.75 $ 1.01 ======== ======== ========= ========= Weighted Average Shares: Basic 25,641 26,797 26,517 26,730 ======== ========= ========= ========= Diluted 25,785 26,876 26,610 26,962 ======== ========= ========= =========
KOGER EQUITY, INC. FUNDS FROM OPERATIONS (In Thousands except per Share Data) For the For the Three Months Ended Year Ended 12/31/01 12/31/00 12/31/01 12/31/00 -------- -------- -------- -------- Net income $47,879 $ 6,612 $ 73,223 $ 27,153 Depreciation - real estate 7,270 8,372 32,261 31,720 Amortization - deferred tenant costs 514 492 2,172 1,923 Amortization - goodwill 42 42 170 170 Minority interest 107 164 1,044 1,156 Loss (gain) on sale or disposition: Operating properties (39,189) 422 (39,189) (5,963) Non-operating assets 0 0 0 (52) -------- --------- ------- ------- Funds from operations $16,623 $ 16,104 $ 69,681 $ 56,107 ======= ======== ========= ========= Weighted average shares/units outstanding - diluted 26,785 27,876 27,610 27,962 Funds from operations, per diluted share/unit $ 0.62 $ 0.58 $ 2.52 $ 2.01
KOGER EQUITY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In Thousands Except Share Data) December 31, December 31, 2001 2000 ---------------- ---------------- ASSETS Real estate investments: Operating properties: Land $91,919 $138,214 Buildings 568,285 805,935 Furniture and equipment 3,082 2,631 Accumulated depreciation (123,999) (155,817) -------- -------- Operating properties - net 539,287 790,963 Properties under construction: Land - 2,128 Buildings - 12,023 Undeveloped land held for investment 13,779 13,899 Undeveloped land held for sale, net of allowance 76 76 Cash and cash equivalents 113,370 1,615 Accounts receivable, net of allowance for uncollectible accounts of $1,114 and $584 11,574 13,232 Investment in Koger Realty Services, Inc. - 2,533 Cost in excess of fair value of net assets acquired, net of accumulated amortization of $683 and $1,195 595 1,360 Other assets 11,904 13,193 ---------- --------- TOTAL ASSETS $690,585 $851,022 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Mortgages and loans payable $248,683 $343,287 Accounts payable 4,962 4,961 Accrued real estate taxes payable 1,007 4,175 Accrued liabilities - other 9,206 10,562 Dividends payable 44,159 9,392 Advance rents and security deposits 5,103 7,014 ---------- ---------- Total Liabilities 313,120 379,391 -------- -------- Minority interest 22,923 23,138 --------- --------- Shareholders' equity: Preferred stock, $.01 par value; 50,000,000 shares authorized; issued: none Common stock, $.01 par value; 100,000,000 shares authorized; issued: 29,663,362 and 29,559,381 shares; outstanding: 21,128,905 and 26,829,239 shares 297 296 Capital in excess of par value 469,779 468,277 Notes receivable from stock sales (5,066) (6,250) Retained earnings 21,180 20,261 Treasury stock, at cost; 8,534,457 and 2,730,142 shares (131,648) (34,091) --------- --------- Total Shareholders' Equity 354,542 448,493 --------- --------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $690,585 $851,022 ========= =========