EX-99 3 a4393748ex99.txt EXHIBIT 99 Exhibit 99 Koger Equity Announces 7% Increase in First Quarter Funds from Operations; Company Increases 2003 Guidance BOCA RATON, Fla.--(BUSINESS WIRE)--May 8, 2003--Koger Equity, Inc. (NYSE:KE) today reported a 7% increase in funds from operations (FFO) for the first quarter 2003 as compared to the first quarter 2002. FFO for the first quarter 2003 increased 18% as compared to the fourth quarter 2002. These increases were principally the result of the Company's January 31, 2002 acquisition of Three Ravinia in Atlanta, Georgia and the December 6, 2002 acquisition of The Lakes on Post Oak in Houston, Texas. The Company's portfolio ended the first quarter with an overall occupancy of 81.1%, down from 83.7% at December 31, 2002 and 86.3% at March 31, 2002. Earnings per share (EPS) for the three months ended March 31, 2003 was $0.20 per diluted share as compared to $0.24 per diluted share for the same period in 2002. For the first quarter, Koger increased total operating revenues $5.1 million to $36.5 million, from $31.4 million for the same period in 2002. FFO for the first quarter increased to $12.4 million or $0.58 per share on a fully diluted basis, from $11.6 million or $0.54 per share on a fully diluted basis for the first quarter 2002. Operating margins decreased to 63.2% in the first quarter 2003 as compared to 65.8% for the first quarter 2002. For purposes of FFO and EPS, the weighted average number of common shares totaled 21,327,000 for the first quarter 2003 on a fully diluted basis. Overall operating results increased $2.6 million as compared to the first quarter 2002. Net Operating Income of acquisition properties increased $3.6 million as compared to first quarter 2002, but same store Net Operating Income decreased $1.0 million or 5.5% compared to the first quarter 2002. Occupancy on the same store portfolio consisting of 120 buildings was 83.8% at March 31, 2003 compared to 89.8% at March 31, 2002. Thomas J. Crocker, Chief Executive Officer of Koger Equity, Inc. said, "We are pleased to report an increase in our first quarter FFO which was driven primarily by the accretion from our 2002 acquisitions. Our most recent acquisitions are performing above our expectations and validate our strategy of generating long-term growth in earnings and cash flow. While we continue to seek similar opportunities we remain challenged by a weakened demand for office space in most of our markets. Although we are seeing some improvement, we believe that a sustainable turnaround is still several months away. In the interim, we are aggressively pursuing renewals and new tenants even as the competitive environment forces increased allowances and concessions." The Company signed 406,000 square feet of leases in 78 transactions in the first quarter 2003 at an average cost of $1.68 per square foot per year. The weighted average net rental rate on leases signed, excluding first generation space was $12.02 as compared to $12.75 for the average rental rate on expiring leases, a 5.7% decrease in rental rates. The better than expected operating results allowed the Company to improve its dividend payout ratio to funds from operations to 60.4% and to cash available for distribution to 81.8% for the first quarter. Earnings Estimates Based on the current outlook, and Koger's results for the first quarter, the Company is increasing its 2003 diluted FFO per share guidance to a range of $1.85-$1.90. The increase is due to certain unbudgeted items occurring in the first quarter 2003, including lease cancellation fees, additional expense reimbursements (primarily at Three Ravinia), adjustments to straight-line rent and asset management fees from Crocker Realty Trust, LP, offset by the write-off of pursuit costs on certain development projects no longer considered viable. During the scheduled May 8, 2003 conference call, management will further discuss earnings guidance for 2003. Funds from operations (FFO) and Net Operating Income (NOI) are non-GAAP financial measures. The Company believes that FFO and NOI are helpful to investors as measures of the performance of an equity REIT because, along with cash flows from operating activities, financing activities and investing activities, they provide investors with an indication of the ability of the Company to incur and service debt, to make capital expenditures and to fund other cash needs. 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 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, located primarily in 16 suburban office projects in nine cities in the Southeastern United States and Houston, Texas. Copies of the Company's March 31, 2003 First Quarter Supplemental Disclosure package are available upon request to Investor Relations, Koger Equity, Inc., 225 NE Mizner Blvd., Suite 200, Boca Raton, Florida 33432, or call 1-800-850-2037. Additionally, the First Quarter Supplemental Disclosure package and further information about Koger Equity, Inc. 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 Three Months Ended 3/31/03 3/31/02 ---------------- Revenues Rental and other rental services $36,280 $30,595 Management fees 205 788 Other 5 3 ------- -------- Total operating revenues 36,490 31,386 ------- -------- Expenses Property operations 13,349 10,459 Depreciation and amortization 8,456 6,522 General and administrative 2,943 2,510 Direct cost of management fees 86 1,011 Other 36 32 -------- ------- Total expenses 24,870 20,534 -------- ------- Operating Income 11,620 10,852 -------- ------- Other Income and Expense Interest 54 145 Mortgage and loan interest (7,403) (5,795) -------- ------- Total other income and expense (7,349) (5,650) -------- ------- Income Before Loss on Sale or Disposition of Assets, Income Taxes and Minority Interest 4,271 5,202 Gain (loss) on sale or disposition of assets -- 1 -------- ------- Income Before Income Taxes and Minority Interest 4,271 5,203 Income taxes -- 32 -------- ------- Income Before Minority Interest 4,271 5,171 Minority interest -- 20 -------- ------- Net Income $4,271 $5,151 ======== ======= Earnings Per Share: Basic $0.20 $0.24 ======== ======= Diluted $0.20 $0.24 ======== ======= Weighted Average Shares: Basic 21,299 21,159 ======== ======= Diluted 21,327 21,350 ======== ======= KOGER EQUITY, INC. FUNDS FROM OPERATIONS (In Thousands except per Share Data) For the Three Months Ended 3/31/03 3/31/02 ---------------- Net income $4,271 $5,151 Depreciation - real estate 7,191 6,042 Amortization - deferred tenant costs 396 364 Amortization - fair value of acquired leases 492 -- Minority interest -- 20 Loss (gain) on sale or disposition: Operating properties -- -- Non-operating assets -- (1) ------- -------- Funds from operations $12,350 $11,576 ======= ======== Weighted average shares outstanding - diluted 21,327 21,350 Funds from operations, per diluted share/unit $0.58 $0.54 KOGER EQUITY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In Thousands) March December 31, 31, 2003 2002 --------- ---------- ASSETS Real estate investments: Operating properties: Land $ 110,653 $ 110,653 Buildings 779,914 783,185 Furniture and equipment 3,488 3,320 Accumulated depreciation (157,023) (149,830) --------- ---------- Operating properties, net 737,032 747,328 Undeveloped land held for investment 9,995 9,995 Undeveloped land held for sale, net of allowance 3,831 3,831 Cash and cash equivalents 5,893 4,627 Restricted cash 13,191 13,340 Accounts receivable, net of allowance for uncollectible accounts of $1,331 and $1,280 12,657 12,183 Cost in excess of fair value of net assets acquired, net of accumulated amortization of $683 and $683 595 595 Other assets 18,091 13,186 --------- ---------- TOTAL ASSETS $801,285 $805,085 ========= ========== LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Mortgages and loans payable $431,660 $431,698 Accounts payable 2,486 3,801 Accrued real estate taxes payable 4,022 147 Other accrued liabilities 9,969 13,435 Dividends payable 7,458 7,453 Advance rents and security deposits 5,678 5,483 --------- ---------- Total Liabilities 461,273 462,017 --------- ---------- Shareholders' equity: Common stock 298 298 Capital in excess of par value 472,253 472,156 Notes receivable from stock sales (5,266) (5,266) Accumulated other comprehensive loss (212) (212) Retained earnings 4,626 7,813 Treasury stock, at cost (131,687) (131,721) ---------- --------- Total Shareholders' Equity 340,012 343,068 ---------- --------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $801,285 $805,085 ========= ========= CONTACT: Koger Equity, Inc. Thomas C. Brockwell, 561/395-9666 Supplemental Operating & Financial Data First Quarter 2003 KOGER EQUITY, INC. AND SUBSIDIARIES SUPPLEMENTAL INFORMATION TABLE OF CONTENTS / "SAFE HARBOR" MARCH 31, 2003 Page ------------ I. Financial Data - Consolidated Balance Sheets 2 - Consolidated Statement of Operations 3 - 4 - Funds from Operations 5 - Net Operating Income 6 - 7 - Capital Expenditures 8 - Summary of Outstanding Debt 9 II. Acquisition/Construction Summaries - Operating Property Acquisitions 10 - Building Completions 11 - Buildings Under Construction 12 III. Portfolio Operating Statistics - Twenty-Five Largest Tenants 13 - Industry Diversification 14 - Regional Summary of MSAs 15 - Occupancy/Leased Summary 16 - Occupancy Trend 17 - Leasing Summary 18 - Lease Distribution 19 - Lease Expirations 20 - Net Effective Rents 21 - Capital Expenditure Leasing Commitment 22 - Same Suite Analysis 23 IV. Special Items - Special Items Included In Results 24 This supplemental package may contain forward-looking statements under the meaning of the Private Securities Litigation Reform Act of 1995. Although Koger Equity, Inc. believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, there can be no assurance that the expectations will be attained. Forward-looking statements are not guarantees of future performance and therefore, undue reliance should not be placed on them. Please refer to our filings with the Securities and Exchange Commission for a more detailed discussion of the risks that may have a direct bearing on our operating results, performance and financial condition. Koger Equity, Inc. 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. Page 1
KOGER EQUITY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS Dollars in thousands --------------------------------------------------------------------------------------------------------------- (Unaudited) (Unaudited) (Unaudited) (Unaudited) 3/31/03 12/31/02 9/30/02 6/30/02 3/31/02 ------------ ---------- ----------- ----------- ------------ ASSETS Real Estate Investments: Operating properties: Land $110,653 $110,653 $98,253 $98,253 $110,084 Buildings 779,914 783,185 688,363 685,975 670,895 Furniture and equipment 3,488 3,320 3,120 2,987 2,933 Accumulated depreciation (157,023) (149,830) (142,295) (136,010) (129,617) ------------ ---------- ----------- ----------- ------------ Operating properties, net 737,032 747,328 647,441 651,205 654,295 Undeveloped land held for investment 9,995 9,995 11,015 13,779 13,779 Undeveloped land held for sale 3,831 3,831 2,840 76 76 Cash and temporary investments 5,893 4,627 10,930 14,564 16,461 Restricted cash 13,191 13,340 0 0 0 Accounts receivable, net 12,657 12,183 10,744 9,802 10,441 Cost in excess of fair value of net assets acquired, net of accumulated amortization 595 595 595 595 595 Other assets 18,091 13,186 11,939 11,809 11,722 ------------ ---------- ----------- ----------- ------------ TOTAL ASSETS $801,285 $805,085 $695,504 $701,830 $707,369 ============ ========== =========== =========== ============ LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Mortgages and loan payable $431,660 $431,698 $314,994 $321,217 $327,415 Accounts payable 2,486 3,801 3,236 1,837 2,046 Accrued real estate taxes payable 4,022 147 6,336 6,358 3,273 Other accrued liabilities 9,969 13,435 9,929 8,903 8,607 Dividends payable 7,458 7,453 7,453 7,452 7,433 Advance rents and security deposits 5,678 5,483 5,137 4,656 4,876 ------------ ---------- ----------- ----------- ------------ Total Liabilities 461,273 462,017 347,085 350,423 353,650 ------------ ---------- ----------- ----------- ------------ Shareholders' Equity: Common stock 298 298 298 298 298 Capital in excess of par value 472,253 472,156 472,012 471,974 471,205 Notes receivable from stock sales to related parties (5,266) (5,266) (5,066) (5,066) (5,066) Other comprehensive loss (212) (212) 0 0 0 Retained earnings 4,626 7,813 12,726 15,784 18,898 Treasury stock, at cost (131,687) (131,721) (131,551) (131,583) (131,616) ------------ ---------- ----------- ----------- ------------ Total Shareholders' Equity 340,012 343,068 348,419 351,407 353,719 ------------ ---------- ----------- ----------- ------------ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $801,285 $805,085 $695,504 $701,830 $707,369 ============ ========== =========== =========== ============
Page 2
KOGER EQUITY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) In thousands, except per share data -------------------------------------------------------------------------------------------------- Three Months Ended ---------------------------------------------------------- 3/31/03 12/31/02 9/30/02 6/30/02 3/31/02 ----------- ---------- ---------- ---------- ------------ REVENUES Rental and other rental services $36,280 $32,065 $31,836 $31,855 $30,595 Management fees 205 757 839 963 788 Other 5 51 0 0 3 ----------- ---------- ---------- ---------- ------------ Total operating revenues 36,490 32,873 32,675 32,818 31,386 ----------- ---------- ---------- ---------- ------------ EXPENSES Property operations 13,349 12,002 11,846 11,928 10,459 Depreciation and amortization 8,456 7,993 6,663 6,731 6,522 General and administrative 2,943 2,953 2,971 2,947 2,510 Direct cost of management fees 86 705 797 822 1,011 Other 36 18 43 49 32 ----------- ---------- ---------- ---------- ------------ Total operating expenses 24,870 23,671 22,320 22,477 20,534 ----------- ---------- ---------- ---------- ------------ OPERATING INCOME 11,620 9,202 10,355 10,341 10,852 ----------- ---------- ---------- ---------- ------------ OTHER INCOME AND EXPENSE Interest income 54 76 98 87 145 Mortgage and loan interest (7,403) (7,281) (6,041) (6,029) (5,795) ----------- ---------- ---------- ---------- ------------ Total other income and expense (7,349) (7,205) (5,943) (5,942) (5,650) INCOME BEFORE GAIN (LOSS) ON SALE OR DISPOSITION OF ASSETS 4,271 1,997 4,412 4,399 5,202 Gain (loss) on sale or disposition of assets 0 19 1 0 1 ----------- ---------- ---------- ---------- ------------ INCOME BEFORE INCOME TAXES 4,271 2,016 4,413 4,399 5,203 Income taxes 0 (525) 19 62 32 ----------- ---------- ---------- ---------- ------------ INCOME BEFORE MINORITY INTEREST 4,271 2,541 4,394 4,337 5,171 Minority interest 0 0 0 0 20 ----------- ---------- ---------- ---------- ------------ NET INCOME $4,271 $2,541 $4,394 $4,337 $5,151 =========== ========== ========== ========== ============ EARNINGS PER SHARE - Diluted $0.20 $0.12 $0.21 $0.20 $0.24 =========== ========== ========== ========== ============ WEIGHTED AVERAGE SHARES - Diluted 21,327 21,332 21,410 21,469 21,350 =========== ========== ========== ========== ============ OPERATING MARGIN 63.2% 62.6% 62.8% 62.6% 65.8% =========== ========== ========== ========== ============
Page 3 KOGER EQUITY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) In thousands, except per share data ----------------------------------------------------------------------------- Three Months Ended ----------------------------------- 3/31/03 3/31/02 Fav/(Unfav) ---------- ----------- ----------- REVENUES Rental and other rental services $36,280 $30,595 $5,685 Management fees 205 788 (583) Other 5 3 2 ---------- ----------- ----------- Total operating revenues 36,490 31,386 5,104 ---------- ----------- ----------- EXPENSES Property operations 13,349 10,459 (2,890) Depreciation and amortization 8,456 6,522 (1,934) General and administrative 2,943 2,510 (433) Direct cost of management fees 86 1,011 925 Other 36 32 (4) ---------- ----------- ----------- Total operating expenses 24,870 20,534 (4,336) ---------- ----------- ----------- OPERATING INCOME 11,620 10,852 768 ---------- ----------- ----------- OTHER INCOME AND EXPENSE Interest income 54 145 (91) Mortgage and loan interest (7,403) (5,795) (1,608) ---------- ----------- ----------- Total other income and expense (7,349) (5,650) (1,699) INCOME BEFORE GAIN (LOSS) ON SALE OR DISPOSITION OF ASSETS 4,271 5,202 (931) Gain (loss) on sale or disposition of assets 0 1 (1) ---------- ----------- ----------- INCOME BEFORE INCOME TAXES 4,271 5,203 (932) Income taxes 0 32 32 ---------- ----------- ----------- INCOME BEFORE MINORITY INTEREST 4,271 5,171 (900) Minority interest 0 20 20 ---------- ----------- ----------- NET INCOME $4,271 $5,151 $(880) ========== =========== =========== EARNINGS PER SHARE - Diluted $0.20 $0.24 $(0.04) ========== =========== =========== WEIGHTED AVERAGE SHARES - Diluted 21,327 21,350 (23) ========== =========== =========== OPERATING MARGIN 63.2% 65.8% ========== =========== Page 4
KOGER EQUITY, INC. AND SUBSIDIARIES FUNDS FROM OPERATIONS (Unaudited) In thousands, except per share data ------------------------------------------------------------------------------------------------------- Three Months Ended ----------------------------------------------------------- 3/31/03 12/31/02 9/30/02 6/30/02 3/31/02 --------- ---------- ---------- ---------- ---------- Funds from Operations: Net income $4,271 $2,541 $4,394 $4,337 $5,152 Depreciation - real estate 7,191 7,396 6,174 6,277 6,041 Amortization - deferred tenant costs 396 444 378 338 363 Amortization - fair value of acquired leases 492 0 0 0 0 Minority interest 0 0 0 0 20 Loss (gain) on sale of operating properties 0 0 0 0 (1) Loss (gain) on sale of non-operating assets 0 (19) (1) 0 (1) --------- ---------- ---------- ---------- ---------- Funds from Operations (a) 12,350 10,362 10,945 10,952 11,574 Cash Available for Distribution: Add (Deduct): Rental income from straight-line rents (1,295) (404) (730) (534) (460) Amortization of deferred financing costs 357 1,002 303 299 289 Revenue Maintaining Building improvements (661) (2,091) (332) (1,285) (965) Revenue maintaining tenant improvements (b) (1,253) (1,464) (1,767) (1,070) (906) Revenue maintaining leasing commissions (b) (374) (569) (205) (479) (88) --------- ---------- ---------- ---------- ---------- Cash Available for Distribution (a) $9,124 $6,836 $8,214 $7,883 $9,444 ========= ========== ========== ========== ========== Weighted average common shares/units outstanding - diluted 21,327 21,332 21,410 21,469 21,350 ========= ========== ========== ========== ========== Per share/unit - diluted: Funds from operations $0.58 $0.49 $0.51 $0.51 $0.54 ========= ========== ========== ========== ========== Cash available for distribution $0.43 $0.32 $0.38 $0.37 $0.44 ========= ========== ========== ========== ========== Dividends paid (c) $0.35 $0.35 $0.35 $0.35 $2.09 ========= ========== ========== ========== ========== Dividend payout ratio: Funds from operations 60.4% 72.1% 68.5% 68.6% 64.8% ========= ========== ========== ========== ========== Cash available for distribution 81.8% 109.2% 91.2% 95.3% 79.5% ========= ========== ========== ========== ==========
(a) Funds from Operations and Cash Available for Distribution are non-GAAP financial measures and should not be considered as comparable to Net Income or Earnings per Share. (b) The amounts for the periods ending in 2002 represent the leasing costs associated with 2nd generation space. (c) Amount includes a special dividend of $1.74 per share paid in January 2002. Page 5
KOGER EQUITY, INC. AND SUBSIDIARIES NET OPERATING INCOME (a) (b) (Unaudited) In thousands, except SF and per share data -------------------------------------------------------------------------------------------------------- Three Months Ended --------------------------------------------------- 3/31/03 12/31/02 9/30/02 6/30/02 3/31/02 ---------- ---------- --------- --------- --------- Same Store Sales: Properties 120 Revenue $27,538 $27,353 $28,138 $28,442 $28,362 Square Feet 6,923,153 Expense 9,631 10,038 10,369 9,923 9,414 ---------- ---------- --------- --------- --------- NOI 17,907 17,315 17,769 18,519 18,948 ---------- ---------- --------- --------- --------- Occupancy - Period End 83.8% 87.2% 88.3% 89.0% 89.8% Acquisitions: Properties 4 Revenue (c) $8,596 $4,741 $3,583 $3,305 $2,206 Square Feet 2,009,380 Expense 3,789 1,962 1,575 1,665 1,011 ---------- ---------- --------- --------- --------- NOI 4,807 2,779 2,008 1,640 1,195 ---------- ---------- --------- --------- --------- Occupancy - Period End 71.8% 72.0% 63.3% 63.1% 56.7% Development: Properties - Revenue $- $- $- $- $- Square Feet - Expense - - - - - ---------- ---------- --------- --------- --------- NOI - - - - - ---------- ---------- --------- --------- --------- Occupancy - Period End 0.0% 0.0% 0.0% 0.0% 0.0% Asset Sales: Properties - Revenue $(29) $(29) $115 $108 $27 Square Feet - Expense (71) 2 (97) 340 33 ---------- ---------- --------- --------- --------- NOI 42 (31) 212 (232) (6) ---------- ---------- --------- --------- --------- Occupancy - Period End 0.0% 0.0% 0.0% 0.0% 0.0% Consolidated Portfolio Revenue $36,105 $32,065 $31,836 $31,855 $30,595 Expense 13,349 12,002 11,847 11,928 10,458 ---------- ---------- --------- --------- --------- NOI 22,756 20,063 19,989 19,927 20,137 ---------- ---------- --------- --------- --------- Occupancy - Period End 81.1% 83.7% 85.7% 86.3% 86.3%
(a) Net Operating Income is defined as Rental and other rental services revenue less Property operating expense, excluding amortization of the fair value of acquired leases. (b) Net Operating Income is a non-GAAP financial measure and should not be considered as comparable to Net Income. (c) Excludes credit adjustment of $175 for the fair value of acquired leases for the period ended 3/31/03. Page 6
KOGER EQUITY, INC. AND SUBSIDIARIES NET OPERATING INCOME (a) (b) (Unaudited) In thousands, except SF and per share data ------------------------------------------------------------------------------------------ Three Months Ended -------------------------------------- 3/31/03 3/31/02 Fav/(Unfav) ------------ ----------- ----------- Same Store Sales: Properties 120 Revenue $27,538 $28,362 $(824) Square Feet 6,923,153 Expense 9,631 9,414 (217) ------------ ----------- ----------- NOI 17,907 18,948 (1,041) ------------ ----------- ----------- Occupancy - Period End 83.8% 89.8% -6.0% Acquisitions: Properties 4 Revenue (c) $8,596 $2,206 $6,390 Square Feet 2,009,380 Expense 3,789 1,011 (2,778) ------------ ----------- ----------- NOI 4,807 1,195 3,612 ------------ ----------- ----------- Occupancy - Period End 71.8% 56.7% 15.1% Development: Properties - Revenue $- $- $- Square Feet - Expense - - - ------------ ----------- ----------- NOI - - - ------------ ----------- ----------- Occupancy - Period End 0.0% 0.0% 0.0% Asset Sales: Properties - Revenue $(29) $27 $(56) Square Feet - Expense (71) 33 104 ------------ ----------- ----------- NOI 42 (6) 48 ------------ ----------- ----------- Occupancy - Period End 0.0% 0.0% 0.0% Consolidated Portfolio Revenue $36,105 $30,595 $5,510 Expense 13,349 10,458 (2,891) ------------ ----------- ----------- NOI 22,756 20,137 2,619 ------------ ----------- ----------- Occupancy - Period End 81.1% 86.3% -5.2%
(a) Net Operating Income is defined as Rental and other rental services revenue less Property operating expense, excluding amortization of the fair value of acquired leases. (b) Net Operating Income is a non-GAAP financial measure and should not be considered as comparable to Net Income. (c) Excludes credit adjustment of $175 for the fair value of acquired leases for the period ended 3/31/03. Page 7
KOGER EQUITY, INC. AND SUBSIDIARIES CAPITAL EXPENDITURES (Unaudited) -------------------------------------------------------------------------------------------------------------------- Three Months Ended ------------------------------------------------------------------------ 3/31/03 12/31/02 9/30/02 6/30/02 3/31/02 ------------ ------------ ------------ ------------ ------------ Revenue Maintaining: Building Improvements $660,966 $2,091,048 $332,300 $1,285,274 $965,000 Tenant Improvements - 2001 Leasing 48,310 298,454 30,754 - - Tenant Improvements - 2002 Leasing 926,380 1,060,884 1,139,035 716,686 571,400 Tenant Improvements - 2003 Leasing 277,853 - - - - Leasing Commissions - 2001 Leasing 1,641 5,452 - 216,801 - Leasing Commissions - 2002 Leasing 150,832 736,406 208,940 - 50,332 Leasing Commissions - 2003 Leasing 221,203 - - - - ------------ ------------ ------------ ------------ ------------ Revenue Maintaining Capital Expenditures 2,287,185 4,192,244 1,711,029 2,218,761 1,586,732 ------------ ------------ ------------ ------------ ------------ Revenue Enhancing: Building Improvements 88,181 - - - - Tenant Improvements - 2001 Leasing - - - - - Tenant Improvements - 2002 Leasing 1,005,839 359,906 754,092 1,278,692 511,624 Tenant Improvements - 2003 Leasing 77,044 - - - - Leasing Commissions - 2001 Leasing - - - - - Leasing Commissions - 2002 Leasing 156,756 195,342 137,822 705,399 62,639 Leasing Commissions - 2003 Leasing 42,730 - - - - ------------ ------------ ------------ ------------ ------------ Revenue Enhancing Capital Expenditures 1,370,550 555,248 891,914 1,984,091 574,263 ------------ ------------ ------------ ------------ ------------ Total Capital Expenditures $3,657,735 $4,747,492 $2,602,943 $4,202,852 $2,160,995 ============ ============ ============ ============ ============
Page 8 KOGER EQUITY, INC. AND SUBSIDIARIES SUMMARY OF OUTSTANDING DEBT AS OF MARCH 31, 2003 Monthly Outstanding Balance Interest Debt ------------------- Description Rate Maturity Service 3/31/03 12/31/02 ------------------------------- -------- ----------- ------- ------------------- $(000) $(000) $(000) Fixed Rate: Northwestern Mutual - Tranche A 8.19% 01/02/07 789 90,870 91,394 Northwestern Mutual - Tranche B 8.33% 01/02/09 710 80,868 81,331 Northwestern Mutual - Tranche C 7.10% 01/02/07 105 13,871 13,942 Northwestern Mutual - Tranche D 7.10% 01/02/09 216 28,592 28,738 New York Life 8.00% 12/10/02 0 - 7,718 Allstate Life 8.20% 12/01/06 165 18,960 19,066 Metropolitan Life 5.26% 12/17/07 373 85,000 85,000 ------- -------- ---------- Total Fixed Rate Debt 7.30% 2,358 318,161 327,189 ------- -------- ---------- Variable Rate: GE Capital 7.38% 06/30/21 12 1,499 1,509 Column Financial (2) 4.15% 12/09/04 266 77,000 77,000 Secured Revolving Credit Facility - $100 Million 4.12% 12/27/2004 120 35,000 26,000 ------- -------- ---------- Total Variable Rate Debt 4.18% 398 113,499 104,509 ------- -------- ---------- Total Debt 6.48% 2,756 431,660 431,698 ======= ======== ========== Market Capitalization: Total Debt 431,660 431,698 Common Stock 326,007 332,200 -------- ---------- Total Market Capitalization 757,667 763,898 ======== ========== -------------------------------------------------------------------------------- Amount -------- $(000) Schedule of Mortgage Maturities by Year (1): 2003 3,882 2004 82,631 2005 6,112 2006 23,706 2007 98,098 Thereafter 182,231 -------- Total 396,660 ======== (1) Does not include Secured Revolving Credit Facility. (2) Interest rate capped at 287 basis points over maximum LIBOR of 5.45 percent. Page 9
KOGER EQUITY, INC. AND SUBSIDIARIES OPERATING PROPERTY ACQUISITIONS 2002 AND 2003 Rentable Percent Square Date Purchase Leased Property Location Feet Purchased Price (1) 3/31/03 --------------------- ---------------------- ------------ ----------- ------------------ ---------- 2002 ---- Three Ravinia Atlanta, GA 805,000 01/31/02 $125,000,000 63% The Lakes on Post Oak Houston, TX 1,205,000 12/06/02 101,900,000 78% ------------ ------------------ 2,010,000 $226,900,000 72% ============ ================== ========== 2003 ---- None
(1) Purchase price consists of the contract price only and does not include closing costs. Page 10
KOGER EQUITY, INC. AND SUBSIDIARIES BUILDING COMPLETIONS 2002 AND 2003 Percent Square Month Leased Property Location Feet Completed Total Cost (1) 3/31/03 ------------------------------------------------------------------------------------------------ 2002 ---- None. 2003 ---- None.
Page 11
KOGER EQUITY, INC. AND SUBSIDIARIES BUILDINGS UNDER CONSTRUCTION MARCH 31, 2003 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.
Page 12
KOGER EQUITY, INC. AND SUBSIDIARIES TWENTY-FIVE LARGEST TENANTS BASED ON ANNUALIZED GROSS RENTS AS OF MARCH 31, 2003 Remaining Annualized Number Occupied Term Percent of Gross Percent Tenant (a) of Leases Square Feet (Months) Occupied Rent (b) of Rent ---------------------------- ----------- ------------ ---------- ---------- --------------- ---------- U S Government 42 930,019 91 12.9% $16,966,118 12.8% State Of Florida 42 693,247 33 9.6% 12,703,364 9.6% Blue Cross & Blue Shield 11 579,084 26 8.1% 9,455,439 7.1% Six Continents Hotels 1 344,389 72 4.8% 9,166,966 6.9% Bechtel Corporation 1 371,230 75 5.2% 6,685,499 5.0% Citifinancial 1 159,827 53 2.2% 2,958,751 2.2% Landstar 1 176,000 140 2.4% 2,644,068 2.0% Zurich Insurance Company 2 97,913 46 1.4% 1,895,596 1.4% Huntsman Corp 1 108,764 134 1.5% 1,709,855 1.3% Hoechst Celanese 1 92,376 3 1.3% 1,667,620 1.3% Ford Motor Company 4 63,337 38 0.9% 1,363,408 1.0% Washington Mutual Bank 2 75,376 62 1.0% 1,306,355 1.0% ACS State Healthcare, LLC 1 52,689 71 0.7% 1,143,951 0.9% Bellsouth 4 66,526 35 0.9% 991,184 0.7% Siemens 2 64,883 10 0.9% 957,874 0.7% Sara Lee 2 52,021 27 0.7% 937,241 0.7% Enovia Corporation 1 44,095 17 0.6% 867,655 0.7% Best Software Inc. 1 47,110 69 0.7% 770,249 0.6% Mergent - FIS Inc. 1 45,040 53 0.6% 748,421 0.6% Navision Software 1 37,783 53 0.5% 741,554 0.6% Peerless Insurance Co. 1 36,306 32 0.5% 715,098 0.5% Check Solutions Company 1 40,307 70 0.6% 710,964 0.5% Sungard Trust Systems Inc. 2 43,569 39 0.6% 710,039 0.5% Hirecheck Inc. 1 30,226 59 0.4% 679,174 0.5% Alcan Cable 1 26,201 99 0.4% 652,106 0.5% ----------- ------------ --------------- Total / Weighted Average 128 4,278,318 61 59.5% $79,148,547 59.6% =========== ============ ========== ========== =============== ==========
(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 March 31, 2003 multiplied by 12. Page 13
KOGER EQUITY, INC. AND SUBSIDIARIES INDUSTRY DIVERSIFICATION AS OF MARCH 31, 2003 Remaining Percent Annualized Number Occupied Term of Gross Percent Industry (a) of Leases Square Feet (Months) Occupied Rent (b) of Rent ------------------------------------------------- ----------- ------------ --------- -------- ------------- ------- Finance and Insurance 149 1,687,952 33 23.5% $30,605,799 23.0% Public Adminstration 89 1,661,753 65 23.1% 30,264,290 22.8% Professional, Scientific, and Technical Services 166 1,383,892 49 19.3% 25,551,695 19.2% Manufacturing 51 610,054 44 8.5% 11,137,726 8.4% Accomodation and Food Services 8 360,704 69 5.0% 9,371,030 7.1% Information 41 451,736 45 6.3% 7,960,472 6.0% Transportation and Warehousing 8 207,535 123 2.9% 3,277,043 2.5% Construction 15 116,352 24 1.6% 2,116,453 1.6% Administrative and Support Services 23 108,171 33 1.5% 1,954,129 1.5% Educational Services 16 94,437 29 1.3% 1,727,685 1.3% Health Care and Social Assistance 18 76,524 28 1.1% 1,346,076 1.0% Other (c) 309 429,634 23 6.0% 7,542,456 5.7% ----------- ------------ ------------- Total / Weighted Average 893 7,188,744 49 100.0% $132,854,854 100.0% =========== ============ ========= ======== ============= =======
(a) Classifications are based on the North American Indistrial Classification System (NAICS). (b) Annualized Gross Rent is the monthly contractual base rent and current reimbursements under existing leases as of March 31, 2003 multiplied by 12. (c) Includes leases whose classification does not total 1.0% or more of the portfolio's annualized gross rent. Page 14
KOGER EQUITY, INC. AND SUBSIDIARIES REGIONAL SUMMARY OF MSAs AS OF MARCH 31, 2003 # of Age % Square % MSA State Bldgs (yrs) Square Feet Feet NOI (a) ---------------------- ---------- ------- ------- --------------- ------------ ---------------- Atlanta GA 26 16 2,367,868 26.5% 31.3% Orlando FL 28 19 1,304,473 14.6% 15.5% Jacksonville FL 11 9 1,167,243 13.1% 13.0% Houston TX 3 23 1,204,852 13.5% 11.1% St. Petersburg FL 15 20 668,144 7.5% 7.3% Tallahassee FL 19 21 833,838 9.3% 7.2% Charlotte NC 15 16 709,233 7.9% 6.6% Memphis TN 6 10 531,755 6.0% 5.5% Richmond VA 1 15 145,127 1.6% 2.6% ------- --------------- ------------ ---------------- Total 124 17 8,932,533 100.0% 100.0% ======= ======= =============== ============ ================ (a) Based on Net Operating Income for the first quarter of 2003.
Page 15
KOGER EQUITY, INC. AND SUBSIDIARIES OCCUPANCY SUMMARY AS OF MARCH 31, 2003 Square Footage Percentage --------------------------------------------- ----------------------------------------- Leased, Not Leased, Not Commenced Commenced Occupied (a) Vacant Total Occupied (a) Vacant Total ---------- ----------------------- ---------- ---------- ------------------- --------- Atlanta 1,852,411 85,576 429,881 2,367,868 78.2% 3.6% 18.2% 100.0% Orlando 1,056,117 38,924 209,432 1,304,473 81.0% 3.0% 16.1% 100.0% Jacksonville 1,125,451 41,614 178 1,167,243 96.4% 3.6% 0.0% 100.0% Houston 937,575 19,092 248,185 1,204,852 77.8% 1.6% 20.6% 100.0% St. Petersburg 571,096 2,834 94,214 668,144 85.5% 0.4% 14.1% 100.0% Tallahassee 596,237 0 237,601 833,838 71.5% 0.0% 28.5% 100.0% Charlotte 555,740 6,539 146,954 709,233 78.4% 0.9% 20.7% 100.0% Memphis 410,781 2,675 118,299 531,755 77.3% 0.5% 22.2% 100.0% Richmond 137,733 3,861 3,533 145,127 94.9% 2.7% 2.4% 100.0% ---------- ----------- ----------- ---------- Total 7,243,141 201,115 1,488,277 8,932,533 81.1% 2.3% 16.7% 100.0% ========== =========== =========== ========== ========== ========== ======== =========
(a) Includes square footage of fully executed leases for vacant space that commence on a future date. Page 16
KOGER EQUITY, INC. AND SUBSIDIARIES OCCUPANCY SUMMARY For The Period Ended --------------------------------------------------------------------- MSA Square Feet 3/31/2003 12/31/2002 9/30/2002 6/30/2002 3/31/2002 ------------------------ ------------ ------------ ----------- ----------- Atlanta - SSS 1,563,340 1,347,087 1,415,731 1,405,961 1,363,854 1,377,317 86.2% 90.6% 89.9% 87.2% 88.1% Orlando 1,304,473 1,056,117 1,158,989 1,215,547 1,215,820 1,215,339 81.0% 88.8% 93.2% 93.2% 93.2% Jacksonville 1,167,243 1,125,451 1,156,395 1,156,973 1,151,758 1,152,430 96.4% 99.1% 99.1% 98.7% 98.7% Charlotte 709,233 555,740 571,548 574,139 606,586 621,847 78.4% 80.6% 81.0% 85.5% 87.7% St. Petersburg 668,144 571,096 571,967 576,970 575,697 569,837 85.5% 85.6% 86.4% 86.2% 85.3% Tallahassee 833,838 596,237 595,144 600,038 651,426 674,128 71.5% 71.4% 72.0% 78.1% 80.8% Memphis 531,755 410,781 416,116 434,426 443,745 451,877 77.3% 78.3% 81.7% 83.4% 85.0% Richmond 145,127 137,733 141,752 141,752 145,008 145,008 94.9% 97.7% 97.7% 99.9% 99.9% ---------- ------------- ------------ ------------ ----------- ----------- Same Store 6,923,153 5,800,242 6,027,642 6,105,806 6,153,894 6,207,783 83.8% 87.1% 88.2% 88.9% 89.7% ---------- ------------- ------------ ------------ ----------- ----------- Houston 1,204,852 937,575 941,411 0 0 0 77.8% 78.1% 0.0% 0.0% 0.0% Atlanta - ACQ 804,528 505,324 505,324 509,578 507,423 456,423 62.8% 62.8% 63.3% 63.1% 56.7% ---------- --------------------------------------------------------------------- Acquisitions 2,009,380 1,442,899 1,446,735 509,578 507,423 456,423 71.8% 72.0% 25.4% 25.3% 22.7% ---------- ------------- ------------ ------------ ----------- ----------- Total 8,932,533 7,243,141 7,474,377 6,615,384 6,661,317 6,664,206 81.1% 83.7% 85.6% 86.2% 86.2% ========== ============= ============ ============ =========== ===========
Page 17
KOGER EQUITY, INC. AND SUBSIDIARIES LEASING SUMMARY For The Three Months Ended 3/31/03 ---------------------------------------------------------------------------------------------------------- MSA Leased Expirations Renewals Leasing New and Gross Net Leased Leased Leased Square Feet 12/31/02 (a) (b) (c) Retention Backfill Activity Absorption 3/31/03 (a) 12/31/02 3/31/03 ------------------------------------------- ----------------------------------------------------------------------- Atlanta 2,367,868 1,975,803 111,122 52,934 47.6% 20,372 73,306 (37,816) 1,937,987 83.4% 81.8% Orlando 1,304,473 1,161,439 123,431 10,805 8.8% 46,228 57,033 (66,398) 1,095,041 89.0% 83.9% Jacksonville 1,167,243 1,161,576 118,338 89,928 76.0% 33,899 123,827 5,489 1,167,065 99.5% 100.0% Houston 1,204,852 949,973 32,931 17,727 53.8% 21,898 39,625 6,694 956,667 78.8% 79.4% St. Petersburg 668,144 578,726 37,085 22,514 60.7% 9,775 32,289 (4,796) 573,930 86.6% 85.9% Tallahassee 833,838 595,144 31,545 28,003 88.8% 4,635 32,638 1,093 596,237 71.4% 71.5% Charlotte 709,233 571,548 35,250 9,378 26.6% 16,603 25,981 (9,269) 562,279 80.6% 79.3% Memphis 531,755 416,949 13,490 3,109 23.0% 6,888 9,997 (3,493) 413,456 78.4% 77.8% Richmond 145,127 141,752 13,359 0 0.0% 13,201 13,201 (158) 141,594 97.7% 97.6% ---------- ------------ ---------- -------- -------- -------- ---------- ----------- Total 8,932,533 7,552,910 516,551 234,398 45.4% 173,499 407,897 (108,654) 7,444,256 84.6% 83.3% ========== ============ ========== ======== ========= ======== ======== ========== =========== ========= =========
(a) Leased figures include all leases in effect as of the period end date, including those leases expiring on the period end date, as well as fully executed leases for vacant space that commences on a future date. (b) Includes the rentable square footage of expired leases, as well as the square footage of future expirations for which renewal and backfills have been signed. (c) Expirations also include leases that ended due to a termination right or default. Page 18
KOGER EQUITY, INC. AND SUBSIDIARIES LEASE DISTRIBUTION AS OF MARCH 31, 2003 Tenant Occupied Percent Annualized Average Percent Number of Percent of Square of Square Gross Annualized of Total Remaining Category Leases (1) Leases Feet (2) Feet Rent (3) Rent PSF Rents Term --------------------- ----------- ---------- ----------- ----------- ------------- ------------ --------- --------- 2,500 or Less 442 49.5% 541,383 7.5% $9,764,731 $18.04 7.3% 22 2,501 - 5,000 203 22.7% 728,027 10.1% 13,691,160 18.81 10.3% 26 5,001 - 7,500 74 8.3% 460,626 6.4% 8,628,160 18.73 6.5% 29 7,501 - 10,000 43 4.8% 374,094 5.2% 6,773,115 18.11 5.1% 33 10,001 - 20,000 52 5.8% 744,302 10.4% 13,707,719 18.42 10.3% 32 20,001 - 40,000 44 4.9% 1,260,432 17.5% 22,255,872 17.66 16.8% 56 40,001 - 60,000 18 2.0% 880,941 12.3% 16,564,259 18.80 12.5% 53 60,001 - 100,000 11 1.2% 878,721 12.2% 16,200,594 18.44 12.2% 55 100,001 or Greater 6 0.7% 1,320,218 18.4% 25,269,243 19.14 19.0% 79 ----------- ---------- ----------- ----------- ------------- --------- Total / Weighted Average 893 100.0% 7,188,744 100.0% $132,854,854 $18.48 100.0% 49 =========== ========== =========== =========== ============= ============ ========= =========
Square Feet % of Total ------------- ------------ Square footage occupied by tenants 7,188,744 80.5% Square footage attributable to vending/antenna 1,859 0.0% Square footage occupied by owner/building use 52,538 0.6% ------------- ------------ Total Occupied Square Footage 7,243,141 81.1% ------------- ------------ Leased square footage 201,115 2.3% Vacant square footage 1,488,277 16.7% ------------- ------------ Total Net Rentable Square Footage 8,932,533 100.0% ============= ============
(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 March 31, 2003 multiplied by 12. Rent abatements are not included in this analysis. Page 19
KOGER EQUITY, INC. AND SUBSIDIARIES LEASE EXPIRATIONS AS OF MARCH 31, 2003 City Item 2003 2004 2005 2006 2007 2008 ------------ ------------------- ---------------------------------------------------------------------------- Atlanta Square Feet (1) 96,500 92,901 191,751 79,495 191,602 183,319 % Square Feet (2) 4.08% 3.92% 8.10% 3.36% 8.09% 7.74% Annualized Rent (3) 1,943,613 1,915,917 3,676,333 1,424,589 3,899,187 3,553,017 Number of Leases (4) 47 36 32 25 21 12 Rent PSF $20.14 $20.62 $19.17 $17.92 $20.35 $19.38 Orlando Square Feet (1) 218,576 290,710 166,947 105,679 140,596 94,955 % Square Feet (2) 16.76% 22.29% 12.80% 8.10% 10.78% 7.28% Annualized Rent (3) 3,840,948 5,284,305 2,985,427 2,006,873 2,100,115 1,692,207 Number of Leases (4) 58 59 46 22 11 7 Rent PSF $17.57 $18.18 $17.88 $18.99 $14.94 $17.82 Jacksonville Square Feet (1) 105,686 92,737 174,619 179,867 275,860 81,514 % Square Feet (2) 9.05% 7.94% 14.96% 15.41% 23.63% 6.98% Annualized Rent (3) 1,811,974 1,750,544 2,381,878 2,881,626 5,190,209 1,416,864 Number of Leases (4) 7 7 4 5 6 3 Rent PSF $17.14 $18.88 $13.64 $16.02 $18.81 $17.38 Houston Square Feet (1) 61,360 79,119 74,852 43,188 87,296 50,708 % Square Feet (2) 5.09% 6.57% 6.21% 3.58% 7.25% 4.21% Annualized Rent (3) 1,185,769 1,571,492 1,453,206 824,503 1,603,782 1,067,273 Number of Leases (4) 23 22 19 10 8 7 Rent PSF $19.32 $19.86 $19.41 $19.09 $18.37 $21.05 St. Petersburg Square Feet (1) 74,001 150,327 102,907 58,067 55,241 97,410 % Square Feet (2) 11.08% 22.50% 15.40% 8.69% 8.27% 14.58% Annualized Rent (3) 1,263,877 2,254,191 1,738,889 968,917 1,028,325 1,773,569 Number of Leases (4) 40 25 23 10 10 5 Rent PSF $17.08 $15.00 $16.90 $16.69 $18.62 $18.21 Tallahassee Square Feet (1) 168,332 70,119 21,546 143,243 94,758 65,182 % Square Feet (2) 20.19% 8.41% 2.58% 17.18% 11.36% 7.82% Annualized Rent (3) 3,219,067 1,240,743 358,281 2,844,834 1,708,546 1,199,334 Number of Leases (4) 34 16 8 7 2 2 Rent PSF $19.12 $17.69 $16.63 $19.86 $18.03 $18.40 Charlotte Square Feet (1) 194,478 119,771 42,473 72,816 66,881 15,464 % Square Feet (2) 27.42% 16.89% 5.99% 10.27% 9.43% 2.18% Annualized Rent (3) 3,525,983 2,214,136 728,832 1,189,411 1,184,913 219,103 Number of Leases (4) 24 21 15 8 3 3 Rent PSF $18.13 $18.49 $17.16 $16.33 $17.72 $14.17 Memphis Square Feet (1) 55,418 40,322 145,100 82,035 38,219 47,188 % Square Feet (2) 10.42% 7.58% 27.29% 15.43% 7.19% 8.87% Annualized Rent (3) 1,116,597 813,174 2,737,763 1,479,648 677,026 923,652 Number of Leases (4) 12 12 27 15 8 3 Rent PSF $20.15 $20.17 $18.87 $18.04 $17.71 $19.57 Richmond Square Feet (1) 13,320 13,750 45,704 22,292 26,372 4,391 % Square Feet (2) 9.18% 9.47% 31.49% 15.36% 18.17% 3.03% Annualized Rent (3) 266,994 269,492 877,381 431,674 492,691 90,472 Number of Leases (4) 5 4 5 4 4 1 Rent PSF $20.04 $19.60 $19.20 $19.36 $18.68 $20.60 Total Square Feet (1) 987,671 949,756 965,899 786,682 976,825 640,131 % Square Feet (2) 11.06% 10.63% 10.81% 8.81% 10.94% 7.17% Annualized Rent (3) 18,174,824 17,313,993 16,937,991 14,052,075 17,884,795 11,935,490 Number of Leases (4) 250 202 179 106 73 43 Rent PSF $18.40 $18.23 $17.54 $17.86 $18.31 $18.65
City Item 2009 2010 2011 2012 2013 + Total ------------ ------------------ -------------------------------------------------------------------- Atlanta Square Feet (1) 590,900 101,897 26,201 95,305 189,741 1,839,612 % Square Feet (2) 24.95% 4.30% 1.11% 4.02% 8.01% 77.69% Annualized Rent (3) 14,243,119 1,802,710 652,106 2,015,025 3,211,924 38,337,541 Number of Leases (4) 11 2 1 4 4 195 Rent PSF $24.10 $17.69 $24.89 $21.14 $16.93 $20.84 Orlando Square Feet (1) 25,000 635 0 7,080 0 1,050,178 % Square Feet (2) 1.92% 0.05% 0.00% 0.54% 0.00% 80.51% Annualized Rent (3) 459,306 11,618 0 175,088 0 18,555,889 Number of Leases (4) 1 1 0 1 0 206 Rent PSF $18.37 $18.30 $0.00 $24.73 $0.00 $17.67 Jacksonville Square Feet (1) 3,462 0 26,947 0 176,000 1,116,692 % Square Feet (2) 0.30% 0.00% 2.31% 0.00% 15.08% 95.67% Annualized Rent (3) 67,821 0 534,302 0 2,644,068 18,679,285 Number of Leases (4) 1 0 1 0 1 35 Rent PSF $19.59 $0.00 $19.83 $0.00 $15.02 $16.73 Houston Square Feet (1) 385,887 36,000 0 0 108,764 927,174 % Square Feet (2) 32.03% 2.99% 0.00% 0.00% 9.03% 76.95% Annualized Rent (3) 6,936,630 646,036 0 0 1,709,855 16,998,546 Number of Leases (4) 3 2 0 0 1 95 Rent PSF $17.98 $17.95 $0.00 $0.00 $15.72 $18.33 St. Petersburg Square Feet (1) 12,709 17,686 0 0 0 568,348 % Square Feet (2) 1.90% 2.65% 0.00% 0.00% 0.00% 85.06% Annualized Rent (3) 182,883 6,615 0 0 0 9,217,266 Number of Leases (4) 1 1 0 0 0 115 Rent PSF $14.39 $0.37 $0.00 $0.00 $0.00 $16.22 Tallahassee Square Feet (1) 0 0 26,696 0 0 589,876 % Square Feet (2) 0.00% 0.00% 3.20% 0.00% 0.00% 70.74% Annualized Rent (3) 0 0 347,181 0 0 10,917,987 Number of Leases (4) 0 0 1 0 0 70 Rent PSF $0.00 $0.00 $13.01 $0.00 $0.00 $18.51 Charlotte Square Feet (1) 40,307 0 0 0 0 552,190 % Square Feet (2) 5.68% 0.00% 0.00% 0.00% 0.00% 77.86% Annualized Rent (3) 710,964 0 0 0 0 9,773,342 Number of Leases (4) 1 0 0 0 0 75 Rent PSF $17.64 $0.00 $0.00 $0.00 $0.00 $17.70 Memphis Square Feet (1) 0 0 0 0 0 408,282 % Square Feet (2) 0.00% 0.00% 0.00% 0.00% 0.00% 76.78% Annualized Rent (3) 0 0 0 0 0 7,747,860 Number of Leases (4) 0 0 0 0 0 77 Rent PSF $0.00 $0.00 $0.00 $0.00 $0.00 $18.98 Richmond Square Feet (1) 10,563 0 0 0 0 136,392 % Square Feet (2) 7.28% 0.00% 0.00% 0.00% 0.00% 93.98% Annualized Rent (3) 198,433 0 0 0 0 2,627,138 Number of Leases (4) 2 0 0 0 0 25 Rent PSF $18.79 $0.00 $0.00 $0.00 $0.00 $19.26 Total Square Feet (1) 1,068,828 156,218 79,844 102,385 474,505 7,188,744 % Square Feet (2) 11.97% 1.75% 0.89% 1.15% 5.31% 80.48% Annualized Rent (3) 22,799,156 2,466,980 1,533,590 2,190,113 7,565,847 132,854,854 Number of Leases (4) 20 6 3 5 6 893 Rent PSF $21.33 $15.79 $19.21 $21.39 $15.94 $18.48
(1) Total net rentable square feet represented by expiring leases. Expiration date reflects renewal expiration if fully executed. (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 March 31, 2003 multiplied by 12. Rent abatements are not included in this analysis. (4) Analysis does not include owner occupied space, vending leases and antenna leases. Page 20
KOGER EQUITY, INC. AND SUBSIDIARIES NET EFFECTIVE RENTS New & Backfill Leasing ---------------------------------------------------------------- 3/31/2003 12/31/2002 9/30/2002 6/30/2002 Average -------------- ------------ ---------- ---------- ---------- Number of leases 42 31 29 29 33 Rentable square footage leased 171,239 217,767 108,050 154,666 162,931 Average per rentable square foot over the lease term: Gross Rent $17.12 $17.06 $17.95 $20.47 $18.03 Tenant improvements (1.47) (2.59) (1.52) (1.96) (1.85) Leasing commissions (0.41) (0.60) (0.49) (0.98) (0.60) Other/concessions (0.58) (1.22) (0.07) (0.64) (0.63) -------------- ------------ ---------- ---------- ---------- Effective Rent 14.66 12.65 15.87 16.89 14.95 Expense stop (4.98) (5.34) (5.50) (6.16) (5.44) -------------- ------------ ---------- ---------- ---------- Equivalent effective net rent $9.68 $7.31 $10.37 $10.73 $9.50 ============== ============ ========== ========== ========== Average term (yrs) 4.8 4.9 4.8 6.0 5.1
Renewal Leasing ---------------------------------------------------------------- 3/31/2003 12/31/2002 9/30/2002 6/30/2002 Average -------------- ------------ ---------- ---------- ---------- Number of leases 36 50 41 56 46 Rentable square footage leased 234,398 414,429 260,287 169,543 269,664 Average per rentable square foot over the lease term: Gross Rent $19.09 $17.31 $17.25 $18.53 $18.02 Tenant improvements (1.43) (0.18) (0.40) (0.91) (0.70) Leasing commissions (0.12) (0.06) (0.05) (0.24) (0.12) Other/concessions (0.02) (0.10) (0.14) (0.00) (0.07) -------------- ------------ ---------- ---------- ---------- Effective Rent 17.52 16.97 16.66 17.38 17.13 Expense stop (5.40) (5.36) (5.06) (5.55) (5.36) -------------- ------------ ---------- ---------- ---------- Equivalent effective net rent $12.12 $11.61 $11.60 $11.83 $11.78 ============== ============ ========== ========== ========== Average term (yrs) 5.5 2.1 2.7 3.8 3.4
Page 21
KOGER EQUITY, INC. AND SUBSIDIARIES CAPITAL EXPENDITURES - LEASING ACTIVITY Three Months Ended, Dollars -------------------------------------------------------------------------- 3/31/03 12/31/02 9/30/02 6/30/02 3/31/02 --------------- -------------- -------------- ------------- ------------ Renewal Leasing: RSF Leased 234,398 414,429 260,287 169,543 434,612 Tenant Improvements $1,835,392 $287,380 $418,111 $676,631 $1,511,292 Leasing Commissions $157,976 $111,504 $68,310 $165,517 $263,741 --------------- -------------- -------------- ------------- ------------ Total Renewal $1,993,368 $398,884 $486,421 $842,148 $1,775,033 =============== ============== ============== ============= ============ Backfill Leasing: RSF Leased 113,751 112,164 96,754 19,165 5,889 Tenant Improvements $501,811 $1,428,067 $705,528 $182,611 $26,706 Leasing Commissions $183,426 $432,109 $248,643 $33,786 $4,552 --------------- -------------- -------------- ------------- ------------ Total Backfill $685,237 $1,860,176 $954,171 $216,397 $31,258 =============== ============== ============== ============= ============ Revenue Maintaining: RSF Leased 348,149 526,593 357,041 188,708 440,501 Tenant Improvements $2,337,203 $1,715,447 $1,123,639 $859,242 $1,537,998 Leasing Commissions $341,402 $543,613 $316,953 $199,303 $268,293 --------------- -------------- -------------- ------------- ------------ Total Revenue Maintaining $2,678,605 $2,259,060 $1,440,592 $1,058,545 $1,806,291 =============== ============== ============== ============= ============ Revenue Enhancing - New/First Generation RSF Leased 57,488 105,603 11,296 135,720 34,293 Tenant Improvements $706,307 $1,663,681 $111,808 $1,654,991 $297,444 Leasing Commissions $151,022 $301,057 $7,388 $955,251 $73,562 --------------- -------------- -------------- ------------- ------------ Total Renewal $857,329 $1,964,738 $119,196 $2,610,242 $371,006 =============== ============== ============== ============= ============ Total: RSF Leased 405,637 632,196 368,337 324,428 474,794 Tenant Improvements $3,043,510 $3,379,128 $1,235,447 $2,514,233 $1,835,442 Leasing Commissions $492,424 $844,670 $324,341 $1,154,554 $341,855 --------------- -------------- -------------- ------------- ------------ Total $3,535,934 $4,223,798 $1,559,788 $3,668,787 $2,177,297 =============== ============== ============== ============= ============
(a) These figures reflect the dollars committed for improvements under the terms of the leases executed during each period. Actual expenditures and the period in which they are expended will vary.
KOGER EQUITY, INC. AND SUBSIDIARIES CAPITAL EXPENDITURES - LEASING ACTIVITY Three Months Ended, PSF ------------------------------------------------------------------------- 3/31/03 12/31/02 9/30/02 6/30/02 3/31/02 ------------------------------------------------------------------------- Renewal Leasing: RSF Leased 234,398 414,429 260,287 169,543 434,612 Tenant Improvements $7.83 $0.69 $1.61 $3.99 $3.48 Leasing Commissions $0.67 $0.27 $0.26 $0.98 $0.61 ------------------------------------------------------------------------- Total Renewal $8.50 $0.96 $1.87 $4.97 $4.08 ========================================================================= Backfill Leasing: RSF Leased 113,751 112,164 96,754 19,165 5,889 Tenant Improvements $4.41 $12.73 $7.29 $9.53 $4.53 Leasing Commissions $1.61 $3.85 $2.57 $1.76 $0.77 ------------------------------------------------------------------------- Total Backfill $6.02 $16.58 $9.86 $11.29 $5.31 ========================================================================= Revenue Maintaining: RSF Leased 348,149 526,593 357,041 188,708 440,501 Tenant Improvements $6.71 $3.26 $3.15 $4.55 $3.49 Leasing Commissions $0.98 $1.03 $0.89 $1.06 $0.61 ------------------------------------------------------------------------- Total Revenue Maintaining $7.69 $4.29 $4.03 $5.61 $4.10 ========================================================================= Revenue Enhancing - New/First Generation RSF Leased 57,488 105,603 11,296 135,720 34,293 Tenant Improvements $12.29 $15.75 $9.90 $12.19 $8.67 Leasing Commissions $2.63 $2.85 $0.65 $7.04 $2.15 ------------------------------------------------------------------------- Total Renewal $14.91 $18.60 $10.55 $19.23 $10.82 ========================================================================= Total: RSF Leased 405,637 632,196 368,337 324,428 474,794 Tenant Improvements $7.50 $5.35 $3.35 $7.75 $3.87 Leasing Commissions $1.21 $1.34 $0.88 $3.56 $0.72 ------------------------------------------------------------------------- Total $8.72 $6.68 $4.23 $11.31 $4.59 =========================================================================
(a) These figures reflect the dollars committed for improvements under the terms of the leases executed during each period. Actual expenditures and the period in which they are expended will vary. Page 22 KOGER EQUITY, INC. AND SUBSIDIARIES SAME SUITE ANALYSIS YEAR TO DATE MARCH 31, 2003 New/Backfill (a) ----------------------------------------- RSF New Expiring Percent Leased Net Net Rent Change Change Rent -------- ------- -------- ------- ------- Atlanta 20,372 $11.15 $14.67 ($3.52) -24.0% Orlando 44,903 $11.32 $14.03 ($2.71) -19.3% Jacksonville 33,899 $11.17 $13.59 ($2.42) -17.8% Houston 0 $0.00 $0.00 $0.00 0.0% St. Petersburg 8,840 $11.15 $11.99 ($0.84) -7.0% Tallahassee 1,150 $13.45 $12.54 $0.91 7.3% Charlotte 16,603 $10.33 $16.09 ($5.76) -35.8% Memphis 6,888 $9.30 $14.01 ($4.71) -33.6% Richmond 13,201 $12.89 $14.10 ($1.21) -8.6% -------- ------- -------- ------- ------- Total 145,856 $11.20 $14.12 ($2.92) -20.7% ======== ======= ======== ======= ======= (a) Analysis includes leases fully executed from 1/1/03 to 3/31/03 for buildings owned at 3/31/03. Does not include First Generation space. KOGER EQUITY, INC. AND SUBSIDIARIES SAME SUITE ANALYSIS YEAR TO DATE MARCH 31, 2003 Renewal ----------------------------------------- RSF New Expiring Percent Leased Net Net Rent Change Change Rent -------- ------- -------- ------- ------- Atlanta 52,934 $14.83 $9.22 $5.61 60.8% Orlando 10,805 $13.81 $13.74 $0.07 0.5% Jacksonville 89,928 $11.80 $12.11 ($0.31) -2.6% Houston 17,727 $10.86 $12.72 ($1.86) -14.6% St. Petersburg 22,514 $9.70 $9.92 ($0.22) -2.2% Tallahassee 28,003 $13.44 $15.90 ($2.46) -15.5% Charlotte 9,378 $12.66 $13.41 ($0.75) -5.6% Memphis 3,109 $11.74 $13.92 ($2.18) -15.7% Richmond 0 $0.00 $0.00 $0.00 0.0% -------- ------- -------- ------- ------- Total 234,398 $12.53 $11.90 $0.64 5.4% ======== ======= ======== ======= ======= (a) Analysis includes leases fully executed from 1/1/03 to 3/31/03 for buildings owned at 3/31/03. Does not include First Generation space. KOGER EQUITY, INC. AND SUBSIDIARIES SAME SUITE ANALYSIS YEAR TO DATE MARCH 31, 2003 Total Leasing ----------------------------------------- RSF New Expiring Percent Leased Net Net Rent Change Change Rent -------- ------- -------- ------- ------- Atlanta 73,306 $13.81 $10.73 $3.07 28.6% Orlando 55,708 $11.80 $13.97 ($2.17) -15.5% Jacksonville 123,827 $11.63 $12.52 ($0.89) -7.1% Houston 17,727 $10.86 $12.72 ($1.86) -14.6% St. Petersburg 31,354 $10.11 $10.50 ($0.39) -3.8% Tallahassee 29,153 $13.44 $15.77 ($2.33) -14.8% Charlotte 25,981 $11.17 $15.12 ($3.95) -26.1% Memphis 9,997 $10.06 $13.98 ($3.92) -28.1% Richmond 13,201 $12.89 $14.10 ($1.21) -8.6% -------- ------- -------- ------- ------- Total 380,254 $12.02 $12.75 ($0.73) -5.7% ======== ======= ======== ======= ======= (a) Analysis includes leases fully executed from 1/1/03 to 3/31/03 for buildings owned at 3/31/03. Does not include First Generation space. Page 23 KOGER EQUITY, INC. AND SUBSIDIARIES SPECIAL ITEMS INCLUDED IN QUARTER'S RESULTS MARCH 31, 2003 In Thousands, Except Per Share Data ----------------------------------- Lease Cancellation Fees 705 Straight Line Rent Catchup For All Leases Less Than 5,000 RSF 665 Expense Reimbursement Catchup For 2002 427 Compensation Expense Accrued Related To Options (177) Write Off of Development Pursuit Costs & Other Assets (247) Asset Management Fees from Crocker Realty Trust 194 --------- Total 1,567 ========= Weighted average common shares/units outstanding - diluted 21,327 ========= Per share/unit - diluted: FFO Impact $0.07 Page 24