-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AnW4HRDiGodjhjfOK6ZZuHzpLUpX7zOgeY4PnQpt1fR6Dy5DmQ8yqigycEpQVGnd PgTA0UalAFuSOuG9Sp/2pw== 0001157523-03-006465.txt : 20031110 0001157523-03-006465.hdr.sgml : 20031110 20031110170549 ACCESSION NUMBER: 0001157523-03-006465 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20031104 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20031110 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KOGER EQUITY INC CENTRAL INDEX KEY: 0000835664 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 592898045 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09997 FILM NUMBER: 03989333 BUSINESS ADDRESS: STREET 1: 8880 FREEDOM CROSSING TRAIL CITY: JACKSONVILLE STATE: FL ZIP: 32256 BUSINESS PHONE: 9047321000 MAIL ADDRESS: STREET 1: 8880 FREEDOM CROSSING TRAIL CITY: JACKSONVILLE STATE: FL ZIP: 32256 8-K 1 a4511894.txt KOGER EQUITY, INC. 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): November 4, 2003 ---------------- KOGER EQUITY, INC. - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Its Charter) FLORIDA - -------------------------------------------------------------------------------- (State or Other Jurisdiction of Incorporation) 1-9997 59-2898045 - -------------------------------------------------------------------------------- (Commission File Number) (IRS Employer Identification No.) 225 NE MIZNER BOULEVARD, SUITE 200 BOCA RATON, FLORIDA 33432 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) (561) 395-9666 - -------------------------------------------------------------------------------- (Registrant's Telephone Number, Including Area Code) NA - -------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Reports) Item 9. Regulation FD Disclosure. Koger Equity, Inc. announced its quarterly results for the period ended September 30, 2003, as more particularly described in its News Release, dated November 4, 2003, and related Supplemental Information, dated September 30, 2003, on the Company's web site, a copy of which is attached hereto as Exhibit 99(a) and by this reference made a part hereof. Through a newly formed DownREIT limited partnership, Koger Equity, Inc. also announced that it provided its portion of a non-refundable deposit for the acquisition of all of the partnership interests in a partnership that owns an office building known as Broward Financial Center, which is located in Ft. Lauderdale, Florida and contains 325,000 square feet of rentable space. The transaction is expected to close in January, 2004 and is more particularly described in its News Release, dated November 4, 2003, a copy of which is attached hereto as Exhibit 99(b) and by this reference made a part hereof. For more information on Koger Equity, Inc., contact the company at 800-850-2037 or visit its Web site at www.koger.com. Item 7. Financial Statements and Exhibits. (c) Exhibits Exhibit Number Description of Exhibit ------- ---------------------- 99(a) Koger Equity, Inc. News Release, dated November 4, 2003, and related Supplemental Information, dated September 30, 2003. 99(b) Koger Equity, Inc. News Release, dated November 4, 2003. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. KOGER EQUITY, INC. Dated: November 10, 2003 By: /S/ Steven A. Abney ---------------------------- Steven A. Abney Title: Vice President, Finance and Chief Accounting Officer (Principal Financial Officer) EXHIBIT INDEX The following designated exhibits are filed herewith: Exhibit Number Description of Exhibit ------- ---------------------- 99(a) Koger Equity, Inc. News Release, dated November 4, 2003, and related Supplemental Information, dated September 30, 2003. 99(b) Koger Equity, Inc. News Release, dated November 4, 2003. EX-99 3 a4511894ex99a.txt KOGER EQUITY, INC. EXHIBIT 99(A) Exhibit 99(a) Koger Equity Announces Third Quarter Earnings BOCA RATON, Fla.--(BUSINESS WIRE)--Nov. 4, 2003--Koger Equity, Inc. (NYSE:KE) today reported results for the third quarter ended September 30, 2003. Net income available to common shareholders for the third quarter 2003 totaled $3.3 million, or $0.15 per diluted share, compared to $4.4 million, or $0.21 per diluted share, for the third quarter 2002. Net income was lower in the third quarter 2003 due primarily to increased depreciation and amortization related to the Company's December 2002 acquisition of The Lakes on Post Oak in Houston, Texas. Funds from operations (FFO) for the third quarter 2003 increased 2% to $11.3 million or $0.52 per diluted share from $10.9 million or $0.51 per diluted share for the same period last year. The Company's portfolio ended the third quarter 2003 with an overall occupancy of 81.6%, compared to 82.6% at September 30, 2002. Koger's total operating revenues increased 7.6% or $2.5 million to $35.2 million in the third quarter 2003, from $32.7 million for the same period in 2002. The increase is due principally to the Company's December 2002 acquisition of The Lakes on Post Oak. Offsetting some of the increase was a 4.5% or $1.3 million decline in same-store total operating revenues as compared to the same period in 2002 as well as a reduction in income from third-party management fees. Occupancy on the same-store portfolio consisting of 120 buildings was 84.1% at September 30, 2003, compared to 88.2% at September 30, 2002. The Company's acquisition assets in Dallas, Houston and Atlanta, which are not included in the same-store universe, were 74.1% occupied at September 30, 2003, compared to 63.3% at September 30, 2002. Thomas J. Crocker, Chief Executive Officer of Koger Equity, Inc. said, "We are very pleased to report third quarter FFO results above the consensus estimates. Our year-to-date new and backfill leasing volume has exceeded our budget by over 40% and our property management team continues to aggressively control our operating expenses. Our same-store occupancy and operating results have softened somewhat but we believe that will be offset by the performance of our recently acquired assets in Dallas and by the income from our newly formed joint venture that will acquire Broward Financial Centre in Ft. Lauderdale." Mr. Crocker continued, "In the third quarter we strengthened Koger's balance sheet with our $75 million preferred stock issuance. That offering was over-subscribed, sold out in less than three days and was favorably priced relative to recent preferred offerings from a number of our peers. The proceeds from that offering were used to acquire the Dallas properties and fully pay down our line of credit. We now have the liquidity to continue to acquire additional high-quality, well-located assets in our target markets." Mr. Crocker concluded, "We have almost 600,000 square feet of Class A inventory in Atlanta and Houston and we believe Koger is well positioned to substantially benefit as job growth and office space demand return to these major markets." The Company signed 245,000 square feet of leases in 73 transactions in the third quarter 2003 at an average cost of $2.11 per square foot per year. The weighted average net rental rate on leases signed, excluding first generation space was $11.03 as compared to $11.80 for the average rental rate on expiring leases, a 6.5% decrease in rental rates. For the third quarter 2003, the Company had negative net absorption totaling 159,000 square feet, most of which occurred in Charlotte. Results for the Nine Months Ended September 30, 2003 Net income available to common shareholders for the first nine months of 2003 totaled $11.0 million, or $0.52 per diluted share, compared to $13.9 million, or $0.65 per diluted share for the same period in 2002. The decline in net income was due primarily to increased depreciation and amortization resulting from The Lakes on Post Oak acquisition. FFO for the first nine months of 2003 increased 3.7% to $34.7 million, or $1.62 per diluted share, compared to $33.5 million, or $1.56 per diluted share for the same period in 2002. The increase is due to The Lakes on Post Oak acquisition, but was partially offset by lower rental revenues from the Company's same-store portfolio. For the first nine months of 2003, Koger increased total operating revenues 11.2% or $10.9 million to $107.7 million, from $96.9 million for the same period in 2002. The increase is due principally to the Company's December 2002 acquisition of The Lakes on Post Oak, and was somewhat offset by a 3.7% or $3.2 million decline in same-store total operating revenues, as compared to the same period in 2002. The Company signed 885,000 square feet of leases in 232 transactions in the first nine months of 2003 at an average cost of $1.93 per square foot per year. The weighted average net rental rate on leases signed, excluding first generation space was $11.90 as compared to $11.85 for the average rental rate on expiring leases, a 0.4% increase in rental rates. For the first nine months of 2003, the Company had negative net absorption totaling 255,000 square feet, most of which occurred in Charlotte, Orlando, Houston and Atlanta. Earnings Estimates Based on the current outlook and Koger's results for the first nine months of 2003, the Company is maintaining its FFO per diluted share guidance for fiscal 2003. Management expects 2003 net income available to common shareholders will range between $0.62-$0.67 per diluted share while FFO is expected to range between $2.10-$2.15 per diluted share. The Company also announced full year guidance for fiscal 2004. For the year ending December 31, 2004, Koger expects 2004 net income available to common shareholders and FFO to be in the range of $0.51-$0.61 per diluted share and $2.00-$2.10 per diluted share respectively. The Company's significant assumptions for 2004 include: - -- Average of 5 months free rent on new leasing. - -- 7% reduction in average rental rates on renewals. - -- Acquisitions resulting in 2004 FFO of $.10 per diluted share. - -- Year-end 2004 occupancy of 83.2% compared to year-end 2003 occupancy of 81.7%. - -- Positive absorption across the portfolio totaling 138,000 square feet. - -- Average LIBOR rate of 1.73%, resulting in an average variable interest rate of 4.5%. - -- 8.5% dividend on the Company's 3 million preferred shares, totaling $6.4 million. During the scheduled November 5, 2003 conference call, management will further discuss earnings guidance for 2004. Funds from operations (FFO) is a non-GAAP financial measure. The Company believes that Funds from Operations is one measure of the performance of an equity real estate investment trust. Funds from Operations should not be considered as an alternative to net income as an indication of the Company's financial performance or to cash flow from operating activities (determined in accordance with accounting principles generally accepted in the United States of America) as a measure of the Company's liquidity, nor is it necessarily indicative of sufficient cash flow to fund all of the Company's needs. While the Company believes its calculation of FFO generally conforms with the National Association of Real Estate Investment Trusts' ("NAREIT") definition of FFO, the Company's method of calculating FFO may be different from methods used by other REIT's and the method preferred by NAREIT. 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 operate; its ability to timely lease or re-lease space at current or anticipated rents to creditworthy tenants; competition for tenants; 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 126 office buildings, containing 9.21 million rentable square feet, located primarily in 18 suburban office projects in ten cities in the Southeastern United States and Texas. Copies of the Company's September 30, 2003 Third 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 September 30, 2003 Third 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 For the Three Months Ended Nine Months Ended 9/30/03 9/30/02 9/30/03 9/30/02 -------- -------- --------- -------- Revenues Rental and other rental services $35,163 $31,836 $107,407 $94,286 Management fees -- 839 331 2,590 Other -- -- 5 2 -------- -------- --------- -------- Total operating revenues 35,163 32,675 107,743 96,878 -------- -------- --------- -------- Expenses Property operations 13,907 11,846 41,949 34,233 Depreciation and amortization 7,925 6,663 24,537 19,915 General and administrative 2,385 2,971 8,415 8,428 Direct cost of management fees -- 797 88 2,630 Other 36 43 103 125 -------- -------- --------- -------- Total operating expenses 24,253 22,320 75,092 65,331 -------- -------- --------- -------- Operating Income 10,910 10,355 32,651 31,547 -------- -------- --------- -------- Other Income and Expense Interest income 39 98 179 329 Mortgage and loan interest (7,289) (6,041) (22,059) (17,864) -------- -------- --------- -------- Total other income and expense (7,250) (5,943) (21,880) (17,535) -------- -------- --------- -------- Income Before Gain on Sale or Disposition of Assets, Income Taxes and Minority Interest 3,660 4,412 10,771 14,012 Gain on sale or disposition of assets -- 1 589 2 -------- -------- --------- -------- Income Before Income Taxes and Minority Interest 3,660 4,413 11,360 14,014 Income taxes (1) 19 (22) 112 -------- -------- --------- -------- Income Before Minority Interest 3,661 4,394 11,382 13,902 Minority interest -- -- -- 20 -------- -------- --------- -------- Net Income 3,661 4,394 11,382 13,882 Dividends on preferred stock (371) -- (371) -- -------- -------- --------- -------- Net Income Available to Common Shareholders $3,290 $4,394 $11,011 $13,882 ======== ======== ========= ======== Earnings Per Share Available to Common Shareholders: Basic $0.15 $0.21 $0.52 $0.65 ======== ======== ========= ======== Diluted $0.15 $0.21 $0.52 $0.65 ======== ======== ========= ======== Weighted Average Shares: Basic 21,332 21,293 21,314 21,258 ======== ======== ========= ======== Diluted 21,455 21,410 21,377 21,407 ======== ======== ========= ======== KOGER EQUITY, INC. FUNDS FROM OPERATIONS (In Thousands except per Share Data) For the Three For the Nine Months Ended Months Ended 9/30/03 9/30/02 9/30/03 9/30/02 -------- -------- -------- -------- Net income available to common shareholders $3,290 $4,394 $11,011 $13,882 Depreciation - real estate 7,147 6,174 21,728 18,493 Amortization - deferred tenant costs 436 378 1,264 1,080 Amortization - fair value of acquired leases 378 -- 1,303 -- Minority interest -- -- -- 20 Gain on sale of non-operating assets -- (1) (589) (2) -------- -------- -------- -------- Funds from operations $11,251 $10,945 $34,717 $33,473 ======== ======== ======== ======== Weighted average shares/units outstanding - diluted 21,455 21,410 21,378 21,407 Funds from operations, per diluted share/unit $0.52 $0.51 $1.62 $1.56 KOGER EQUITY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In Thousands) September 30, December 31, 2003 2002 ------------- -------------- ASSETS Real estate investments: Operating properties: Land $ 116,658 $ 110,653 Buildings 814,183 783,185 Furniture and equipment 3,533 3,320 Accumulated depreciation (171,697) (149,830) ------------- -------------- Operating properties, net 762,677 747,328 Undeveloped land held for investment 9,995 9,995 Undeveloped land held for sale, net of allowance 3,041 3,831 Cash and cash equivalents 13,302 4,627 Restricted cash 14,520 13,340 Accounts receivable, net of allowance for uncollectible accounts of $1,620 and $1,280 14,575 12,183 Other assets 18,059 13,781 ------------- -------------- TOTAL ASSETS $836,169 $805,085 ============= ============== LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Mortgages and loans payable $394,128 $431,698 Accounts payable 3,764 3,801 Accrued real estate taxes payable 9,893 147 Other accrued liabilities 10,846 13,435 Dividends payable 7,840 7,453 Advance rents and security deposits 5,343 5,483 ---------- --------- Total Liabilities 431,814 462,017 ---------- --------- Shareholders' equity: Preferred Stock 30 -- Common stock 299 298 Capital in excess of par value 544,689 472,156 Notes receivable from stock sales (5,266) (5,266) Accumulated other comprehensive loss (212) (212) Retained earnings (deficit) (3,566) 7,813 Treasury stock, at cost (131,619) (131,721) ---------- --------- Total Shareholders' Equity 404,355 343,068 ---------- --------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $836,169 $805,085 ========== ========= KOGER EQUITY, INC. FORECASTED FUNDS FROM OPERATIONS (per Diluted Share) For the Year Ended 12/31/03 12/31/04 ------------ ------------ Net income available to common shareholders, per diluted share $0.62-0.67 $0.51-0.61 Depreciation - real estate 1.36 1.34 Amortization - deferred tenant costs 0.07 0.07 Amortization - fair value of acquired leases 0.08 0.08 Gain on sale or disposition: Non-operating assets (0.03) -- ------------ ------------ Funds from operations, per diluted share $2.10-2.15 $2.00-2.10 ============ ============ CONTACT: Koger Equity, Inc. Thomas C. Brockwell, 561-395-9666 KOGER EQUITY, INC. AND SUBSIDIARIES SUPPLEMENTAL INFORMATION TABLE OF CONTENTS / "SAFE HARBOR" September 30, 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. A+B40cquisition/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 - Summary of Assets By City 15 - Occupancy/Leased Summary 16 - Occupancy Trend 17 - Leasing Summary 18 - 19 - Lease Distribution 20 - Lease Expirations 21 - Net Effective Rents 22 - Capital Expenditure Leasing Commitment 23 - Same Suite Analysis 24 - 25 IV. Special Items - Special Items Included in Results 26 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) 9/30/03 6/30/03 3/31/03 12/31/02 9/30/02 ----------- ---------- ---------- --------- ---------- ASSETS Real estate investments: Operating properties: Land $ 116,658 $ 110,653 $ 110,653 $ 110,653 $ 98,253 Buildings 814,183 784,145 779,914 783,185 688,363 Furniture and equipment 3,533 3,488 3,488 3,320 3,120 Accumulated depreciation (171,697) (164,470) (157,023) (149,830) (142,295) --------------- ---------------- ---------------- --------------- --------------- Operating properties, net 762,677 733,816 737,032 747,328 647,441 Undeveloped land held for investment 9,995 9,995 9,995 9,995 11,015 Undeveloped land held for sale 3,041 3,041 3,831 3,831 2,840 Cash and temporary investments 13,302 4,741 5,893 4,627 10,930 Restricted cash 14,520 14,417 13,191 13,340 0 Accounts receivable, net 14,575 13,007 12,657 12,183 10,744 Cost in excess of fair value of net assets acquired, net of accumulated amortization 595 595 595 595 595 Other assets 17,464 17,126 18,091 13,186 11,939 --------------- ---------------- ---------------- --------------- --------------- TOTAL ASSETS $ 836,169 $ 796,738 $ 801,285 $ 805,085 $ 695,504 =============== ================ ================ =============== =============== LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Mortgages and loan payable $ 394,128 $ 426,371 $ 431,660 $ 431,698 $ 314,994 Accounts payable 3,764 2,648 2,486 3,801 3,236 Accrued real estate taxes payable 9,893 7,997 4,022 147 6,336 Other accrued liabilities 10,846 10,889 9,969 13,435 9,929 Dividends payable 7,840 7,463 7,458 7,453 7,453 Advance rents and security deposits 5,343 5,224 5,678 5,483 5,137 --------------- ---------------- ---------------- --------------- --------------- Total Liabilities 431,814 460,592 461,273 462,017 347,085 --------------- ---------------- ---------------- --------------- --------------- Shareholders' Equity: Preferred stock 30 0 0 0 0 Common stock 299 298 298 298 298 Capital in excess of par value 544,689 472,364 472,253 472,156 472,012 Notes receivable from stock sales to related parties (5,266) (5,266) (5,266) (5,266) (5,066) Other comprehensive loss (212) (212) (212) (212) 0 Retained earnings (deficit) (3,566) 613 4,626 7,813 12,726 Treasury stock, at cost (131,619) (131,651) (131,687) (131,721) (131,551) --------------- ---------------- ---------------- --------------- --------------- Total Shareholders' Equity 404,355 336,146 340,012 343,068 348,419 --------------- ---------------- ---------------- --------------- --------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 836,169 $ 796,738 $ 801,285 $ 805,085 $ 695,504 =============== ================ ================ =============== ===============
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KOGER EQUITY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) In thousands, except per share data - -------------------------------------------------------------------------------------------------------------------------------- Three Months Ended ----------------------------------------------------------------------------- 9/30/03 6/30/03 3/31/03 12/31/02 9/30/02 ------- ------- ------- -------- ------- REVENUES Rental and other rental services $ 35,163 $ 35,964 $ 36,280 $ 32,065 $ 31,836 Management fees 0 126 205 757 839 Other 0 0 5 51 0 ---------- -------- -------- -------- -------- Total operating revenues 35,163 36,090 36,490 32,873 32,675 ---------- -------- -------- -------- -------- EXPENSES Property operations 13,907 14,694 13,348 12,002 11,846 Depreciation and amortization 7,925 8,156 8,456 7,993 6,663 General and administrative 2,385 3,086 2,944 2,953 2,971 Direct cost of management fees 0 2 86 705 797 Other 36 31 36 18 43 ---------- -------- -------- -------- -------- Total operating expenses 24,253 25,969 24,870 23,671 22,320 ---------- -------- -------- -------- -------- OPERATING INCOME 10,910 10,121 11,620 9,202 10,355 ---------- -------- -------- -------- -------- OTHER INCOME AND EXPENSE Interest income 39 86 54 76 98 Mortgage and loan interest (7,289) (7,367) (7,403) (7,281) (6,041) ---------- -------- -------- -------- -------- Total other income and expense (7,250) (7,281) (7,349) (7,205) (5,943) INCOME BEFORE GAIN (LOSS) ON SALE OR DISPOSITION OF ASSETS 3,660 2,840 4,271 1,997 4,412 Gain (loss) on sale or disposition of assets 0 589 0 19 1 ---------- -------- -------- -------- -------- INCOME BEFORE INCOME TAXES 3,660 3,429 4,271 2,016 4,413 Income taxes (1) (21) 0 (525) 19 ---------- -------- -------- -------- -------- INCOME BEFORE MINORITY INTEREST 3,661 3,450 4,271 2,541 4,394 Minority interest 0 0 0 0 0 ---------- -------- -------- -------- -------- NET INCOME $ 3,661 $ 3,450 $ 4,271 $ 2,541 $ 4,394 ---------- -------- -------- -------- -------- Dividends on preferred stock $ (371) $ - $ - $ - $ - ---------- -------- -------- -------- -------- NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 3,290 $ 3,450 $ 4,271 $ 2,541 $ 4,394 ========== ======== ======== ======== ======== EARNINGS PER SHARE AVAILABLE TO COMMON SHAREHOLDERS - Diluted $ 0.15 $ 0.16 $ 0.20 $ 0.12 $ 0.21 ========== ======== ======== ======== ======== WEIGHTED AVERAGE SHARES - Diluted 21,455 21,382 21,327 21,332 21,410 ========== ======== ======== ======== ======== OPERATING MARGIN 60.4% 59.1% 63.2% 62.6% 62.8% ========== ======== ======== ======== ========
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KOGER EQUITY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) In thousands, except per share data - ----------------------------------------------------------------------------------------------------------------------------------- Three Months Ended Nine Months Ended ----------------------------------- --------------------------------- 9/30/03 9/30/02 Fav/(Unfav) 9/30/03 9/30/02 Fav/(Unfav) ------- ------- ----------- ------- ------- ---------- REVENUES Rental and other rental services $ 35,163 $ 31,836 $ 3,327 $ 107,407 $ 94,286 $ 13,121 Management fees 0 839 (839) 331 2,590 (2,259) Other 0 0 0 5 2 3 -------- -------- -------- --------- -------- -------- Total operating revenues 35,163 32,675 2,488 107,743 96,878 10,865 -------- -------- -------- --------- -------- -------- EXPENSES Property operations 13,907 11,846 (2,061) 41,949 34,233 (7,716) Depreciation and amortization 7,925 6,663 (1,262) 24,537 19,915 (4,622) General and administrative 2,385 2,971 586 8,415 8,428 13 Direct cost of management fees 0 797 797 88 2,630 2,542 Other 36 43 7 103 125 22 -------- -------- -------- --------- -------- -------- Total operating expenses 24,253 22,320 (1,933) 75,092 65,331 (9,761) -------- -------- -------- --------- -------- -------- OPERATING INCOME 10,910 10,355 555 32,651 31,547 1,104 -------- -------- -------- --------- -------- -------- OTHER INCOME AND EXPENSE Interest income 39 98 (59) 179 329 (150) Mortgage and loan interest (7,289) (6,041) (1,248) (22,059) (17,864) (4,195) -------- -------- -------- --------- -------- -------- Total other income and expense (7,250) (5,943) (1,307) (21,880) (17,535) (4,345) INCOME BEFORE GAIN (LOSS) ON SALE OR DISPOSITION OF ASSETS 3,660 4,412 (752) 10,771 14,012 (3,241) Gain (loss) on sale or disposition of assets 0 1 (1) 589 2 587 -------- -------- -------- --------- -------- -------- INCOME BEFORE INCOME TAXES 3,660 4,413 (753) 11,360 14,014 (2,654) Income taxes (1) 19 20 (22) 112 134 -------- -------- -------- --------- -------- -------- INCOME BEFORE MINORITY INTEREST 3,661 4,394 (733) 11,382 13,902 (2,520) Minority interest 0 0 0 0 20 20 -------- -------- -------- --------- -------- -------- NET INCOME 3,661 4,394 (733) 11,382 13,882 (2,500) Dividends on preferred stock (371) 0 (371) (371) 0 (371) -------- -------- -------- --------- -------- -------- NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 3,290 $ 4,394 $ (1,104) $ 11,011 $ 13,882 $ (2,871) ======== ======== ======== ========= ======== ======== EARNINGS PER SHARE AVAILABLE TO COMMON SHAREHOLDERS - Diluted $ 0.15 $ 0.21 $ (0.06) $ 0.52 $ 0.65 $ (0.13) ======== ======== ======== ========= ======== ======== WEIGHTED AVERAGE SHARES - Diluted 21,455 21,410 45 21,377 21,407 (30) ======== ======== ======== ========= ======== ======== OPERATING MARGIN 60.4% 62.8% 60.9% 63.7% ======== ======== ======== ========= ======== ========
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KOGER EQUITY, INC. AND SUBSIDIARIES FUNDS FROM OPERATIONS (Unaudited) In thousands, except per share data - ------------------------------------------------------------------------------------------------------------------------------------ Three Months Ended -------------------------------------------------------------------------------- 9/30/03 6/30/03 3/31/03 12/31/02 9/30/02 --------- ------------- -------------- --------------- ------------- Funds from Operations: Net income $ 3,290 $ 3,450 $ 4,271 $ 2,541 $ 4,394 Depreciation - real estate 7,147 7,390 7,191 7,396 6,174 Amortization - deferred tenant costs 436 432 396 444 378 Amortization - fair value of acquired leases 378 432 493 0 0 Loss (gain) on sale of non-operating assets 0 (589) 0 (19) (1) --------- ------------- -------------- --------------- ------------- Funds from Operations (a) 11,251 11,115 12,351 10,362 10,945 Cash Available for Distribution: Add (Deduct): Rental income from straight-line rents (801) (1,075) (1,295) (404) (730) Amortization of deferred financing costs 370 368 357 1,291 303 Revenue Maintaining Building improvements (423) (695) (661) (2,091) (332) Revenue maintaining tenant improvements (b) (804) (1,391) (1,253) (1,464) (1,767) Revenue maintaining leasing commissions (b) (222) (266) (374) (569) (205) --------- ------------- -------------- --------------- ------------- Cash Available for Distribution (a) $ 9,371 $ 8,056 $ 9,125 $ 7,125 $ 8,214 ========= ============= ============== =============== ============= Weighted average common shares/units outstanding - diluted 21,455 21,382 21,327 21,332 21,410 ========= ============= ============== =============== ============= Per share/unit - diluted: Funds from operations $ 0.52 $ 0.52 $ 0.58 $ 0.49 $ 0.51 ========= ============= ============== =============== ============= Cash available for distribution $ 0.44 $ 0.38 $ 0.43 $ 0.33 $ 0.38 ========= ============= ============== =============== ============= Dividends paid $ 0.35 $ 0.35 $ 0.35 $ 0.35 $ 0.35 ========= ============= ============== =============== ============= Dividend payout ratio: Funds from operations 66.7% 67.3% 60.4% 72.1% 68.5% ========= ============= ============== =============== ============= Cash available for distribution 80.1% 92.9% 81.8% 104.8% 91.2% ========= ============= ============== =============== =============
(b) The amounts for the periods ending in 2002 represent the leasing costs associated with 2nd generation space. Page 5
KOGER EQUITY, INC. AND SUBSIDIARIES NET OPERATING INCOME (a) (b) (Unaudited) In thousands, except SF and per share data - ----------------------------------------------------------------------------------------------------------- Three Months Ended -------------------------------------------------------------- 9/30/03 6/30/03 3/31/03 12/31/02 9/30/02 -------- --------- --------- ---------- ---------- Same Store Sales: Properties 120 Revenue $ 26,859 $ 27,377 $ 27,538 $ 27,353 $ 28,138 Square Feet 6,922,606 Expense 10,061 10,312 9,631 10,038 10,369 -------- --------- --------- ---------- ---------- NOI 16,736 17,065 17,907 17,315 17,769 -------- --------- --------- ---------- ---------- Occupancy - Period End 84.1% 85.8% 83.8% 87.1% 88.2% Acquisitions: Properties 6 Revenue (c) $ 8,422 $ 8,452 $ 8,596 $ 4,741 $ 3,583 Square Feet 2,288,769 Expense 3,845 4,421 3,789 1,962 1,575 -------- --------- --------- ---------- ---------- NOI 4,481 4,031 4,807 2,779 2,008 -------- --------- --------- ---------- ---------- Occupancy - Period End 74.1% 71.0% 71.8% 71.8% 63.3% Development: Properties - Revenue $ - $ - $ - $ - $ - Square Feet - Expense - - - - - -------- --------- --------- ---------- ---------- NOI - - - - - -------- --------- --------- ---------- ---------- Occupancy - Period End 0.0% 0.0% 0.0% 0.0% 0.0% Asset Sales: Properties - Revenue $ 0 $ 289 $ (29) $ (29) $ 115 Square Feet - Expense 0 (40) (71) 2 (97) -------- --------- --------- ---------- ---------- NOI (0) 329 42 (31) 212 -------- --------- --------- ---------- ---------- Occupancy - Period End 0.0% 0.0% 0.0% 0.0% 0.0% Consolidated Portfolio Properties 126 Revenue $ 35,281 $ 36,118 $ 36,105 $ 32,065 $ 31,836 Square Feet 9,211,375 Expense $ 13,907 $ 14,693 $ 13,349 $ 12,002 $ 11,847 -------- --------- --------- ---------- ---------- NOI 21,374 21,425 22,756 20,063 19,989 -------- --------- --------- ---------- ---------- Occupancy - Period End 81.6% 82.5% 81.1% 86.6% 85.6%
(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 adjustments for the fair value of acquired leases for the period ended 3/31/03, 6/30/03 and 9/30/03, $175, ($154) and $118 respectively. Page 6
KOGER EQUITY, INC. AND SUBSIDIARIES NET OPERATING INCOME (a) (b) (Unaudited) In thousands, except SF and per share data - ---------------------------------------------------------------------------------------------------------------------------------- Three Months Ended Nine Months Ended ------------------------------------ ---------------------------------- 09/30/03 09/30/02 Fav/(Unfav) 09/30/03 09/30/02 Fav/(Unfav) Same Store Sales: --------- --------- ------------ --------- --------- ----------- Properties 120 Revenue $ 26,859 $ 28,138 $ (1,279) $ 81,774 $ 84,942 $ (3,168) Square Feet 6,922,606 Expense 10,061 10,369 308 30,005 29,708 (297) --------- --------- ------------ --------- --------- ----------- NOI 16,798 17,769 (971) 51,769 55,235 (3,465) --------- --------- ------------ --------- --------- ----------- Occupancy - Period End 84.1% 88.2% -4.1% 84.1% 88.2% -4.1% Acquisitions: Properties 6 Revenue (c) $ 8,422 $ 3,583 $ 4,839 $ 25,470 $ 9,094 $ 16,376 Square Feet 2,288,769 Expense 3,845 1,575 (2,366) 12,056 4,251 (7,900) --------- --------- ------------ --------- --------- ----------- NOI 4,576 2,008 2,568 13,414 4,843 8,571 --------- --------- ------------ --------- --------- ----------- Occupancy - Period End 74.1% 63.3% 11% 74.1% 63.3% 10.8% Development: Properties - Revenue $ - $ - $ - $ - $ - $ - Square Feet - Expense - - - - - - --------- --------- ------------ --------- --------- ----------- NOI - - - - - - --------- --------- ------------ --------- --------- ----------- Occupancy - Period End 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Asset Sales: Properties - Revenue $ 0 $ 115 $ (115) $ 260 $ 250 $ 10 Square Feet - Expense 0 (97) (97) (112) 275 387 --------- --------- ------------ --------- --------- ----------- NOI (0) 212 (212) 372 (25) 396 --------- --------- ------------ --------- --------- ----------- Occupancy - Period End 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Consolidated Portfolio Properties 126 Revenue $ 35,281 $ 31,836 $ 3,445 $ 107,504 $ 94,286 $ 13,217 Square Feet 9,211,375 Expense $ 13,907 11,847 (2,217) $ 41,949 34,234 (7,872) --------- --------- ------------ --------- --------- ----------- NOI 21,374 19,989 1,385 65,555 60,053 5,502 --------- --------- ------------ --------- --------- ----------- Occupancy - Period End 81.6% 85.6% -4.0% 81.6% 85.6% -4.0%
(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 adjustments for the fair value of acquired leases for the period ended 3/31/03, 6/30/03 and 9/30/03, $175, ($154) and $118 respectively. Page 7
KOGER EQUITY, INC. AND SUBSIDIARIES CAPITAL EXPENDITURES (Unaudited) - --------------------------------------------------------------------------------------------------------------------------- Three Months Ended -------------------------------------------------------------------------- 9/30/03 6/30/03 3/31/03 12/31/02 9/30/02 Revenue Maintaining: ----------- ----------- ----------- ----------- ----------- Building Improvements $ 423,302 $ 694,892 $ 660,966 $ 2,091,048 $ 332,300 Tenant Improvements - 2001 Leasing 75,890 26,104 48,310 298,454 30,754 Tenant Improvements - 2002 Leasing 28,031 217,127 926,380 1,060,884 1,139,035 Tenant Improvements - 2003 Leasing 700,056 1,148,118 277,853 - - Leasing Commissions - 2001 Leasing 1,235 2,047 1,641 5,452 - Leasing Commissions - 2002 Leasing 8,251 661 150,832 736,406 208,940 Leasing Commissions - 2003 Leasing 212,803 263,379 221,203 - - ----------- ----------- ----------- ----------- ----------- Revenue Maintaining Capital Expenditures 1,449,568 2,352,328 2,287,185 4,192,244 1,711,029 ----------- ----------- ----------- ----------- ----------- Revenue Enhancing: Building Improvements 1,207,945 781,462 88,181 - - Tenant Improvements - 2002 Leasing (63,719) 732,711 1,005,839 359,906 754,092 Tenant Improvements - 2003 Leasing 1,127,369 421,104 77,044 - - Leasing Commissions - 2002 Leasing 53,491 10,250 156,756 195,342 137,822 Leasing Commissions - 2003 Leasing 208,379 251,269 42,730 - - ----------- ----------- ----------- ----------- ----------- Revenue Enhancing Capital Expenditures 2,533,465 2,196,796 1,370,550 555,248 891,914 Total Capital Expenditures $ 3,983,033 $ 4,549,124 $ 3,657,735 $ 4,747,492 $ 2,602,943 =========== =========== =========== =========== ===========
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KOGER EQUITY, INC. AND SUBSIDIARIES SUMMARY OF OUTSTANDING DEBT AS OF SEPTEMBER 30, 2003 Monthly Interest Debt Outstanding Balance Description Rate Maturity Service 9/30/03 12/31/02 $(000) $(000) $(000) - -------------------------------------- -------- -------- ------- ------- -------- Fixed Rate: Northwestern Mutual - Tranche A 8.19% 01/02/07 789 89,871 91,394 Northwestern Mutual - Tranche B 8.33% 01/02/09 710 79,985 81,331 Northwestern Mutual - Tranche C 7.10% 01/02/07 105 13,737 13,942 Northwestern Mutual - Tranche D 7.10% 01/02/09 216 28,314 28,738 New York Life 8.00% 01/10/03 0 - 7,718 Allstate Life 8.20% 12/01/06 165 18,742 19,066 Metropolitan Life 5.26% 01/01/08 373 85,000 85,000 ------- ------- -------- Total Fixed Rate Debt 7.29% 2,358 315,649 327,189 ------- ------- -------- Variable Rate: GE Capital 6.38% 06/30/21 12 1,479 1,509 Column Financial (1) 3.99% 12/09/04 262 77,000 77,000 Secured Revolving Credit Facility - $100 Million 0.00% 12/27/04 85 0 26,000 ------- ------- -------- Total Variable Rate Debt 4.04% 359 78,479 104,509 ------- ------- -------- Total Debt 6.64% 2,717 394,128 431,698 ======= ======= ======== Market Capitalization: Total Debt 394,128 431,698 Common Stock 401,241 332,200 ------- -------- Total Market Capitalization 795,369 763,898 ======= ======== - ---------------------------------------------------------------------------------------------------------- Amount $(000) -------- Schedule of Mortgage Maturities by Year (1): 2003 1,350 2004 82,631 2005 6,112 2006 23,706 2007 98,098 Thereafter 182,231 -------- Total 394,128 ======== (1) Interest rate capped at 287 basis points over maximum LIBOR of 5.45 percent.
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KOGER EQUITY, INC. AND SUBSIDIARIES OPERATING PROPERTY ACQUISITIONS 2002 AND 2003 Rentable Percent Square Date Purchase Leased Property Location Feet Purchased Price (1) 9/30/03 - -------------------------- --------------- ---------------- ----------- --------------- --------- 2002 Three Ravinia Atlanta, GA 804,528 01/31/02 $ 125,000,000 66% The Lakes on Post Oak Houston, TX 1,204,852 12/06/02 101,850,000 75% ---------------- --------------- --------- 2,009,380 $ 226,850,000 71% ================ =============== ========= 2003 Dallas Cigna Plaza Dallas, TX 127,226 9/11/2003 $ 15,170,874 92% Dallas Rosemeade Dallas, TX 152,163 9/11/2003 $ 17,979,126 100% ---------------- --------------- --------- 279,389 $ 33,150,000 96% ================ =============== ========= (1) Purchase price consists of the contract price only and does not include closing costs.
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KOGER EQUITY, INC. AND SUBSIDIARIES BUILDING COMPLETIONS 2002 AND 2003 Percent Square Month Leased Property Location Feet Completed Total Cost 9/30/03 - ------------------------------ -------------------------- ------------- ------------- --------------- ------------ 2002 - ---- None. 2003 - ---- None.
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KOGER EQUITY, INC. AND SUBSIDIARIES BUILDINGS UNDER CONSTRUCTION SEPTEMBER 30, 2003 Square Expected Projected Pre-Leasing Property Location Feet Completion Cost to Date - --------------------------- ---------------------- ------------- ----------------- ------------- ---------------- None. ------------- ------------- ---------------- - $ - ============= ============= ================
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KOGER EQUITY, INC. AND SUBSIDIARIES TWENTY-FIVE LARGEST TENANTS BASED ON ANNUALIZED GROSS RENTS AS OF SEPTEMBER 30, 2003 Remaining Annualized Number Occupied Term Percent of Gross Percent Tenant (a) of Leases Square Feet (Months) Occupied Rent (b) of Rent - --------------------------------- ---------- ------------- ------------ ---------- -------------- ---------- US GOVERNMENT 46 932,293 85 12.5% $17,356,032 12.6% STATE OF FLORIDA 40 690,203 28 9.2% 12,198,516 8.9% BLUE CROSS & BLUE SHIELD 11 579,084 21 7.8% 9,620,355 7.0% SIX CONTINENTS HOTELS 2 344,389 59 4.6% 9,339,997 6.8% BECHTEL CORPORATION 1 347,082 69 4.6% 6,351,601 4.6% CITIFINANCIAL 1 159,827 47 2.1% 2,958,751 2.2% CIGNA GENERAL LIFE INSURANCE 1 116,423 71 1.6% 2,897,877 2.1% LANDSTAR SYSTEM HOLDINGS INC 1 176,000 134 2.4% 2,644,068 1.9% ZURICH INSURANCE COMPANY 2 97,913 40 1.3% 1,895,596 1.4% NORTHERN TELECOM, INC. 1 62,155 33 0.8% 1,809,942 1.3% ACS STATE HEALTHCARE,LLC 2 79,714 44 1.1% 1,758,774 1.3% HUNTSMAN CORP 2 108,710 113 1.5% 1,722,252 1.3% TRANSCORE 1 60,840 50 0.8% 1,527,675 1.1% WASHINGTON MUTUAL BANK 2 86,361 57 1.2% 1,500,179 1.1% FORD MOTOR COMPANY 4 63,337 32 0.8% 1,376,056 1.0% BELLSOUTH 3 66,202 29 0.9% 974,565 0.7% SIEMENS WESTINGHOUSE POWER 1 63,809 4 0.9% 966,706 0.7% SARA LEE CORP 2 52,021 21 0.7% 964,921 0.7% ENOVIA CORPORATION 1 44,095 11 0.6% 880,034 0.6% NEXTIRA ONE 1 29,168 50 0.4% 838,903 0.6% BEST SOFTWARE INC 1 47,110 63 0.6% 770,249 0.6% NAVISION SOFTWARE US, INC. 1 37,783 47 0.5% 763,800 0.6% MERGENT - FIS INC. 1 45,040 47 0.6% 761,933 0.6% CHECK SOLUTIONS COMPANY 1 40,307 64 0.5% 760,697 0.6% SUNGARD TRUST SYSTEMS INC 2 43,569 33 0.6% 725,724 0.5% ---------- ------------- -------------- Total / Weighted Average 131 4,373,435 55 58.6% $83,365,202 60.6% ========== ============= ============ ========== ============== ==========
(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 September 30, 2003 multiplied by 12. Page 13
KOGER EQUITY, INC. AND SUBSIDIARIES INDUSTRY DIVERSIFICATION AS OF SEPTEMBER 30, 2003 Remaining Annualized Number Occupied Term Percent of Gross Percent Industry (a) of Leases Square Feet (Months) Occupied Rent (b) of Rent - ------------------------------------------------ ---------- ------------ ---------- ----------- ----------- --------- Finance and Insurance 154 1,841,291 33 24.7% $33,713,871 24.5% Public Adminstration 90 1,562,326 58 20.9% 28,389,711 20.6% Professional, Scientific, and Technical Services 175 1,395,114 44 18.7% 25,152,714 18.3% Information 45 527,190 40 7.1% 9,990,602 7.3% Manufacturing 52 544,752 48 7.3% 9,582,665 7.0% Accomodation and Food Services 9 360,704 57 4.8% 9,541,580 6.9% Unidentified 254 336,900 37 4.5% 5,780,640 4.2% Transportation and Warehousing 8 235,217 115 3.2% 3,561,046 2.6% Administrative and Support and Waste Management and Remediation Services 23 142,377 40 1.9% 2,585,995 1.9% Wholesale Trade 7 112,401 42 1.5% 2,409,974 1.8% Educational Services 16 87,185 29 1.2% 1,631,072 1.2% Other (c) 78 318,759 39 4.3% 5,158,998 3.8% ---------- ------------ ----------- ------------ --------- Total / Weighted Average 911 7,464,216 47 100.0% $137,498,870 100.0% ========== ============ ========== =========== ============ =========
(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 September 30, 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 SUMMARY OF ASSETS BY CITY AS OF SEPTEMBER 30, 2003 # of Age % Square % City State Bldgs (yrs) Square Feet Feet NOI (a) - ---------------------------- ------------- ---------- --------- ------------------ ------------ ----------- Atlanta GA 26 17 2,368,014 25.7% 31.0% Jacksonville FL 11 9 1,168,088 12.7% 17.0% Orlando FL 28 19 1,303,801 14.2% 15.8% Houston TX 3 23 1,204,852 13.1% 9.9% St. Petersburg FL 15 21 668,144 7.3% 7.4% Tallahassee FL 19 21 834,025 9.1% 6.2% Memphis TN 6 11 530,688 5.8% 4.5% Charlotte NC 15 16 709,247 7.7% 4.1% Richmond VA 1 15 145,127 1.6% 2.2% Dallas TX 2 6 279,389 3.0% 1.8% ---------- --------- ------------------ ------------ ----------- Total 126 17 9,211,375 100.0% 100.0% ========== ========= ================== ============ ===========
(a) Based on Net Operating Income for the third quarter of 2003. Page 15
KOGER EQUITY, INC. AND SUBSIDIARIES OCCUPANCY SUMMARY AS OF SEPTEMBER 30, 2003 Square Footage Percentage ------------------------------------------------------------ ----------------------------------------------- Leased, Not Leased, Not Commenced Commenced Occupied (a) Vacant Total Occupied (a) Vacant Total ---------------- -------------- ------------ ------------ ------------- -------------- ------- ------- Atlanta 1,924,698 5,737 437,579 2,368,014 81.3% 0.2% 18.5% 100.0% Jacksonville 1,160,630 0 7,458 1,168,088 99.4% 0.0% 0.6% 100.0% Orlando 1,082,934 10,011 210,856 1,303,801 83.1% 0.8% 16.2% 100.0% Houston 898,344 1,859 304,649 1,204,852 74.6% 0.2% 25.3% 100.0% Tallahassee 593,429 0 240,596 834,025 71.2% 0.0% 28.8% 100.0% St. Petersburg 587,761 4,498 75,885 668,144 88.0% 0.7% 11.4% 100.0% Charlotte 428,146 26,348 254,753 709,247 60.4% 3.7% 35.9% 100.0% Memphis 426,170 4,500 100,018 530,688 80.3% 0.8% 18.8% 100.0% Richmond 143,184 0 1,943 145,127 98.7% 0.0% 1.3% 100.0% Dallas 268,586 0 10,803 279,389 96.1% 0.0% 3.9% 100.0% ---------------- -------------- ------------ ------------ ------------- -------------- ------- ------- Total 7,513,882 52,953 1,644,540 9,211,375 81.6% 0.6% 17.9% 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 As of -------------------------------------------------------- MSA Square 9/30/2003 6/30/2003 3/31/2003 12/31/2002 9/30/2002 ---------- --------- --------- --------- ---------- --------- Atlanta - SSS 1,563,486 1,396,604 1,429,547 1,347,087 1,415,731 1,405,961 89.3% 91.4% 86.2% 90.5% 89.9% Orlando 1,303,801 1,082,934 1,090,238 1,056,117 1,158,989 1,215,547 83.1% 83.6% 81.0% 88.9% 93.2% Jacksonville 1,168,088 1,160,630 1,156,829 1,125,451 1,156,395 1,156,973 99.4% 99.0% 96.3% 99.0% 99.0% Charlotte 709,247 428,146 555,348 555,740 571,548 574,139 60.4% 78.3% 78.4% 80.6% 81.0% St. Petersburg 668,144 587,761 571,262 571,096 571,967 576,970 88.0% 85.5% 85.5% 85.6% 86.4% Tallahassee 834,025 593,429 595,557 596,237 595,144 600,038 71.2% 71.4% 71.5% 71.4% 71.9% Memphis 530,688 426,170 398,625 410,781 416,116 434,426 80.3% 75.1% 77.4% 78.4% 81.9% Richmond 145,127 143,184 141,013 137,733 141,752 141,752 98.7% 97.2% 94.9% 97.7% 97.7% ---------- --------- --------- --------- ---------- --------- Same Store 6,922,606 5,818,858 5,938,419 5,800,242 6,027,642 6,105,806 84.1% 85.8% 83.8% 87.1% 88.2% ---------- --------- --------- --------- ---------- --------- Houston 1,204,852 898,344 890,035 937,575 941,411 74.6% 73.9% 77.8% 78.1% Atlanta - ACQ 804,528 528,094 535,769 505,324 505,324 509,578 65.6% 66.6% 62.8% 62.8% 63.3% Dallas - ACQ 279,389 268,586 96.1% ---------- --------- --------- --------- ---------- --------- Acquisitions 2,288,769 1,695,024 1,425,804 1,442,899 1,446,735 509,578 74.1% 71.0% 71.8% 71.8% 63.3% ---------- --------- --------- --------- ---------- --------- Total 9,211,375 7,513,882 7,364,223 7,243,141 7,474,377 6,615,384 81.6% 79.9% 78.6% 81.1% 82.6% ========== ========= ========= ========= ========== =========
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KOGER EQUITY, INC. AND SUBSIDIARIES LEASING SUMMARY For The Three Months Ended 9/30/03 -------------------------------------------------------------------------------------------------------- MSA Leased Expirations Leasing New and Gross Net Leased Leased Leased Square Feet 6/30/03(a) (b)(c) Renewals Retention Backfill Activity Absorption 9/30/03(a) 6/30/03 9/30/03 ----------- ----------- ----------- --------- ----------- --------- -------- ----------- ----------- ------- ------- Atlanta 2,368,014 1,965,316 58,235 5,183 8.9% 18,171 23,354 (34,881) 1,930,435 83.0% 81.5% Jacksonville 1,168,088 1,161,439 4,834 0 0.0% 4,025 4,025 (809) 1,160,630 99.4% 99.4% Orlando 1,303,801 1,096,014 129,732 94,693 73.0% 31,970 126,663 (3,069) 1,092,945 84.1% 83.8% Houston 1,204,852 914,555 36,463 2,844 7.8% 19,267 22,111 (14,352) 900,203 75.9% 74.7% Tallahassee 834,025 595,557 2,291 0 0.0% 163 163 (2,128) 593,429 71.4% 71.2% St. Petersburg 668,144 585,490 9,210 7,139 77.5% 8,840 15,979 6,769 592,259 87.6% 88.6% Charlotte 709,247 562,511 153,811 21,749 14.1% 24,045 45,794 (108,017) 454,494 79.3% 64.1% Memphis 530,688 435,811 11,884 3,879 32.6% 2,864 6,743 (5,141) 430,670 82.1% 81.2% Richmond 145,127 141,013 1,985 0 0.0% 4,156 4,156 2,171 143,184 97.2% 98.7% Dallas 279,389 268,586 0 0 0.0% 0 0 0 268,586 96.1% 96.1% ----------- ----------- ----------- --------- ----------- --------- -------- ----------- ----------- ------- ------- Total 9,211,375 7,726,292 408,445 135,487 33.2% 113,501 248,988 (159,457) 7,566,835 83.9% 82.1% =========== =========== =========== ========= =========== ========= ======== =========== =========== ======= =======
(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 LEASING SUMMARY For The Nine Months Ended 9/30/03 -------------------------------------------------------------------------------------------------------- MSA Leased Expirations Leasing New and Gross Net Leased Leased Leased Square Feet 6/30/03(a) (b)(c) Renewals Retention Backfill Activity Absorption 9/30/03(a) 6/30/03 9/30/03 ----------- ----------- ----------- --------- ----------- --------- -------- ----------- ----------- ------- ------- Atlanta 2,368,014 1,975,803 213,182 86,413 40.5% 81,401 167,814 (45,368) 1,930,435 83.4% 81.5% Jacksonville 1,168,088 1,161,576 142,558 91,228 64.0% 50,384 141,612 (946) 1,160,630 99.4% 99.4% Orlando 1,303,801 1,161,439 285,638 123,222 43.1% 93,922 217,144 (68,494) 1,092,945 89.1% 83.8% Houston 1,204,852 949,973 130,527 34,758 26.6% 45,999 80,757 (49,770) 900,203 78.8% 74.7% Tallahassee 834,025 595,144 44,211 30,951 70.0% 11,545 42,496 (1,715) 593,429 71.4% 71.2% St. Petersburg 668,144 578,726 62,951 36,779 58.4% 39,705 76,484 13,533 592,259 86.6% 88.6% Charlotte 709,247 571,548 219,942 42,715 19.4% 60,173 102,888 (117,054) 454,494 80.6% 64.1% Memphis 530,688 416,949 66,459 29,558 44.5% 50,622 80,180 13,721 430,670 78.6% 81.2% Richmond 145,127 141,752 18,440 2,515 13.6% 17,357 19,872 1,432 143,184 97.7% 98.7% Dallas 279,389 268,586 0 0 0.0% 0 0 0 268,586 96.1% 96.1% Total 9,211,375 7,821,496 1,183,908 478,139 40.4% 451,108 929,247 (254,661) 7,566,835 84.9% 82.1%
(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 commence 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 19
KOGER EQUITY, INC. AND SUBSIDIARIES LEASE DISTRIBUTION AS OF SEPTEMBER 30, 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 457 50.2% 541,141 7.2% $9,533,951 $17.62 6.9% 20 2,501 - 5,000 194 21.3% 696,086 9.3% 12,657,694 18.18 9.2% 28 5,001 - 7,500 78 8.6% 482,831 6.5% 8,645,482 17.91 6.3% 29 7,501 - 10,000 43 4.7% 371,854 5.0% 6,288,700 16.91 4.6% 35 10,001 - 20,000 51 5.6% 731,259 9.8% 13,489,430 18.45 9.8% 31 20,001 - 40,000 51 5.6% 1,481,086 19.8% 26,075,747 17.61 19.0% 51 40,001 - 60,000 18 2.0% 880,367 11.8% 16,216,667 18.42 11.8% 47 60,001 - 100,000 13 1.4% 1,015,654 13.6% 19,352,703 19.05 14.1% 62 100,001 or Greater 6 0.7% 1,263,938 16.9% 25,238,497 19.97 18.4% 69 ---------- --------- ------------ --------- ------------- --------- -------- ---------- Total / Weighted Average 911 100.0% 7,464,216 100.0% $137,498,870 $18.42 100.0% 47 ========== ========= ============ ========= ============= ========== ========= ===========
Square Feet % of Total ------------------- --------------- Square footage occupied by tenants 7,464,216 81.0% Square footage attributable to vending/antenna 1,661 0.0% Square footage occupied by owner/building use 48,005 0.5% ------------------- --------------- Total Occupied Square Footage 7,513,882 81.6% ------------------- --------------- Leased square footage 52,953 0.6% Vacant square footage 1,644,540 17.9% ------------------- --------------- Total Net Rentable Square Footage 9,211,375 100.0% =================== ===============
(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 September 30, 2003 multiplied by 12. Rent abatements are not included in this analysis. Page 20
KOGER EQUITY, INC. AND SUBSIDIARIES LEASE EXPIRATIONS AS OF SEPTEMBER 30, 2003 City Item 2003 2004 2005 2006 2007 2008 2009 - ----------------------------------------------------------------------------------------------------------------------------------- Atlanta Square Feet (1) 54,146 137,782 191,959 92,198 184,942 210,562 641,692 % Square Feet (2) 2.29% 5.82% 8.11% 3.89% 7.81% 8.89% 27.10% Annualized Rent (3) 1,116,106 3,179,235 3,711,351 1,629,030 3,837,453 3,742,469 14,457,689 Number of Leases (4) 18 45 32 33 21 18 16 Rent PSF $20.61 $23.07 $19.33 $17.67 $20.75 $17.77 $22.53 Jacksonville Square Feet (1) 98,061 90,500 172,508 184,720 277,855 96,579 6,917 % Square Feet (2) 8.40% 7.75% 14.77% 15.81% 23.79% 8.27% 0.59% Annualized Rent (3) 1,658,297 1,722,671 2,471,817 3,090,156 5,194,381 1,620,574 130,011 Number of Leases (4) 3 7 3 7 7 4 2 Rent PSF $16.91 $19.04 $14.33 $16.73 $18.69 $16.78 $18.80 Orlando Square Feet (1) 75,538 351,516 174,427 151,400 155,419 133,124 40,499 % Square Feet (2) 5.79% 26.96% 13.38% 11.61% 11.92% 10.21% 3.11% Annualized Rent (3) 1,515,573 6,276,906 3,041,737 2,528,883 2,401,721 2,219,907 743,854 Number of Leases (4) 27 67 47 40 15 10 3 Rent PSF $20.06 $17.86 $17.44 $16.70 $15.45 $16.68 $18.37 Houston Square Feet (1) 34,831 81,274 68,089 38,601 90,272 92,597 361,620 % Square Feet (2) 2.89% 6.75% 5.65% 3.20% 7.49% 7.69% 30.01% Annualized Rent (3) 523,194 1,486,686 1,121,019 659,074 1,592,018 1,090,550 6,617,788 Number of Leases (4) 15 23 16 10 9 16 3 Rent PSF $15.02 $18.29 $16.46 $17.07 $17.64 $11.78 $18.30 Tallahassee Square Feet (1) 196,251 78,228 22,120 20,728 94,758 148,287 0 % Square Feet (2) 29.37% 11.71% 3.31% 3.10% 14.18% 22.19% 0.00% Annualized Rent (3) 3,587,605 1,418,154 370,045 380,223 1,715,386 2,550,523 0 Number of Leases (4) 24 23 8 4 2 3 0 Rent PSF $18.28 $18.13 $16.73 $18.34 $18.10 $17.20 $0.00 St. Petersburg Square Feet (1) 50,062 159,526 111,371 58,174 58,042 106,714 26,841 % Square Feet (2) 6.00% 19.13% 13.35% 6.98% 6.96% 12.80% 3.22% Annualized Rent (3) 835,240 2,448,799 1,900,817 941,258 1,076,277 1,921,434 182,883 Number of Leases (4) 21 36 27 11 11 7 4 Rent PSF $16.68 $15.35 $17.07 $16.18 $18.54 $18.01 $6.81 Charlotte Square Feet (1) 21,033 115,374 37,517 87,935 66,881 44,464 76,236 % Square Feet (2) 3.96% 21.74% 7.07% 16.57% 12.60% 8.38% 14.37% Annualized Rent (3) 384,345 2,170,577 651,002 1,428,920 1,207,410 701,953 922,149 Number of Leases (4) 7 23 14 13 3 9 4 Rent PSF $18.27 $18.81 $17.35 $16.25 $18.05 $15.79 $12.10 Memphis Square Feet (1) 6,109 49,103 143,012 94,901 40,029 57,831 1,572 % Square Feet (2) 0.86% 6.92% 20.16% 13.38% 5.64% 8.15% 0.22% Annualized Rent (3) 124,003 989,043 2,748,854 1,646,950 726,182 1,110,684 0 Number of Leases (4) 4 16 26 22 9 5 1 Rent PSF $20.30 $20.14 $19.22 $17.35 $18.14 $19.21 $0.00 Richmond Square Feet (1) 12,739 11,235 47,198 27,621 28,887 4,391 10,563 % Square Feet (2) 8.78% 7.74% 32.52% 19.03% 19.90% 3.03% 7.28% Annualized Rent (3) 298,173 225,091 912,780 538,738 548,397 84,527 213,705 Number of Leases (4) 4 3 7 6 5 1 2 Rent PSF $23.41 $20.03 $19.34 $19.50 $18.98 $19.25 $20.23 Dallas Square Feet (1) 0 0 0 62,155 90,008 0 116,423 % Square Feet (2) 0.00% 0.00% 0.00% 22.25% 32.22% 0.00% 41.67% Annualized Rent (3) 0 0 0 1,809,942 2,366,578 0 2,897,877 Number of Leases (4) 0 0 0 1 2 0 1 Rent PSF $0.00 $0.00 $0.00 $29.12 $26.29 $0.00 $24.89 Total Square Feet (1) 548,770 1,074,538 968,201 818,433 1,087,093 894,549 1,282,363 % Square Feet (2) 5.96% 11.67% 10.51% 8.89% 11.80% 9.71% 13.92% Annualized Rent (3) 10,042,535 19,917,160 16,929,423 14,653,173 20,665,804 15,042,620 26,165,955 Number of Leases (4) 123 243 180 147 84 73 36 Rent PSF $18.30 $18.54 $17.49 $17.90 $19.01 $16.82 $20.40 City Item 2010 2011 2012 2013 + Total - --------------------------------------------------------------------------------------------------------------------------------- Atlanta Square Feet (1) 101,897 26,201 95,305 189,741 1,926,425 2,368,014 % Square Feet (2) 4.30% 1.11% 4.02% 8.01% 81.35% Annualized Rent (3) 1,754,045 648,797 2,015,025 3,221,072 39,312,273 Number of Leases (4) 3 1 4 4 195 Rent PSF $17.21 $24.76 $21.14 $16.98 $20.41 Jacksonville Square Feet (1) 0 56,249 0 176,000 1,159,389 1,168,088 % Square Feet (2) 0.00% 4.82% 0.00% 15.07% 99.26% Annualized Rent (3) 0 647,722 0 2,644,068 19,179,697 Number of Leases (4) 0 2 0 1 36 Rent PSF $0.00 $11.52 $0.00 $15.02 $16.54 Orlando Square Feet (1) 635 0 7,080 0 1,089,638 1,303,801 % Square Feet (2) 0.05% 0.00% 0.54% 0.00% 83.57% Annualized Rent (3) 11,618 0 170,108 0 18,910,305 Number of Leases (4) 1 0 1 0 211 Rent PSF $18.30 $0.00 $24.03 $0.00 $17.35 Houston Square Feet (1) 25,637 0 0 95,857 888,778 1,204,852 % Square Feet (2) 2.13% 0.00% 0.00% 7.96% 73.77% Annualized Rent (3) 403,423 0 0 1,581,640 15,075,392 Number of Leases (4) 3 0 0 1 96 Rent PSF $15.74 $0.00 $0.00 $16.50 $16.96 Tallahassee Square Feet (1) 0 26,696 0 0 587,068 668,144 % Square Feet (2) 0.00% 4.00% 0.00% 0.00% 87.87% Annualized Rent (3) 0 347,181 0 0 10,369,117 Number of Leases (4) 0 1 0 0 65 Rent PSF $0.00 $13.01 $0.00 $0.00 $17.66 St. Petersburg Square Feet (1) 17,686 0 0 0 588,416 834,025 % Square Feet (2) 2.12% 0.00% 0.00% 0.00% 70.55% Annualized Rent (3) 245,270 0 0 0 9,551,977 Number of Leases (4) 1 0 0 0 118 Rent PSF $13.87 $0.00 $0.00 $0.00 $16.23 Charlotte Square Feet (1) 0 0 0 0 449,440 530,688 % Square Feet (2) 0.00% 0.00% 0.00% 0.00% 84.69% Annualized Rent (3) 0 0 0 0 7,466,356 Number of Leases (4) 0 0 0 0 73 Rent PSF $0.00 $0.00 $0.00 $0.00 $16.61 Memphis Square Feet (1) 0 32,686 0 4,500 429,743 709,247 % Square Feet (2) 0.00% 4.61% 0.00% 0.63% 60.59% Annualized Rent (3) 0 392,232 0 0 7,737,948 Number of Leases (4) 0 1 0 1 85 Rent PSF $0.00 $12.00 $0.00 $0.00 $18.01 Richmond Square Feet (1) 0 0 0 0 142,634 145,127 % Square Feet (2) 0.00% 0.00% 0.00% 0.00% 98.28% Annualized Rent (3) 0 0 0 0 2,821,410 Number of Leases (4) 0 0 0 0 28 Rent PSF $0.00 $0.00 $0.00 $0.00 $19.78 Dallas Square Feet (1) 0 0 0 0 268,586 279,389 % Square Feet (2) 0.00% 0.00% 0.00% 0.00% 96.13% Annualized Rent (3) 0 0 0 0 7,074,397 Number of Leases (4) 0 0 0 0 4 Rent PSF $0.00 $0.00 $0.00 $0.00 $26.34 Total Square Feet (1) 145,855 141,832 102,385 466,098 7,530,117 9,211,375 % Square Feet (2) 1.58% 1.54% 1.11% 5.06% 81.75% Annualized Rent (3) 2,414,356 2,035,932 2,185,132 7,446,780 137,498,870 Number of Leases (4) 8 5 5 7 911 Rent PSF $16.55 $14.35 $21.34 $15.98 $18.26
(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 September 30, 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 21
KOGER EQUITY, INC. AND SUBSIDIARIES NET EFFECTIVE RENTS New & Backfill Leasing --------------------------------------------------------------------------------- 9/30/2003 6/30/2003 3/31/2002 12/31/2002 Average ------------- -------------- -------------- ------------- ------------ Number of leases 43 38 42 29 38 Rentable square footage leased 110,793 126,159 171,239 108,050 129,060 Average per rentable square foot over the lease term: Gross Rent $ 17.17 $ 16.29 $ 17.12 $ 17.95 $ 17.08 Tenant improvements (2.40) (2.06) (1.47) (1.52) (1.89) Leasing commissions (0.51) (0.67) (0.41) (0.49) (0.52) Other/concessions (0.98) (0.48) (0.58) (0.07) (0.57) ------------- -------------- -------------- ------------- ------------ Effective Rent 13.28 13.08 14.66 15.87 14.11 Expense stop (5.02) (5.64) (4.98) (5.50) (5.26) ------------- -------------- -------------- ------------- ------------ Equivalent effective net rent $ 8.26 $ 7.44 $ 9.68 $ 10.37 $ 8.85 ============= ============== ============== ============= ============ Average term (yrs) 3.9 5.2 4.8 4.8 4.7 Renewal Leasing --------------------------------------------------------------------------------- 9/30/2003 6/30/2003 3/31/2002 12/31/2002 Average ------------- -------------- -------------- ------------- ------------ Number of leases 30 43 36 41 38 Rentable square footage leased 134,632 108,254 234,398 260,287 184,393 Average per rentable square foot over the lease term: Gross Rent $ 16.55 $ 18.85 $ 19.09 $ 17.25 $ 18.01 Tenant improvements (0.96) (0.78) (1.43) (0.40) (0.87) Leasing commissions (0.25) (0.39) (0.12) (0.05) (0.20) Other/concessions (0.35) (0.14) (0.02) (0.14) (0.15) ------------- -------------- -------------- ------------- ------------ Effective Rent 14.99 17.54 17.52 16.66 16.78 Expense stop (4.84) (5.57) (5.40) (5.06) (5.24) Equivalent effective net rent $ 10.16 $ 11.97 $ 12.12 $ 11.60 $ 11.54 ============= ============== ============== ============= ============ Average term (yrs) 3.3 3.2 5.5 2.7 3.6
(1) Analysis does not include owner occupied space or leases with less than a one year term. Page 22
KOGER EQUITY, INC. AND SUBSIDIARIES CAPITAL EXPENDITURES - LEASING ACTIVITY Three Months Ended, Dollars -------------------------------------------------------------------------------- 9/30/03 6/30/03 3/31/03 12/31/02 9/30/02 --------------- ------------- ------------- -------------- ------------ Renewal Leasing: RSF Leased 134,632 108,254 234,398 414,429 260,287 Tenant Improvements $ 368,405 $ 265,789 $ 1,835,392 $ 287,380 $ 418,111 Leasing Commissions $ 96,107 $ 133,622 $ 157,976 $ 111,504 $ 68,310 --------- --------- ----------- --------- --------- Total Renewal $ 464,512 $ 399,411 $ 1,993,368 $ 398,884 $ 486,421 ========= ========= =========== ========= ========= Backfill Leasing: RSF Leased 73,355 34,603 113,751 112,164 96,754 Tenant Improvements $ 618,026 $ 222,803 $ 501,811 $ 1,428,067 $ 705,528 Leasing Commissions $ 129,522 $ 71,506 $ 183,426 $ 432,109 $ 248,643 --------- --------- ----------- --------- --------- Total Backfill $ 747,548 $ 294,309 $ 685,237 $ 1,860,176 $ 954,171 ========= ========= =========== ========= ========= Sub-Total Revenue Maintaining: RSF Leased 207,987 142,857 348,149 526,593 357,041 Tenant Improvements $ 986,431 $ 488,592 $ 2,337,203 $ 1,715,447 $ 1,123,639 Leasing Commissions $ 225,629 $ 205,128 $ 341,402 $ 543,613 $ 316,953 --------- --------- ----------- --------- --------- Total Revenue Maintaining $ 1,212,060 $ 693,720 $ 2,678,605 $ 2,259,060 $ 1,440,592 ========= ========= =========== ========= ========= Revenue Enhancing - New/First Generation RSF Leased 37,438 91,556 57,488 105,603 11,296 Tenant Improvements $ 425,671 $ 1,128,510 $ 706,307 $ 1,663,681 $ 111,808 Leasing Commissions $ 94,002 $ 370,359 $ 151,022 $ 301,057 $ 7,388 --------- --------- ----------- --------- --------- Total Renewal $ 519,673 $ 1,498,869 $ 857,329 $ 1,964,738 $ 119,196 ========= ========= =========== ========= ========= Total: RSF Leased 245,425 234,413 405,637 632,196 368,337 Tenant Improvements $ 1,412,102 $ 1,617,102 $ 3,043,510 $ 3,379,128 $ 1,235,447 Leasing Commissions $ 319,631 $ 575,487 $ 492,424 $ 844,670 $ 324,341 --------- --------- ----------- --------- --------- Total $ 1,731,733 $ 2,192,589 $ 3,535,934 $ 4,223,798 $ 1,559,788 =========== =========== =========== =========== =========== Three Months Ended, PSF ----------------------------------------------------------------------------- 9/30/03 6/30/03 3/31/03 12/31/02 9/30/02 --------------- ------------- ------------- -------------- ----------- Renewal Leasing: RSF Leased 134,632 108,254 234,398 414,429 260,287 Tenant Improvements $ 2.74 $ 2.46 $ 7.83 $ 0.69 $ 1.61 Leasing Commissions $ 0.71 $ 1.23 $ 0.67 $ 0.27 $ 0.26 --------- --------- ----------- --------- --------- Total Renewal $ 3.45 $ 3.69 $ 8.50 $ 0.96 $ 1.87 ========= ========= =========== ========= ========= Backfill Leasing: RSF Leased 73,355 34,603 113,751 112,164 96,754 Tenant Improvements $ 8.43 $ 6.44 $ 4.41 $ 12.73 $ 7.29 Leasing Commissions $ 1.77 $ 2.07 $ 1.61 $ 3.85 $ 2.57 --------- --------- ----------- --------- --------- Total Backfill $ 10.19 $ 8.51 $ 6.02 $ 16.58 $ 9.86 ========= ========= =========== ========= ========= Sub-Total Revenue Maintaining RSF Leased 207,987 142,857 348,149 526,593 357,041 Tenant Improvements $ 4.74 $ 3.42 $ 6.71 $ 3.26 $ 3.15 Leasing Commissions $ 1.08 $ 1.44 $ 0.98 $ 1.03 $ 0.89 --------- --------- ----------- --------- --------- Total Revenue Maintaining $ 5.83 $ 4.86 $ 7.69 $ 4.29 $ 4.03 ========= ========= =========== ========= ========= Revenue Enhancing - New/First Generation RSF Leased 37,438 91,556 57,488 105,603 11,296 Tenant Improvements $ 11.37 $ 12.33 $ 12.29 $ 15.75 $ 9.90 Leasing Commissions $ 2.51 $ 4.05 $ 2.63 $ 2.85 $ 0.65 --------- --------- ----------- --------- --------- Total Renewal $ 13.88 $ 16.37 $ 14.91 $ 18.60 $ 10.55 ========= ========= =========== ========= ========= Total: RSF Leased 245,425 234,413 405,637 632,196 368,337 Tenant Improvements $ 5.75 $ 6.90 $ 7.50 $ 5.35 $ 3.35 Leasing Commissions $ 1.30 $ 2.46 $ 1.21 $ 1.34 $ 0.88 --------- --------- ----------- --------- --------- Total $ 7.06 $ 9.35 $ 8.72 $ 6.68 $ 4.23 ========= ========= =========== ========= =========
(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. (b) Analysis does not include owner occupied space or leases with less than a one year term. Page 23
KOGER EQUITY, INC. AND SUBSIDIARIES SAME SUITE ANALYSIS - AVERAGE OVER TERM YEAR TO DATE SEPTEMBER 30, 2003 New/Backfill (a) Renewal -------------------------------------------- ------------------------------------------- RSF New Expiring Percent RSF New Expiring Percent Leased Net Rent Net Rent Change Change Leased Net Rent Net Rent Change Change ----------------- -------- -------- -------- -------- -------- -------- ------- -------- Atlanta 47,065 $12.21 $10.36 $1.85 17.9% 85,558 $14.18 $9.94 $4.24 42.7% Orlando 90,732 $11.89 $13.80 ($1.91) -13.8% 123,222 $11.22 $11.57 ($0.35) -3.0% Jacksonville 46,871 $11.92 $13.99 ($2.07) -14.8% 91,228 $12.47 $11.65 $0.82 7.0% Houston 15,091 $9.38 $11.23 ($1.85) -16.5% 34,758 $10.48 $11.02 ($0.54) -4.9% St. Petersburg 27,520 $9.58 $11.54 ($1.96) -17.0% 36,779 $10.86 $10.82 $0.04 0.4% Tallahassee 7,897 $14.61 $12.90 $1.71 13.3% 30,951 $14.70 $15.21 ($0.51) -3.4% Charlotte 58,612 $10.25 $11.13 ($0.88) -7.9% 42,715 $12.71 $12.69 $0.02 0.2% Memphis 49,050 $9.69 $10.15 ($0.46) -4.5% 29,558 $13.13 $12.99 $0.14 1.1% Richmond 17,357 $13.70 $13.63 $0.07 0.5% 2,515 $13.00 $13.09 ($0.09) -0.7% ------- ------ ------ ------ ------ ------- ------ ------ ------- ----- Total 360,195 $11.23 $12.14 ($0.90) -7.4% 477,284 $12.39 $11.63 $0.77 6.6% ======= ====== ====== ====== ====== ======= ====== ====== ======= =====
Total Leasing -------------------------------------------- RSF New Expiring Percent Leased Net Rent Net Rent Change Change --------- -------- --------- ------ ------- Atlanta 132,623 $13.48 $10.09 $3.39 33.6% Orlando 213,954 $11.50 $12.52 ($1.01) -8.1% Jacksonville 138,099 $12.28 $12.44 ($0.16) -1.3% Houston 49,849 $10.15 $11.08 ($0.94) -8.5% St. Petersburg 64,299 $10.31 $11.13 ($0.82) -7.3% Tallahassee 38,848 $14.68 $14.74 ($0.06) -0.4% Charlotte 101,327 $11.29 $11.79 ($0.50) -4.2% Memphis 78,608 $10.98 $11.22 ($0.23) -2.1% Richmond 19,872 $13.61 $13.56 $0.05 0.4% ------- ------ ------ ------- ----- Total 837,479 $11.90 $11.85 $0.05 0.4% ======= ====== ====== ======= ===== (a) Analysis includes leases fully executed from 1/1/03 to 9/30/03 for buildings owned at 9/30/03. Does not include First Generation space. Page 24
KOGER EQUITY, INC. AND SUBSIDIARIES SAME SUITE ANALYSIS - CASH BASIS YEAR TO DATE SEPTEMBER 30, 2003 New/Backfill (a) Renewal ---------------------------------------------------------------- ---------------------------------------- RSF New Expiring Percent RSF New Expiring Percent Leased Net Rent Net Rent Change Change Leased Net Rent Net Rent Change Change ------- -------- -------- ------ -------- ------- ------- -------- ------ ------- Atlanta 47,065 $11.92 $11.37 $0.55 4.8% 85,558 $14.01 $10.68 $3.33 31.2% Orlando 90,732 $11.87 $14.44 ($2.57) -17.8% 123,222 $11.03 $12.15 ($1.12) -9.2% Jacksonville 46,871 $11.56 $13.46 ($1.90) -14.1% 91,228 $11.73 $12.03 ($0.30) -2.5% Houston 15,091 $10.11 $11.23 ($1.12) -10.0% 34,758 $10.24 $11.02 ($0.78) -7.1% St. Petersburg 27,520 $9.48 $11.89 ($2.41) -20.3% 36,779 $10.63 $11.55 ($0.92) -8.0% Tallahassee 7,897 $14.47 $13.35 $1.12 8.4% 30,951 $13.66 $15.80 ($2.14) -13.5% Charlotte 58,612 $10.23 $13.84 ($3.61) -26.1% 42,715 $11.59 $13.90 ($2.31) -16.6% Memphis 49,050 $6.84 $10.50 ($3.66) -34.9% 29,558 $12.48 $14.58 ($2.10) -14.4% Richmond 17,357 $12.94 $14.14 ($1.20) -8.5% 2,515 $12.15 $13.39 ($1.24) -9.3% ------- ------ ------ ------- ------ ------- ------ ------- ------- ------ Total 360,195 $10.74 $12.91 ($2.17) -16.8% 477,284 $11.93 $12.29 ($0.36) -2.9% ======= ====== ====== ======= ====== ======= ====== ======= ======= ======
Total Leasing ------------------------------------------------------------- RSF New Expiring Percent Leased Net Rent Net Rent Change Change ---------- ------------ ------------ ------------ ------------ Atlanta 132,623 $13.27 $10.92 $2.34 21.5% Orlando 213,954 $11.39 $13.12 ($1.73) -13.2% Jacksonville 138,099 $11.67 $12.52 ($0.84) -6.7% Houston 49,849 $10.20 $11.08 ($0.88) -8.0% St. Petersburg 64,299 $10.14 $11.70 ($1.56) -13.3% Tallahassee 38,848 $13.82 $15.30 ($1.48) -9.7% Charlotte 101,327 $10.80 $13.87 ($3.06) -22.1% Memphis 78,608 $8.96 $12.03 ($3.07) -25.5% Richmond 19,872 $12.84 $14.05 ($1.21) -8.6% ------- ------ ------ ------- ------- Total 837,479 $11.41 $12.55 ($1.14) -9.1% ======= ====== ====== ======= ======= (a) Analysis includes leases fully executed from 1/1/03 to 9/30/03 for buildings owned at 9/30/03. Does not include First Generation space. Page 25
KOGER EQUITY, INC. AND SUBSIDIARIES SPECIAL ITEMS INCLUDED IN QUARTER'S RESULTS In Thousands, Except Per Share Data - --------------------------------------------------------------------------------------------------------------------------- 9/30/2003 6/30/2003 3/31/2003 -------------- ----------------- ----------------- Lease Cancellation Fees 374 427 705 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) (177) Write Off of Development Pursuit Costs & Other Assets - - (247) Asset Management Fees from Crocker Realty Trust - 67 194 Leasing Commissions from Terminated A/P Knight Contract - 59 - Partial Tenant Default Settlement From Sold Assets - 289 - -------------- ----------------- ----------------- Total 374 665 1,567 ============== ================= ================= Weighted average common shares/units outstanding - diluted 21,455 21,382 21,327 ============== ================= ================= Per share/unit - diluted: FFO Impact $ 0.02 $ 0.03 $ 0.07 ============== ================= =================
Page 26 EX-99 4 a4511894ex99b.txt KOGER EQUITY, INC. EXHIBIT 99(B) Exhibit 99(b) Koger Equity, Inc. Announces Joint Venture Acquisition of Fort Lauderdale Property BOCA RATON, Fla.--(BUSINESS WIRE)--Nov. 4, 2003--Koger Equity, Inc. (NYSE:KE) today announced that Koger, through a subsidiary DownREIT limited partnership ("Koger LP"), will enter into a joint venture with an affiliate of Investcorp Properties Limited of New York ("Investcorp"), to acquire all of the interests in a partnership that owns as its sole asset a 325,000 square foot Class A office property, known as Broward Financial Centre. Broward Financial Centre is located at the southwest corner of Broward Boulevard and Federal Highway in downtown Fort Lauderdale, Florida. Based on the in-place net operating income of the property, which is currently 88% occupied, the price at which the joint venture is acquiring the partnership interests represents an implied capitalization rate of approximately 9.0%. Koger will own 30% of the joint venture, while Investcorp will own 70%. Koger will be engaged by the joint venture to provide leasing and management services to the property. Currently, approximately 14% of the existing partnership interests in Broward Financial Centre are owned by entities in which Koger's Chief Executive Officer, Thomas J. Crocker has a 50% ownership interest (collectively, "Crocker Affiliate"). The decision to acquire Broward Financial Centre and the terms thereof were approved by the members of Koger's board of directors and finance committee without the participation of Mr. Crocker. Investcorp, as the joint venture partner acquiring 70% of the economic interests, played a substantial role in negotiating the purchase. The joint venture expects to close on the acquisition in January 2004. Koger LP will fund its portion of the joint venture equity in part by the issuance of Units in exchange for the contribution of the partnership interests held by Crocker Affiliate (approximately 40% of Koger's total investment in the joint venture), with the remaining equity to be funded by Koger's secured line of credit. Koger LP will acquire the partnership interests held by Crocker Affiliate by issuing limited partnership units ("Units") in exchange for the contribution of its partnership interests. Crocker Affiliate will receive that number of Units equal to the value of its partnership interest at closing divided by the lesser of the closing price of Koger common stock on the day preceding the closing and the average per share closing price of Koger common stock for the thirty trading days preceding the closing. Using the closing stock price as of November 3, 2003, of $19.75 per share, the number of Units issued would be approximately 91,000 Units. The Units will be entitled to receive quarterly distributions equivalent to the quarterly dividend declared on Koger Common Stock. Commencing on the first anniversary of the transaction, the Crocker Affiliate can cause the Units to be redeemed in exchange for cash (at a price per Unit equal to the lesser of the per share price for a share of Koger common stock at the time of redemption and the average per share closing price of Koger common stock for the thirty trading days preceding the redemption) or, at Koger's option, shares of common stock of Koger (one share of Koger common stock per Unit). Tom Crocker, CEO, said, "With this transaction we are pleased to re-enter the South Florida market, one of the fastest growing regions in the country. Broward Financial Centre is a premier building in the market, with a strong credit rent-roll and limited near term rollover. It complements our strategy of acquiring in-fill locations with strong, long-term growth potential. Finally, we believe that establishing a positive relationship with an experienced company like Investcorp could be a valuable strategic resource in Koger's future growth." John Fraser, a Managing Director at Investcorp commented, "We are pleased that we were able to form a joint venture partnership with Koger Equity, which is gaining a reputation as one of the leading Class A office owners in the Southeastern United States. We believe this relationship will allow us to expand our presence in this important market. After considering Koger's commitment to building long-term value in its assets, our decision to partner with them was rather easy. We are excited about the future opportunities that this relationship will create." Estimates 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 to creditworthy tenants; 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. About Koger Equity Koger Equity, Inc. owns and operates 126 office buildings, containing 9.21 million rentable square feet, primarily located within 18 suburban office projects in ten cities in the Southeastern United States and Texas. Additional information about Koger is available upon request to Investor Relations, 225 NE Mizner Blvd., Suite 200, Boca Raton, Florida 33432-4079, or call 800-850-2037, or visit Koger's website at www.koger.com. CONTACT: Koger Equity, Inc., Boca Raton Thomas C. Brockwell, 561-395-9666 -----END PRIVACY-ENHANCED MESSAGE-----