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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K

X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
----- EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2001 OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
------
For the transition period from ------------ to ------------

Commission File Number 1-9997
KOGER EQUITY, INC.
(Exact name of Registrant as specified in its Charter)

FLORIDA 59-2898045
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
433 Plaza Real, Suite 335
Boca Raton, Florida 33432
(Address of principal executive offices) (Zip code)

Registrant's telephone number, including area code: (561) 395-9666
Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class Name of Exchange on Which Registered
1. Common Stock, Par Value $.01 New York Stock Exchange
2. Common Stock Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:

Title of Class
NONE

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. X
---

The aggregate market value of the voting stock held by non-affiliates of the
registrant on March 1, 2002 was approximately $369,853,000.

The number of shares of registrant's Common Stock outstanding on March 1, 2002
was 21,134,458.

Documents Incorporated by Reference

The Company's Proxy Statement to be filed pursuant to Regulation 14A under the
Securities Act of 1934 for the 2002 Annual Meeting of Shareholders is
incorporated by reference in Part III of this report.


1







TABLE OF CONTENTS

ITEM NO. DESCRIPTION PAGE NO.

PART I

1. BUSINESS.................................................... 3

2. PROPERTIES.................................................. 5

3. LEGAL PROCEEDINGS........................................... 10

4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS......... 10

PART II

5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS....................................... 10

6. SELECTED FINANCIAL DATA..................................... 11

7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS....................... 12

7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.. 23

8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA................. 24

9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE....................... 46

PART III

10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.......... 46

11. EXECUTIVE COMPENSATION...................................... 47

12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT............................................ 47

13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.............. 47

PART IV

14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
REPORTS ON FORM 8-K....................................... 48

15. SIGNATURES.................................................. 58



2






PART I
Item 1. BUSINESS

General

Koger Equity, Inc. ("KE") is a self-administered and self-managed equity
real estate investment trust (a "REIT") which develops, owns, operates and
manages suburban office buildings (the "Office Buildings") primarily located in
12 office centers (each a "Koger Center") located in eight metropolitan areas
throughout the southeastern United States. As of December 31, 2001, KE owns 120
Office Buildings, of which 118 are in Koger Centers and two are outside Koger
Centers but in metropolitan areas where Koger Centers are located.
Koger-Vanguard Partners, L.P. ("KVP") is a limited partnership, for which KE is
the general partner, which owns suburban office buildings located in a Koger
Center. As of December 31, 2001, KVP owns 13 Office Buildings. The Office
Buildings contain approximately 6.9 million rentable square feet and were on
average 90 percent leased as of December 31, 2001. While KE expects to continue
the development of suburban office properties for its own account, it may from
time to time acquire developed properties compatible with its properties in
other markets primarily in the Southeast if such acquisitions can be made on
terms favorable to KE. During December 2001, KE sold 75 suburban office
buildings and one retail center, containing more than 3.9 million rentable
square feet, located throughout San Antonio and Austin, Texas; Greensboro and
Charlotte, North Carolina; Greenville, South Carolina; and Birmingham, Alabama.
These properties were sold to AP-Knight, LP ("AP-Knight"), an affiliate of
Apollo Real Estate Investment Fund ("Apollo").

KE owns approximately 78 acres of unencumbered land held for development
and approximately one acre of unencumbered land held for sale. A majority of the
land held for development adjoins Office Buildings in four Koger Centers, which
have infrastructure, including roads and utilities, in place. The remaining land
held for development adjoins properties which were sold during 2001. KE intends
over time to develop and construct office buildings using this land and to
acquire additional land for development. In addition, KE provides leasing,
management and other customary tenant-related services for the Koger Centers.

In addition to managing its own properties, KE provides property and asset
management services through its wholly-owned subsidiaries, Southeast Properties
Holding Corporation ("Southeast"), Koger Real Estate Services, Inc. ("KRES") and
Koger Realty Services, Inc. ("KRSI") for office buildings owned by unaffiliated
parties (KE, KVP, Southeast , KRES and KRSI are hereafter referred to as the
"Company"). Through August 2001, KRSI provided property management services to
Koala Realty Holding Company, Inc. ("Koala") for 55 office properties. On
December 12, 2001, KRSI began providing property management services to the
properties sold to AP-Knight. The Company currently provides asset management
services to Crocker Realty Trust for office properties containing approximately
4.6 million square feet.

KE operates in a manner so as to qualify as a REIT under the provisions of
the Internal Revenue Code of 1986, as amended (the "Code"). As a REIT, the
Company will not, with certain limited exceptions, be taxed at the corporate
level on taxable income distributed to its shareholders on a current basis. The
Company distributes at least 90 percent of its annual REIT taxable income (which
term is used herein as defined and modified in the Code) to its shareholders. To
qualify as a REIT, a corporation must meet certain substantive tests: (a) at
least 95 percent of its gross income must be derived from certain passive and
real estate sources; (b) at least 75 percent of its gross income must be derived
from certain real estate sources; (c) at the close of each calendar quarter, it
must meet certain tests designed to ensure that its assets consist principally
(at least 75 percent by value) of real estate assets, cash and cash equivalents
and that its holdings of securities are adequately diversified; (d) each year,
it must distribute at least 90 percent of its REIT taxable income; and (e) at no
time during the second half of any calendar year may the Company be "closely
held" (i.e., have more than 50 percent in value of its outstanding stock owned,
directly, indirectly or constructively, by not more than five individuals). The
constructive ownership rules, among other things, treat the shareholders of a
corporation as owning proportionately any stock in another corporation owned by
the first corporation. Management fee revenue does not qualify as real estate or
passive income for purposes of determining whether the Company has met the REIT
requirements that at least 95 percent of the Company's gross income be derived
from certain real estate and passive sources and that at least 75 percent of its
gross income be derived from certain real estate sources. Accordingly, in the
event the Company derives income in excess of five percent from management and
other "non-real estate" and "non-passive" activities, the Company would no
longer qualify as a REIT for federal income tax purposes and would be required
to pay federal income taxes as a business corporation. The income earned by KRSI
is not included in determining KE's qualification as a REIT.

3



Two major governmental tenants, when all of their respective departments
and agencies which lease space in the Company's buildings are combined, lease
more than 10 percent of the rentable area of the Company's buildings and
contribute more than 10 percent of the Company's annualized rentals as of
December 31, 2001. At that date, the United States of America leased 13 percent
of the Company's rentable square feet and accounted for an aggregate of 15.7
percent of the Company's annualized rents. In addition, the State of Florida
leased 11.1 percent of the Company's rentable square feet and accounted for 13.5
percent of the Company's annualized rents. Some of the Company's principal
tenants are the United States of America, the State of Florida, Blue Cross and
Blue Shield of Florida, Landstar System Holdings, Wellspring Resources, Siemens
Westinghouse, Zurich Insurance, General Electric, Hoechst Celanese Corp. and
Hanover Insurance. Governmental tenants (including the State of Florida and the
United States of America), which account for 27.3 percent of the Company's
leased space, may be subject to budget reductions in times of recession and
governmental austerity measures. There can be no assurance that governmental
appropriations for rents may not be reduced. Additionally, certain
private-sector tenants, which have contributed to the Company's rent stream, may
reduce their current demands, or curtail their future need, for additional
office space.

Competition

The Company competes in the leasing of office space with a considerable
number of other realty concerns, including local, regional and national, some of
which have greater resources than the Company. Through its ownership and
management of suburban office parks, the Company seeks to attract tenants by
offering office space convenient to residential areas. In recent years local,
regional and national concerns have built competing office parks and single
buildings in suburban areas in which the Company's Office Buildings are located.
In addition, the Company competes for tenants with large high-rise office
buildings generally located in the downtown business districts of these
metropolitan areas. Although competition from other lessors of office space
varies from city to city, the Company has been able to attain and maintain what
it considers satisfactory occupancy levels at satisfactory rental rates.

Investment Policies

The Company is currently in a position to capitalize on some of its
strengths, such as the value of its franchise in the suburban office park market
and its operating systems, development expertise, acquisition expertise and
unimproved land available for development. The Company intends to continue to
develop and construct office buildings primarily using its existing inventory of
78 acres of land held for development, most of which is partially or wholly
improved with streets and/or utilities and is located in various metropolitan
areas where the Company currently operates or manages suburban office parks. The
Company may also acquire existing office buildings or additional land for
development in other markets primarily in the Southeast that the Company
0considers favorable. Although all of the Company's properties are located in
the Southeast, management does not consider that the Company's development and
acquisitions activities are limited to any particular area. The Company may also
sell Office Buildings or Koger Centers located in certain markets. In addition,
the Company has adopted a plan to repurchase up to 2.65 million shares of its
common stock.

The investment policies of the Company may be changed by its directors at
any time without notice to, or a vote of, shareholders. Although the Company has
no fixed policy which limits the percentage of its assets which may be invested
in any one type of investment or the geographic areas in which the Company may
acquire properties, the Company intends to continue to operate so as to qualify
for tax treatment as a REIT. The Company may in the future invest in other types
of office buildings, apartment buildings, shopping centers, and other
properties. The Company also may invest in the securities (including mortgages)
of companies primarily engaged in real estate activities; however, it does not
intend to become an investment company regulated under the Investment Company
Act of 1940.


4



For the year ended December 31, 2001, all of the Company's rental revenues
were derived from buildings purchased or constructed by the Company. The
Company's 2001 interest revenues were derived from temporary cash investments
and notes receivable from current and former employees.

Employees

The Company has a combined financial, administrative, leasing, and center
maintenance staff of 180 employees. A resident manager is responsible for the
leasing and operations of all buildings in a Koger Center or metropolitan area.
The Company has approximately 63 employees who perform maintenance activities.

Item 2. PROPERTIES

General

As of December 31, 2001, the Company owned 120 Office Buildings located in
the eight metropolitan areas of Jacksonville, Orlando, St. Petersburg, and
Tallahassee, Florida; Atlanta, Georgia; Charlotte, North Carolina; Memphis,
Tennessee; and Richmond, Virginia. The Koger Centers have been developed in
campus-like settings with extensive landscaping and ample tenant parking. The
Office Buildings are generally one to five-story structures of contemporary
design and constructed of masonry, concrete and steel, with facings of brick,
concrete and glass. The Koger Centers are generally located with easy access,
via expressways, to the central business district and to shopping and
residential areas in the respective communities. The properties are well
maintained and adequately covered by insurance.

Leases on the Office Buildings vary between net leases (under which the
tenant pays some operating expenses, such as utilities, insurance and repairs)
and gross leases (under which the Company pays all such items). Most leases are
on a gross basis and are for terms generally ranging from three to five years.
In some instances, such as when a tenant rents the entire building, leases are
for terms of up to 20 years. As of December 31, 2001, the Office Buildings were
on average 90 percent leased and the average annual rent per rentable square
foot leased was $16.71. The buildings are occupied by numerous tenants
(approximately 896 leases), many of whom lease relatively small amounts of
space, conducting a broad range of commercial activities.

New leases and renewals of existing leases are negotiated at the current
market rate at the date of execution. The Company endeavors to include
escalation provisions in all of its gross leases. As of December 31, 2001,
approximately four percent of the Company's annualized gross rental revenues
were derived from existing leases containing rental escalation provisions based
upon changes in the Consumer Price Index (some of which contain maximum rates of
increases); approximately 93 percent of such revenues were derived from leases
containing escalation provisions based upon fixed steps or real estate tax and
operating expense increases; and approximately three percent of such revenues
were derived from leases without escalation provisions. Some of the Company's
leases contain options which allow the lessee to renew for varying periods,
generally at the same rental rate and subject, in most instances, to Consumer
Price Index escalation provisions.

The Company owns approximately 85 acres of unimproved land (78 acres held
for development, one acre held for sale and six acres not suitable for
development) located in the metropolitan areas of Birmingham, Alabama; Orlando
and St. Petersburg, Florida; Atlanta, Georgia; Charlotte and Greensboro, North
Carolina; and Columbia and Greenville, South Carolina. Each of these parcels of
land has been partially or wholly developed with streets and/or utilities.


5








Property Location and Other Information

The following table sets forth information relating to the properties owned by
the Company as of December 31, 2001.

Average Land
Number Age of Improved Unimproved
of Buildings Rentable with Bldgs. Land
Koger Center/Location Buildings (In Years) (1) Sq. Ft. (In Acres) (In Acres)
- --------------------- ---------- -------------- ------------- -------------- ------------

Atlanta Chamblee 21 19 1,110,903 76.2 2.5
Atlanta Gwinnett 3 5 260,484 15.9 19.6
Atlanta Perimeter 1 16 176,503 5.3
Birmingham Colonnade 16.5
Charlotte Carmel 7.7
Charlotte University 2 3 182,852 18.7
Charlotte Vanguard 13 18 525,732 39.7 17.1
Columbia Spring Valley 1.0
Greensboro Wendover 9.1
Greenville Park Central 3.5
Jacksonville Baymeadows 7 9 749,790 51.1
Jacksonville JTB 4 2 416,773 32.0
Memphis Germantown 6 8 527,180 34.6
Orlando Central 21 30 616,905 44.7 1.3
Orlando Lake Mary 2 3 303,481 20.2
Orlando University 5 7 380,117 27.1
Richmond Paragon 1 16 145,008 8.1
St. Petersburg 15 18 669,807 68.7 6.7
Tallahassee 19 19 833,372 62.7
---- --------- -----
Total 120 6,898,907 505.0 85.0
=== ========= ===== ====
Average 14
==

(1) The age of each building was weighted by the rentable square feet for such
building to determine the weighted average age of (a) the buildings in each
Koger Center or location and (b) all buildings owned by the Company.



6






Percent Leased and Average Rental Rates

The following table sets forth, with respect to each Koger Center or
location, the number of buildings, number of leases, rentable square feet,
percent leased, and the average annual rent per rentable square foot leased, in
each case as of December 31, 2001.


Average
Number Number Rentable Annual
of of Square Percent Rent Per
Koger Center/Location Buildings Leases Feet Leased (1) Square Foot (2)
- --------------------- --------- -------- ----------- ---------- ---------------

Atlanta Chamblee 21 137 1,110,903 91% $18.10
Atlanta Gwinnett (3) 3 46 260,484 74% 19.39
Atlanta Perimeter 1 15 176,503 93% 20.63
Charlotte University 2 20 182,852 99% 18.09
Charlotte Vanguard 13 69 525,732 88% 15.89
Jacksonville Baymeadows 7 38 749,790 99% 12.33 (4)
Jacksonville JTB 4 7 416,773 100% 12.94 (4)
Memphis Germantown 6 87 527,180 86% 18.16
Orlando Central 21 147 616,905 97% 15.64
Orlando Lake Mary 2 21 303,481 97% 20.17
Orlando University (3) 5 63 380,117 85% 18.25
Richmond Paragon 1 29 145,008 100% 18.09
St. Petersburg (3) 15 126 669,807 85% 15.82
Tallahassee 19 91 833,372 80% 18.43
----- ----- -----------
Total 120 896 6,898,907
=== ===== =========
Weighted Average - Total Company 90% $16.71
=== ======
Weighted Average - Operational Buildings 91% $16.61
=== ======
Weighted Average - Buildings in Lease-up 80% $19.67
=== ======



(1) The percent leased rates have been calculated by dividing total rentable
square feet leased in a building by rentable square feet in such building.

(2) Rental rates are computed by dividing (a) total annualized base rents
(which excludes expense pass-throughs and reimbursements) for a Koger
Center or location as of December 31, 2001 by (b) the rentable square feet
applicable to such total annualized base rents.

(3) Includes a building which is currently in the lease-up period.

(4) Includes the effect of net leases where tenants pay certain operating costs
in addition to base rent.


7





Lease Expirations on the Company's Properties

The following schedule sets forth with respect to all of the Office
Buildings (a) the number of leases which will expire in calendar years 2002
through 2010, (b) the total rentable area in square feet covered by such leases,
(c) the percentage of total rentable square feet leased represented by such
leases, (d) the average annual rent per square foot for such leases, (e) the
current annualized base rents represented by such leases, and (f) the percentage
of gross annualized base rents contributed by such leases. This information is
based on the buildings owned by the Company on December 31, 2001 and on the
terms of leases in effect as of December 31, 2001, on the basis of then existing
base rentals, and without regard to the exercise of options to renew.
Furthermore, the information below does not reflect that some leases have
provisions for early termination for various reasons, including, in the case of
government entities, lack of budget appropriations. Leases were renewed on
approximately 66 percent, 61 percent and 66 percent of the Company's square
feet, which were scheduled to expire during 2001, 2000 and 1999, respectively.




Percentage of Average Percentage
Total Square Annual Rent Total of Total
Number of Number of Feet Leased per Square Annualized Annual. Rents
Leases Square Feet Represented by Foot Under Rents Under Represented by
Period Expiring Expiring Expiring Leases Expiring Leases Expiring Leases Expiring Leases
- ------ ---------- ------------ --------------- --------------- --------------- ---------------

2002 290 1,264,098 20.4% $17.30 $21,871,262 21.1%
2003 205 1,386,694 22.3% 15.50 21,488,495 20.7%
2004 197 820,821 13.2% 16.34 13,412,061 12.9%
2005 91 603,969 9.7% 17.87 10,794,397 10.4%
2006 64 553,616 8.9% 18.09 10,015,100 9.7%
2007 15 479,384 7.7% 16.39 7,857,309 7.6%
2008 16 346,630 5.6% 18.06 6,260,497 6.0%
2009 8 224,516 3.6% 19.78 4,440,393 4.3%
2010 3 116,495 1.9% 17.10 1,991,685 1.9%
Other 7 412,578 6.7% 13.60 5,610,640 5.4%
---- ----------- ----- ------------ ------
Total 896 6,208,801 100.0% $16.71 $103,741,839 100.0%
==== =========== ===== ====== ============ ======




Building Improvements, Tenant Improvements and Deferred Tenant Costs on the
Company's Properties





The following table sets forth certain information with respect to the
building improvements made, and tenant improvement costs and deferred tenant
costs (leasing commissions and tenant relocation costs) incurred, by the Company
during the three years ended December 31, 2001. The information set forth below
is not necessarily indicative of future expenditures for these items.




Building Improvements Tenant Improvements Deferred Tenant Costs
---------------------------- --------------------------- --------------------------------
Per Average Per Average Per Average
Usable Sq. Usable Sq. Usable Sq.
Year Total Ft. Owned Total Ft. Owned Total Ft. Owned
- ------ ------------ ------------ --------------- ---------- -------------- -----------

1999 (1) $4,545,000 $0.50 $13,204,000 $1.46 $1,736,000 $0.19
2000 (2) 4,005,000 0.48 8,362,000 1.00 1,711,000 0.20
2001 (3) 4,829,000 0.58 6,666,000 0.80 1,381,000 0.17

(1) Excludes the 14 buildings for which construction was completed during 1997,
1998 and 1999.

(2) Excludes the 18 buildings for which construction was completed during 1998,
1999 and 2000.

(3) Excludes the 13 buildings for which construction was completed during 1999,
2000 and 2001.



8




Fixed Rate Indebtedness on the Company's Properties

The following table sets forth with respect to each Koger Center or
location the principal amount (dollars in thousands) of, and the weighted
average interest rate on, the indebtedness of the Company having a fixed
interest rate and encumbering the Company's properties in such Koger Center or
location as of December 31, 2001.

Weighted
Mortgage Average
Loan Interest
Koger Center/Location Balance Rate
---------------------- ----------- ---------
Atlanta Chamblee $ 0 -
Atlanta Gwinnett 10,693 8.26%
Atlanta Perimeter 7,201 8.26%
Charlotte University 0 -
Charlotte Vanguard 19,468 8.20%
Jacksonville Baymeadows 33,733 7.86%
Jacksonville JTB 17,414 8.26%
Memphis Germantown 24,269 7.84%
Orlando Central 26,335 8.26%
Orlando Lake Mary 12,778 8.26%
Orlando University 20,657 7.25%
Richmond Paragon 7,903 8.00%
St. Petersburg 27,779 8.26%
Tallahassee 38,909 8.10%
----------
Total $247,139 8.04%
========== =====

The outstanding principal amount of the mortgage loan with Northwestern
Mutual Life Insurance Company has been allocated based upon the square footage
of the collateral in the applicable Koger Center or location. For additional
information on these loans see Note 3, "Mortgages and Loans Payable" of the
Notes to Consolidated Financial Statements.

Indebtedness with Variable Interest Rates

As of December 31, 2001, the Company had a $125 million secured revolving
credit facility and a term loan with variable interest rates and encumbering
certain of the Company's properties. The following table sets forth historical
information with respect to indebtedness having variable interest rates (dollars
in thousands):




Weighted Approximate Approximate
Balance Average Maximum Average Wtd. Avg. Int.
Year Ended at End Int. Rate at Amount Amount Rate During
December 31 of Period End of Period Outstanding Outstanding the Period
- ----------- --------- --------------- ----------- ----------- -------------

2001 $ 1,544 7.9% $101,577 $90,009 5.7%
2000 90,000 8.1% 123,500 96,262 7.9%
1999 94,000 8.0% 128,000 95,277 6.7%



9




Item 3. LEGAL PROCEEDINGS
None.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.

PART II

Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

The Company's common stock is listed on the New York Stock Exchange under
the ticker symbol KE. The high and low closing sales prices for the periods
indicated in the table below were:






Years
2001 2000 1999
--------------------------- --------------------------- ---------------------------
Quarter Ended High Low High Low High Low
- ------------- --------- ---------- ---------- ---------- ---------- ----------

March 31 $15.97 $13.35 $17.9375 $15.5000 $17.5625 $12.6875
June 30 16.60 14.07 18.8750 16.5625 18.4375 12.8750
September 30 17.51 15.95 17.4375 16.6250 18.0000 15.5000
December 31 18.10 16.30 16.9375 15.0625 16.8750 14.2500




Any dividend paid in respect of the Company's common stock during the last
quarter of each year will, if necessary, be adjusted to satisfy the REIT
qualification requirement that at least 90 percent of the Company's REIT taxable
income for such taxable year be distributed. The Company's secured revolving
credit facility requires the Company to maintain certain financial ratios, which
includes a limitation on dividends. However, this covenant does not restrict the
Company from paying the dividends required to maintain its qualification as a
REIT.

Set forth below are the dividends per share paid during the three years ended
December 31, 2001.

Years
---------------------
Quarter Ended 2001 2000 1999
------------- ---- ---- ----
March 31 $.35 $.35 $.30
June 30 .35 .35 .30
September 30 .35 .35 .35
December 31 .35 .35 .35

On January 15, 2002, the Company paid a capital gain distribution in the
form of a special dividend of $1.74 per share to shareholders of record on
December 28, 2001. On February 7, 2002, the Company paid a quarterly dividend of
$0.35 per share to shareholders of record on December 31, 2001. In addition, the
Company's Board of Directors has declared a quarterly dividend of $0.35 per
share payable on May 2, 2002, to shareholders of record on March 31, 2002.

On March 1, 2002, there were approximately 1,228 shareholders of record and
the closing price of the Company's common stock on the New York Stock Exchange
was $17.50.


10



Item 6. SELECTED FINANCIAL DATA



The following selected financial data should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Consolidated Financial Statements (as defined below) and the
notes thereto.





(In thousands except per share and property data)
Income Information 2001 2000 1999 1998 1997
---------- ---------- ---------- ---------- ----------

Rental revenues and other rental services $165,623 $164,733 $156,153 $133,663 $109,501
Interest revenues 776 703 457 446 1,274
Total revenues 170,560 167,874 160,093 138,082 113,989
Property operations expense 61,608 61,868 60,582 53,719 44,453
Depreciation and amortization 36,007 35,133 32,314 28,381 24,073
Mortgage and loan interest 25,204 27,268 21,893 16,616 16,517
General and administrative expense 8,412 20,217 8,633 6,953 6,374
Net income 73,223 27,153 36,586 29,602 21,204
Earnings per share - diluted 2.75 1.01 1.35 1.10 .94
Dividends declared per common share (1) 3.14 1.40 1.35 1.15 .55

Weighted average shares outstanding - diluted 26,610 26,962 27,019 26,901 22,495

Balance Sheet Information
Operating properties (before depreciation) $663,286 $946,780 $927,523 $872,183 $681,249
Undeveloped land 13,855 13,975 17,137 20,535 14,761
Total assets 690,585 851,022 885,739 834,995 656,097
Mortgages and loans payable 248,683 343,287 351,528 307,903 181,963
Total shareholders' equity 354,542 448,493 467,826 464,763 444,262

Other Information
Funds from operations (2) $ 69,681 $ 56,107 $ 65,011 $ 56,486 $ 42,324
Income before interest, income taxes,
depreciation and amortization $135,118 $ 89,533 $ 90,980 $ 75,555 $ 62,729
Number of buildings (at end of period) 120 194 218 251 228
Percent leased (at end of period) 90% 90% 93% 90% 92%



(1) Includes a capital gain distribution in the form of a special dividend of
$1.74 per share.

(2) The Company believes that Funds from Operations is one measure of the
performance of an equity REIT. 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 GAAP) 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. Funds from Operations is calculated as follows
(in thousands):





2001 2000 1999 1998 1997
--------- --------- --------- --------- ---------

Net income $73,223 $27,153 $36,586 $29,602 $21,204
Depreciation - real estate 32,261 31,720 28,800 25,146 21,795
Amortization - deferred tenant costs 2,172 1,923 2,132 1,464 1,031
Amortization - goodwill 170 170 170 170 170
Minority interest 1,044 1,156 1,174 139
Gain on sale or disposition of operating properties (39,189) (5,963) (3,846)
Gain on sale or disposition of non-operating assets (52) (5) (35) (1,955)
Recovery of loss on land held for sale (379)
Loss on early retirement of debt 458
-------- ------- ------- -------- --------
Funds from Operations $69,681 $56,107 $65,011 $56,486 $42,324
======= ======= ======= ======= =======



11




Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The following discussion should be read in conjunction with the selected
financial data and the consolidated financial statements (the "Consolidated
Financial Statements") appearing elsewhere in this report. Historical results
and percentage relationships in the Consolidated Financial Statements, including
trends which might appear, should not be taken as indicative of future
operations or financial position. The Consolidated Financial Statements include
the accounts of KE, Southeast, KRES, KRSI and KVP (collectively, the "Company").

GENERAL

The Company has prepared, and is responsible for, the accompanying
Consolidated Financial Statements and the related consolidated financial
information included in this report. Such Consolidated Financial Statements were
prepared in accordance with accounting principles generally accepted in the
United States of America ("GAAP") and include amounts determined using
management's best judgments and estimates of the expected effects of events and
transactions that are being accounted for currently.

The Company's independent auditors have audited the accompanying
Consolidated Financial Statements. The objective of their audit, conducted in
accordance with auditing standards generally accepted in the United States of
America, was to express an opinion on the fairness of presentation, in all
material respects, of the Company's consolidated financial position, results of
operations, and cash flows in conformity with GAAP. They evaluated the Company's
internal control structure to the extent considered necessary by them to
determine the audit procedures required to support their report on the
Consolidated Financial Statements and not to provide assurance on such
structure.

The Company maintains accounting and other control systems which management
believes provide reasonable assurance that the Company's assets are safeguarded
and that the Company's books and records reflect the authorized transactions of
the Company, although there are inherent limitations in any internal control
structure, as well as cost versus benefit considerations. The Audit Committee of
the Company's Board of Directors, which is composed exclusively of directors who
are not officers of the Company, directs matters relating to audit functions,
annually appoints the auditors subject to ratification of the Company's Board of
Directors, reviews the auditors' independence, reviews the scope and results of
the annual audit, and periodically reviews the adequacy of the Company's
internal control structure with its external auditors, its internal auditors and
its senior management.

RESULTS OF OPERATIONS

Rental Revenues. Rental revenues increased $848,000 or 0.5 percent from the
year ended December 31, 2000 to the year ended December 31, 2001. This increase
resulted primarily from (i) the increase in the Company's average rental rate
and (ii) increases in rental revenues ($7,308,000) from seven buildings
constructed by the Company. The effect of these increases was partially offset
by (i) the reduction of rental revenues ($5,949,000) caused by the sale of two
office parks during 2000 and 75 office buildings and one retail center on
December 12, 2001 (the "2001 Property Sale") and (ii) the decline in occupancy
in the stabilized properties owned at December 31, 2001. For 2000, rental
revenues increased $8,365,000 or 5.4 percent from the year ended December 31,
1999. This increase resulted primarily from (i) the increase in the Company's
average rental rate and (ii) increases in rental revenues ($15,364,000) from
properties acquired and construction completed during 1999 and 2000. The effect
of these increases was partially offset by the reduction of rental revenues
($13,497,000) caused by the sale of two office parks during 1999 and two office
parks during 2000. As of December 31, 2001, the Company's buildings were on
average 90 percent leased. As of December 31, 2000 and 1999, the buildings owned
by the Company were on average 90 and 93 percent leased, respectively.

Management Fee Revenues. For 2001, management fee revenues increased
$2,287,000, as compared to 2000. This increase was due primarily to (i) the
merger of Koger Realty Services, Inc. into a wholly owned taxable subsidiary of
the Company on February 1, 2001 (the "Merger") and (ii) the increase in asset
management fees ($156,000) earned from Crocker Realty Trust. These increases
were partially offset by reductions in (i) fees earned under the management
contract with Centoff Realty Company, Inc. ("Centoff"), a subsidiary of Morgan
Guaranty Trust Company of New York and (ii) construction management fees.
Management fee revenues decreased $591,000 for 2000, as compared to 1999, due
primarily to a decrease in fees earned under the Centoff management contract. On
January 1, 2000, the management contract for one of the Centoff centers was
transferred from KE to Koger Realty Services, Inc. During November 2000, the
management contract for the remaining Centoff center was terminated when the
property was sold by the third party owner. The effect of these decreases was
partially offset by the asset management fees ($296,000) earned from Crocker
Realty Trust during 2000.


12


Income from Koger Realty Services, Inc. Income from Koger Realty Services,
Inc. decreased $564,000 for 2001, as compared to 2000, due to the Merger. For
2000, income from Koger Realty Services, Inc. decreased $454,000, as compared to
1999, due primarily to an increase in general and administrative expenses.

Interest Revenues. For 2001, interest revenues increased $73,000, as
compared to 2000, due to the higher average balance of cash to invest. Interest
revenues increased $246,000 for 2000, as compared to 1999, due to the interest
earned from loans to certain current and former employees.

Expenses. Property operations expense includes such charges as utilities,
real estate taxes, janitorial, maintenance, property insurance, provision for
uncollectible rents and management costs. During 2001, property operations
expense decreased $260,000 or 0.4 percent, compared to 2000, primarily due to
the reduction of property operations expense ($3,365,000) caused by the sale of
two office parks during 2000 and the 2001 Property Sale. Most of this decrease
was offset by (i) the increases in property operations expense ($1,870,000) from
seven buildings constructed by the Company and (ii) increased accruals to
provision for uncollectible accounts. During 2000, property operations expense
increased by $1,286,000 or 2.1 percent, compared to 1999, primarily due to (i)
increases in property operations expense ($5,662,000) for properties acquired
and construction completed during 1999 and 2000 and (ii) increases in real
estate taxes. These increases were partially offset by the decrease in property
operations expense ($5,847,000) for the properties sold during 1999 and 2000.
For 2001, 2000 and 1999, property operations expense as a percentage of total
rental revenues was 37.2 percent, 37.6 percent and 38.8 percent, respectively.

Depreciation expense has been calculated on the straight-line method based
upon the useful lives of the Company's depreciable assets, generally 3 to 40
years. For 2001, depreciation expense increased $605,000 or 1.9 percent,
compared to 2000, due to the construction completed during 2000 and 2001. The
effect of this increase was partially offset by the sale of two office parks
during 2000 and the 2001 Property Sale. For 2000, depreciation expense increased
$2,976,000 or 10.2 percent, compared to the prior year, due to the properties
acquired and construction completed during 1999 and 2000.

Amortization expense increased $269,000, compared to 2000, due to deferred
tenant costs incurred during 2000 and 2001. During 2000, amortization expense
decreased $157,000, compared to 1999, due to deferred tenant costs associated
with properties sold during 1999 and 2000.

Interest expense decreased $2,064,000 during 2001, compared to 2000,
primarily due to (i) the decrease in the average balance of mortgages and loans
payable and (ii) the decrease in the average interest rate on the Company's
variable rate loans. For 2000, interest expense increased $5,375,000, compared
to 1999, primarily due to (i) the increase in the average balance of mortgages
and loans payable, (ii) the reduction in interest capitalized to construction
and (iii) the increase in the average interest rate on the Company's variable
rate loans. During 2001, 2000, and 1999, the weighted average interest rate on
the Company's variable rate loans was 5.7 percent, 7.9 percent and 6.7 percent,
respectively. The Company's average outstanding amount under such loans during
2001, 2000, and 1999 was $90,009,000, $96,262,000, and $95,277,000,
respectively. During 2001, 2000, and 1999, the weighted average interest rate on
the Company's fixed rate loans was 8.0 percent, 8.0 percent and 8.2 percent,
respectively. The Company's average outstanding amount under its fixed rate
loans during 2001, 2000, and 1999 was $250,373,000, $255,439,000, and
$225,391,000, respectively.


13



For 2001, general and administrative expenses decreased $11,805,000,
compared to 2000, primarily due to certain non-recurring charges incurred during
2000, which are described below. General and administrative expenses increased
by $11,584,000 during 2000, compared to 1999. This increase is primarily due to
certain non-recurring charges for (i) corporate reorganization costs
($8,767,000), (ii) severance payments made to certain former senior executives
($2,562,000), (iii) changes in termination benefits under the Supplemental
Executive Retirement Plan ($704,000), (iv) payments to retiring directors
($138,000) and (v) initial fees for listing on the New York Stock Exchange
($161,000).

Direct costs of management fees increased $2,480,000 during 2001, compared
to 2000, primarily due to the Merger. The effect of this increase was partially
offset by declines in costs due to (i) termination of the Centoff management
contract and (ii) reduction in construction management services provided to
third parties. For 2000, direct cost of management fees decreased $534,000,
compared to 1999, due to decreased costs associated with providing property
management services under the Centoff contract.

Other expenses decreased $28,000 during 2001, compared to 2000, primarily
due to the reduction in real estate taxes on unimproved land caused by the
reduction in acres held for investment and held for sale. During 2000, other
expenses decreased $926,000, compared to 1999, primarily due to (i) the
reduction in costs for certain corporate strategic issues and (ii) the reduction
in real estate taxes on unimproved land due to the reduction in acres held for
investment and held for sale.

Management periodically reviews its investment in properties for evidence
of impairments in value. Factors considered consist of, but are not limited to,
the following: current and projected occupancy rates, market conditions in
different geographic regions, and management's plans with respect to its
properties. Where management concludes that expected cash flows will not enable
the Company to recover the carrying amount of its investments, losses are
recorded and asset values are reduced. No such impairments in value existed
during 2001, 2000 or 1999.

Operating Results. Net income totaled $73,223,000, $27,153,000 and
$36,586,000 for 2001, 2000 and 1999, respectively. For 2001, net income
increased $46,070,000 or 169.7 percent from the prior year due primarily to (i)
the increase in gain on sale or disposition of assets and (ii) the decreases in
mortgage and loan interest and general and administrative expenses. For 2000,
net income decreased $9,433,000 or 25.8 percent from the prior year due
primarily to increases in (i) general and administrative expenses due to
corporate reorganization costs and other non-recurring charges, (ii) property
operations expense, (iii) depreciation expense and (iv) interest expense. The
effect of these increases was partially offset by increases in (i) rental
revenues and (ii) gain on sale or disposition of assets.

LIQUIDITY AND CAPITAL RESOURCES

Operating Activities. During the year ended December 31, 2001, the Company
generated approximately $64 million in net cash from operating activities. The
Company's primary internal sources of cash are (i) the collection of rents from
buildings owned by the Company and (ii) the receipt of management fees paid to
the Company in respect of properties managed on behalf of third party owners. As
a REIT for Federal income tax purposes, the Company is required to pay out
annually, as dividends, 90 percent of its REIT taxable income (which, due to
non-cash charges, including depreciation and net operating loss carryforwards,
may be substantially less than cash flow). In the past, the Company has paid out
dividends in amounts at least equal to its REIT taxable income. The Company
believes that its cash provided by operating activities and its current cash
balance will be sufficient to cover debt service payments and to pay the
dividends required to maintain REIT status through 2002.

The level of cash flow generated by rents depends primarily on the
occupancy rates of the Company's buildings and changes in rental rates on new
and renewed leases and under escalation provisions. As of December 31, 2001,
approximately 97 percent of the Company's annualized gross rental revenues were
derived from existing leases containing provisions for rent escalations.
However, market conditions may prevent the Company from escalating rents under
such provisions.


14



As of December 31, 2001, leases representing approximately 21 percent of
the gross annualized rent from the Company's properties, without regard to the
exercise of options to renew, were due to expire during 2002. This represents
290 leases for space in buildings located in 13 of the 14 Koger Centers or
locations in which the Company owns buildings. Certain of these tenants may not
renew their leases or may reduce their demand for space. Leases were renewed on
approximately 66 percent, 61 percent and 66 percent of the Company's rentable
square feet, which were scheduled to expire during 2001, 2000 and 1999,
respectively. For those leases, which renewed during 2001, the average rental
rate increased from $15.00 to $15.80, an increase of 5.3 percent. For those
leases in properties owned by the Company at December 31, 2001, which renewed
during 2001, the average rental rate increased from $14.61 to $15.33, an
increase of 4.9 percent. However, for leases in these properties which renewed
during the fourth quarter of 2001, the average rental rate increased 2.9
percent. Current market conditions in certain markets may require that rental
rates at which leases are renewed or at which vacated space is leased be lower
than rental rates under existing leases. Based upon the amount of leases which
will expire during 2002 and the competition for tenants in the markets in which
the Company operates, the Company has offered, and expects to continue to offer,
incentives to certain new and renewal tenants. These incentives may include the
payment of tenant improvement costs and, in certain markets, reduced rents
during initial lease periods.

The Company has benefited from existing economic conditions and stable
vacancy levels for office buildings in many of the metropolitan areas in which
the Company owns buildings. The Company believes that the southeastern region of
the United States provides significant economic growth potential due to its
diverse regional economies, expanding metropolitan areas, skilled work force and
moderate labor costs. However, the Company cannot predict whether such economic
growth will continue and the Company is currently experiencing slower growth and
increasing vacancy levels in the markets in which it owns buildings. Cash flow
from operations could be reduced if economic growth were not to continue in the
Company's markets and if this resulted in lower occupancy rates for the
Company's buildings. For the properties owned on December 31, 2001, occupancy
was 90 percent at December 31, 2001 compared with 91.4 percent at December 31,
2000.

Governmental tenants (including the State of Florida and the United States
of America), which accounted for 27.3 percent of the Company's leased space as
of December 31, 2001, may be subject to budget reductions in times of recession
and governmental austerity measures. Consequently, there can be no assurance
that governmental appropriations for rents may not be reduced. Additionally,
certain of the private-sector tenants, which have contributed to the Company's
rent stream, may reduce their current demands, or curtail their future need, for
additional office space.

On December 12, 2001, the Company began providing property management
services to AP-Knight for 75 suburban office buildings and one retail center.
AP-Knight acquired these properties from the Company. The Company agreed to
continue to manage these properties for what it considers to be standard
property management fees. This agreement is terminable by either party upon 30
days written notice. From February 1, 2001 through August 31, 2001, the Company
provided property management services for 55 commercial office properties owned
by Koala. During this period, the Company earned fees of $3,499,000 for the
management of these properties. The Company had a contract for the management of
eight commercial office properties owned by Centoff. This agreement was
terminated during November 2000 when the properties were sold by Centoff. The
Company earned fees of $998,000 and $846,000 for the management of these
properties during 2000 and 1999, respectively. At the end of 1999, Centoff
terminated the management agreement with KE related to eight commercial office
buildings. The Company earned fees of $780,000 for the management and leasing of
these properties during 1999. Another agreement to manage one commercial office
building was terminated by the Company during February 1999. During 1999, the
Company earned fees of $82,000 for the management of this building.

During 2000, the Company reached an agreement with Crocker Realty Trust
("CRT") to provide asset management services for the 6.1 million square foot
portfolio of CRT of which Mr. Crocker is the Chairman of the Board and Chief
Executive Officer owning 2.8 percent of the outstanding CRT shares, Mr. Onisko
is the Treasurer and Chief Financial Officer owning 0.2 percent of the
outstanding shares and Apollo is a principal shareholder owning 49 percent of
the outstanding CRT shares. The Company is paid a fee for these services based
upon the value of CRT's assets. The agreement is terminable by either party upon
90 days written notice. The terms of this agreement were approved by a committee
of the Company's Board of Directors whose members were not affiliated with CRT,
and who determined that such terms were similar to those that could be obtained
from an unaffiliated third party. The Company earned fees of $296,000 under this
agreement during the period from June 15, 2000 through December 31, 2000. During
2001, the Company earned fees of $452,000 under this agreement. Currently, the
Company provides asset management services for 4.6 million square feet owned by
CRT.

15



Investing Activities. At December 31, 2001, substantially all of the
Company's invested assets were in real properties. Improvements to the Company's
existing properties have been financed through internal operations. During 2001,
the Company's expenditures for improvements to existing properties decreased by
approximately $969,000 from the prior year, primarily due to decreases in
expenditures for tenant improvements. This decrease in expenditures for tenant
improvements was primarily due to (i) the sale of two office parks during 2000
and (ii) the lower leasing activity of second generation space during 2001
compared to 2000.

During 2001, the Company completed the construction of two buildings, which
contain 180,900 gross square feet. During 2000, the Company completed the
construction of six buildings, which contain 579,200 gross square feet. During
1999, the Company completed the construction of six buildings, which contain
630,400 gross square feet.

On November 1, 1999, the Company acquired four buildings, containing
508,600 gross square feet, located in Charlotte, North Carolina and Orlando,
Florida for a purchase price of $64.1 million.

On December 12, 2001, the Company sold 75 suburban office buildings, one
retail center and 3.4 acres of unimproved land for approximately $199,587,000,
net of selling costs, and 5,733,772 shares of the Company's common stock (which
were valued at approximately $96,327,000). These properties contained more than
3.9 million rentable square feet and were located throughout Austin and San
Antonio, Texas; Charlotte and Greensboro, North Carolina; Greenville, South
Carolina; and Birmingham, Alabama. These properties were sold to AP-Knight, an
affiliate of Apollo. A director of the Company is the partner responsible for
investments at Apollo. The transaction was negotiated by a Special Committee of
the Board of Directors composed of directors who had no affiliation with Apollo.
In order to insure that the terms of the transaction were equal to, or better
than, a similar transaction with an unrelated third party, the Company initiated
a marketing period through its financial advisor during which unrelated bidders
were asked to submit competing offers to purchase these properties. Prior to the
closing of the sale, the Company did not receive any attractive alternative
offers for these properties. In connection with this transaction, Morgan Stanley
& Co. Incorporated acted as financial advisor and provided an opinion to the
Special Committee of the Board of Directors which opinion stated that the
consideration received from the transaction was fair from a financial point of
view to the Company.

On June 1, 2000, the Company sold the Tulsa Center (containing 476,400
multi-tenant usable square feet and 10 acres of undeveloped land) for
approximately $28,841,000, net of selling costs. The Company sold approximately
5.6 acres of unimproved land located in Richmond, Virginia, for approximately
$800,000, net of selling costs, on July 10, 2000. On August 11, 2000, the
Company sold the El Paso Center (containing 315,600 multi-tenant usable square
feet) for approximately $20,075,000, net of selling costs. The sale of these
properties when combined with certain property adjustments resulted in a gain of
$6,015,000. On August 31, 1999, the Company sold the Jacksonville Central Center
(containing 666,000 multi-tenant usable square feet and 1.4 acres of undeveloped
land) and the Charlotte East Center (containing 468,900 multi-tenant usable
square feet and 3.9 acres of undeveloped land) for approximately $68,761,000,
net of selling costs.

Financing Activities. The Company's primary external sources of cash are
bank borrowings, mortgage financings, and public and private offerings of equity
securities. The proceeds of these financings are used by the Company to acquire
buildings and land or to refinance debt. The Company has a $125 million secured
revolving credit facility provided by Fleet National Bank, Wells Fargo Bank,
N.A. and Compass Bank.


16



Prior to 1999, the Company's Board of Directors (the "Board") approved the
repurchase of up to one million shares of the Company's common stock (the
"Shares"). The Company repurchased 54,000 Shares for approximately $852,000
during 1999. During 2000, the Board approved the repurchase of up to 2.65
million Shares and the Company repurchased 1,209,980 Shares for approximately
$20.4 million. The Company did not repurchase any Shares during 2001.

During 1999, the Company increased its non-recourse loan with Northwestern
Mutual Life Insurance Company ("Northwestern") by $45 million to a total of $235
million, which is secured by nine office parks and one freestanding building.
This loan is divided into (i) a tranche in the amount of $100.5 million with a
10 year maturity and an average interest rate of 8.19 percent, (ii) a tranche in
the amount of $89.5 million with a maturity of 12 years and an interest rate of
8.33 percent, (iii) a tranche in the amount of $14.7 million which matures
January 2, 2007 and an interest rate of 7.1 percent and (iv) a tranche in the
amount of $30.3 million which matures on January 2, 2009 and an interest rate of
7.1 percent. Amortization with respect to this indebtedness is based on equal
monthly installments over a 25 year amortization period. This indebtedness
requires the Company to maintain certain financial ratios.

During December 2001, the Company repaid the $90 million outstanding
balance under the secured revolving credit facility provided by First Union
National Bank of Florida, AmSouth Bank, N.A., Citizens Bank of Rhode Island,
Compass Bank and Guaranty Federal Bank. This credit facility matured during
December 2001. On December 28, 2001, the Company closed on a new $125 million
secured revolving credit facility provided by Fleet National Bank, Wells Fargo
Bank, N.A. and Compass Bank. This facility provides for monthly interest
payments, requires the Company to maintain certain financial ratios and matures
in December 2004.

Loan maturities and normal amortization of mortgages and loans payable
during the year 2002 are expected to total approximately $12.7 million, which
includes a $7.9 million balloon payment due under a term loan which matures in
December 2002. In order to generate funds sufficient to make principal payments
in respect of indebtedness of the Company over the long term, as well as
necessary capital and tenant acquisition expenditures, the Company will be
required to successfully refinance its indebtedness or procure additional equity
capital. However, there can be no assurance that any such refinancing or equity
financing will be achieved or will generate adequate funds on a timely basis for
these purposes. If additional funds are raised by issuing equity securities,
further dilution to existing shareholders may result. Unfavorable conditions in
the financial markets, the degree of leverage of the Company and various other
factors may limit the ability of the Company to successfully undertake any such
financings, and no assurance can be given as to the availability of alternative
sources of funds. The Company has filed shelf registration statements with
respect to the issuance of up to $300 million of its common and/or preferred
stock. The Company has issued $91.6 million of its common stock under such
registration statements.

In addition, in the event the Company is unable to generate sufficient
funds both to meet principal payments in respect of its indebtedness and to
satisfy distribution requirements of 90 percent of annual REIT taxable income to
its shareholders, the Company may be unable to qualify as a REIT. In such an
event, the Company (i) will incur federal income taxes and perhaps penalties,
(ii) if the Company is then paying dividends, may be required to decrease any
dividend payments to its shareholders, and (iii) the market price of the
Company's common stock may decrease. The Company would also be prohibited from
requalifying as a REIT for five years.

CAUTIONARY STATEMENT RELEVANT TO FORWARD-LOOKING INFORMATION FOR PURPOSE OF
"SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

The Private Securities Litigation Reform Act of 1995 (the "Act") provides a
"safe harbor" for forward-looking statements to encourage companies to provide
prospective information about their businesses without fear of litigation so
long as those statements are identified as forward-looking and are accompanied
by meaningful cautionary statements identifying important factors that could
cause actual results to differ materially from those projected in such
statements. The Company desires to take advantage of the "safe harbor"
provisions of the Act.


17




This Annual Report on Form 10-K contains forward-looking statements,
together with related data and projections, about the Company's projected
financial results and its future plans and strategies. However, actual results
and needs of the Company may vary materially from forward-looking statements and
projections made from time to time by the Company on the basis of management's
then-current expectations. The business in which the Company is engaged involves
changing and competitive markets and a high degree of risk, and there can be no
assurance those forward-looking statements and projections will prove accurate.
Accordingly, the Company hereby identifies the following important factors,
which could cause the Company's actual performance and financial results to
differ materially from any results, which might be projected, forecast,
estimated or budgeted by the Company.

Real Estate Financing Risks

Existing Debt. The Company is subject to risks normally associated with
debt financing, including (a) the risk that the Company's cash flow will be
insufficient to meet required payments of principal and interest, (b) the risk
that the existing debt in respect of the Company's properties (which in
substantially all cases will not have been fully amortized at maturity) will not
be able to be refinanced and (c) the risk that the terms of any refinancing of
any existing debt will not be as favorable as the terms of such existing debt.
The Company currently has outstanding debt of approximately $248.7 million, all
of which is secured by certain of the Company's properties. Approximately $151.4
million of such debt will mature before 2008, with the majority of the remaining
balance maturing in 2009. The $125 million secured revolving credit facility
(none of which was outstanding at year end) matures in December 2004. If
principal payments due at maturity cannot be refinanced, extended or paid with
proceeds of other capital transactions, such as new equity capital, the Company
expects that its cash flow will not be sufficient to repay all such maturing
debt. Furthermore, if prevailing interest rates or other factors at the time of
refinancing (such as the reluctance of lenders to make commercial real estate
loans) result in higher interest rates upon refinancing than the interest rates
on the existing debt, the interest expense relating to such refinanced debt
would increase, which would adversely affect the Company's cash flow and the
amount of distributions the Company would be able to make to its shareholders.
If the Company has mortgaged a property to secure payment of debt and the
Company is unable to meet the mortgage payments, then the mortgagee may
foreclose upon, or otherwise take control of, such property, with a consequent
loss of income and asset value to the Company.

Risk of Rising Interest Rates and Variable Rate Debt. The Company currently
has a $125 million secured revolving credit facility and a term loan with
variable interest rates. The Company may incur additional variable rate debt in
the future. Increases in interest rates on such debt could increase the
Company's interest expense, which would adversely affect the Company's cash flow
and its ability to pay distributions to its shareholders.

Existing Leverage; No Limitation on Debt. As of December 31, 2001, the debt
to total market capitalization ratio of the Company was approximately 41
percent. The Company's policy regarding this ratio (i.e., total consolidated
debt as a percentage of the sum of the market value of issued and outstanding
capital stock plus total consolidated debt) is not subject to any limitation in
the organizational documents of the Company. Accordingly, the Board of Directors
could establish policies which would increase the Company's debt to total market
capitalization ratio. If this action were taken, the Company could become more
highly leveraged, resulting in an increase in debt service that (a) could
adversely affect the Company's cash flow and, consequently, the amount of cash
available for distribution to shareholders and (b) could increase the risk of
default on the Company's debt.

For purposes of establishing and evaluating its debt policy, the Company
measures its leverage by reference to the total market capitalization of the
Company rather than by reference to the book value of its assets. The Company
has used total market capitalization because it believes that the book value of
its assets (which to a large extent is comprised of the depreciated value of
real property, the Company's primary tangible asset) does not accurately reflect
its ability to borrow and to meet debt service requirements. The market
capitalization of the Company, however, is more variable than book value, and
does not necessarily reflect the fair market value of the underlying assets of
the Company at all times. The Company also considers factors other than its
market capitalization in making decisions regarding the incurrence of
indebtedness, such as the purchase price of properties to be acquired with debt
financing, the estimated market value of its properties upon refinancing and the
ability of particular properties, and the Company as a whole, to generate cash
flow to cover expected debt service.


18



Geographic Concentration

The Company's revenues and the value of its properties may be affected by a
number of factors, including the regional and local economic climates of the
metropolitan areas in which the Company's buildings are located (which may be
adversely impacted by business layoffs or downsizing, industry slowdowns,
changing demographics and other factors) and regional and local real estate
conditions in such areas (such as oversupply of, or reduced demand for, office
and other competing commercial properties). All of the Company's properties are
located in the southeastern United States. There is also the problem of over
building in certain sub-markets located in markets which the Company currently
serves. While the Company has avoided acquiring or developing property in these
sub-markets such over built condition may move over into the sub-markets where
the Company has property. The Company's performance and its ability to make
distributions to its shareholders are, therefore, dependent on economic
conditions in these market areas. The Company's historical growth has occurred
during periods when the economy in the southeastern United States has
out-performed the national economy. There can be no assurance as to the
continued growth of the economy in the southeastern United States or the future
growth rate of the Company.

Renewal of Leases and Reletting of Space

The Company is subject to the risks that upon expiration of leases for
space located in its buildings (a) such leases may not be renewed, (b) such
space may not be relet or (c) the terms of renewal or reletting (taking into
account the cost of required renovations) may be less favorable than current
lease terms. Leases on a total of 20.4 percent and 22.3 percent of the total
rentable square feet leased in the Company's buildings will expire in 2002 and
2003, respectively. If the Company is unable to promptly relet, or renew the
leases for, all or a substantial portion of the space located in its buildings,
or if the rental rates upon such renewal or reletting are significantly lower
than expected rental rates, or if the Company's reserves for these purposes
prove inadequate, then the Company's cash flow and its ability to make expected
distributions to its shareholders may be adversely affected.

Leases with State of Florida

At December 31, 2001, the Company had 48 leases with various departments
and agencies of the State of Florida which totaled approximately 766,000
rentable square feet. The majority of these leases are for space in Office
Buildings located in Tallahassee, Florida. These leases have provisions for
early termination for various reasons, including lack of budget appropriations.
Therefore during times of recession and government austerity measures, the State
of Florida may be subject to budget reductions and may decide to terminate
certain of its leases prior to the contractual lease expiration date. In
addition, these leases provide the State of Florida with the right to terminate,
without penalty, prior to the contractual lease expiration date in the event a
State owned building becomes available for occupancy upon giving six months
advance written notice to the Company.

Real Estate Investment Risks

General Risks. Real property investments are subject to varying degrees of
risk. The yields available from equity investments in real estate depend in
large part on the amount of income generated and expenses incurred. If the
Company's properties do not generate revenues sufficient to meet operating
expenses, including current levels of debt service, tenant improvements, leasing
commissions and other capital expenditures, the Company may have to borrow
additional amounts to cover fixed costs and the Company's cash flow and its
ability to make distributions to its shareholders will be adversely affected.
The Company must obtain external financing to meet future debt maturities.


19




The Company's net revenues and the value of its properties may be adversely
affected by a number of factors, including the national, regional and local
economic climates; regional and local real estate conditions; the perceptions of
prospective tenants as to the attractiveness of the property; the ability of the
Company to provide adequate management, maintenance and insurance; and increased
operating costs (including real estate taxes and utilities). In addition, real
estate values and income from properties are also affected by such factors as
applicable laws, including tax laws, interest rate levels and the availability
of financing.

Illiquidity of Real Estate. Equity real estate investments are relatively
illiquid. Such illiquidity will tend to limit the ability of the Company to vary
its portfolio promptly in response to changes in economic or other conditions.

Competition. Numerous office buildings compete with the Company's buildings
in attracting tenants to lease space. Some of these competing buildings are
newer, better located or better capitalized than some of the Company's
buildings. Moreover, the Company believes that major national or regional
commercial property developers will continue to seek development opportunities
in the southeastern United States. These developers may have greater financial
resources than the Company. The number of competitive commercial properties in a
particular area could have a material adverse affect on the Company's ability to
lease space in its buildings or at newly developed or acquired properties and
the rents charged.

Changes in Laws. Because increases in income, service or transfer taxes are
generally not passed through to tenants under leases, such increases may
adversely affect the Company's cash flow and its ability to make distributions
to its shareholders. The Company's properties are also subject to various
federal, state and local regulatory requirements, such as requirements of the
Americans with Disabilities Act (the "ADA") and state and local fire and life
safety requirements. Failure to comply with these requirements could result in
the imposition of fines by governmental authorities or awards of damages to
private litigants. The Company believes that its properties are currently in
compliance with all such regulatory requirements. However, there can be no
assurance that these requirements will not be changed or that new requirements
will not be imposed which would require significant unanticipated expenditures
by the Company and could have an adverse affect on the Company's cash flow and
expected distributions.

Uninsured Loss. The Company presently carries comprehensive liability,
fire, and flood (where appropriate), extended coverage and rental loss insurance
with respect to its properties, with policy specifications and insured limits
customary for similar properties. There are, however, certain types of losses
(such as from wars) that may be either uninsurable or not economically
insurable. Should an uninsured loss or a loss exceeding policy limits occur, the
Company could lose both its capital invested in, and anticipated profits from,
one or more of its properties.

Bankruptcy and Financial Condition of Tenants. At any time, a tenant of the
Company's buildings may seek the protection of the bankruptcy laws, which could
result in the rejection and termination of such tenant's lease and thereby cause
a reduction in the cash flow available for distribution by the Company. No
assurance can be given that tenants will not file for bankruptcy protection in
the future or, if any tenants file, that they will affirm their leases and
continue to make rental payments in a timely manner. In addition, a tenant from
time to time may experience a downturn in its business which may weaken its
financial condition and result in its failure to make rental payments when due.
If a tenant's lease is not affirmed following bankruptcy or if a tenant's
financial condition weakens, the Company's income may be adversely affected.

Americans with Disabilities Act Compliance. Under the ADA, all public
accommodations and commercial facilities are required to meet certain federal
requirements relating to access and use by disabled persons. These requirements
became effective in 1992. Compliance with the requirements of the ADA could
require removal of access barriers and non-compliance could result in imposition
of fines by the U.S. Government or an award of damages to private litigants.
Although the Company believes that its properties are substantially in
compliance with these requirements, the Company may incur additional costs to
comply with the ADA. Although the Company believes that such costs will not have
a material adverse affect on the Company, if required changes involve a greater
expenditure than the Company currently anticipates, the Company's ability to
make distributions to its shareholders could be adversely affected.


20



Risks Involved in Property Ownership Through Partnership and Joint
Ventures. Although the Company owns fee simple interests in all but 13 of its
properties, in the future the Company could, if then permitted by the covenants
in its loan agreements and its financial position, participate with other
entities in property ownership through partnerships or joint ventures. KE is
currently the general partner of Koger-Vanguard Partners, L.P., which owns 13
office buildings in Charlotte, North Carolina. Partnership or joint venture
investments may, under certain circumstances, involve risks not otherwise
present in property ownership, including the possibility that (a) the Company's
partners or co-ventures might become bankrupt, (b) such partners or co-ventures
might at any time have economic or other business interests or goals which are
inconsistent with the business interests or goals of the Company, and (c) such
partners or co-ventures may be in a position to take action contrary to the
instructions or the requests of the Company or contrary to the Company's
policies or objectives, including the Company's policy to maintain its
qualification as a REIT. The Company will, however, seek to maintain sufficient
control of such participants or joint ventures to permit the Company's business
objectives to be achieved. There is no limitation under the Company's
organizational documents as to the amount of available funds that may be
invested in partnerships or joint ventures.

Impact of Inflation. The Company may experience increases in its expenses,
including debt service, as a result of inflation. The Company's exposure to
inflationary cost increases in property level expenses is reduced by escalation
clauses, which are included in most of its leases. However, market conditions
may prevent the Company from escalating rents. Inflationary pressure may
increase operating expenses, including labor and energy costs (and, indirectly,
real estate taxes) above expected levels at a time when it may not be possible
for the Company to increase lease rates to offset such higher operating
expenses. In addition, inflation can have secondary effects upon occupancy rates
by decreasing the demand for office space in many of the markets in which the
Company operates.

Although, inflation has historically often caused increases in the value of
income-producing real estate through higher rentals, the Company can provide no
assurance that inflation will increase the value of its properties in the future
and, in fact, the rate of inflation over recent years has been considerably
below that which has been experienced previously.

Risk of Development, Construction and Acquisition Activities

Within the constraints of its policy concerning leverage, the Company has
and will continue to develop and construct office buildings, particularly on its
undeveloped land. Risks associated with the Company's development and
construction activities, including activities relating to its undeveloped land,
may include: abandonment of development opportunities; construction costs of a
property exceeding original estimates and possibly making the property
uneconomical; insufficient occupancy rates and rents at a newly completed
property to make the property profitable; unavailability of financing on
favorable terms for development of a property; and the failure to complete
construction and lease-up on schedule, resulting in increased debt service
expense and construction costs. In addition, new development activities,
regardless of whether or not they are ultimately successful, typically require a
substantial portion of management's time and attention. Development activities
are subject to risks relating to the inability to obtain, or delays in
obtaining, all necessary zoning, land-use, building, occupancy and other
required governmental permits and authorizations.

The Company will continue to acquire office buildings. Acquisitions of
office buildings entail risks that investments will fail to perform in
accordance with expectations. Estimates of the cost of improvements to bring an
acquired building up to standards established for the market position intended
for such building may prove inaccurate. In addition, there are general
investment risks associated with any new real estate investment.

The Company anticipates that any future developments and acquisitions would
be financed through a combination of internally generated cash, equity
investments and secured or unsecured financing. If new developments are financed
through construction loans, there is a risk that, upon completion of
construction, permanent financing for newly developed properties may not be
available or may be available only on disadvantageous terms.


21



Changes in Policies Without Shareholder Approval

The investment, financing, borrowing and distribution policies of the
Company, as well as its policies with respect to all other activities, including
growth, debt, capitalization and operations, are determined by the Board of
Directors. Although the Board of Directors has no present intention to do so,
these policies may be amended or revised at any time and from time to time at
the discretion of the Board of Directors without a vote of the shareholders of
the Company. A change in these policies could adversely affect the financial
condition or results of operations of the Company or the market price of the
common stock.

Limitations of REIT Status on Business of Subsidiaries

Certain requirements for REIT qualification may in the future limit the
Company's ability to increase fee development, management and leasing operations
conducted, and related services offered, by the Company's subsidiaries without
jeopardizing the Company's qualification as a REIT.

Adverse Consequences of Failure to Qualify as a REIT

The Company believes it has operated so as to qualify as a REIT under the
Internal Revenue Code since its inception in 1988. Although management of the
Company intends that the Company continue to operate so as to qualify as a REIT,
no assurance can be given that the Company will remain qualified as a REIT.
Qualification as a REIT involves the application and satisfaction of highly
technical and complex Code requirements for which there are only limited
judicial and administrative interpretations. Uncertainty in the application of
such requirements, as well as circumstances not entirely within the Company's
control, may affect the Company's ability to qualify as a REIT. In addition, no
assurance can be given that legislation, new regulations, administrative
interpretations or court decisions will not significantly change the tax laws
with respect to qualification as a REIT or the federal income tax consequences
of such qualification. The Company, however, is not aware of any pending tax
legislation that would adversely affect the Company's ability to operate as a
REIT.

Possible Environmental Liabilities

Under various federal, state and local environmental laws, ordinances and
regulations, a current or previous owner or operator of real estate may be
required to investigate and clean up hazardous or toxic substances or petroleum
product releases at such property and may be held liable to a governmental
entity or to third parties for property damage and for investigation and
clean-up costs incurred by such parties in connection with the contamination.
Such laws typically impose clean-up responsibility and liability without regard
to whether the owner knew, or caused the presence, of the contaminants, and the
liability under such laws has been interpreted to be joint and several unless
the harm is divisible and there is a reasonable basis for allocation of
responsibility. The costs of investigation, remediation or removal of such
substances may be substantial, and the presence of such substances, or the
failure to properly remediate the contamination on such property, may adversely
affect the owner's ability to sell or rent such property or to borrow using such
property as collateral. Any person who arranges for the disposal or treatment of
hazardous or toxic substances at a disposal or treatment facility also may be
liable for the costs of removal or remediation of a release of hazardous or
toxic substances at such disposal or treatment facility, whether or not such
facility is owned or operated by such person. In addition, some environmental
laws create a lien on the contaminated site in favor of the government for
damages and costs that it incurs in connection with the contamination. Finally,
the owner of a site may be subject to common law claims by third parties based
on damages and costs resulting from environmental contamination emanating from a
site.

Certain federal, state and local laws, regulations and ordinances govern
the removal, encapsulation or disturbance of asbestos-containing materials
("ACM") when such materials are in poor condition or in the event of
construction, remodeling, renovation or demolition of a building. Such laws may
impose liability for release of ACM and may provide for third parties to seek
recovery from owners or operators of real properties for personal injury
associated with ACM. In connection with its ownership and operation of its
properties, the Company may be potentially liable for such costs. All ACM in the
Company's buildings has been found to be in good condition and non-friable, and
should not present a risk as long as it continues to be properly managed.


22



The Company's environmental assessments of its properties have not revealed
any environmental liability that the Company believes would have a material
adverse affect on its business, assets or results of operations taken as a
whole, nor is the Company aware of any such material environmental liability.
Nevertheless, it is possible that the Company's assessments do not reveal all
environmental liabilities or that there are material environmental liabilities
of which the Company is unaware. Moreover, there can be no assurance that future
laws, ordinances or regulations will not impose any material environmental
liability or the current environmental condition of the Company's properties
will not be affected by tenants, by the condition of land or operations in the
vicinity of such properties (such as the presence of underground storage tanks),
or by third parties unrelated to the Company.

Effect of Market Interest Rates on Price of Common Stock

One of the factors that will influence the market price of the Company's
common stock in public markets will be the annual dividend yield on the share
price reflected by dividend distributions by the Company. An increase in market
interest rates could reduce cash available for distribution by the Company to
its shareholders and, accordingly, adversely affect the market price of the
common stock.

Additional Information

For additional disclosure of risk factors to which the Company is subject,
see the other sections of "Management's Discussion and Analysis of Financial
Condition and Results of Operations."

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

The Company currently has a $125 million secured revolving credit facility
and a term loan with variable interest rates. The Company may incur additional
variable rate debt in the future to meet its financing needs. Increases in
interest rates on such debt could increase the Company's interest expense, which
would adversely affect the Company's cash flow and its ability to pay
distributions to its shareholders. The Company has not entered into any interest
rate hedge contracts in order to mitigate the interest rate risk with respect to
the secured revolving credit facility. As of December 31, 2001, the Company had
$1.5 million outstanding under loans with variable interest rates. If the
weighted average interest rate on this variable rate debt were 100 basis points
higher or lower, annual interest expense would be increased or decreased by
approximately $15,000.


23




Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA




INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULES

PAGE NO.


Independent Auditors' Report............................................................................ 25

Consolidated Financial Statements:
Consolidated Balance Sheets as of December 31, 2001
and 2000........................................................................................ 26

Consolidated Statements of Operations for Each
of the Three Years in the Period Ended
December 31, 2001............................................................................... 27

Consolidated Statements of Changes in Shareholders'
Equity for Each of the Three Years in the
Period Ended December 31, 2001................................................................ 28

Consolidated Statements of Cash Flows for Each
of the Three Years in the Period Ended
December 31, 2001............................................................................... 29

Notes to Consolidated Financial Statements for
Each of the Three Years in the Period Ended
December 31, 2001............................................................................... 30

Financial Statement Schedules:
Schedule II - Valuation and Qualifying Accounts
for the Three Years Ended December 31, 2001..................................................... 43

Schedule III - Real Estate and Accumulated
Depreciation as of December 31, 2001............................................................ 44





24





INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders of
Koger Equity, Inc.
Boca Raton, Florida

We have audited the accompanying consolidated balance sheets of Koger Equity,
Inc. and subsidiaries (the "Company") as of December 31, 2001 and 2000, and the
related consolidated statements of operations, changes in shareholders' equity,
and cash flows for each of the three years in the period ended December 31,
2001. Our audits also included the financial statement schedules listed in the
Index at Item 8. These financial statements and financial statement schedules
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements and financial statement
schedules based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Koger Equity, Inc. and subsidiaries
as of December 31, 2001 and 2000, and the results of their operations and their
cash flows for each of the three years in the period ended December 31, 2001 in
conformity with accounting principles generally accepted in the United States of
America. Also, in our opinion, such financial statement schedules, when
considered in relation to the basic consolidated financial statements taken as a
whole, present fairly in all material respects the information set forth
therein.

As described in Note 2 to the consolidated financial statements, the Company has
sold operating properties with over 3.9 million rentable square feet in exchange
for cash and shares of the Company's common stock. The purchaser, AP-Knight LP,
an affiliate of Apollo Real Estate Advisors, LP, was a related party at the date
of the transaction.

DELOITTE & TOUCHE LLP
Certified Public Accountants

West Palm Beach, Florida
February 22, 2002





25




KOGER EQUITY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2001 AND 2000
(In Thousands Except Share Data)




2001 2000
ASSETS

Real estate investments:
Operating properties:
Land $ 91,919 $138,214
Buildings 568,285 805,935
Furniture and equipment 3,082 2,631
Accumulated depreciation (123,999) (155,817)
-------- -------
Operating properties - net 539,287 790,963
Properties under construction:
Land - 2,128
Buildings - 12,023
Undeveloped land held for investment 13,779 13,899
Undeveloped land held for sale, net of allowance 76 76
Cash and cash equivalents 113,370 1,615
Accounts receivable, net of allowance for uncollectible
accounts of $1,114 and $584 11,574 13,232
Investment in Koger Realty Services, Inc. - 2,533
Cost in excess of fair value of net assets acquired,
net of accumulated amortization of $683 and $1,195 595 1,360
Other assets 11,904 13,193
---------- ----------
TOTAL ASSETS $690,585 $851,022
======== ========

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgages and loans payable $248,683 $343,287
Accounts payable 4,962 4,961
Accrued real estate taxes payable 1,007 4,175
Accrued liabilities - other 9,206 10,562
Dividends payable 44,159 9,392
Advance rents and security deposits 5,103 7,014
--------- -----------
Total Liabilities 313,120 379,391
--------- ---------

Minority interest 22,923 23,138
--------- ----------
Commitments and contingencies (Notes 2 and 10)

Shareholders' equity:
Preferred stock, $.01 par value; 50,000,000 shares
authorized; issued: none - -
Common stock, $.01 par value; 100,000,000 shares
authorized; issued: 29,663,362 and 29,559,381 shares;
outstanding: 21,128,905 and 26,829,239 shares 297 296
Capital in excess of par value 469,779 468,277
Notes receivable from stock sales (5,066) (6,250)
Retained earnings 21,180 20,261
Treasury stock, at cost; 8,534,457 and 2,730,142 shares (131,648) (34,091)
--------- ----------
Total Shareholders' Equity 354,542 448,493
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $690,585 $851,022

======== ========


See Notes to Consolidated Financial Statements.


26




KOGER EQUITY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR EACH OF THE THREE YEARS IN THE PERIOD
ENDED DECEMBER 31, 2001
(In Thousands Except Per Share Data)




2001 2000 1999
------ ------- -------

Revenues
Rental $164,679 $163,831 $155,466
Other rental services 944 902 687
Management fees 4,080 1,793 2,384
Income from Koger Realty Services, Inc. 81 645 1,099
Interest 776 703 457
--------- ------------ ------------
Total revenues 170,560 167,874 160,093
--------- --------- ---------

Expenses
Property operations 61,608 61,868 60,582
Depreciation and amortization 36,007 35,133 32,314
Mortgage and loan interest 25,204 27,268 21,893
General and administrative 8,412 20,217 8,633
Direct cost of management fees 3,378 898 1,432
Other 189 217 1,143
--------- ------------ -----------
Total expenses 134,798 145,601 125,997
--------- --------- ---------

Income Before Gain on Sale or Disposition of
Assets, Income Taxes and Minority Interest 35,762 22,273 34,096
Gain on sale or disposition of assets 39,189 6,015 3,851
--------- ---------- ----------
Income Before Income Taxes and Minority Interest 74,951 28,288 37,947
Income tax provision (benefit) 684 (21) 187
--------- ---------- ----------
Income Before Minority Interest 74,267 28,309 37,760
Minority interest 1,044 1,156 1,174
--------- ---------- ----------
Net Income $ 73,223 $ 27,153 $ 36,586
========= ========= =========

Earnings Per Share:
Basic $ 2.76 $ 1.02 $ 1.37
========= =========== ===========
Diluted $ 2.75 $ 1.01 $ 1.35
========= =========== ===========

Weighted Average Shares:
Basic 26,517 26,730 26,689
========= ========== ==========
Diluted 26,610 26,962 27,019
========= ========== ==========



See Notes to Consolidated Financial Statements.




27




KOGER EQUITY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR EACH OF THE THREE YEARS IN THE PERIOD
ENDED DECEMBER 31, 2001
(In Thousands)





Capital Notes Total
Common Stock in Excess Receivable Share-
Shares Par of Par from Stock Retained Treasury holders'
Issued Value Value Sales Earnings Stock Equity
------ ----- --------- ---------- -------- -------- ---------


BALANCE,
DECEMBER 31, 1998 28,560 $286 $454,988 $30,020 $(20,531) $464,763

Common stock sold 207 235 442
Treasury stock reissued 123 162 285
Treasury stock purchased (852) (852)
Options exercised 174 2 2,120 (40) 2,082
Restricted stock issued 22 368 (56) 312
401(k) Plan contribution 139 129 268
Dividends declared (36,060) (36,060)
Net income 36,586 36,586
------- -- -------- --------- ------ --------- ---------
BALANCE,
DECEMBER 31, 1999 28,756 288 457,945 30,546 (20,953) 467,826

Common stock sold 220 $(5,066) 7,005 2,159
Treasury stock purchased (20,434) (20,434)
Options exercised 803 8 10,026 (1,184) 163 9,013
Restricted stock issued (48) (48)
401(k) Plan contribution 134 128 262
Dividends declared (37,438) (37,438)
Net income 27,153 27,153
-------- -- -------- -------- -------- --------- ----------
BALANCE,
DECEMBER 31, 2000 29,559 296 468,277 (6,250) 20,261 (34,091) 448,493

Common stock sold 125 134 259
Stock loan repayments 1,184 (1,364) (180)
Treasury stock acquired (96,327) (96,327)
Options exercised 104 1 1,377 1,378
Dividends declared (72,304) (72,304)
Net income 73,223 73,223
-------- -- -------- -------- -------- --------- ---------
BALANCE,
DECEMBER 31, 2001 29,663 $297 $469,779 $(5,066) $21,180 $(131,648) $354,542
======== ==== ======== ======= ======= ========= ========



See Notes to Consolidated Financial Statements.



28





KOGER EQUITY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR EACH OF THE THREE YEARS IN THE PERIOD
ENDED DECEMBER 31, 2001
(In Thousands)




2001 2000 1999
------ ------ --------


Operating Activities
Net income $ 73,223 $ 27,153 $ 36,586
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 36,007 35,133 32,314
Income from Koger Realty Services, Inc. (81) (645) (1,099)
Provision for uncollectible accounts 1,448 721 349
Minority interest 1,044 1,156 1,174
Gain on sale or disposition of assets (39,189) (6,015) (3,851)
Changes in assets and liabilities:
Increase (decrease) in accounts payable, accrued
liabilities and other liabilities (7,116) (6,096) 3,677
Increase in accounts receivable and other assets (1,343) (2,765) (3,665)
-------- --------- --------
Net cash provided by operating activities 63,993 48,642 65,485
-------- --------- --------
Investing Activities
Proceeds from sales of assets 199,646 49,726 68,763
Cash acquired in purchase of assets from KRSI 2,535 - -
Dividends received from Koger Realty Services, Inc. - 431 441
Property acquisitions - (10) (64,158)
Building and land construction expenditures (2,012) (16,184) (55,979)
Tenant improvements to first generation space (4,363) (7,133) (7,053)
Tenant improvements to existing properties (6,610) (8,362) (13,204)
Building improvements (4,899) (4,065) (4,573)
Energy management improvements (201) (252) (245)
Deferred tenant costs (2,338) (3,812) (2,663)
Additions to furniture and equipment (177) (402) (427)
-------- --------- --------
Net cash provided by (used in) investing activities 181,581 9,937 (79,098)
-------- --------- --------
Financing Activities
Proceeds from mortgages and loans 42,500 76,783 171,052
Proceeds from sales of common stock 259 2,159 442
Proceeds from exercise of stock options 1,373 8,204 1,835
Collection of notes receivable from stock sales 174 - -
Principal payments on mortgages and loans (137,104) (85,024) (127,427)
Dividends paid (37,537) (37,416) (34,661)
Distributions paid to minority interest holders (1,259) (1,202) (1,082)
Treasury stock purchased - (20,434) (852)
Financing costs (2,225) (34) (521)
-------- --------- --------
Net cash provided by (used in) financing activities (133,819) (56,964) 8,786
-------- --------- --------
Net increase (decrease) in cash and cash equivalents 111,755 1,615 (4,827)
Cash and cash equivalents - beginning of year 1,615 0 4,827
-------- --------- --------
Cash and cash equivalents - end of year $113,370 $ 1,615 $ 0
======== ========= ========



See Notes to Consolidated Financial Statements.



29




KOGER EQUITY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR EACH OF THE THREE YEARS IN THE PERIOD
ENDED DECEMBER 31, 2001

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.

Organization. Koger Equity, Inc. ("KE") was incorporated in Florida on June
21, 1988. KE has three wholly-owned subsidiaries, which are Southeast Properties
Holding Corporation ("Southeast"), a Florida corporation; Koger Real Estate
Services, Inc. ("KRES"), a Florida corporation; and Koger Realty Services, Inc.
("KRSI"), a Florida corporation. Koger-Vanguard Partners, L.P. ("KVP") is a
Delaware limited partnership, for which KE is the general partner.

Principles of Consolidation. The consolidated financial statements include
the accounts of KE, its wholly-owned subsidiaries and KVP (the "Company"). All
material intercompany transactions and accounts have been eliminated in
consolidation.

Investment in Koger Realty Services, Inc. During January 2001, KE organized
KRSI Merger, Inc., a Florida corporation, as a wholly owned taxable subsidiary.
Effective February 1, 2001, Koger Realty Services, Inc. ("Koger Realty"), a
Delaware corporation, was merged into this new subsidiary (the "Merger").
Pursuant to the Merger, the common stock of Koger Realty was repurchased at the
formula price set forth in its Articles of Incorporation. All of the outstanding
common stock of Koger Realty was owned by officers and employees of Koger
Realty, some of whom were also officers of KE. Subsequent to the Merger, the
name of the new Florida subsidiary was changed to Koger Realty Services, Inc.
This merger was accounted for using the purchase method of accounting resulting
in a reduction in the cost basis of assets of approximately $143,000. Prior to
the Merger, the Company accounted for its investment in the preferred stock of
Koger Realty using the equity method.

Real Estate Investments. Operating properties, properties under
construction, furniture and equipment, and undeveloped land held for investment
are stated at cost less accumulated depreciation. Undeveloped land held for sale
is carried at the lower of cost or fair value less selling costs.

Periodically, management reviews its portfolio of operating properties,
undeveloped land held for investment and related goodwill and in those instances
where properties have suffered an impairment in value, the properties and
related goodwill will be reduced to their fair value. This review includes a
quarterly analysis of occupancy levels and rental rates for the Company's
properties in order to identify properties, which may have suffered an
impairment in value. Management prepares estimates of future undiscounted cash
flows for these properties to determine whether the Company will be able to
recover its investment. In making such estimates, management considers the
conditions in the commercial real estate markets in which the properties are
located, current and expected occupancy rates, current and expected rental
rates, and expected changes in operating costs. As of December 31, 2001, there
were no such impairments in value. Maintenance and repairs are charged to
operations. Acquisitions, additions, and improvements are capitalized.

Minority Interest. During 1998, KE acquired a suburban office park for a
purchase price of $52.3 million. The transaction was structured as a
contribution of the property to KVP in exchange for 999,710 limited partner
units valued at $22.95 million. In connection with this transaction, KVP assumed
$22.2 million of debt and received a contribution of $7.2 million from KE in
exchange for general partner interests. The limited partner units are entitled
to a cumulative preferred return, which approximates the average dividend rate
on KE's shares. In addition, the limited partner units carry with them the right
to redeem the units for common shares of KE on a one-unit-for-one-share basis
or, at the option of KE, the units may be redeemed for cash. KE has reported
KVP's assets, liabilities and operations in its consolidated financial
statements. The limited partnership units and earnings thereon are reported as
minority interests.



30




Depreciation and Amortization. The Company uses the straight-line method
for depreciation and amortization. Acquisition costs, building improvements and
tenant improvements are depreciated over the periods benefited by the
expenditures which range from 3 to 40 years. Deferred tenant costs (leasing
commissions and tenant relocation costs) are amortized over the term of the
related leases. Deferred financing costs are amortized over the terms of the
related debt agreements using a method which approximates the interest method.
Cost in excess of fair value of net assets acquired is being amortized over 15
years.

Revenue Recognition. Rentals are generally recognized as revenue over the
lives of leases according to provisions of the lease agreements. However, the
straight-line basis, which averages annual minimum rents over the terms of
leases, is used to recognize minimum rental revenues under leases which provide
for material varying rents over their terms. For 2001, 2000 and 1999, the
recognition of rental revenues on this basis for applicable leases increased
rental revenues by $1,470,000, $1,897,000 and $1,764,000, respectively, over the
amount which would have been recognized based upon the contractual provisions of
these leases. Interest revenue is recognized on the accrual basis for
interest-earning investments.

Federal Income Taxes. The Company is qualified and has elected tax
treatment as a real estate investment trust under the Internal Revenue Code (a
"REIT"). A corporate REIT is a legal entity that holds real estate, and through
distributions to shareholders, is permitted to reduce or avoid the payment of
Federal income taxes at the corporate level. To maintain qualification as a
REIT, the Company must distribute to shareholders at least 90 percent of REIT
taxable income. To the extent that the Company pays dividends equal to 100
percent of REIT taxable income, the earnings of the Company are taxed at the
shareholder level. However, the use of net operating loss carryforwards, which
may reduce REIT taxable income to zero, are limited for alternative minimum tax
purposes. Distributed capital gains on sales of real estate are not subject to
tax; however, undistributed capital gains are taxed as capital gain. Although
KRSI is consolidated with the Company for financial reporting purposes, this
entity is subject to Federal income tax and files separate Federal and state
income tax returns.

Stock Options. Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation" requires expanded disclosures of
stock-based compensation arrangements with employees and encourages (but does
not require) compensation cost to be measured based on the fair value of the
equity instrument awarded. Companies are permitted, however, to continue to
apply Accounting Principles Board Opinion No. 25 ("APB 25"), which recognizes
compensation cost based on the intrinsic value of the equity instrument awarded.
The Company has continued to apply APB 25 to its stock based compensation awards
to employees and has disclosed the required pro forma effect on net income and
earnings per share.

Earnings Per Common Share. Basic earnings per common share has been
computed based on the weighted average number of shares of common stock
outstanding for each period. Diluted earnings per common share is similar to
basic earnings per share except that the weighted average number of common
shares outstanding is increased to include the number of additional common
shares that would have been outstanding if the dilutive common shares had been
issued. The treasury stock method is used to calculate dilutive shares which
reduces the gross number of dilutive shares by the number of shares purchasable
from the proceeds of the options assumed to be exercised. Following is a
reconciliation of number of shares (in thousands) used in the computation of
basic and diluted earnings per share.




2001 2000 1999
-------- -------- -------

Weighted average number of common
shares outstanding - Basic 26,517 26,730 26,689
Effect of dilutive securities:
Stock options 93 232 330
------ ------ ------
Adjusted common shares - Diluted 26,610 26,962 27,019
====== ====== ======





31




Fair Value of Financial Instruments. The Company believes that the carrying
amount of its financial instruments (temporary investments, accounts receivable,
accounts payable, and mortgages and loans payable) is a reasonable estimate of
fair value of these instruments.

Cash and Cash Equivalents. Cash in excess of daily requirements is invested
in short-term monetary securities. Such temporary cash investments have an
original maturity of less than three months and are deemed to be cash
equivalents for purposes of the statements of cash flows.

Statements of Cash Flows. During 1999, the Company contributed 15,603
shares of common stock to the Company's 401(k) Plan. These shares had a value of
approximately $268,000 based on the closing price of the Company's common stock
on the American Stock Exchange on December 31, 1998. In addition, the Company
issued 19,695 shares of common stock as payment for certain 1998 bonuses for
senior management. These shares had a value of approximately $285,000 based on
the closing price of the Company's common stock on the American Stock Exchange
on February 18, 1999. During 2000, the Company contributed 15,557 shares of
common stock to the Company's 401(k) Plan. These shares had a value of
approximately $262,000 based on the closing price of the Company's common stock
on the American Stock Exchange on December 31, 1999. The Company's common stock
is currently traded on the New York Stock Exchange. During 2001, the Company
received 86,779 shares of its common stock as settlement of $1,364,000 of notes
receivable from former employees ($1,010,000 of which were Notes Receivable from
Stock Sales). Pursuant to the Merger, the Company acquired the net assets of
Koger Realty in exchange for its preferred stock in Koger Realty. The net assets
of Koger Realty acquired consisted of (i) cash in the amount of $2,535,000, (ii)
other assets with a fair value of $1,016,000 and (iii) liabilities assumed with
a fair value of $937,000. During December 2001, the Company acquired 5,733,772
shares of its common stock in conjunction with the sale of properties to
AP-Knight, LP (see Footnote 2. Transactions with Related Parties).

For 2001, 2000 and 1999, total interest payments (net of amounts
capitalized) were $25,600,000, $27,307,000 and $21,353,000, respectively, for
the Company. Interest capitalized during 2001, 2000 and 1999 totaled $207,000,
$1,059,000 and $3,343,000, respectively. For 2001, 2000 and 1999, payments for
income taxes totaled $252,000, $155,000 and $455,000, respectively.

Estimates. The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during each reporting period. Actual results could differ
from those estimates.

New Accounting Standards. During July 2001, the Financial Accounting
Standards Board ("FASB") issued Statement of Financial Accounting Standards
("SFAS") No. 141, "Business Combinations", and SFAS No. 142, "Goodwill and Other
Intangible Assets." These Statements make significant changes to the accounting
for business combinations, goodwill, and intangible assets. SFAS No. 141
eliminates the pooling-of-interests method of accounting for business
combinations with limited exceptions for combinations initiated prior to July 1,
2001. In addition, it further clarifies the criteria for recognition of
intangible assets separately from goodwill. This statement is effective for
business combinations completed after June 30, 2001. SFAS No. 142 discontinues
the practice of amortizing goodwill and indefinite lived intangible assets and
initiates an annual review for impairment. Impairment would be examined more
frequently if certain indicators are encountered. Intangible assets with a
determinable useful life will continue to be amortized over that period. The
amortization provisions apply to goodwill and intangible assets acquired after
September 30, 2001. SFAS No. 142 is effective for fiscal years beginning after
December 15, 2001. Goodwill and intangible assets on the books at December 31,
2001 will be affected when the Company adopts the Statement effective January 1,
2002. The Company is evaluating the impact of the adoption of these standards
and has not yet determined the effect of adoption on its financial position and
results of operations.



32




In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations." SFAS No. 143 requires entities to record the fair value
of a liability for an asset retirement obligation in the period in which it is
incurred and requires that the amount recorded as a liability be capitalized by
increasing the carrying amount of the related long-lived asset. Subsequent to
initial measurement, the liability is accreted to the ultimate amount
anticipated to be paid, and is also adjusted for revisions to the timing or
amount of estimated cash flows. The capitalized cost is depreciated over the
useful life of the related asset. Upon settlement of the liability, an entity
either settles the obligation for its recorded amount or incurs a gain or loss
upon settlement. SFAS No. 143 is required to be adopted for fiscal years
beginning after June 15, 2002, with earlier application encouraged. The Company
is currently assessing but has not yet determined the impact of SFAS No. 143 on
its financial position and results of operations.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." This statement supersedes SFAS No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of." SFAS No. 144 retains the fundamental provisions of
SFAS No. 121 for (a) recognition and measurement of the impairment of long-lived
assets to be held and used and (b) measurement of long-lived assets to be
disposed of by sale. SFAS No. 144 is effective for fiscal years beginning after
December 15, 2001. The Company is currently assessing but has not yet determined
the impact of SFAS No. 144 on its financial position and results of operations.

2. TRANSACTIONS WITH RELATED PARTIES.

Three directors were elected to the Company's Board of Directors under the
terms of an agreement dated October 10, 1996 between the Company and an
affiliate of Apollo Real Estate Investment Fund II, L.P. ("Apollo") pursuant to
which Apollo purchased three million shares of common stock from the Company for
$43.5 million ($14.50 per share). Such agreement granted to Apollo registration
rights and a conditional exemption from certain of the Company's takeover
defenses for a period of three years, which period ended on October 10, 1999.
During December 2001, the Company sold 75 suburban office buildings, one retail
center and 3.4 acres of unimproved land to AP-Knight, LP ("AP-Knight"), an
affiliate of Apollo, for approximately $206.7 million cash ($199.6 million net
of selling costs) and Apollo's 5.73 million shares of the Company's common
stock. In addition to the above consideration, the Company received a membership
interest in an Apollo subsidiary. This interest will provide the Company with a
20 percent participation in the net cash flow from the disposed assets after
Apollo has received a 15 percent internal rate of return on its equity
investment. The transaction was negotiated by a Special Committee of the Board
of Directors composed of directors who had no affiliation with Apollo. The
Company initiated a marketing period through its financial advisor during which
unrelated bidders were asked to submit competing offers to purchase these
properties. Prior to the closing of the sale, the Company did not receive any
attractive alternative offers for these properties. In connection with this
transaction, Morgan Stanley & Co. Incorporated acted as financial advisor and
provided an opinion to the Special Committee of the Board of Directors which
opinion stated that the consideration received from the transaction was fair
from a financial point of view to the Company.

During February 2001, Koger Realty Services, Inc., a Delaware corporation
("Koger Realty"), was merged into a wholly owned taxable subsidiary of KE. Prior
to the Merger, KE owned all of the preferred stock of Koger Realty, which
represented in excess of 95 percent (by value) of the economic benefits of Koger
Realty. This preferred stock was nonvoting stock and not convertible into common
stock while held by KE. All of the outstanding common stock of Koger Realty had
been acquired by officers and employees of Koger Realty, some of whom were also
officers of KE. Pursuant to the Merger, Koger Realty repurchased all outstanding
common stock at the formula price set forth in its Articles of Incorporation. In
connection with the Merger, Messrs. Hughes, Teagle, and Stephens were paid
$20,555, $15,416 and $10,277, respectively, to redeem their shares of common
stock of Koger Realty in which they had a basis of $19,840, $14,880 and $9,920,
respectively.

During 2000, the Company reached an agreement with Crocker Realty Trust
("CRT") to provide asset management services for the portfolio of CRT, which
currently contains 4.6 million rentable square feet. Mr. Crocker is the Chairman
of the Board and Chief Executive Officer of CRT and owns 2.8 percent of the
outstanding CRT shares. Mr. Onisko is the Treasurer and Chief Financial Officer
of CRT and owns 0.2 percent of the outstanding CRT shares. In addition, Apollo
is a principal shareholder of CRT owning 49 percent of the outstanding CRT
shares. The Company is paid a fee for these services based upon the value of
CRT's assets. This agreement is terminable by either party upon 90 days written
notice. The terms of this agreement were approved by a committee of the
Company's Board of Directors whose members were not affiliated with CRT. The
Company earned fees of $452,000 and $296,000 under this agreement during 2001
and 2000, respectively.


33



In conjunction with the Company's plan to repurchase up to 2.65 million
shares of common stock (the "Shares"), the Board of Directors granted to Mr.
Crocker the right to purchase up to 500,000 Shares and to Mr. Onisko, the right
to purchase up to 150,000 Shares. These officers are entitled to make purchases
of one Share of every three Shares purchased by the Company as part of this
plan. The Shares may be purchased from the Company at the same time and for the
same price as the Company purchases Shares. In addition, the Company will loan
up to 75% of the purchase price for these Shares to Mr. Crocker and to Mr.
Onisko. These loans will be collateralized by the Shares purchased. The loan
amount cannot exceed 75% of the collateral value at any point in time. These
loans will bear interest at 150 basis points over the applicable LIBOR rate.
Approximately $836,000 of these loans are subject to recourse and the remaining
loans will be without recourse. Accrued interest on these loans is a recourse
obligation and any paid interest is not refundable if the stock is returned in
settlement of the loans. Through December 31, 2001, Mr. Crocker acquired 302,495
Shares and Mr. Onisko acquired 100,831 Shares under this plan. All of these
Shares were acquired during 2000.

During 2000, the Company's Board approved a program to lend up to $2.5
million to executive officers and department heads for the purpose of exercising
options. The loans have a term of 60 months and bear interest at 150 basis
points over the applicable LIBOR rate. There were no loans outstanding at
year-end under this program. Through December 31, 2001, options have been
exercised to acquire 185,027 Shares under this program.

3. MORTGAGES AND LOANS PAYABLE.

The Company has $235 million of non-recourse loans ($219.8 million of which
was outstanding on December 31, 2001) with Northwestern Mutual Life Insurance
Company ("Northwestern") which are secured by nine office parks and one
freestanding building. These loans are divided into (i) a tranche in the amount
of $100.5 million with a 10 year maturity and an average interest rate of 8.19
percent, (ii) a tranche in the amount of $89.5 million with a maturity of 12
years and an interest rate of 8.33 percent, (iii) a tranche in the amount of
$14.7 million which matures on January 2, 2007 and an interest rate of 7.1
percent and (iv) a tranche in the amount of $30.3 million which matures on
January 2, 2009 and an interest rate of 7.1 percent. Monthly payments on this
loan include principal amortization based on a 25-year amortization period. This
indebtedness requires the Company to maintain certain financial ratios and is
collateralized by properties with a carrying value of approximately $371.8
million at December 31, 2001.

The Company has a $125 million secured revolving credit facility (none of
which was outstanding on December 31, 2001) provided by Fleet National Bank,
Wells Fargo Bank, N.A. and Compass Bank. Based on the Company's election, the
interest rate on this revolving credit facility will be either (i) the lender's
LIBOR rate plus either 165,190 or 215 basis points (depending on the Company's
leverage ratio) or (ii) the lender's prime rate plus either 40, 65 or 90 basis
points (depending on the Company's leverage ratio). Interest payments will be
due monthly on this credit facility which has a term of three years. This credit
facility requires the Company to maintain certain financial ratios, which
includes a limitation on dividends, and is collateralized by properties with a
carrying value of approximately $98.4 million at December 31, 2001. This credit
facility matures in December 2004.

The Company assumed other non-recourse loans with outstanding balances of
$30.7 million ($28.9 million of which was outstanding on December 31, 2001) in
conjunction with certain property acquisitions. The contractual interest rates
on these loans range from 7.88 percent to 8.2 percent. Amortization with respect
to this indebtedness is based on equal monthly installments based on 25-year
amortization periods. These three loans mature in 2002, 2006 and 2021. This
indebtedness is collateralized by properties with a carrying value of
approximately $59.4 million at December 31, 2001.

The Company is in compliance with all of the above referenced debt
covenants as of December 31, 2001.


34


The annual maturities of mortgages and loans payable, as of December 31,
2001, are summarized as follows:

Year Ending Amount
December 31, (In thousands)
------------ --------------
2002 $ 12,702
2003 5,200
2004 5,629
2005 6,110
2006 23,704
Subsequent Years 195,338
--------
Total $248,683
========

4. LEASES.

The Company's operations consist principally of owning and leasing of
office space. Most of the leases are for terms of three to five years.
Generally, the Company pays all operating expenses, including real estate taxes
and insurance. At December 31, 2001, approximately 97 percent of the Company's
annualized rentals were subject to rent escalations based on changes in the
Consumer Price Index, fixed rental increases or increases in real estate taxes
and certain operating expenses. A substantial number of leases contain options
that allow leases to renew for varying periods.

The Company's leases are operating leases and expire at various dates
through 2020. Minimum future rental revenues from leases in effect at December
31, 2001, determined without regard to renewal options, are summarized as
follows:

Year Ending Amount
December 31, (In thousands)
------------ ---------------
2002 $ 95,691
2003 77,455
2004 59,162
2005 46,404
2006 35,531
Subsequent Years 93,771
------
Total $408,014
========

The above minimum future rental revenue does not include contingent rentals
that may be received under provisions of the lease agreements. Of the total
rental revenues recorded by the Company, contingent rentals amounted to
$10,510,000, $10,415,000 and $9,638,000 for the years 2001, 2000, and 1999,
respectively.

At December 31, 2001, annualized rental revenues totaled approximately
$16,262,000 (15.7 percent) and $14,016,000 (13.5 percent), respectively, for the
United States of America and the State of Florida, when all of their departments
and agencies which lease space in the Company's buildings were combined.

5. STOCK OPTIONS AND RIGHTS.

1988 Stock Option Plan. The Company's Amended and Restated 1988 Stock
Option Plan (the "1988 Plan") provided for the granting of options to purchase
up to 500,000 shares of its common stock to key employees of the Company and its
subsidiaries. To exercise the option, payment of the option price is required
before the option shares are delivered. These options expire seven years from
the date of grant and are generally exercisable beginning one year from the date
of the grant at the rate of 20 percent per annum of the shares covered by each
option on a cumulative basis, being fully exercisable five years after the date
of grant. In accordance with the terms of the 1988 Plan, additional options
cannot be granted after ten years from the date of adoption of this plan.


35



1993 Stock Option Plan. The Company's 1993 Stock Option Plan (the "1993
Plan") provides for the granting of options to purchase up to 1,000,000 shares
of its common stock to key employees of the Company and its affiliates. To
exercise the option, payment of the option price is required before the option
shares are delivered. These options expire ten years from the date of grant and
are generally exercisable beginning one year from the date of the grant at the
rate of 20 percent per annum of the shares covered by each option on a
cumulative basis, being fully exercisable five years after the date of grant.

1996 Stock Option Plan. The Company's 1996 Stock Option Plan (the "1996
Plan") provides for the granting of options to purchase up to 650,000 shares of
its common stock to key employees of the Company. To exercise the option,
payment of the option price is required before the option shares are delivered.
These options expire ten years from the date of grant and are exercisable
beginning one year from the date of the grant at the rate of 20 percent per
annum of the shares covered by each option on a cumulative basis, being fully
exercisable five years after the date of grant.

1998 Equity and Cash Incentive Plan. The Company's 1998 Equity and Cash
Incentive Plan (the "1998 Plan") provides for the issuance of up to 2,000,000
shares of its common stock pursuant to the grant of awards under this plan which
may include stock options, stock appreciation rights, restricted stock,
unrestricted stock, deferred stock and performance awards (in cash or stock or
combinations thereof). Options granted pursuant to the 1998 Plan would expire
ten years from the date of grant.

Information Concerning Options Granted. Substantially all of the options
granted have been granted with an exercise price equal to the market value at
the date of grant. If compensation cost for stock option grants had been
determined based on the fair value at the grant dates for 2001, 2000 and 1999
consistent with the method prescribed by SFAS No. 123, the Company's net
earnings and earnings per share would have been adjusted to the pro forma
amounts indicated below:



2001 2000 1999
---------------- ---------------- ---------------


Net income - As reported $73,223,000 $27,153,000 $36,586,000
- Pro forma $71,722,000 $24,938,000 $35,208,000
Diluted earnings per share - As reported $2.75 $1.01 $1.35
- Pro forma $2.70 $0.92 $1.30



Under SFAS No. 123, the fair value of each option grant is estimated on the
date of grant using the binomial option-pricing model with the following
weighted average assumptions used for grants in 2001, 2000 and 1999:



2001 2000 1999
----------- ------------ ---------------

1993 Plan, 1996 Plan, 1998 Plan and Other
Dividend yield - 8.00% -
Expected volatility - 28.02% -
Risk-free interest rates - 6.62% -
Expected lives (months) - 82 -





36




A summary of the status of fixed stock option grants as of December 31,
2001, 2000 and 1999, and changes during the years ending on those dates is
presented below:



2001 2000 1999
----------------------- --------------------------- -----------------------
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Options Price Options Price Options Price
---------- ---------- ------------ ------------- --------- --------


Outstanding - beginning of year 2,883,834 $17.28 2,257,293 $15.97 2,514,721 $15.68
Granted - - 1,746,000 16.57 - -
Exercised (103,981) 13.21 (824,707) 11.40 (174,571) 10.74
Expired - - - - - -
Forfeited (262,576) 17.94 (294,752) 19.52 (82,857) 18.17
---------- ---------- ----------
Outstanding - end of year 2,517,277 $17.37 2,883,834 $17.28 2,257,293 $15.97
========= ====== ========= ====== ========= ======


The weighted average fair value of options granted during 2000 was $3.15.
There were no options granted during 2001 and 1999.

The following table summarizes information about fixed stock options
outstanding at December 31, 2001:



Exercise Options Options Weighted Average
Price Outstanding Exercisable Remaining Life
-------- ----------- ----------- ----------------
(Months)


$ 7.5000 15,200 15,200 38
7.6250 40,533 40,533 27
11.5000 73,350 73,350 42
15.3750 132,400 132,400 59
15.8750 44,500 8,900 98
16.0625 1,000,000 333,333 98
17.5625 600,000 199,998 102
19.1250 5,000 4,000 68
19.8125 74,294 74,294 67
20.0000 102,000 61,200 80
21.2500 25,000 25,000 77
21.8750 280,000 280,000 74
22.8125 125,000 125,000 74
--------- ---------
2,517,277 1,373,208 88
========= ========= ==



Remaining non-exercisable options as of December 31, 2001 become
exercisable as follows:

Number
Year of Options
---- ----------
2002 563,634
2003 562,635
2004 8,900
2005 8,900
---------
1,144,069
=========

Shareholder Rights Plan. Pursuant to a Shareholder Rights Plan (the "Rights
Plan"), on September 30, 1990, the Board of Directors of the Company declared a
dividend of one common stock purchase right (the "Rights") for each outstanding
share of common stock of the Company. Under the terms of the Rights Plan, the
rights which were distributed to the shareholders of record on October 11, 1990,
trade together with the Company's Shares and are not exercisable until the
occurrence of certain events (none of which have occurred through December 31,
2001), including acquisition of, or commencement of a tender offer for, 15
percent or more of the Company's common stock. In such event, each right
entitles its holder (other than the acquiring person or bidder) to acquire
additional shares of the Company's common stock at a 50 percent discount from
the market price. The rights are redeemable under circumstances as specified in
the Rights Plan. The Rights Plan was amended effective October 10, 1996 for
Apollo and its affiliates. See Note 2 for further discussion of this amendment.
Pursuant to an amendment to the Common Stock Rights Agreement dated as of August
17, 2000, the Rights have been extended ten years, through September 30, 2010.

37




6. STOCK INVESTMENT PLAN.

The Company has a stock investment plan (the "SIP") which provides for
regular purchases of the Company's Shares by all employees and directors. The
SIP provides for monthly payroll and directors' fees deductions up to $1,700 per
month with the Company making monthly contributions for the account of each
participant as follows: (i) 25 percent of amounts up to $50; (ii) 20 percent of
amounts between $50 and $100; and (iii) 15 percent of amounts between $100 and
$1,700, which amounts are used by an unaffiliated Administrator to purchase
Shares from the Company.

The Company has reserved a total of 200,000 Shares for issuance under the
SIP. The Company's contribution and the expenses incurred in administering the
SIP totaled approximately $37,300, $50,500 and $54,700 for 2001, 2000 and 1999,
respectively. Through December 31, 2001, 157,152 Shares have been issued under
the SIP.

7. EMPLOYEE BENEFIT PLANS.

The Company has a 401(k) plan (the "401(k) Plan") which permits
contributions by employees. For 1999, the Company's Board of Directors approved
a Company contribution to the 401(k) Plan in the form of the Company's Shares
(15,557 Shares which had a value of approximately $262,000 on December 31,
1999). The contribution for 1999 was made during February 2000. For 2000 and
2001, the Company's Board of Directors approved cash contributions to the 401(k)
Plan which totaled $182,000 and $167,000, respectively.

The Company has a supplemental executive retirement plan (the "SERP"), an
unfunded defined benefit plan. The purpose of the SERP is to facilitate the
retirement of select key executive employees by supplementing their benefits
under the Company's 401(k) Plan. The benefits are based on years of service and
the employee's average base salary during the last three calendar years of
employment. The SERP was curtailed during 2000 when as part of the corporate
reorganization 12 of the 13 active participants terminated employment with the
Company. SERP benefits were settled, via single cash payments, for 9 of these 12
individuals. Currently, there are four retired participants (all receiving
monthly benefits) and one active participant in the SERP. Net periodic pension
cost for the SERP for 2001, 2000 and 1999 was as follows (in thousands):



2001 2000 1999
----- ------- -----


Service cost $ 13 $ 47 $ 182
Interest cost 279 433 481
Amortization of unrecognized prior service cost 76 257 418
Amortization of unrecognized net loss - 4 39
------ -------- ---------
Net periodic benefit cost 368 741 1,120
Curtailment - unrecognized prior service
cost acceleration - 2,512 -
Curtailment gain - (586) -
Termination benefit cost - 1,128 -
------ -------- ---------
Total Cost $368 $3,795 $1,120
==== ====== ======




38




Assumptions used in the computation of net periodic pension cost for the
SERP were as follows:



2001 2000 1999
---- ---- ----

Discount rate 6.5% 7.5% 7.5%
Rate of increase in salary levels 5.0% 5.0% 5.0%



The following table provides a reconciliation of benefit obligations, the
status of the unfunded SERP and the amounts included in accrued
liabilities-other in the Consolidated Balance Sheet at December 31, 2001 and
2000 (in thousands):




2001 2000
----- ------


Change in benefit obligation
Benefit obligation at beginning of year (KE and KRSI for 2001) $4,061 $6,981
Service cost 13 47
Interest cost 279 433
Amendments 0 0
Actuarial (gain)/loss 407 (1,503)
Benefits paid (614) (3,317)
Termination benefit cost 0 1,129
-------- -------
Benefit obligation at end of year 4,146 3,770
-------- -------

Change in plan assets
Fair value of plan assets at beginning of year 0 0
Expected return on plan assets 0 0
Employer contribution 614 3,317
Benefits paid (614) (3,317)
-------- -------
Fair value of plan assets at end of year 0 0
-------- -------

Funded status (4,146) (3,770)
Unrecognized prior service cost 657 616
Unrecognized actuarial loss 407 0
--------- -----------
Net amount recognized $(3,082) $(3,154)
======= =======

Amounts recognized in the statement of financial
position consist of:
Accrued benefit liability $(3,082) $(3,154)
Additional minimum liability (577) (470)
Intangible asset 577 470
--------- ---------
Net amount recognized $(3,082) $(3,154)
======= =======



8. DIVIDENDS.

During 2001, 2000 and 1999, the Company paid a total of $1.40, $1.40 and
$1.30 per share of regular dividends, respectively. In addition on January 15,
2002, the Company paid a capital gain distribution in the form of a special
dividend of $1.74 per share to shareholders of record on December 28, 2001. For
tax purposes, this special dividend will be treated as if it was paid in 2001.
For income tax purposes, the components of the dividends paid during 2001 are as
follows:



39







Unrecaptured Qualified
Section 1250 Five Year
Payment Date Ordinary Income Return of Capital Gain (25%) Gain
--------------------- --------------- ----------------- -------------- -----------


February 1, 2001 $0.350 - - -
May 3, 2001 0.350 - - -
August 2, 2001 0.350 - - -
November 1, 2001 0.350 - - -
January 15, 2002 0.002 - $1.603 $0.135
-------- ----- ------ ------
$1.402 - $1.603 $0.135
======== ===== ====== ======



The Company intends that the quarterly dividend payout in the last quarter
of each year will be adjusted to reflect the distribution of at least 90 percent
of the Company's REIT taxable income as required by the Federal income tax laws.
The Company's secured revolving credit facility requires the Company to maintain
certain financial ratios, which includes a limitation on dividends. During
November 2001, the Company's Board of Directors declared a quarterly dividend of
$0.35 per share payable on February 7, 2002, to shareholders of record on
December 31, 2001.

9. FEDERAL INCOME TAXES.

The Company is operated in a manner so as to qualify and has elected tax
treatment as a REIT. As a REIT, the Company is required to distribute to
shareholders at least 90 percent of REIT taxable income. For the three years in
the period ended December 31, 2001, the Company has paid out dividends in
amounts at least equal to its REIT taxable income. For the year ended December
31, 2001, the Company's taxable income prior to the dividends paid deduction was
approximately $37,573,000 (which equals the Company's 2001 dividends paid
deduction). The Company's taxable income prior to the dividends paid deduction
for the years ended December 31, 2000 and 1999 was approximately $26,393,000 and
$34,661,000, respectively. The difference between net income for financial
reporting purposes and taxable income results primarily from different methods
of accounting for bad debts, depreciable lives related to the properties owned,
advance rents received and net operating loss carryforwards. At December 31,
2001, the net book basis of the Company's assets and liabilities exceeded the
net tax basis of assets and liabilities in the amount of approximately $33.4
million.

The following table reconciles the Company's net income to REIT taxable
income (which excludes non-REIT operations) for the year ended December 31, 2001
(in thousands):







2001
Estimate 2000 1999
--------- --------- --------
Net Income $73,223 $27,153 $36,586
Less: Net income of taxable REIT Subsidiary (651) 0 0
--------- --------- --------
Net income from REIT operations 72,572 27,153 36,586
Add: Book depreciation and amortization 35,954 35,133 32,314
Less: Tax depreciation and amortization (27,314) (28,537) (27,484)
Book/tax difference on gains from capital transactions (2,416) (1,503) (2,676)
Other book/tax differences, net (2,178) (5,853) (1,540)
--------- --------- --------
Taxable income before adjustments 76,618 26,393 37,200
Less: Capital gains distributions (36,728) 0 0
--------- --------- --------
Taxable ordinary income before adjustments 39,890 26,393 37,200
Less: Net operating loss carryforward (2,317) 0 (2,539)
--------- --------- --------
Adjusted taxable income subject to 90 percent dividend requirement $37,573 $26,393 $34,661
======= ======= =======




40


The Company utilized approximately $2,539,000 of net operating loss
carryforwards to reduce REIT taxable income for 1999. The Company's net
operating loss carryforward available to offset REIT taxable income for 2001 is
approximately $2,414,000. The use of net operating loss carryforwards and other
tax attributes by the Company is subject to certain limitations imposed by
Internal Revenue Code Sections 382 and 383. These limitations apply to both
regular and alternative minimum taxes. These net operating loss carryforwards
and other tax attributes can be used in varying degrees to offset REIT taxable
income or tax through 2007. For 2000 and 1999, the Company incurred alternative
minimum taxes of approximately $0 and $508,000, respectively, and recorded a
provision for alternative minimum taxes of approximately $340,000 for 2001. KRSI
is subject to Federal, state and local income taxes. During 2001, KRSI recorded
a provision for Federal income tax of $323,000.

10. COMMITMENTS AND CONTINGENCIES.

At December 31, 2001, the Company had no material commitments for the
construction of buildings or for improvements to existing buildings.

Certain stock option agreements, which granted options to purchase 1.6
million shares of the Company's common stock, contain provisions providing for
amounts to be placed in escrow equal to any extraordinary dividend or other
extraordinary distribution paid to the Company's shareholders as if the 1.6
million options had been exercised immediately prior to the declaration of such
distribution. The Company paid a special distribution of $1.74 per share on
January 15, 2002. If the closing price of the Company's common stock equals or
exceeds $14.3225 on at least 60 days during the period from September 1, 2002 to
December 31, 2002, then $1.74 million will be accrued as compensation expense in
2002 related to one million options.

11. SUBSEQUENT EVENTS (UNAUDITED).

During January 2002, the Company acquired the 999,710 limited partnership
units in KVP for approximately $16.5 million. On January 31, 2002, the Company
acquired a 31-story office building, containing approximately 806,000 rentable
square feet, located in Atlanta's Central Perimeter submarket for $125 million.
This purchase was funded with cash and by drawing $80 million under the
Company's secured revolving credit facility.

12. INTERIM FINANCIAL INFORMATION (UNAUDITED).

Selected quarterly information for the two years in the period ended
December 31, 2001 is presented below (in thousands except per share amounts):





Total Diluted
Rental Total Net Earnings
Quarters Ended Revenues Revenues Income Per Share
-------------- -------- -------- ------ ----------


March 31, 2000 (1) $41,406 $41,802 $ 5,355 $ .20
June 30, 2000 (2) 42,131 42,796 5,840 .22
September 30, 2000 (3) 40,750 41,774 9,346 .35
December 31, 2000 (4) 40,446 41,502 6,612 .25
March 31, 2001 41,591 43,013 8,625 .32
June 30, 2001 41,628 43,185 8,713 .32
September 30, 2001 42,243 43,471 8,006 .30
December 31, 2001 (5) 40,161 40,891 47,879 1.86


(1) The results for the quarter ended March 31, 2000 were affected by
certain non-recurring charges, which totaled $3,510.

(2) The results for the quarter ended June 30, 2000 were affected by
corporate reorganization costs, which totaled $7,180, and by a
gain on the sale or disposition of assets, which totaled $4,404.



41


(3) The results for the quarter ended September 30, 2000 were
affected by a gain on the sale or disposition of assets, which
totaled $2,033.

(4) The results for the quarter ended December 31, 2000 were affected
by corporate reorganization costs, which totaled $2,095.

(5) The results for the quarter ended December 31, 2001 were affected
by a gain on the sale of assets, which totaled $39,189.



42






SCHEDULE II


KOGER EQUITY, INC. AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR THE THREE YEARS ENDED DECEMBER 31, 2001
(In Thousands)





Additions
-----------------------
Balance at Charged to Charged to Balance at
beginning of costs and other end of
Description period expenses accounts Deductions period
- ---------------------------------------- ------------ ---------- ---------- ---------- ----------

2001
Allowance for uncollectible accounts $ 584 $ 1,448 $ 0 $ 918(a) $ 1,114
======== ======== ======== ======= ======
Valuation allowance - land held for sale $ 74 $ 0 $ 0 $ 0 $ 74
========= ======== ======== ======= =======

2000
Allowance for uncollectible accounts $ 440 $ 721 $ 0 $ 577(a) $ 584
======== ======== ======== ======= =======
Valuation allowance - land held for sale $ 279 $ 0 $ 0 $ 205(b) $ 74
======== ======== ======== ======= =======

1999
Allowance for uncollectible accounts $ 436 $ 349 $ 0 $ 345(a) $ 440
======== ======== ======== ======= =======
Valuation allowance - land held for sale $ 279 $ 0 $ 0 $ 0 $ 279
======== ======== ======== ======= =======



(a) Receivable balances which were determined to be uncollectible and
written-off in the applicable year.

(b) Land parcel was sold for which valuation allowance had been recorded.




43




Schedule III

KOGER EQUITY, INC. AND SUBSIDIARIES
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2001
(in thousands)




COSTS CAPITALIZED
SUBSEQUENT
TO ACQUISITION
INITIAL COST ------------- TOTAL COST
--------------- CARRY- ---------------------- (d) (a)
BLDGS & IMPROVE- ING BLDGS & (b)(c) ACCUM MORT- DATE DEPRECIABLE
CENTER/LOCATION LAND IMPROV. MENTS COSTS LAND IMPROV. TOTAL DEPR. GAGES ACQUIRED LIFE
- --------------- -------- ------- ------ ------ ---- ------- ------- ------- ---------- -------- --------

OPERATING REAL ESTATE:
ATLANTA CHAMBLEE $14,667 $ 68,712 $17,457 $0 $14,667 $86,169 $100,836 $ 26,554 $ 0 1988 - 2000 3 - 40 YRS.
ATLANTA GWINNETT 3,100 21,392 2,952 0 3,100 24,344 27,444 2,729 10,693 1993 - 2000 3 - 39 YRS.
ATLANTA PERIMETER 2,785 18,407 984 0 2,785 19,391 22,176 2,410 7,201 1997 3 - 39 YRS.
CHARLOTTE UNIVERSITY 3,132 20,007 (5) 0 3,132 20,002 23,134 1,112 0 1999 3 - 39 YRS.
CHARLOTTE VANGUARD 5,136 48,019 2,475 0 5,136 50,494 55,630 4,495 21,012(e) 1998 3 - 40 YRS.
JACKSONVILLE BAYMEADOWS 10,514 39,250 3,012 0 10,514 42,262 52,776 8,064 33,733 1993 - 1998 3 - 40 YRS.
JACKSONVILLE JTB 5,554 35,151 3,131 0 5,554 38,282 43,836 2,910 17,414 1997 - 2001 3 - 39 YRS.
MEMPHIS GERMANTOWN 8,472 38,559 6,274 0 8,472 44,833 53,305 11,540 24,269 1988 - 2000 3 - 40 YRS.
ORLANDO CENTRAL 8,092 29,825 11,855 0 8,092 41,680 49,772 16,384 26,335 1988 - 1993 3 - 40 YRS.
ORLANDO LAKE MARY 5,506 35,523 26 0 5,506 35,549 41,055 1,980 12,778 1999 3 - 39 YRS.
ORLANDO UNIVERSITY 5,780 27,063 4,721 0 5,780 31,784 37,564 5,752 20,657 1990 - 2001 3 - 40 YRS.
RICHMOND PARAGON 1,422 15,144 1,480 0 1,422 16,624 18,046 2,114 7,903 1998 3 - 39 YRS.
ST. PETERSBURG 7,135 36,020 9,975 0 7,135 45,995 53,130 13,539 27,779 1988 - 2000 3 - 40 YRS.
TALLAHASSEE 10,624 59,536 11,152 0 10,624 70,688 81,312 22,755 38,909 1988 - 1997 3 - 40 YRS.
------------------------- -- ----------------- -------- --------- ----------
SUBTOTALS 91,919 492,608 75,489 0 91,919 568,097 660,016 122,338 248,683
FURNITURE & EQUIPMENT 0 3,082 0 0 0 3,082 3,082 1,661 0 3 - 15 YRS.
IMPROVEMENTS IN PROGRESS 0 0 188 0 0 188 188 0 0
----- ------ ----- -- ----- ------ ------ ------ ------
TOTAL OPERATING
REAL ESTATE 91,919 495,690 75,677 0 91,919 571,367 663,286 123,999 248,683
----- ------ ------ -- ----- ------- ------- ------- --------

UNIMPROVED LAND:
ATLANTA GWINNETT 3,744 0 0 0 3,744 0 3,744 0 0 1993
BIRMINGHAM COLONNADE 4,886 0 0 0 4,886 0 4,886 0 0 1998
CHARLOTTE CARMEL 991 0 0 0 991 0 991 0 0 1993
CHARLOTTE VANGUARD 1,516 0 0 0 1,516 0 1,516 0 0 1998
COLUMBIA SPRING VALLEY 76 0 0 0 76 0 76 0 0 1993
GREENSBORO WENDOVER 680 0 0 0 680 0 680 0 0 1993
GREENVILLE PARK CENTRAL 438 0 0 0 438 0 438 0 0 1997
ORLANDO CENTRAL 817 0 0 0 817 0 817 0 0 1989
ST. PETERSBURG 707 0 0 0 707 0 707 0 0 1993
------------------------- ----------------------------------------------------
TOTAL UNIMPROVED LAND 13,855 0 0 0 13,855 0 13,855 0 0
------- ----------------- --- ------------------------------------------------
TOTAL $105,774 $495,690 $75,677 $0 $105,774 $571,367 $677,141 $123,999 $248,683
======== ======== ======= == ======== ======== ======== ======== =========






44





Schedule III
KOGER EQUITY, INC. AND SUBSIDIARIES
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2001
(in thousands)


(a) At December 31, 2001, the outstanding balance of mortgages payable was
$248,683. In addition, the Company has a secured revolving credit facility
with variable interest rates which is collaterialized by mortgages on a
pool of buildings. At December 31, 2001, the outstanding balance of the
secured revolving credit facility was $0.


(b) Aggregate cost basis for Federal income tax purposes was $679,278 at
December 31, 2001.

(c) Reconciliation of total real estate carrying value for the years ended
December 31, 2001, 2000 and 1999 is as follows:




2001 2000 1999
---------- ---------- ----------


Balance at beginning of year $974,906 $994,919 $935,598
Acquisitions and construction 2,701 16,599 120,564
Improvements 16,073 19,812 25,075
Sale of unimproved land (120) (1,027) (628)
Sale or disposition of operating real estate (316,419) (55,397) (85,690)
---------- ---------- ----------
Balance at close of year $677,141 $974,906 $994,919
======== ======== ========



(d) Reconciliation of accumulated depreciation for the years ended December 31,
2001, 2000 and 1999 is as follows:



2001 2000 1999
---------- ---------- ----------


Balance at beginning of year $155,817 $137,452 $129,682
Depreciation expense:
Operating real estate 32,261 31,720 28,800
Furniture and equipment 496 432 376
Sale or disposition of operating real estate (64,575) (13,787) (21,406)
---------- ---------- ----------
Balance at close of year $123,999 $155,817 $137,452
======== ======== ========


(e) Includes $19,468 of fixed rate debt and $1,544 of variable rate debt.


45




Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

PART III

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information about directors of the Company who are not executive officers
is contained in the Company's Proxy Statement (the "2002 Proxy Statement") and
is incorporated herein by reference.

The following tabulation lists the executive officers of the Company, their
ages and their occupations for the past five years:

Victor A. Hughes, Jr. .............. Chairman of the Board
Thomas J. Crocker................... Chief Executive Officer and Director
Robert E. Onisko.................... Chief Financial Officer
Christopher L. Becker............... Senior Vice President
Thomas C. Brockwell................. Senior Vice President
Drew P. Cunningham.................. Senior Vice President
James L. Stephens................... Vice President and Chief Accounting Officer

Mr. Hughes, age 66, was elected Chairman of the Board on June 21, 1996. He
also served as Chief Executive Officer from June 21, 1996 to February 29, 2000.
He held the position of Chief Financial Officer of the Company from March 31,
1991 to April 1, 1998, and the position of President from August 22, 1995 to
November 14, 1997.

Mr. Crocker, age 48, became Chief Executive Officer of the Company on March
1, 2000, and was elected to the Board of Directors of the Company on February
17, 2000. He previously held the position of Chief Executive Officer of Crocker
Realty Trust, Inc., a private real estate investment trust, from November 1997
to February 29, 2000, and Chief Executive Officer of Crocker & Associate, L.P.,
a private real estate limited partnership, from July 1996 to November 1997. Mr.
Crocker served as Chairman and Chief Executive Officer of Crocker Realty Trust,
Inc., a public real estate investment trust, from July 1, 1995 to June 30, 1996.

Mr. Onisko, age 54, became Chief Financial Officer of the Company on March
1, 2000. He previously held the position of Secretary and Treasurer of Crocker
Realty Trust, Inc., a private real estate investment trust, from November 1997
to February 29, 2000. From July 1996 to November 1997, Mr. Onisko served as
Secretary and Treasurer of Crocker & Associates, L.P., a private real estate
limited partnership. He was Executive Vice President, Chief Financial Officer
and Secretary of Crocker Realty Trust, Inc., a public real estate investment
trust, from July 1, 1995 to June 30, 1996.

Mr. Becker, age 45, has been Senior Vice President of the Company since
June 19, 2000, and previously held the position of Senior Vice President of
Crocker Realty Trust, Inc., a private real estate investment trust from November
1997 to June 2000. Prior to that he was Senior Vice President of Crocker &
Associates, L.P., a private real estate limited partnership, from July 1996 to
November 1997. Mr. Becker served as Senior Vice President of Crocker Realty
Trust, Inc., a public real estate investment trust from July 1, 1995 to June 30,
1996.

Mr. Brockwell, age 38, has been Senior Vice President of the Company since
June 19, 2000. He previously held the position of Vice President of Crocker
Realty Trust, Inc. for the five years prior to employment with the Company.

Mr. Cunningham, age 38, has been Senior Vice President of the Company since
June 19, 2000, and previously held the position of Senior Vice President of
Crocker Realty Trust, Inc., a private real estate investment trust, from
November 1997 to June 2000. Prior to that he was Senior Vice President of
Crocker & Associates, L.P., a private real estate limited partnership, from July
1996 to November 1997. Mr. Cunningham served as Senior Vice President of Crocker
Realty Trust, Inc., a public real estate investment trust from July 1, 1995 to
June 30, 1996.



46




Mr. Stephens, age 44, has been Vice President of the Company since May 7,
1996, and was the Treasurer of the Company from March 31, 1991 to May 7, 1996.
He has served as Chief Accounting Officer of the Company since March 31, 1991.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires that the
Company's directors and executive officers file with the Securities and Exchange
Commission (the "SEC") and the New York Stock Exchange initial reports of
ownership and reports of changes in ownership of the Company's equity
securities. Executive officers and directors are required by regulations of the
SEC to furnish the Company with copies of all Section 16(a) forms they file.

To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 2001, the
Company's executive officers and directors complied with all Section 16(a)
filing requirements.

Item 11. EXECUTIVE COMPENSATION

Information regarding executive compensation is incorporated by reference
to the section headed "Compensation of Executive Officers" in the 2002 Proxy
Statement (except for information contained under the headings "Report on
Executive Compensation for 2001 by the Compensation Committee" and "Shareholder
Return Performance Presentation").

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The stock ownership of each person known to the Company to be the
beneficial owner of more than five percent (5%) of its outstanding common stock
is incorporated by reference to the section headed "Information About Koger
Equity Common Stock Ownership" of the 2002 Proxy Statement. The beneficial
ownership of common stock of all directors of the Company is incorporated by
reference to the section headed "Election of Directors" contained in the 2002
Proxy Statement.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Reference is made to Item 1. "Business," 2. "Properties," 7. "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
Note 2 "Transactions With Related Parties" to the Notes to Consolidated
Financial Statements contained in this Report and to the heading "Certain
Relationships and Transactions" contained in the 2002 Proxy Statement for
information regarding certain relationships and related transactions which
information is incorporated herein by reference.


47



PART IV

Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)(1) See "Item 8 - Financial Statements and Supplementary Data - Index to
Consolidated Financial Statements and Financial Statement Schedules"
for a list of the financial statements included in this report.

(2) The consolidated supplemental financial statement schedules required
by Regulation S-X are included on pages 43 through 45 in this Form.

(b) Reports on Form 8-K:
On November 9, 2001, the Company filed a Form 8-K (dated November 7,
2001) reporting under Item 9, Regulation FD Disclosure, the
announcement of its quarterly and nine months results for the period
ended September 30, 2001, and providing under Item 7, Financial
Statements and Exhibits, the Koger Equity, Inc. News Release, dated
November 7, 2001, and related Supplemental Information, dated
September 30, 2001.

On December 19, 2001, the Company filed a Form 8-K (dated December
17, 2001) reporting under Item 9, Regulation FD Disclosure, the
announcement that its Board of Directors had declared a capital gain
distribution and providing under Item 7, Financial Statements and
Exhibits, the Koger Equity, Inc. News Release dated December 17,
2001.

On December 20, 2001, the Company filed a Form 8-K (dated December
12, 2001) reporting under Item 2, Acquisition or Disposition of
Assets, the sale of select non-core assets and providing under Item
7, Financial Statements and Exhibits, unaudited pro forma financial
statements for the disposition.

(c) The following exhibits are filed as part of this report:

Exhibit
Number Description

1 Underwriting Agreement dated December 12, 1997, between Koger
Equity, Inc. and J.P. Morgan Securities, Inc., Bear Stearns and
Company, Inc. and BT Alex Brown Incorporated, as Representatives of
the several underwriters. Incorporated by reference to Exhibit 1 of
the Form 8-K, dated December 12, 1997, filed by the Registrant on
December 15, 1997 (File No. 1-9997).

1(a) Underwriting Agreement dated March 24, 1998, between Koger Equity,
Inc. and Wheat, First Securities, Inc. Incorporated by reference to
Exhibit 1 of the Form 8-K, dated March 24, 1998, filed by the
Registrant on March 30, 1998 (File No. 1-9997).

2 Agreement and Plan of Merger, dated as of December 21, 1993 between
the Company and Koger Properties, Inc. Incorporated by reference to
Exhibit 2 of Form 10-K filed by the Registrant for the period ended
December 31, 1993 (File No. 1-9997).

3(a) Articles of Amendment and Restatement of Articles of Incorporation
of Koger Equity, Inc., dated May 18, 2000. Incorporated by reference
to Exhibit 3(a) of the Form 10-Q filed by the Registration for the
quarter ended September 30, 2000 (File No. 1-9997).

3(b) Koger Equity, Inc. By Laws, as Amended and Restated on February 17,
2000. Incorporated by reference to Exhibit 3(b) of the Form 10-Q
filed by the Registrant for the quarter ended September 30, 2000
(File No. 1-9997).

4(a) Common Stock Certificate of Koger Equity, Inc. Incorporated by
reference to Exhibit 4(a) of the Form 10-Q filed by the Registrant
for the quarter ended June 30, 2001 (File No. 1-9997).



48



Exhibit
Number Description
- ------- --------------------------------------------------------------------
4(b)(1)(A) Koger Equity, Inc. Rights Agreement (the "Rights Agreement") dated
as of September 30, 1990 between the Company and Wachovia Bank and
Trust Company, N.A. as Rights Agent ("Wachovia"). Incorporated by
reference to Exhibit 1 to a Registration Statement on Form 8-A,
dated October 3, 1990 (File No. 1-9997).

4(b)(1)(B) First Amendment to the Rights Agreement, dated as of March 22, 1993,
between the Company and First Union National Bank of North Carolina,
as Rights Agent ("First Union"), entered into for the purpose of
replacing Wachovia. Incorporated by reference to Exhibit 4(b)(4) of
the Form 10-Q filed by the Registrant for the quarter ended March
31, 1993 (File No. 1-9997).

4(b)(1)(C) Second Amendment to the Rights Agreement, dated as of December 21,
1993, between the Company and First Union. Incorporated by reference
to Exhibit 5 to an Amendment on Form 8-A/A, dated December 21, 1993,
to a Registration Statement of the Registrant on Form 8-A, dated
October 3, 1990 (File No. 1-9997).

4(b)(1)(D) Third Amendment to Rights Agreement, dated as of October 10, 1996,
between Koger Equity, Inc. and First Union. Incorporated by
reference to Exhibit 6 to an Amendment on Form 8-A/A, dated November
7, 1996, to a Registration Statement of the Registrant on Form 8-A,
dated October 3, 1990 (File No. 1-9997).

4(b)(1)(E) Fourth Amendment to Rights Agreement, dated as of February 27, 1997,
between Koger Equity, Inc. and First Union. Incorporated by
reference to Exhibit 8 to an Amendment on Form 8-A/A, dated March
17, 1997, to a Registration Statement of the Registrant on Form 8-A,
dated October 3, 1990 (File No. 1-9997).

4(b)(1)(F) Fifth Amendment to Rights Agreement, dated as of November 23, 1999,
between Koger Equity, Inc. and Norwest Bank Minnesota, National
Association, as successor Rights Agent. Incorporated by reference to
Exhibit 11 to an Amendment on Form 8-A/A, dated November 23, 1999,
to a Registration Statement of the Registrant on Form 8-A, dated
October 3, 1990 (File No. 1-9997).

4(b)(1)(G) Sixth Amendment to Rights Agreement, dated as of August 17, 2000,
between Koger Equity, Inc. and Wells Fargo Bank Minnesota, N.A., as
successor Rights Agent. Incorporated by reference to Exhibit 4(1) to
an Amendment on Form 8-A/A, dated August 17, 2000, to the
Registration Statement of the Registrant on Form 8-A, dated January
28, 2000 (File No. 1-9997).

4(b)(1)(H) Seventh Amendment to the Rights Agreement between Koger Equity, Inc.
and Wells Fargo Bank Minnesota, N.A., as successor Rights Agent.
Incorporated by reference to Exhibit 4(j) to an Amendment on Form
8-A/A, dated December 21, 2001 (File No. 1-9997).

4(b)(2) Form of Common Stock Purchase Rights Certificate (attached as
Exhibit A to the Rights Agreement). Pursuant to the Rights
Agreement, printed Common Stock Purchase Rights Certificates will
not be mailed until the Distribution Date (as defined in the Rights
Agreement).

4(b)(3) Summary of Common Stock Purchase Rights (attached as Exhibit B to
the Rights Agreement, Exhibit 4(b)(1)(A)).

10(a)(1)(A) Koger Equity, Inc. Amended and Restated 1988 Stock Option Plan.
Incorporated by reference to Exhibit 10(e)(1)(A) of Form 10-Q filed
by the Registrant for the quarter ended June 30, 1992 (File No.
1-9997).

10(a)(1)(B) Form of Stock Option Agreement pursuant to Koger Equity, Inc.
Amended and Restated 1988 Stock Option Plan. Incorporated by
reference to Exhibit 10(e)(2)(A) of Form 10-Q filed by the
Registrant for the quarter ended June 30, 1992 (File No. 1-9997).

10(a)(1)(C) Form of Amendment to Stock Option Agreement pursuant to Koger
Equity, Inc. Amended and Restated 1988 Stock Option Plan.
Incorporated by reference to Exhibit 10(a)(1)(C) of Form 10-K filed
by the Registrant for the period ended December 31, 1996 (File No.
1-9997).

10(a)(2)(A) Koger Equity, Inc. 1993 Stock Option Plan. Incorporated by reference
to Exhibit II to Registrant's Proxy Statement dated June 30, 1993
(File No. 1-9997).


49





Exhibit
Number Description
- ------- --------------------------------------------------------------------
10(a)(2)(B) Form of Stock Option Agreement pursuant to Koger Equity, Inc. 1993
Stock Option Plan. Incorporated by reference to Exhibit 10(e)(3)(B)
of Form 10-K filed by the Registrant for the period ended December
31, 1994 (File No. 1-9997).

10(a)(2)(C) Form of Amendment to Stock Option Agreement pursuant to Koger
Equity, Inc. 1993 Stock Option Plan. Incorporated by reference to
Exhibit 10(a)(2)(C) of Form 10-K filed by the Registrant for the
period ended December 31, 1996 (File No. 1-9997).

10(a)(3)(A) Koger Equity, Inc. 1996 Stock Option Plan. Incorporated by reference
to Exhibit 10(a)(3)(A) of Form 10-K filed by the Registrant for the
period ended December 31, 1996 (File No. 1-9997).

10(a)(3)(B) Form of Stock Option Agreement pursuant to Koger Equity, Inc. 1996
Stock Option Plan. Incorporated by reference to Exhibit 10(a)(3)(B)
of Form 10-K filed by the Registrant for the period ended December
31, 1996 (File No. 1-9997).

10(a)(4) Form of Koger Equity, Inc. Restricted Stock Award effective as of
May 1, 1999. Incorporated by reference to Exhibit 10(a) on Form 10-Q
filed by the Registrant for the quarter ended June 30, 1999 (File
No. 1-9997).

10(a)(5) Koger Equity, Inc. 1998 Equity and Cash Incentive Plan, as Amended
and Restated. Incorporated by reference to Exhibit A to Registrant's
Proxy Statement, dated April 18, 2000 (File No. 1-9997).

10(a)(6) Stock Option Agreement between Koger Equity, Inc. and Thomas J.
Crocker, dated as of February 17, 2000. Incorporated by reference to
Exhibit 10(a)(6) of Form 10-Q filed by the Registrant for the
quarter ended June 30, 2000 (File No. 1-9997).

10(a)(7) Stock Option Agreement between Koger Equity, Inc. and Robert E.
Onisko, dated as of February 17, 2000. Incorporated by reference to
Exhibit 10(b)(6) of Form 10-Q filed by the Registrant for the
quarter ended June 30, 2000 (File No. 1-9997).

10(b) Reserved.

10(c) License Agreement, dated as of July 28, 1995, between Koger Equity,
Inc. and Koger Realty Services, Inc. Incorporated by reference to
Exhibit 10(v) of Form 10-Q filed by the Registrant for the quarter
ended June 30, 1995 (File No. 1-9997).

10(d)(1) Amended and Restated Supplemental Executive Retirement Plan,
effective as of May 20, 1999. Incorporated by reference to Exhibit
10(b) of Form 10-Q filed by the Registrant for the quarter ended
June 30, 1999 (File No. 1-9997).

10(d)(2) Amendment No. 1 to Supplemental Executive Retirement Plan, effective
June 21, 1996. Incorporated by reference to Exhibit 10(d)(2) of Form
10-K filed by the Registrant for the period ended December 31, 1997
(File No. 1-9997).

10(d)(3) Amendment No. 2 to Supplemental Executive Retirement Plan, effective
May 19, 1998. Incorporated by reference to Exhibit 10(d)(3) of Form
10-K filed by the Registrant for the period ended December 31, 1998
(File No. 1-9997).

10(d)(4) Amendment No. 3 to Supplemental Executive Retirement Plan, effective
May 19, 1998. Incorporated by reference to Exhibit 10(d)(4) of the
Form 10-K filed by the Registrant for the period ended December 31,
1998 (File No. 1-9997).

10(e) Form of Indemnification Agreement between Koger Equity, Inc. and its
Directors and certain of its officers. Incorporated by reference to
Exhibit 10(x) of Form 10-K filed by the Registrant for the year
ended December 31, 1995 (File No. 1-9997).

10(f)(1)(A) Amended and Restated Employment Agreement between Koger Equity, Inc.
and Victor A. Hughes, Jr. effective as of April 1, 1998.
Incorporated by reference to Exhibit 10(f)(1) of Form 10-K filed by
the Registrant for the period ended December 31, 1998 (File No.
1-9997).


50





Exhibit
Number Description
- ------- --------------------------------------------------------------------
10(f)(1)(B) Amended and Restated Employment Agreement between Koger Equity, Inc.
and James C. Teagle, effective as of April 1, 1998. Incorporated by
reference to Exhibit 10(f)(2) of Form 10-K filed by the Registrant
for the period ended December 31, 1998 (File No. 1-9997).

10(f)(1)(C) Employment Agreement between Koger Equity, Inc. and David B. Hiley,
effective as of April 1, 1998. Incorporated by reference to Exhibit
10(f)(3) of Form 10-K filed by the Registrant for the period ended
December 31, 1998 (File No. 1-9997).

10(f)(1)(D) Employment Agreement between Koger Equity, Inc. and Thomas J.
Crocker, effective January 17, 2000. Incorporated by reference to
Exhibit 10(a)(1) of Form 10-Q filed by the Registrant for the
quarter ended June 30, 2000 (File No. 1-9997).

10(f)(1)(E) Employment Agreement between Koger Equity, Inc. and Robert E.
Onisko, effective January 17, 2000. Incorporated by reference to
Exhibit 10(b)(1) of Form 10-Q filed by the Registrant for the
quarter ended June 30, 2000 (File No. 1-9997).

10(f)(2)(A) Change of Control Agreement between Koger Equity, Inc. and Victor A.
Hughes, Jr., effective as of May 20, 1999. Incorporated by reference
to Exhibit 10(c) of Form 10-Q filed by the Registrant for the
quarter ended June 30, 1999 (File No. 1-9997).

10(f)(2)(B) Change of Control Agreement between Koger Equity, Inc. and James C.
Teagle, effective as of May 20, 1999. Incorporated by reference to
Exhibit 10(d) of Form 10-Q filed by the Registrant for the quarter
ended June 30, 1999 (File No. 1-9997).

10(f)(2)(C) Change of Control Agreement between Koger Equity, Inc. and David B.
Hiley, effective as of May 20, 1999. Incorporated by reference to
Exhibit 10(e) of Form 10-Q filed by the Registrant for the quarter
ended June 30, 1999 (File No. 1-9997).

10(f)(3)(A) Promissory Note (No Recourse Note), dated as of February 17, 2000,
executed by Thomas J. Crocker as maker in favor of Koger Equity,
Inc. as lender. Incorporated by reference to Exhibit 10(a)(2) of
Form 10-Q filed by the Registrant for the quarter ended June 30,
2000 (File No. 1-9997).

10(f)(3)(B) Promissory Note (25% Recourse Note), dated as of February 17, 2000,
executed by Thomas J. Crocker as maker in favor of Koger Equity,
Inc. as lender. Incorporated by reference to Exhibit 10(a)(3) of
Form 10-Q filed by the Registrant for the quarter ended June 30,
2000 (File No. 1-9997).

10(f)(3)(C) Stock Pledge Security Agreement between Koger Equity, Inc. and
Thomas J. Crocker, dated as of February 17, 2000. Incorporated by
reference to Exhibit 10(a)(4) of Form 10-Q filed by the Registrant
for the quarter ended June 30, 2000 (File No. 1-9997).

10(f)(3)(D) Stock Purchase and Loan Agreement between Thomas J. Crocker and
Koger Equity, Inc., dated as of February 17, 2000. Incorporated by
reference to Exhibit 10(a)(5) of Form 10-Q filed by the Registrant
for the quarter ended June 30, 2000 (File No. 1-9997).

10(f)(4)(A) Promissory Note (No Recourse Note), dated as of February 17, 2000,
executed by Robert E. Onisko as maker in favor of Koger Equity, Inc.
as lender. Incorporated by reference to Exhibit 10(b)(2) of Form
10-Q filed by the Registrant for the quarter ended June 30, 2000
(File No. 1-9997).

10(f)(4)(B) Promissory Note (25% Recourse Note), dated as of February 17, 2000,
executed by Robert E. Onisko as maker in favor of Koger Equity, Inc.
as lender. Incorporated by reference to Exhibit 10(b)(3) of Form
10-Q filed by the Registrant for the quarter ended June 30, 2000
(File No. 1-9997).

10(f)(4)(C) Stock Pledge Security Agreement between Koger Equity, Inc. and
Robert E. Onisko, dated as of February 17, 2000. Incorporated by
reference to Exhibit 10(b)(4) of Form 10-Q filed by the Registrant
for the quarter ended June 30, 2000 (File No. 1-9997).

10(f)(4)(D) Stock Purchase and Loan Agreement between Robert E. Onisko and Koger
Equity, Inc., dated as of February 17, 2000. Incorporated by
reference to Exhibit 10(b)(5) of Form 10-Q filed by the Registrant
for the quarter ended June 30, 2000 (File No. 1-9997).





51


Exhibit
Number Description
- ------- --------------------------------------------------------------------
10(g) Reserved.

10(h)(1)(A) Loan Application, dated July 29, 1996, by Koger Equity, Inc. to The
Northwestern Mutual Life Insurance Company. Incorporated by
reference to Exhibit 10(j)(1) on Form 8-K, dated December 16, 1996,
filed by the Registrant on March 10, 1997 (File No. 1-9997).

10(h)(1)(B) Master Loan Agreement, made as of December 6, 2001, between Koger
Equity, Inc. and The Northwestern Mutual Life Insurance Company.
Incorporated by reference to Exhibit 10(a) on Form 8-K, dated
December 6, 2001, filed by the Registrant on March 21, 2002 (File
No. 1-9997).

10(h)(2)(A) Koger Equity, Inc. Tranche A Promissory Note, dated December 16,
1996, in the principal amount of $100,500,000 payable to The
Northwestern Mutual Life Insurance Company. Incorporated by
reference to Exhibit 10(j)(2)(A) on Form 8-K, dated December 16,
1996, filed by the Registrant on March 10, 1997 (File No. 1-9997).

10(h)(2)(B) Koger Equity, Inc. Tranche B Promissory Note, dated December 16,
1996, in the principal amount of $89,500,000 payable to The
Northwestern Mutual Life Insurance Company. Incorporated by
reference to Exhibit 10(j)(2)(B) on Form 8-K, dated December 16,
1996, filed by the Registrant on March 10, 1997 (File No. 1-9997).

10(h)(2)(C) Koger Equity, Inc. Tranche C Promissory Note, dated September 2,
1999, in the principal amount of $14,700,000 payable to The
Northwestern Mutual Life Insurance Company. Incorporated by
reference to Exhibit 10(j)(6) on Form 8-K, dated September 2, 1999,
filed by the Registrant on November 17, 1999 (File No. 1-9997)

10(h)(2)(D) Koger Equity, Inc. Tranche D Promissory Note, dated September 2,
1999, in the principal amount of $30,300,000 payable to The
Northwestern Mutual Life Insurance Company. Incorporated by
reference to Exhibit 10(j)(7) on Form 8-K, dated September 2, 1999,
filed by the Registrant on November 17, 1999 (File No. 1-9997).

10(h)(2)(E) First Amendment of Tranche B Promissory Note, dated August 11, 2000,
between Koger Equity, Inc. and The Northwestern Mutual Life
Insurance Company. Incorporated by reference to Exhibit 10(j)(2)(E)
of Form 10-Q filed by the Registrant for the quarter ended September
30, 2000 (File No. 1-9997).

10(h)(2)(F) Third Amendment to Tranche A Promissory Note, dated December 6,
2001, between Koger Equity, Inc. and The Northwestern Mutual Life
Insurance Company. Incorporated by reference to Exhibit 10(b) on
Form 8-K, dated December 6, 2001, filed by the Registrant on March
21, 2002 (File No. 1-9997).

10(h)(2)(G) Second Amendment to Tranche B Promissory Note, dated December 6,
2001, between Koger Equity, Inc. and The Northwestern Mutual Life
Insurance Company. Incorporated by reference to Exhibit 10(c) on
Form 8-K, dated December 6, 2001, filed by the Registrant on March
21, 2002 (File No. 1-9997).

10(h)(2)(H) First Amendment to Tranche C Promissory Note, dated December 6,
2001, between Koger Equity, Inc. and The Northwestern Mutual Life
Insurance Company. Incorporated by reference to Exhibit 10(d) on
Form 8-K, dated December 6, 2001, filed by the Registrant on March
21, 2002 (File No. 1-9997).

10(h)(2)(I) First Amendment to Tranche D Promissory Note, dated December 6,
2001, between Koger Equity, Inc. and The Northwestern Mutual Life
Insurance Company. Incorporated by reference to Exhibit 10(e) on
Form 8-K, dated December 6, 2001, filed by the Registrant on March
21, 2002 (File No. 1-9997).



52




Exhibit
Number Description
- ------- --------------------------------------------------------------------
10(h)(3)(A) Master Lien Instrument from Koger Equity, Inc. to The Northwestern
Mutual Life Insurance Company, dated December 16, 1996, (1) with
Mortgage and Security Agreement for Duval, Leon, Orange and Pinellas
Counties, Florida and (2) with Deed of Trust and Security Agreement
for Greenville County, South Carolina, Shelby County, Tennessee and
Bexar, El Paso and Travis Counties, Texas. Incorporated by reference
to Exhibit 10(j)(3)(A) on Form 8-K, dated December 16, 1996, filed
by the Registrant on March 10, 1997 (File No. 1-9997).

10(h)(3)(B) Master Lien Instrument from Koger Equity, Inc. to The Northwestern
Mutual Life Insurance Company, dated September 2, 1999, for Duval,
Leon, Orange and Pinellas Counties, Florida, Greenville County,
South Carolina, Shelby County, Tennessee, and Bexar, El Paso and
Travis Counties, Texas. Incorporated by reference to Exhibit
10(j)(8) on Form 8-K, dated September 2, 1999, filed by the
Registrant on November 17, 1999 (File No. 1-9997).

10(h)(3)(C) Leasehold Deed of Trust and Security Agreement, dated September 2,
1999, between Koger Equity, Inc., and John S. Shoaf, Jr.
("Trustee"), and The Northwestern Mutual Life Insurance Company for
Shelby County, Tennessee. Incorporated by reference to Exhibit
10(j)(9) on Form 8-K, dated September 2, 1999, filed by the
Registrant on November 17, 1999 (File No. 1-9997).

10(h)(3)(D) IDB Deed of Trust and Security Agreement, dated September 2, 1999,
between the Industrial Development Board of the City of Memphis and
County of Shelby, Koger Equity, Inc., and Trustee and The
Northwestern Mutual Life Insurance Company for Shelby County,
Tennessee. Incorporated by reference to Exhibit 10(j)(10) on Form
8-K, dated September 2, 1999, filed by the Registrant on November
17, 1999 (File No. 1-9997).

10(h)(3)(E) Consolidation, Amendment and Restatement of Mortgage and Security
Agreement and Spreader Agreement, dated December 6, 2001, between
Koger Equity, Inc. and The Northwestern Mutual Life Insurance
Company, for Orange County, Florida. Incorporated by reference to
Exhibit 10(h) on Form 8-K, dated December 6, 2001, filed by the
Registrant on March 21, 2002 (File No. 1-9997).

10(h)(3)(F) Consolidation, Amendment and Restatement of Mortgage and Security
Agreement and Spreader Agreement, dated December 6, 2001, between
Koger Equity, Inc. and The Northwestern Mutual Life Insurance
Company, for Pinellas County, Florida. Incorporated by reference to
Exhibit 10(i) on Form 8-K, dated December 6, 2001, filed by the
Registrant on March 21, 2002 (File No. 1-9997).

10(h)(3)(G) Consolidation, Amendment and Restatement of Mortgage and Security
Agreement and Spreader Agreement, dated December 6, 2001, between
Koger Equity, Inc. and The Northwestern Mutual Life Insurance
Company, for Duval County, Florida. Incorporated by reference to
Exhibit 10(j) on Form 8-K, dated December 6, 2001, filed by the
Registrant on March 21, 2002 (File No. 1-9997).

10(h)(3)(H) Consolidation, Amendment and Restatement of Mortgage and Security
Agreement, dated December 6, 2001, between Koger Equity, Inc. and
The Northwestern Mutual Life Insurance Company, for Leon County,
Florida. Incorporated by reference to Exhibit 10(k) on Form 8-K,
dated December 6, 2001, filed by the Registrant on March 21, 2002
(File No. 1-9997).

10(h)(3)(I) Consolidation, Amendment and Restatement of Deed of Trust and
Security Agreement, dated December 6, 2001, between Koger Equity,
Inc. and Robert J. Pinstein ("Trustee"), and The Northwestern Mutual
Life Insurance Company, for Shelby County, Tennessee. Incorporated
by reference to Exhibit 10(l) on Form 8-K, dated December 6, 2001,
filed by the Registrant on March 21, 2002 (File No. 1-9997).

10(h)(3)(J) Amendment and Restatement of IDB Deed of Trust and Security
Agreement, dated December 6, 2001, between The Industrial
Development Board of the City of Memphis and County of Shelby, Koger
Equity, Inc. and Robert J. Pinstein and The Northwestern Mutual Life
Insurance Company, for Shelby County, Tennessee. Incorporated by
reference to Exhibit 10(m) on Form 8-K, dated December 6, 2001,
filed by the Registrant on March 21, 2002 (File No. 1-9997).


53



Exhibit
Number Description
- ------- --------------------------------------------------------------------
10(h)(3)(K) Amendment and Restatement of Leasehold Deed of Trust and Security
Agreement, dated December 6, 2001, between Koger Equity, Inc. and
Robert J. Pinstein, and The Northwestern Mutual Life Insurance
Company, for Shelby County, Tennessee. Incorporated by reference to
Exhibit 10(n) on Form 8-K, dated December 6, 2001, filed by the
Registrant on March 21, 2002 (File No. 1-9997).

10(h)(3)(L) Mortgage and Security Agreement, dated December 6, 2001, between
Koger Equity, Inc. and The Northwestern Mutual Life Insurance
Company, for Seminole County, Florida. Incorporated by reference to
Exhibit 10(o) on Form 8-K, dated December 6, 2001, filed by the
Registrant on March 21, 2002 (File No. 1-9997).

10(h)(3)(M) Deed to Secure Debt and Security Agreement, dated December 6, 2001,
between Koger Equity, Inc. and The Northwestern Mutual Life
Insurance Company, for DeKalb County, Georgia. Incorporated by
reference to Exhibit 10(p) on Form 8-K, dated December 6, 2001,
filed by the Registrant on March 21, 2002 (File No. 1-9997).

10(h)(3)(N) Deed to Secure Debt and Security Agreement, dated December 6, 2001,
between Koger Equity, Inc. and The Northwestern Mutual Life
Insurance Company, for Gwinnett County, Georgia. Incorporated by
reference to Exhibit 10 (q) on Form 8-K, dated December 6, 2001,
filed by the Registrant on March 21, 2002 (File No. 1-9997).

10(h)(4)(A) Environmental Indemnity Agreement, dated December 16, 1996, between
Koger Equity, Inc. and The Northwestern Mutual Life Insurance
Company and others. Incorporated by reference to Exhibit 10(j)(4) on
Form 8-K, dated December 16, 1996, filed by the Registrant on March
10, 1997 (File No. 1-9997).

10(h)(4)(B) Environmental Indemnity Agreement, dated September 2, 1999, between
Koger Equity, Inc. and The Northwestern Mutual Life Insurance
Company and others. Incorporated by reference to Exhibit 10(j)(12)
on Form 8-K, dated September 2, 1999, filed by the Registrant on
November 17, 1999 (File No. 1-9997).

10(h)(4)(C) First Amendment to Environmental Indemnity Agreement, dated December
6, 2001, between Koger Equity, Inc. and The Northwestern Mutual Life
Insurance Company. Incorporated by reference to Exhibit 10(f) on
Form 8-K, dated December 6, 2001, filed by the Registrant on March
21, 2002 (File No. 1-9997).

10(h)(4)(D) Third Amendment to Environmental Indemnity Agreement, dated December
6, 2001, between Koger Equity, Inc. and The Northwestern Mutual Life
Insurance Company. Incorporated by reference to Exhibit 10(g) on
Form 8-K, dated December 6, 2001, filed by the Registrant on March
21, 2002 (File No. 1-9997).

10(h)(5)(A) Certificate of Borrower contained in letter, dated December 16,
1996, from Koger Equity, Inc. to The Northwestern Mutual Life
Insurance Company. Incorporated by reference to Exhibit 10(j)(5) on
Form 8-K, dated December 16, 1996, filed by the Registrant on March
10, 1997 (File No. 1-9997).

10(h)(5)(B) Certificate of Borrower contained in letter, dated September 2,
1999, from Koger Equity, Inc. to The Northwestern Mutual Life
Insurance Company. Incorporated by reference to Exhibit 10(j)(13) on
Form 8-K, dated September 2, 1999, filed by the Registrant on
November 17, 1999 (File No. 1-9997).

10(h)(5)(C) Certification of Borrower, dated December 3, 2001, from Koger
Equity, Inc. to The Northwestern Mutual Life Insurance Company.
Incorporated by reference to Exhibit 10(aa) on Form 8-K, dated
December 6, 2001, filed by the Registrant on March 21, 2002 (File
No. 1-9997).

10(h)(6)(A) Absolute Assignment of Leases and Rents from Koger Equity, Inc. to
The Northwestern Mutual Life Insurance Company, dated December 16,
1996, for Duval, Leon, Orange and Pinellas Counties, Florida,
Greenville County, South Carolina, Shelby County, Tennessee, and
Bexar, El Paso and Travis Counties, Texas. Incorporated by reference
to Exhibit 10(j)(3)(B) on Form 8-K, dated December 16, 1996, filed
by the Registrant on March 10, 1997 (File No. 1-9997).



54


Exhibit
Number Description
- ------- --------------------------------------------------------------------
10(h)(6)(B) Absolute Assignment of Leases and Rents from Koger Equity, Inc. to
The Northwestern Mutual Life Insurance Company, dated September 2,
1999, for Duval, Leon, Orange and Pinellas Counties, Florida,
Greenville County, South Carolina, Shelby County, Tennessee, and
Bexar, El Paso and Travis Counties, Texas. Incorporated by reference
to Exhibit 10(j)(11) on Form 8-K, dated September 2, 1999, filed by
the Registrant on November 17, 1999 (File No. 1-9997).

10(h)(6)(C) Consolidation and Amendment of Absolute Assignment of Leases and
Rents, dated December 6, 2001, between Koger Equity, Inc. and The
Northwestern Mutual Life Insurance Company, for Orange County,
Florida. Incorporated by reference to Exhibit 10(r) on Form 8-K,
dated December 6, 2001, filed by the Registrant on March 21, 2002
(File No. 1-9997).

10(h)(6)(D) Consolidation and Amendment of Absolute Assignment of Leases and
Rents, dated December 6, 2001, between Koger Equity, Inc. and The
Northwestern Mutual Life Insurance Company, for Pinellas County,
Florida. Incorporated by reference to Exhibit 10(s) on Form 8-K,
dated December 6, 2001, filed by the Registrant on March 21, 2002
(File No. 1-9997).

10(h)(6)(E) Consolidation and Amendment of Absolute Assignment of Leases and
Rents, dated December 6, 2001, between Koger Equity, Inc. and The
Northwestern Mutual Life Insurance Company, for Duval County,
Florida. Incorporated by reference to Exhibit 10(t) on Form 8-K,
dated December 6, 2001, filed by the Registrant on March 21, 2002
(File No. 1-9997).

10(h)(6)(F) Consolidation and Amendment of Absolute Assignment of Leases and
Rents, dated December 6, 2001, between Koger Equity, Inc. and The
Northwestern Mutual Life Insurance Company, for Leon County,
Florida. Incorporated by reference to Exhibit 10(u) on Form 8-K,
dated December 6, 2001, filed by the Registrant on March 21, 2002
(File No. 1-9997).

10(h)(6)(G) Consolidation and Amendment of Absolute Assignment of Leases and
Rents, dated December 6, 2001, between Koger Equity, Inc. and The
Northwestern Mutual Life Insurance Company, for Shelby County,
Tennessee. Incorporated by reference to Exhibit 10(v) on Form 8-K,
dated December 6, 2001, filed by the Registrant on March 21, 2002
(File No. 1-9997).

10(h)(6)(H) Absolute Assignment of Leases and Rents, dated December 6, 2001,
between Koger Equity, Inc. and The Northwestern Mutual Life
Insurance Company, for Seminole County, Florida. Incorporated by
reference to Exhibit 10(w) on Form 8-K, dated December 6, 2001,
filed by the Registrant on March 21, 2002 (File No. 1-9997).

10(h)(6)(I) Absolute Assignment of Leases and Rents, dated December 6, 2001,
between Koger Equity, Inc. and The Northwestern Mutual Life
Insurance Company, for DeKalb County, Georgia. Incorporated by
reference to Exhibit 10(x) on Form 8-K, dated December 6, 2001,
filed by the Registrant on March 21, 2002 (File No. 1-9997).

10(h)(6)(J) Absolute Assignment of Leases and Rents, dated December 6, 2001,
between Koger Equity, Inc. and The Northwestern Mutual Life
Insurance Company, for Gwinnett County, Georgia. Incorporated by
reference to Exhibit 10(y) on Form 8-K, dated December 6, 2001,
filed by the Registrant on March 21, 2002 (File No. 1-9997).

10(h)7 Side Letter Regarding Land Use Opinion, dated December 6, 2001, from
Koger Equity, Inc. to The Northwestern Mutual Life Insurance
Company. Incorporated by reference to Exhibit 10(z) on Form 8-K,
dated December 6, 2001, filed by the Registrant on March 21, 2002
(File No. 1-9997).

10(i)(1) The Revolving Credit Loan Agreement dated as of December 28, 2001
among Koger Equity, Inc. and Fleet National Bank, as Arranger and
Administrative Agent, and Wells Fargo Bank, National Association, as
Syndication Agent, and The Lenders Party Hereto. Incorporated by
reference to Exhibit 10(a)(1) on Form 8-K, dated December 28, 2001,
filed by the Registrant on February 28, 2002 (File No. 1-9997).

10(i)(2)(A) The Revolving Credit Note dated January 8, 2002 issued by Koger
Equity, Inc. to Fleet National Bank in the principal amount of up to
$55,000,000. Incorporated by reference to Exhibit 10(a)(2)(A) on
Form 8-K, dated December 28, 2001, filed by the Registrant on
February 28, 2002 (File No. 1-9997).


55




Exhibit
Number Description
- ------- --------------------------------------------------------------------
10(i)(2)(B) The Revolving Credit Note dated December 28, 2001 issued by Koger
Equity, Inc. to Wells Fargo Bank, National Association, in the
principal amount of up to $40,000,000. Incorporated by reference to
Exhibit 10(a)(2)(B) on Form 8-K, dated December 28, 2001, filed by
the Registrant on February 28, 2002 (File No. 1-9997).

10(i)(2)(C) The Revolving Credit Note dated December 28, 2001 issued by Koger
Equity, Inc. to Compass Bank, an Alabama banking corporation, in the
principal amount of up to $20,000,000. Incorporated by reference to
Exhibit 10(a)(2)(C) on Form 8-K, dated December 28, 2001, filed by
the Registrant on February 28, 2002 (File No. 1-9997).

10(i)(2)(D) The Revolving Credit Note dated January 8, 2002 issued by Koger
Equity, Inc. to Comerica Bank in the principal amount of up to
$10,000,000. Incorporated by reference to Exhibit 10(a)(2)(D) on
Form 8-K, dated December 28, 2001, filed by the Registrant on
February 28, 2002 (File No. 1-9997).

10(i)(2)(E) The Swingline Note dated December 28, 2001 issued by Koger Equity,
Inc. to Fleet National Bank in the principal amount of up to
$2,500,000. Incorporated by reference to Exhibit 10(a)(2)(E) on Form
8-K, dated December 28, 2001, filed by the Registrant on February
28, 2002 (File No. 1-9997).

10(i)(3)(A) The Deed to Secure Debt and Security Agreement dated as of December
28, 2001 relating to that portion of the Collateral located in the
State of Georgia granted by Koger Equity, Inc. to, and in favor of,
the Lenders. Incorporated by reference to Exhibit 10(a)(3)(A) on
Form 8-K, dated December 28, 2001, filed by the Registrant on
February 28, 2002 (File No. 1-9997).

10(i)(3)(B) The Deed of Trust and Security Agreement dated as of December 28,
2001 relating to that portion of the Collateral located in the State
of North Carolina granted by Koger Equity, Inc. to, and in favor of,
the Lenders. Incorporated by reference to Exhibit 10(a)(3)(B) on
Form 8-K, dated December 28, 2001, filed by the Registrant on
February 28, 2002 (File No. 1-9997).

10(i)(3)(C) The Mortgage and Security Agreement dated as of December 28, 2001
relating to that portion of the Collateral located in the State of
Florida granted by Koger Equity, Inc. to, and in favor of, the
Lenders. Incorporated by reference to Exhibit 10(a)(3)(C) on Form
8-K, dated December 28, 2001, filed by the Registrant on February
28, 2002 (File No. 1-9997).

10(i)(4)(A) The Assignment of Leases and Rents dated as of December 28, 2001
relating to that portion of the Collateral located in the State of
Georgia granted by Koger Equity, Inc. to, and in favor of, the
Lenders. Incorporated by reference to Exhibit 10(a)(4)(A) on Form
8-K, dated December 28, 2001, filed by the Registrant on February
28, 2002 (File No. 1-9997).

10(i)(4)(B) The Assignment of Leases and Rents dated as of December 28, 2001
relating to that portion of the Collateral located in the State of
North Carolina granted by Koger Equity, Inc. to, and in favor of,
the Lenders. Incorporated by reference to Exhibit 10(a)(4)(B) on
Form 8-K, dated December 28, 2001, filed by the Registrant on
February 28, 2002 (File No. 1-9997).

10(i)(4)(C) The Assignment of Leases and Rents dated as of December 28, 2001
relating to that portion of the Collateral located in the State of
Florida granted by Koger Equity, Inc. to, and in favor of, the
Lenders. Incorporated by reference to Exhibit 10(a)(4)(C) on Form
8-K, dated December 28, 2001, filed by the Registrant on February
28, 2002 (File No. 1-9997).

10(i)(5)(A) The Indemnity Agreement Regarding Hazardous Materials, dated as of
December 28, 2001, relating to that portion of the Collateral
located in the State of Georgia. Incorporated by reference to
Exhibit 10(a)(5)(A) on Form 8-K, dated December 28, 2001, filed by
the Registrant on February 28, 2002 (File No. 1-9997).

10(i)(5)(B) The Indemnity Agreement Regarding Hazardous Materials, dated as of
December 28, 2001, relating to that portion of the Collateral
located in the State of North Carolina. Incorporated by reference to
Exhibit 10(a)(5)(B) on Form 8-K, dated December 28, 2001, filed by
the Registrant on February 28, 2002 (File No. 1-9997).


56




Exhibit
Number Description
- ------- --------------------------------------------------------------------
10(i)(5)(C) The Indemnity Agreement Regarding Hazardous Materials, dated as of
December 28, 2001, relating to that portion of the Collateral
located in the State of Florida. Incorporated by reference to
Exhibit 10(a)(5)(C) on Form 8-K, dated December 28, 2001, filed by
the Registrant on February 28, 2002 (File No. 1-9997).

10(j) Management Agreement, dated June 16, 2000, between Koger Equity,
Inc. and Crocker Realty Trust, L.P., a Delaware limited partnership.
Incorporated by reference to Exhibit 10(j) of Form 10-K filed by the
Registrant for the period ended December 31, 2000 (File No. 1-9997).

10(k) Purchase and Sale Agreement by and among Koger Equity, Inc., as
Seller, and AREIF II Realty Trust, Inc., a Maryland corporation, as
Buyer, dated as of August 23, 2001. Incorporated by reference to
Exhibit 10 on Form 8-K, dated August 23, 2001, filed by the
Registrant on August 27, 2001 (File No. 1-9997).

10(l)(1) Amended and Restated Agreement of Limited Partnership of
Koger-Vanguard Partners, L.P., dated as of October 22, 1998, between
Koger Equity, Inc. as General Partner and certain persons as Limited
Partners of Koger-Vanguard Partners, L.P. Incorporated by reference
to Exhibit 12 on Form 8-K, dated October 22, 1998, filed by the
Registrant on December 31, 1998 (File No. 1-9997).

10(l)(2) Agreement Regarding Purchase and Transfer of Partnership Interest
dated as of January 4, 2002 between Koger Equity, Inc. and 77 Center
Investors Limited Partnership and 77 Center Investors II Limited
Partnership. Incorporated by reference to Exhibit 10(a) on Form 8-K,
dated January 4, 2002, filed by the Registrant on March 15, 2002
(File No. 1-9997).

10(l)(3) Assignment and Transfer of Partnership, dated as of January 7, 2002
between 77 Center Investors Limited Partnership and 77 Center
Investors II Limited Partnership and Koger Equity, Inc. and Koger
Realty Services, Inc. Incorporated by reference to Exhibit 10(b) on
Form 8-K, dated January 4, 2002, filed by the Registrant on March
15, 2002 (File No. 1-9997).

11 Earnings Per Share Computations.*

21 Subsidiaries of the Registrant.*

23 Independent Auditors' Consent.*


*Filed with this Report.



57




SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant, Koger Equity, Inc., has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

KOGER EQUITY, INC.

By: /S/ Victor A. Hughes, Jr.
----------------------
Victor A. Hughes, Jr.
Chairman of the Board
Date: March 21, 2002

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant in the capacities and on the dates indicated.





Signature Title Date
/s/ Victor A. Hughes, Jr. Chairman of the Board March 21, 2002
- -------------------------------------------------
(VICTOR A. HUGHES, JR.)

/s/ Thomas J. Crocker Chief Executive Officer March 21, 2002
- ------------------------------------------------- and Director
(THOMAS J. CROCKER)

/s/ Robert E. Onisko Chief Financial Officer March 21, 2002
- -------------------------------------------------
(ROBERT E. ONISKO)

/s/ James L. Stephens Vice President and Chief March 21, 2002
- ------------------------------------------------- Accounting Officer
(JAMES L. STEPHENS)
/s/ D. Pike Aloian Director March 21, 2002
- -------------------------------------------------
(D. PIKE ALOIAN)

/s/ Benjamin C. Bishop Director March 21, 2002
- -------------------------------------------------
(BENJAMIN C. BISHOP)

/s/ David B. Hiley Director March 21, 2002
- -------------------------------------------------
(DAVID B. HILEY)

/s/ John R. S. Jacobsson Director March 21, 2002
- -------------------------------------------------
(JOHN R. S. JACOBSSON)

/s/ George F. Staudter Director March 21, 2002
- -------------------------------------------------
(GEORGE F. STAUDTER)

/s/ James C. Teagle Director March 21, 2002
- -------------------------------------------------
(JAMES C. TEAGLE)



58



EXHIBIT 11





EARNINGS PER SHARE COMPUTATIONS
(In Thousands Except Per Share Data)

2001 2000 1999
----------- ---------- ----------

EARNINGS PER COMMON AND DILUTIVE
POTENTIAL COMMON SHARE:
Net Income $73,223 $27,153 $36,586
======= ======= =======
Shares:
Weighted average number of common
shares outstanding - Basic 26,517 26,730 26,689
Effect of dilutive securities (a):
Stock options 93 232 330
--------- --------- ----------
Adjusted common shares - Diluted 26,610 26,962 27,019
========= ======= ========

EARNINGS PER SHARE - DILUTED $ 2.75 $ 1.01 $ 1.35
========= ========= =========




(a) Shares issuable were derived using the "Treasury Stock Method" for all
dilutive potential shares.





EXHIBIT 21

SUBSIDIARIES OF THE REGISTRANT





State of
Incorporation
Name of Subsidiaries* or Organization
- --------------------- ---------------

Koger Real Estate Services, Inc. Florida

Southeast Properties Holding Corporation, Inc. Florida

Koger Realty Services, Inc. Florida

Koger-Vanguard Partners, L.P. Delaware

Koger Ravinia, LLC Delaware





* These subsidiaries are wholly owned by Koger Equity, Inc.







EXHIBIT 23


INDEPENDENT AUDITORS' CONSENT


We consent to the incorporation by reference in Registration Statement No.
33-55179 of Koger Equity, Inc. on Form S-3, Registration Statement No. 33-54617
of Koger Equity, Inc. on Form S-8, Registration Statement No. 333-20975 of Koger
Equity, Inc. on Form S-3, Registration Statement No. 333-23429 of Koger Equity,
Inc. on Form S-8, Registration Statement No. 333-37919 of Koger Equity, Inc. on
Form S-3, Registration Statement No. 333-33388 of Koger Equity, Inc. on Form S-8
and Registration Statement No. 333-38712 of Koger Equity, Inc. on Form S-8 of
our report dated February 22, 2002, appearing in this Annual Report on Form 10-K
of Koger Equity, Inc. for the year ended December 31, 2001.



DELOITTE & TOUCHE LLP


West Palm Beach, Florida
March 21, 2002