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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________

FORM 10-Q

_________________

(Mark One)    

 

[X ]

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


For the quarterly period ended June 30, 2022

 

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: 001-36769

_____________________

FRP HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

_____________________

Florida   47-2449198

(State or other jurisdiction of

incorporation or organization)

  (I.R.S. Employer Identification No.)
     

200 W. Forsyth St., 7th Floor,

Jacksonville, FL

  32202
(Address of principal executive offices)   (Zip Code)

904-396-5733

(Registrant’s telephone number, including area code)

 

Title of each class   Trading Symbol   Name of each exchange on which registered
Common Stock, $.10 par value   FRPH   NASDAQ  

 

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 whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  [x]    No  [_]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [_]   Accelerated  filer [_]
Non-accelerated filer [x]   Smaller reporting company [x]
Emerging growth company [_]    

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  [_] 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  [_]    No  [x]

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

  Class       Outstanding at August 12, 2022  
  Common Stock, $.10 par value per share       9,455,096 shares  
             
1 
 

 

 

 

 

FRP HOLDINGS, INC.

FORM 10-Q

QUARTER ENDED JUNE 30, 2022

 

 

 

CONTENTS

Page No.

 

Preliminary Note Regarding Forward-Looking Statements     3
           
    Part I.  Financial Information      
           
Item 1.   Financial Statements      
    Consolidated Balance Sheets     4
    Consolidated Statements of Income     5
    Consolidated Statements of Comprehensive Income     6
    Consolidated Statements of Cash Flows     7
    Consolidated Statements of Shareholders’ Equity     8
    Condensed Notes to Consolidated Financial Statements     9
           
Item 2.   Management's Discussion and Analysis of Financial Condition and Results of Operations     20
           
Item 3.   Quantitative and Qualitative Disclosures about Market Risks     35
           
Item 4.   Controls and Procedures     35
           
    Part II.  Other Information      
           

 

Item 1A.

  Risk Factors     35
           
Item 2.   Purchase of Equity Securities by the Issuer     36
           
Item 6.   Exhibits     36
           
Signatures         37
           
Exhibit 31   Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002     39
           
Exhibit 32   Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002     42

 

2 
 

Preliminary Note Regarding Forward-Looking Statements.

 

This Quarterly Report on Form 10-Q, together with other statements and information publicly disseminated by us, contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words or phrases “anticipate,” “estimate,” “believe,” “budget,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “seek,” “should,” “will,” “would,” “expect,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target” and similar expressions identify forward-looking statements. Such statements reflect management’s current views with respect to financial results related to future events and are based on assumptions and expectations that may not be realized and are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual results, financial or otherwise, may differ, perhaps materially, from the results discussed in the forward-looking statements. Risk factors discussed in Item 1A of this Form 10-K and other factors that might cause differences, some of which could be material, include, but are not limited to: the impact of the Covid-19 Pandemic on our operations and financial results; the possibility that we may be unable to find appropriate investment opportunities; levels of construction activity in the markets served by our mining properties; demand for flexible warehouse/office facilities in the Baltimore-Washington-Northern Virginia area; demand for apartments in Washington D.C., Richmond, Virginia and Greenville, South Carolina; our ability to obtain zoning and entitlements necessary for property development; the impact of lending and capital market conditions on our liquidity, our ability to finance projects or repay our debt; general real estate investment and development risks; vacancies in our properties; risks associated with developing and managing properties in partnership with others; competition; our ability to renew leases or re-lease spaces as leases expire; illiquidity of real estate investments; bankruptcy or defaults of tenants; the impact of restrictions imposed by our credit facility; the level and volatility of interest rates; environmental liabilities; inflation risks; cyber security risks; as well as other risks listed from time to time in our SEC filings, including but not limited to, our annual and quarterly reports. We have no obligation to revise or update any forward-looking statements, other than as imposed by law, as a result of future events or new information. Readers are cautioned not to place undue reliance on such forward-looking statements. Additional information regarding these and other risk factors may be found in the Company’s other filings made from time to time with the Securities and Exchange Commission.

3 
 

PART I. FINANCIAL INFORMATION, ITEM 1. FINANCIAL STATEMENTS

FRP HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited) (In thousands, except share data)

 

    June 30, 2022   December 31, 2021
Assets:        
Real estate investments at cost:                
Land   $ 135,139       123,397  
Buildings and improvements     268,156       265,278  
Projects under construction     11,149       8,668  
     Total investments in properties     414,444       397,343  
Less accumulated depreciation and depletion     51,889       46,678  
     Net investments in properties     362,555       350,665  
                 
Real estate held for investment, at cost     9,969       9,722  
Investments in joint ventures     139,655       145,443  
     Net real estate investments     512,179       505,830  
                 
Cash and cash equivalents     159,262       161,521  
Cash held in escrow     765       752  
Accounts receivable, net     1,423       793  
Investments available for sale at fair value              4,317  
Federal and state income taxes receivable              1,103  
Unrealized rents     806       620  
Deferred costs     2,065       2,726  
Other assets     540       528  
Total assets   $ 677,040       678,190  
                 
Liabilities:                
Secured notes payable   $ 178,483       178,409  
Accounts payable and accrued liabilities     4,815       6,137  
Other liabilities     1,886       1,886  
Federal and state income taxes payable     398           
Deferred revenue     223       369  
Deferred income taxes     64,180       64,047  
Deferred compensation     1,307       1,302  
Tenant security deposits     811       790  
    Total liabilities     252,103       252,940  
                 
Commitments and contingencies                 
                 
Equity:                

Common stock, $.10 par value

25,000,000 shares authorized,

9,455,096 and 9,411,028 shares issued

and outstanding, respectively

    945       941  
Capital in excess of par value     58,872       57,617  
Retained earnings     339,081       337,752  
Accumulated other comprehensive income (loss), net     (1,096 )     113  
     Total shareholders’ equity     397,802       396,423  
Noncontrolling interest MRP     27,135       28,827  
     Total equity     424,937       425,250  
Total liabilities and equity   $ 677,040       678,190  

 

See accompanying notes.

4 
 

 

FRP HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In thousands except per share amounts)

(Unaudited)

 

                                 
    THREE MONTHS ENDED   SIX MONTHS ENDED
    JUNE 30,   JUNE 30,
    2022   2021   2022   2021
Revenues:                                
     Lease revenue   $ 6,745       5,861       13,027       9,399  
     Mining lands lease revenue     2,883       2,634       5,308       4,949  
 Total Revenues     9,628       8,495       18,335       14,348  
                                 
Cost of operations:                                
     Depreciation, depletion and amortization     2,868       4,388       5,766       5,831  
     Operating expenses     1,541       1,394       3,349       2,235  
     Property taxes     1,041       1,000       2,069       1,778  
     Management company indirect     805       822       1,579       1,392  
     Corporate expenses (Note 4 Related Party)     1,307       1,050       2,142       1,829  
Total cost of operations     7,562       8,654       14,905       13,065  
                                 
Total operating profit (loss)     2,066       (159     3,430       1,283  
                                 
Net investment income     1,120       1,048       2,018       2,423  
Interest expense     (739 )     (446 )     (1,477 )     (1,371 )
Equity in loss of joint ventures     (1,766 )     (1,118 )     (3,370 )     (2,753 )
Gain on remeasurement of investment in real estate partnership                                51,139  
Gain on sale of real estate              805       733       805  
                                 
Income before income taxes     681       130       1,334       51,526  
Provision for (benefit from) income taxes     99       (151     348       10,370  
                                 
Net income     582       281       986       41,156  
Gain (loss) attributable to noncontrolling interest     (75 )     199       (343 )     12,701  
Net income attributable to the Company   $ 657       82       1,329       28,455  
                                 
Earnings per common share:                                
 Net income attributable to the Company-                                
    Basic   $ 0.07       0.01       0.14       3.04  
    Diluted   $ 0.07       0.01       0.14       3.03  
                                 
Number of shares (in thousands) used in computing:                      
    -basic earnings per common share     9,384       9,353       9,375       9,347  
    -diluted earnings per common share     9,424       9,390       9,416       9,385  
                                                       

 

 

 

 

 

 

See accompanying notes.

5 
 

FRP HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands except per share amounts)

(Unaudited)

 

 

                                 
    THREE MONTHS ENDED   SIX MONTHS ENDED
    JUNE 30,   JUNE 30,
    2022   2021   2022   2021
Net income   $ 582       281       986       41,156  
Other comprehensive income net of tax:                                
  Unrealized loss on investments sale, net of income tax effect of $(133), $(61), $(448) and $(151)     (359     (165     (1,209     (407
                                 
Comprehensive income   $ 223       116       (223)       40,749  
                                 
Less comp. income attributable to Noncontrolling interest   $ (75 )     199       (343 )     12,701  
                                 
Comprehensive income (loss) attributable to the Company   298       (83 )     120       28,048  

 

 

 

 

 

 

 

 

 

See accompanying notes

 

 

6 
 

FRP HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 2022 AND 2021

(In thousands) (Unaudited)

 

      2022   2021
Cash flows from operating activities:                  
 Net income     $ 986       41,156  
 Adjustments to reconcile net income to net cash provided by operating activities:                  
 Depreciation, depletion and amortization       5,890       5,951  
 Deferred income taxes       133       9,273  
 Equity in loss of joint ventures       3,370       2,753  
 Gain on remeasurement of invest in real estate partnership                (51,139 )
 Gain on sale of equipment and property       (733 )     (835 )
 Stock-based compensation       1,026       854  
 Net changes in operating assets and liabilities:                  
  Accounts receivable       (630 )     554  
  Deferred costs and other assets       (1,294 )     280  
  Accounts payable and accrued liabilities       (1,468 )     819  
  Income taxes payable and receivable       1,501       940  
  Other long-term liabilities       26       357  
 Net cash provided by operating activities       8,807       10,963  
                   
Cash flows from investing activities:                  
 Investments in properties       (17,411 )     (6,845 )
 Investments in joint ventures       (4,261 )     (4,768 )
 Return of capital from investments in joint ventures       6,677       17,119  
 Proceeds from sales of investments available for sale       4,317       42,502  
 Cash at consolidation of real estate partnership                3,704  
 Proceeds from the sale of assets       741       878  
 Cash held in escrow       (13 )     (152 )
Net cash (used in) provided by investing activities       (9,950 )     52,438  
                   
Cash flows from financing activities:                  
 Proceeds from long-term debt                92,070  
 Repayment of long-term debt                (90,000 )
 Debt issue costs                (704 )
 Distribution to noncontrolling interest       (1,349 )     (527 )
 Repurchase of company stock                (264 )
 Exercise of employee stock options       233       269  
Net cash (used in) provided by financing activities       (1,116     844  
                   
Net increase (decrease) in cash and cash equivalents       (2,259     64,245  
Cash and cash equivalents at beginning of year       161,521       73,909  
Cash and cash equivalents at end of the period     $ 159,262       138,154  
                   
Supplemental disclosure of cash flow information:                  

Cash paid (received) during the period for:

                 

  Interest

      1,475       1,370  
  Income taxes       (1,734 )     7  
                   
                   

 

 

 

See accompanying notes.

7 
 

FRP HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

SIX MONTHS ENDED JUNE 30, 2022 AND 2021

(In thousands, except share amounts) (Unaudited)

 

                               
                  Accumulated            
                  Other Comp-   Total        
          Capital in       rehensive   Share   Non-    
  Common Stock   Excess of   Retained   Income   holders’   Controlling   Total
  Shares   Amount   Par Value   Earnings   (loss), net   Equity   Interest   Equity
Balance at April 1, 2022   9,431,994     $ 943     $ 57,812     $ 338,424     $ (737   $ 396,442     $ 27,788     $ 424,230  
 Stock option grant compensation   —                  17                         17                17  
 Restricted stock compensation   —                  162                         162                162  
 Shares granted to Directors   11,232       1       649                         650                650  
 Exercise of stock options   11,870       1       232                         233                233  
 Net income   —                           657                657       (75     582  
 Distributions to partners   —                                                      (578     (578
 Unrealized loss on investment, net   —                                    (359     (359              (359
Balance at June 30, 2022   9,455,096     $ 945     $ 58,872     $ 339,081     $ (1,096   $ 397,802     $ 27,135     $ 424,937  
                                                               
Balance at January 1, 2022   9,411,028     $ 941     $ 57,617     $ 337,752     $ 113     $ 396,423     $ 28,827     $ 425,250  
 Stock option grant compensation   —                  34                         34                34  
 Restricted stock compensation   —                  292                         292                292  
 Shares granted to Employees   865                50                         50                50  
 Restricted stock award   21,464       2       (2 )                                             
 Shares granted to Directors   11,232       1       649                         650                650  
 Forfeiture of restricted stock award   (1,363 )                                                               
 Exercise of stock options   11,870       1       232                         233                233  
 Net income   —                           1,329                1,329       (343     986  
 Distributions to partners   —                                                      (1,349     (1,349
 Unrealized loss on investment, net   —                                    (1,209     (1,209              (1,209
Balance at June 30, 2022   9,455,096     $ 945     $ 58,872     $ 339,081     $ (1,096   $ 397,802     $ 27,135     $ 424,937  
                                                               
Balance at April 1, 2021   9,387,823     $ 939     $ 56,474     $ 337,910     $ 433     $ 395,756     $ 31,879     $ 427,635  
 Stock option grant compensation   —                  18                         18                18  
 Restricted stock compensation   —                  134                         134                134  
 Shares granted to Directors   9,105       1       499                         500                500  
 Exercise of stock options   14,100       1       235                         236                236  
 Contributions from partners   —                                                      3       3  
 Net income   —                           82                82       199       281  
 Distributions to partners   —                                                      (357     (357
 Unrealized loss on investment, net   —                                    (165     (165              (165
Balance at June 30, 2021   9,411,028     $ 941     $ 57,360     $ 337,992     $ 268     $ 396,561     $ 31,724     $ 428,285  
                                                               
Balance at January 1, 2021   9,363,717     $ 936     $ 56,279     $ 309,764     $ 675     $ 367,654     $ 14,999     $ 382,653  
                                                               
 Stock option grant compensation   —                  35                         35                35  
 Restricted stock compensation   —                  269                         269                269  
 Shares granted to Employees   1,098                50                         50                50  
 Restricted stock award   27,778       3       (3 )                                             
 Shares granted to Directors   9,105       1       499                         500                500  
 Exercise of stock options   15,334       1       268                         269                269  
 Shares purchased and cancelled   (6,004 )              (37 )     (227 )              (264 )              (264 )
 Contributions from partners   —                                                      4,551       4,551  
 Net income   —                           28,455                28,455       12,701       41,156  
 Distributions to partners   —                                                      (527     (527
 Unrealized loss on investment, net   —                                    (407     (407              (407
Balance at June 30, 2021   9,411,028     $ 941     $ 57,360     $ 337,992     $ 268     $ 396,561     $ 31,724     $ 428,285  
                                                               
                                                               
8 
 

FRP HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2022

(Unaudited)

 

(1) Description of Business and Basis of Presentation.

 

FRP Holdings, Inc. is a holding company engaged in various real estate businesses, namely (i) mining royalty land ownership and leasing, (ii) land acquisition, entitlement and development primarily for future warehouse/office or residential building construction, (iii) ownership, leasing, and management of residential apartment buildings, and (iv) warehouse/office building ownership, leasing and management.

 

The accompanying consolidated financial statements include the accounts of FRP Holdings, Inc. (the “Company” or “FRP”) inclusive of our operating real estate subsidiaries, FRP Development Corp. (“Development”) and Florida Rock Properties, Inc. (“Properties”), Riverfront Investment Partners I, LLC, and commencing March 31, 2021 also Riverfront Investment Partners II, LLC (See Note 12). Our investment in the Brooksville joint venture, BC FRP Realty joint venture, Riverfront Investment Partners II, LLC prior to March 31, 2021, Bryant Street Partnerships, 1800 Half Street and Greenville/Woodfield are accounted for under the equity method of accounting (See Note 11). Our ownership of Riverfront Investment Partners I, LLC and Riverfront Investment Partners II, LLC includes a non-controlling interest representing the ownership of our partner. The Company uses the cost method to account for its investment in DST Hickory Creek because it does not have significant influence over operating and financial policies.

 

These statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the instructions to Form 10-Q and do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (primarily consisting of normal recurring accruals) considered necessary for a fair statement of the results for the interim periods have been included. Operating results for the six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. The accompanying consolidated financial statements and the information included under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" should be read in conjunction with the Company's consolidated financial statements and related notes included in the Company’s Form 10-K for the year ended December 31, 2021.

 

(2) Recently Issued Accounting Standards.

 

None.

 

(3) Business Segments.

 

The Company is reporting its financial performance based on four reportable segments, Asset Management, Mining Royalty Lands, Development and Stabilized Joint Venture, as described below.

 

The Asset Management segment owns, leases and manages commercial properties. During the fourth quarter of 2021 we completed construction on two buildings in our Hollander Business Park which were subsequently added to this segment.

 

Our Mining Royalty Lands segment owns several properties comprising approximately 16,650 acres currently under lease for mining rents or royalties (this does not include the 4,280 acres owned in our Brooksville joint venture with Vulcan Materials). Other than one location in Virginia, all of these properties are located in Florida and Georgia.

 

Through our Development segment, we own and are continuously assessing for their highest and best use for several parcels of land that are in various stages of development. Our overall strategy in this segment is to convert all of our non-income producing lands into income production through (i) an orderly process of constructing new buildings for us to own and operate or (ii) a sale to, or joint venture with, third parties. Additionally, our Development segment will form joint ventures on new developments of land not previously owned by the Company.

9 
 

 

The Stabilized Joint Venture segment includes joint ventures which own, lease and manage buildings that have met our initial lease up criteria. Two of our joint ventures in the segment, Riverfront Investment Partners I, LLC (“Dock 79”) and Riverfront Investment Partners II, LLC (“The Maren”) are consolidated. The Maren was consolidated effective March 31, 2021 and prior periods are still reflected under the equity method. The ownership of Dock 79 and The Maren (commencing March 31, 2021) attributable to our partner MidAtlantic Realty Partners, LLC (MRP) is reflected on our consolidated balance sheet as a noncontrolling interest. Such noncontrolling interests are reported on the Consolidated Balance Sheets within equity but separately from shareholders' equity. On the Consolidated Statements of Income, all of the revenues and expenses from Dock 79 are reported in net income, including both the amounts attributable to the Company and the noncontrolling interest. The Maren is reflected in Equity in loss of joint ventures on the Consolidated Statements of Income for the periods up to March 31, 2021 but is reflected like Dock 79 for periods commencing April 1, 2021. The amounts of consolidated net income attributable to the noncontrolling interest is clearly identified on the accompanying Consolidated Statements of Income.

 

Operating results and certain other financial data for the Company’s Business Segments are as follows (in thousands):

 

                                   
      Three Months ended   Six Months ended
      June 30,   June 30,
      2022   2021   2022   2021
  Revenues:                                
Revenues  Asset management   $ 912       588       1,751       1,300  
Revenues  Mining royalty lands     2,883       2,634       5,308       4,949  
Revenues  Development     408       451       791       768  
Revenues  Stabilized Joint Venture     5,425       4,822       10,485       7,331  
Revenues       9,628       8,495       18,335       14,348  
                                   
  Operating profit (loss):                                
   Before corporate expenses:                                
Operating profit before corporate expenses    Asset management   $ 419       128       711       359  
Operating profit before corporate expenses    Mining royalty lands     2,498       2,400       4,681       4,494  
Operating profit before corporate expenses    Development     (581 )     (411 )     (1,299 )     (797 )
Operating profit before corporate expenses    Stabilized Joint Venture     1,037       (1,226 )     1,479       (944 )
Operating profit before corporate expenses     Operating profit before corporate expenses     3,373       891       5,572       3,112  
   Corporate expenses:                                
Corporate expenses   Allocated to asset management     (225 )     (288 )     (369 )     (502 )
Corporate expenses   Allocated to mining royalty lands     (148 )     (108 )     (242 )     (189 )
Corporate expenses   Allocated to development     (816 )     (522 )     (1,337 )     (941 )
Corporate expenses   Allocated to stabilized joint venture     (118 )     (132 )     (194 )     (197 )
Corporate expenses     Total corporate expenses     (1,307 )     (1,050 )     (2,142 )     (1,829 )
Corporate expenses     $ 2,066       (159     3,430       1,283  
                                   
Interest expense Interest expense   $ 739       446       1,477       1,371  
                                   
  Depreciation, depletion and amortization:                                
Depreciation, depletion and amortization  Asset management   $ 230       134       464       271  
Depreciation, depletion and amortization  Mining royalty lands     189       58       244       123  
Depreciation, depletion and amortization  Development     47       53       92       106  
Depreciation, depletion and amortization  Stabilized Joint Venture     2,402       4,143       4,966       5,331  
Depreciation, depletion and amortization     $ 2,868       4,388       5,766       5,831  
  Capital expenditures:                                
Capital expenditures  Asset management   $ 145       139       595       218  
Capital expenditures  Mining royalty lands     11,126                11,217           
Capital expenditures  Development     2,426       2,907       5,379       6,206  
Capital expenditures  Stabilized Joint Venture     78       412       220       421  
Capital expenditures     $ 13,775       3,458       17,411       6,845  

 

 

10 
 

 

        June 30,       December 31,    
  Identifiable net assets   2022       2021    
                   

Assets

Asset management $ 24,340       23,897    
Assets Mining royalty lands   48,835       37,627    
Assets Development   175,925       176,386    
Assets Stabilized Joint Venture   261,594       266,429    
Investments available for sale Investments available for sale at fair value            4,317    
Cash Cash items   160,027       162,273    
Assets Unallocated corporate assets   6,319       7,261    
Assets   $ 677,040       678,190    

 

(4) Related Party Transactions.

 

The Company is a party to an Administrative Services Agreement which resulted from our January 30, 2015 spin-off of Patriot Transportation Holding, Inc. (Patriot). The Administrative Services Agreement sets forth the terms on which Patriot will provide to FRP certain services that were shared prior to the Spin-off, including the services of certain shared executive officers. The boards of the respective companies amended and extended this agreement for one year effective April 1, 2022.

 

The consolidated statements of income reflect charges and/or allocation from Patriot for these services of $224,000 and $256,000 for the three months ended June 30, 2022 and 2021 and $447,000 and $512,000 for the six months ended June 30, 2022 and 2021, respectively. These charges are reflected as part of corporate expenses.

 

To determine these allocations between FRP and Patriot as set forth in the Administrative Services Agreement, we employ an allocation method to allocate said expenses and thus we believe that the allocations to FRP are a reasonable approximation of the costs related to FRP’s operations, but any such related-party transactions cannot be presumed to be carried out on an arm’s-length basis.

 

(5) Long-Term Debt.

 

The Company’s Outstanding debt, net of unamortized debt issuance costs, consisted of the following (in thousands):

 

    June 30,   December 31,
    2022   2021
Fixed rate mortgage loans, 3.03% interest only, matures 4/1/2033   $ 180,070       180,070  
Unamortized debt issuance costs     (1,587 )     (1,661 )
Credit agreement                  
 Long term debt   $ 178,483       178,409  

 

On February 6, 2019, the Company entered into a First Amendment to the 2015 Credit Agreement (the “Credit Agreement”) with Wells Fargo Bank, N.A. (“Wells Fargo”), effective February 6, 2019. The Credit Agreement modifies the Company’s prior Credit Agreement with Wells Fargo dated January 30, 2015. The Credit Agreement establishes a five-year revolving credit facility with a maximum facility amount of $20 million. The interest rate under the Credit Agreement will be a maximum of 1.50% over Daily 1-Month LIBOR, which may be reduced quarterly to 1.25% or 1.0% over Daily 1-Month LIBOR if the Company meets a specified ratio of consolidated debt to consolidated total capital, as defined which excludes FRP Riverfront. A commitment fee of 0.25% per annum is payable quarterly on the unused portion of the commitment but the amount may be reduced to 0.20% or 0.15% if the Company meets a specified ratio of consolidated total debt to consolidated total capital. The Credit Agreement contains certain conditions, affirmative financial covenants and negative covenants. As of June 30, 2022, there was no debt outstanding on this revolver, $506,000 outstanding under letters of credit and $19,494,000 available for borrowing. The letters of credit were issued to guarantee certain obligations to state agencies related to real estate development. Most of the letters of credit are irrevocable for a period of one year and typically are automatically extended for additional one-year periods. The letter of credit fee is 1% and applicable interest rate would have been

11 
 

2.71314% on June 30, 2022. The credit agreement contains certain conditions and financial covenants, including a minimum tangible net worth and dividend restriction. As of June 30, 2022, these covenants would have limited our ability to pay dividends to a maximum of $246 million combined.

 

On November 17, 2017, Dock 79 borrowed a principal sum of $90,000,000 pursuant to a Loan Agreement and Deed of Trust Note entered into with EagleBank. The loan was secured by the Dock 79 real property and improvements, bore a fixed interest rate of 4.125% per annum and had a term of 120 months. The loan was paid in full on March 19, 2021. A prepayment penalty of $900,000 was recorded into interest expense in the quarter ending March 31, 2021.

 

Effective March 31, 2021, the Company consolidated the assets (at current fair value), liabilities and operating results of our Riverfront Investment Partners II, LLC partnership (“The Maren”) which was previously accounted for under the equity method. As such the full amount of our mortgage loan was recorded in the consolidated financial statements.

 

On March 19, 2021, the Company refinanced Dock 79 and The Maren projects pursuant to separate Loan Agreements and Deed of Trust Notes entered into with Teachers Insurance and Annuity Association of America, LLC. Dock 79 and The Maren borrowed principal sums of $92,070,000 and $88,000,000 respectively, in connection with the refinancing. The loans are separately secured by the Dock 79 and The Maren real property and improvements, bear a fixed interest rate of 3.03% per annum, and require monthly payments of interest only with the principal in full due April 1, 2033. Either loan may be prepaid subsequent to April 1, 2024, subject to yield maintenance premiums. Either loan may be transferred to a qualified buyer as part of a one-time sale subject to a 60% loan to value, minimum of 7.5% debt yield and a 0.75% transfer fee.

 

Debt cost amortization of $37,000 and $38,000 was recorded during the three months ended June 30, 2022 and 2021 and $74,000 and $76,000 during the six months ended June 30, 2022 and 2021, respectively. During the three months ended June 30, 2022 and June 30, 2021 the Company capitalized interest costs of $672,000 and $966,000, respectively. During the six months ended June 30, 2022 and June 30, 2021 the Company capitalized interest costs of $1,346,000 and $1,894,000, respectively.

 

The Company was in compliance with all debt covenants as of June 30, 2022.

 

(6) Earnings per Share.

 

The following details the computations of the Basic and diluted earnings per common share (in thousands, except per share amounts):

                               
  Three Months ended   Six Months ended
  June 30,   June 30,
  2022   2021   2022   2021
Weighted average common shares outstanding   during the period – shares used for basic   earnings per common share   9,384       9,353       9,375       9,347  
                               
Common shares issuable under share based payment plans which are potentially dilutive   40       37       41       38  
                               

Common shares used for diluted earnings

per common share

  9,424       9,390       9,416       9,385  
                               
Net income attributable to the Company $ 657       82       1,329       28,455  
                               
Earnings per common share:                              
 -basic $ 0.07       0.01       0.14       3.04  
 -diluted $ 0.07       0.01       0.14       3.03  

 

12 
 

 

 

For the three and six months ended June 30, 2022, the Company did not have any outstanding anti-dilutive stock options. For the three and six months ended June 30, 2021, 6,680 and 19,950 shares attributable to outstanding stock options were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive.

 

During the first six months of 2021 the Company repurchased 6,004 shares at an average cost of $43.95.

 

(7) Stock-Based Compensation Plans.

 

The Company has two Stock Option Plans (the 2006 Stock Incentive Plan and the 2016 Equity Incentive Option Plan) under which options for shares of common stock were granted to directors, officers and key employees. The 2016 plan permits the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock units, or stock awards. The options awarded under the plans have similar characteristics. All stock options are non-qualified and expire ten years from the date of grant. Stock based compensation awarded to directors, officers and employees are exercisable immediately or become exercisable in cumulative installments of 20% or 25% at the end of each year following the date of grant. When stock options are exercised, the Company issues new shares after receipt of exercise proceeds and taxes due, if any, from the grantee.

 

The Company utilizes the Black-Scholes valuation model for estimating fair value of stock compensation for options awarded to officers and employees. Each grant is evaluated based upon assumptions at the time of grant. The assumptions were no dividend yield, expected volatility between 29% and 41%, risk-free interest rate of 1.4% to 2.9% and expected life of 3.0 to 7.0 years.

 

The dividend yield of zero is based on the fact that the Company does not pay cash dividends and has no present intention to pay cash dividends. Expected volatility is estimated based on the Company’s historical experience over a period equivalent to the expected life in years. The risk-free interest rate is based on the U.S. Treasury constant maturity interest rate at the date of grant with a term consistent with the expected life of the options granted. The expected life calculation is based on the observed and expected time to exercise options by the employees.

 

In January 2022, 7,448 shares of restricted stock were granted to employees that will vest over the next four years. In January 2022, 14,016 shares of restricted stock were granted to employees as part of a long-term incentive plan that will vest over the next five years. In January 2021, 8,896 shares of restricted stock were granted to employees that will vest over the next four years. In January 2021, 18,882 shares of restricted stock were granted to employees as part of a long-term incentive plan that will vest over the next five years. In March 2022 and March 2021, 865 and 1,098 shares of stock, respectively, were granted to employees. In March 2020, 20,520 shares of restricted stock were granted to employees as part of a long-term incentive plan that will vest over the next five years. The number of common shares available for future issuance was 366,723 at June 30, 2022.

 

The Company recorded the following Stock compensation expense in its consolidated statements of income (in thousands):

 

                                 
    Three Months ended   Six Months ended  
    June 30,   June 30,  
    2022   2021   2022   2021  
Stock option grants   $ 17       18       34       35  
Restricted stock awards     162       134       292       269  
Employee stock grant                       50       50  
Annual director stock award     650       500       650       500  
 Stock compensation   $ 829       652       1,026       854  

 

 

 

A Summary of changes in outstanding options is presented below (in thousands, except share and per share amounts):

13 
 

 

        Weighted   Weighted   Weighted
    Number   Average   Average   Average
    Of   Exercise   Remaining   Grant Date
Options   Shares   Price   Term (yrs)   Fair Value(000's)
                 
Outstanding at January 1, 2022     104,755     $ 37.93     4.8   $ 1,416  
  Exercised     (11,870 )   $ 19.69         $ (100 )
Outstanding at June 30, 2022     92,885     $ 40.27     4.9   $ 1,316  
                             
Exercisable at June 30, 2022     84,716     $ 39.72     4.7   $ 1,181  
                             

Vested during six months ended

June 30, 2022

                       $     

 

 

The aggregate intrinsic value of exercisable in-the-money options was $1,748,000 and the aggregate intrinsic value of outstanding in-the-money options was $1,865,000 based on the market closing price of $60.35 on June 30, 2022 less exercise prices.

 

The unrecognized compensation cost of options granted to FRP employees but not yet vested as of June 30, 2022 was $94,000, which is expected to be recognized over a weighted-average period of 1.4 years.

 

A Summary of changes in restricted stock awards is presented below (in thousands, except share and per share amounts):

        Weighted   Weighted   Weighted
    Number   Average   Average   Average
    Of   Exercise   Remaining   Grant Date
Restricted stock   Shares   Price   Term (yrs)   Fair Value(000's)
                 
Non-vested at January 1, 2022     46,074     $ 45.88     3.1   $ 2,114  
    Time-based awards granted     7,448       57.80           431  
    Performance-based awards granted     14,016       57.80           810  
    Vested     (7,813 )     46.30           (362 )
    Forfeited     (1,363 )     46.30           (63 )
Non-vested at June 30, 2022     58,362     $ 50.20     3.4   $ 2,930  
                             

 

Total unrecognized compensation cost of restricted stock granted but not yet vested as of June 30, 2022 was $2,144,000 which is expected to be recognized over a weighted-average period of 3.5 years.

 

 

(8) Contingent Liabilities.

 

The Company may be involved in litigation on a number of matters and is subject to certain claims which arise in the normal course of business. The Company has retained certain self-insurance risks with respect to losses for third party liability and property damage. In the opinion of management, none of these matters are expected to have a material adverse effect on the Company’s consolidated financial condition, results of operations or cash flows.

 

The Company is subject to numerous environmental laws and regulations. The Company believes that the ultimate disposition of currently known environmental matters will not have a material effect on its financial position, liquidity, or operations. The Company can give no assurance that previous environmental studies with respect to its properties have revealed all potential environmental contaminants; that any previous owner, occupant or tenant did not create any material environmental condition not known to the Company; that the current environmental condition of the properties will not be affected by tenants and occupants, by the condition of nearby properties, or by unrelated third

14 
 

parties; and that changes in applicable environmental laws and regulations or their interpretation will not result in additional environmental liability to the Company.

 

As of June 30, 2022, there was $506,000 outstanding under letters of credit. The letters of credit were issued to guarantee certain obligations to state agencies related to real estate development.

 

The Company and MRP guaranteed $26 million of the construction loan on the Bryant Street Partnerships in exchange for a 1% lower interest rate. The Company and MRP have a side agreement limiting the Company’s guarantee to its proportionate ownership. The value of the guarantee was calculated at $1.9 million based on the present value of the 1% interest savings over the anticipated 48-month term. This amount is included as part of the Company’s investment basis and is amortized to expense over the 48 months. The Company will evaluate the guarantee liability based upon the success of the project and assuming no payments are made under the guarantee the Company will have a gain for $1.9 million when the loan is paid in full. Borrower may prepay a portion of the unpaid principal to satisfy such tests.

 

 

(9) Concentrations.

 

The mining royalty lands segment has a total of five tenants currently leasing mining locations and one lessee that accounted for 22.3% of the Company’s consolidated revenues during the six months ended June 30, 2022, and $385,000 of accounts receivable at June 30, 2022. The termination of these lessees’ underlying leases could have a material adverse effect on the Company. The Company places its cash and cash equivalents with Wells Fargo Bank and First Horizon Bank. At times, such amounts may exceed FDIC limits.

 

 

(10) Fair Value Measurements.

 

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Level 1 means the use of quoted prices in active markets for identical assets or liabilities. Level 2 means the use of values that are derived principally from or corroborated by observable market data. Level 3 means the use of inputs are those that are unobservable and significant to the overall fair value measurement.

 

At June 30, 2022, the Company was invested in U.S. Treasury notes valued at $140,883,000 maturing in late 2022 through 2024. The unrealized loss on these investments of $1,699,000 was recorded as part of comprehensive income and based on the market value (Level 1).

 

At June 30, 2022 and 2021, the carrying amount reported in the consolidated balance sheets for cash and cash equivalents including U.S. Treasury notes was adjusted to fair value as described above.

 

The fair values of the Company’s other mortgage notes payable were estimated based on current rates available to the Company for debt of the same remaining maturities. At June 30, 2022, the carrying amount and fair value of such other long-term debt was $180,070,000 and $152,988,000, respectively. At June 30, 2021, the carrying amount and fair value of such other long-term debt was $178,334,000 and $175,625,000, respectively.

 

 

(11) Investments in Joint Ventures.

 

The Company has investments in joint ventures, primarily with other real estate developers. Joint ventures where FRP is not the primary beneficiary are reflected in the line “Investment in joint ventures” on the balance sheet and “Equity in loss of joint ventures” on the income statement. The assets of these joint ventures are restricted to use by the joint ventures and their obligations can only be settled by their assets or additional contributions by the partners.

 

The following table summarizes the Company’s Investments in unconsolidated joint ventures (in thousands):

 

15 
 

 

                            The  
                            Company's  
                            Share of Profit  
     Common     Total     Total Assets of     Profit (Loss)      (Loss) of the  
    Ownership     Investment     The Partnership     Of the Partnership      Partnership (1)  
                               
As of June 30, 2022                              
Brooksville Quarry, LLC   50.00 %  $ 7,546     14,461     (42 )   (21 )
BC FRP Realty, LLC   50.00 %   5,485     22,115     (90 )   (45 )
Bryant Street Partnerships   61.36 %   58,253     203,480     (4,787 )   (3,186 )
Aberdeen Station Loan         917     917              
DST Hickory Creek   26.65 %   6,000     45,186     (271 )   171  
Amber Ridge Loan         6,234     6,234              
1800 Half St. Owner, LLC   61.37 %   39,112     119,957           (64 )
Greenville/Woodfield Partnerships   40.00 %   16,108     92,947     (563 )   (225 )
   Total        $ 139,655     505,297       (5,753 )     (3,370 )

 

 

                          The  
                            Company's  
                            Share of Profit  
     Common     Total     Total Assets of     Profit (Loss)      (Loss) of the  
    Ownership     Investment     The Partnership     Of the Partnership      Partnership (1)  
                               
As of December 31, 2021                              
Brooksville Quarry, LLC   50.00 %  $ 7,488     14,301     (82 )   (41 )
BC FRP Realty, LLC   50.00 %   5,530     22,470     (230 )   (115 )
Riverfront Holdings II, LLC (1)                 (760 )   (628 )
Bryant Street Partnerships   61.36 %   59,558     204,082     (6,084 )   (4,954 )
Aberdeen Station Loan         514     514              
DST Hickory Creek   26.65 %   6,000     46,048     (481 )   343  
Amber Ridge Loan         11,466     11,466              
1800 Half St. Owner, LLC   61.37 %   38,693     93,932     12     20  
Greenville/Woodfield Partnerships   40.00 %   16,194     87,731     (948 )   (379 )
   Total        $ 145,443     480,544       (8,573 )     (5,754 )
                               
(1):Riverfront Holdings II, LLC was consolidated on March 31, 2021. Bryant Street Partnerships included $234,000 in 2021 for the Company’s share of preferred interest and $236,000 in 2022 and $236,000 in the first half of 2021 for amortization of guarantee liability related to the Bryant Street loan.

 

The major classes of assets, liabilities and equity of the Company’s Investments in Joint Ventures as of June 30, 2022 are summarized in the following two tables (in thousands):

                       
  As of June 30, 2022   Total
  Riverfront   Bryant Street   DST Hickory   1800 Half St.   Greenville/   Apartment/
  Holdings II, LLC   Partnership   Creek   Partnership   Woodfield   Mixed Use
                       
Investments in real estate, net 0       195,633       43,124       119,311       92,149      $ 450,217  
Cash and cash equivalents   0       2,831       579       646       466       4,522  
Unrealized rents & receivables   0       4,859       1,181       0       14       6,054  
Deferred costs   0       157       302       0       318       777  
   Total Assets 0       203,480       45,186       119,957       92,947     $ 461,570  
                                             

 

 

Secured notes payable 0       128,697       29,360       47,128       51,148     $ 256,333  
Other liabilities   0       3,077       144       11,876       3,402       18,499  
Capital - FRP   0       54,814       4,179       37,414       15,359       111,766  
Capital – Third Parties   0       16,892       11,503       23,539       23,038       74,972  
   Total Liabilities and Capital 0       203,480       45,186       119,957       92,947     $ 461,570  

 

 

16 
 

                       
  As of June 30, 2022    
  Brooksville   BC FRP   Aberdeen   Amber Ridge   Apartment/   Grand
  Quarry, LLC   Realty, LLC   Loan   Loan   Mixed Use   Total
                       
Investments in real estate, net  $ 14,279       21,305       917       6,234       450,217      $ 492,952  
Cash and cash equivalents   178       224       0       0       4,522       4,924  
Unrealized rents & receivables   0       431       0       0       6,054       6,485  
Deferred costs   4       155       0       0       777       936  
   Total Assets  $ 14,461       22,115       917       6,234       461,570     $ 505,297  
                                               
Secured notes payable  $ 0       11,093       0       0       256,333     $ 267,426  
Other liabilities   42       164       0       0       18,499       18,705  
Capital - FRP   7,546       5,429       917       6,234       111,766       131,892  
Capital - Third Parties   6,873       5,429       0       0       74,972       87,274  
   Total Liabilities and Capital  $ 14,461       22,115       917       6,234       461,570     $ 505,297  
                                               

 

The Company’s capital recorded by the unconsolidated Joint Ventures is $7,764,000 less than the Investment in Joint Ventures reported in the Company’s consolidated balance sheet due primarily to capitalized interest.

 

The major classes of assets, liabilities and equity of the Company’s Investments in Joint Ventures as of December 31, 2021 are summarized in the following two tables (in thousands):

 

 

                       
  As of December 31, 2021   Total
  Riverfront   Bryant Street   DST Hickory   1800 Half St.   Greenville/   Apartment/
  Holdings II, LLC   Partnership   Creek   Partnership   Woodfield   Mixed Use
                       
Investments in real estate, net 0       199,730       43,840       93,504       87,421      $ 424,495  
Cash and cash equivalents   0       1,123       827       428       279       2,657  
Unrealized rents & receivables   0       2,925       1,044       0       5       3,974  
Deferred costs   0       304       337       0       26       667  
   Total Assets 0       204,082       46,048       93,932       87,731     $ 431,793  
                                             

 

 

Secured notes payable 0       119,201       29,337       18,404       44,309     $ 211,251  
Other liabilities   0       9,066       115       14,470       4,462       28,113  
Capital - FRP   0       57,555       4,423       37,478       15,584       115,040  
Capital – Third Parties   0       18,260       12,173       23,580       23,376       77,389  
   Total Liabilities and Capital 0       204,082       46,048       93,932       87,731     $ 431,793  

 

                       
  As of December 31, 2021    
  Brooksville   BC FRP   Aberdeen   Amber Ridge   Apartment/   Grand
  Quarry, LLC   Realty, LLC   Loan   Loan   Mixed Use   Total
                       
Investments in real estate, net  $ 14,281       21,561       514       11,466       424,495      $ 472,317  
Cash and cash equivalents   18       312       0       0       2,657       2,987  
Unrealized rents & receivables   0       368       0       0       3,974       4,342  
Deferred costs   2       229       0       0       667       898  
   Total Assets  $ 14,301       22,470       514       11,466       431,793     $ 480,544  
                                               
Secured notes payable  $ 0       11,384       0       0       211,251     $ 222,635  
Other liabilities   0       140       0       0       28,113       28,253  
Capital - FRP   7,488       5,473       514       11,466       115,040       139,981  
Capital - Third Parties   6,813       5,473       0       0       77,389       89,675  
   Total Liabilities and Capital  $ 14,301       22,470       514       11,466       431,793     $ 480,544  
                                               

 

The amount of consolidated retained earnings (accumulated deficit) for these joint ventures was $(11,400,000) and

17 
 

$(8,942,000) as of June 30, 2022 and December 31, 2021, respectively.

 

 

 

The income statements of the Bryant Street Partnerships are as follows (in thousands):

 

                                 
    Bryant Street   Bryant Street   Bryant Street   Bryant Street  
    Partnerships   Partnerships   Partnerships   Partnerships  
    Total JV   Total JV   Company Share   Company Share  
    Six Months ended   Six Months ended   Six Months ended   Six Months ended  
    June 30,   June 30,   June 30,   June 30,  
    2022   2021   2022   2021  
Revenues:                                
    Rental Revenue   $ 4,018     $ 180     $ 2,465     $ 111  
    Revenue – other     733       77       450       47  
Total Revenues     4,751       257       2,915       158  
                                 
Cost of operations:                                
     Depreciation and amortization     3,260       776       2,000       476  
     Operating expenses     2,523       1,117       1,548       686  
     Property taxes     578       119       355       73  
Total cost of operations     6,361       2,012       3,903       1,235  
                                 
Total operating loss     (1,610 )     (1,755 )     (988 )     (1,077 )
Interest expense     (3,177 )     (655 )     (2,198     (1,130
                                 
Net loss before tax   (4,787 )   $ (2,410 )   $ (3,186 )   $ (2,207 )
                                     

 

 

 

The income statements of the Greenville Woodfield Riverside Partnership are as follows (in thousands):

 

                 
    Woodfield   Woodfield
    Riverside Partnership   Riverside Partnership
    Total JV   Company Share
    Six Months ended   Six Months ended
    June 30,   June 30,
    2022   2022
Revenues:                
    Rental Revenue   $ 1,335     $ 534  
    Revenue – other     86       34  
Total Revenues     1,421       568  
                 
Cost of operations:                
     Depreciation and amortization     765       306  
     Operating expenses     601       240  
     Property taxes     317       127  
Total cost of operations     1,683       673  
                 
Total operating loss     (262 )     (105 )
Interest expense     (301 )     (120 )
                 
Net loss before tax   (563 )   $ (225 )
                 

 

 

18 
 

 

 

(12) Consolidation of Riverfront Investment Partners II, LLC. Riverfront Holdings II, LLC.

 

On May 4, 2018, the Company and MRP Realty formed a Joint Venture to develop the second phase of the four phase master development known as Riverfront on the Anacostia in Washington, D.C. The purpose of the Joint Venture is to develop and own a 250,000-square-foot mixed-use development which supports 264 residential units and 6,937 square feet of retail. The Company contributed land with an agreed to value of $16,300,000 (cost basis of $4.6 million) and $6.2 million of cash to the Joint Venture for an 80% stake in the venture. MRP contributed capital of $5.6 million to the joint venture including development costs paid prior to formation of the joint venture and a $725,000 development fee. The Company further agreed to fund $13.75 million preferred equity financing at 7.5% interest rate all of which was advanced and repaid with interest in March 2021. The Company’s equity interest in the joint venture was previously accounted for under the equity method of accounting as MRP acts as the administrative agent of the joint venture and oversees and controls the day-to-day operations of the project.

 

In March 2021, Phase II (The Maren) reached stabilization. Stabilization in this case means 90% of the individual apartments have been leased and are occupied by third party tenants. Upon reaching stabilization, the Company has, for a period of one year, the exclusive right to (i) cause the joint venture to sell the property or (ii) cause the Company’s and MRP’s percentage interests in the joint venture to be adjusted so as to take into account the contractual payouts assuming a sale at the value of the development at the time of this “Conversion election”.

 

Reaching stabilization results in a change of control for accounting purposes as the veto rights of the minority shareholder lapsed and the Company became the primary beneficiary. As such, beginning March 31, 2021, the Company consolidated the assets (at fair value), liabilities and operating results of the joint venture. This consolidation resulted in a gain on remeasurement of investment in real estate partnership of $51,139,000 of which $13,965,000 was attributed to the noncontrolling interest. In accordance with the terms of the Joint Venture agreements, the Company used the fair value amount at date of conversion and calculated an adjusted ownership under the Conversion election. As such for financial reporting purposes effective March 31, 2021, the Company ownership is based upon this substantive profit sharing arrangement and is 70.41% on a prospective basis as agreed to by FRP and MRP.

                 
    As of March 31, 2021
    Riverfront   Gain on        
    Holdings II, LLC   Remeasurement     Revised  
                 
Land   $ 6,472     $ 22,858         $ 29,330  
Building and improvements, net     87,269       23,531           110,800  
Project under construction     258                    258  
Value of leases in place             4,750           4,750  
Cash     3,704                    3,704  
Cash held in escrow     336                    336  
Accounts receivable     707                    707  
Prepaid expenses     197                    197  
     Total Assets   $ 98,943     $ 51,139         $ 150,082  
                             
Long-term Debt   $ 88,000     $            $ 88,000  
Amortizable debt costs     (1,072                  (1,072
Other liabilities     441                    441  
Equity – FRP     7,026       37,174           44,200  
Equity - MRP     4,548       13,965           18,513  
     Total Liabilities and Capital   $ 98,943     $ 51,139         $ 150,082  
                                 

 

 

19 
 

 

 

 

 

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

 

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying unaudited consolidated financial statements and related notes in Item 1 and with the audited consolidated financial statements and the related notes included in our annual report on Form 10-K. The statements in this discussion regarding industry outlook, our expectations regarding our future performance, liquidity and capital resources and other non-historical statements in this discussion are forward-looking statements. These forward-looking statements are subject to risks and uncertainties, including the risks and uncertainties described in “Forward-Looking Statements” below and “Risk Factors” on page 5 of our annual report on Form 10-K. Our actual results may differ materially from those contained in or implied by any forward-looking statements. We assume no obligation to revise or publicly release any revision to any forward-looking statements contained in this quarterly report on Form 10-Q, unless required by law.

 

The following discussion includes a non-GAAP financial measure within the meaning of Regulation G promulgated by the Securities and Exchange Commission to supplement the financial results as reported in accordance with GAAP. The non-GAAP financial measure discussed is net operating income (NOI). The Company uses this metric to analyze its continuing operations and to monitor, assess, and identify meaningful trends in its operating and financial performance. This measure is not, and should not be viewed as, a substitute for GAAP financial measures. Refer to “Non-GAAP Financial Measure” below in this quarterly report for a more detailed discussion, including reconciliations of this non-GAAP financial measure to its most directly comparable GAAP financial measure.

 

Business Overview - FRP Holdings, Inc. is a real estate development, asset management and operating company businesses. Our properties are located in the Mid-Atlantic and southeastern United States and consist of:

 

Lands leased to mining companies, some of which will have second lives as development properties;

 

Residential apartments in Washington, D.C., Greenville, South Carolina and Richmond, Virginia;

 

Warehouse or office properties in the Mid-Atlantic states either existing or under development;

 

Mixed use properties under development in Washington, D.C. or Greenville, South Carolina; and

 

Properties held for sale.

 

We believe our present capital structure, liquidity and land provide us with years of opportunities to increase recurring revenue and long-term value for our shareholders. We intend to focus on our core business activity of real estate development, asset management and operations. We are developing a broad range of asset types that we believe will provide acceptable rates of return, grow recurring revenues and support future business. Capital commitments will be funded with cash proceeds from completed projects, existing cash, owned-land, partner capital and financing arrangements. We do not anticipate immediate benefits from investments. Timing of projects may be subject to delays caused by factors beyond our control.

 

Reportable Segments

 

We conduct primarily all of our business in the following four reportable segments: (1) asset management (2) mining royalty lands (3) development and (4) stabilized joint ventures. For more information regarding our reportable segments, see Note 3. Business Segments of our condensed consolidated financial statements included in this quarterly report.

 

 

20 
 

Asset Management Segment.

 

The Asset Management segment owns, leases and manages commercial properties. These assets create revenue and cash flows through tenant rental payments, lease management fees and reimbursements for building operating costs. The Company’s industrial warehouses typically lease for terms ranging from 3 – 10 years often with 1 or 2 renewal options. All base rent revenue is recognized on a straight-lined basis. All of the commercial warehouse leases are triple net and common area maintenance costs (CAM Revenue) are billed monthly, and insurance and real estate taxes are billed annually. 34 Loveton is the only office product wherein all leases are full service therefore there is no CAM revenue. Office leases are also recognized on a straight-lined basis. The major cash outlays incurred in this segment are for operating expenses, real estate taxes, building repairs, lease commissions and other lease closing costs, construction of tenant improvements, capital to acquire existing operating buildings and closing costs related thereto and personnel costs of our property management team.

 

As of June 30, 2022, the Asset Management Segment owned four commercial properties in fee simple as follows:

 

1) 34 Loveton Circle in suburban Baltimore County, Maryland consists of one office building totaling 33,708 square feet which is 95.1% occupied (16% of the space is occupied by the Company for use as our Baltimore headquarters). The property is subject to commercial leases with various tenants.

2) 155 E. 21st Street in Duval County, Florida was an office building property that remains under lease through March 2026. We permitted the tenant to demolish all structures on the property during 2018.

3) Cranberry Run Business Park in Hartford County, Maryland consists of five office buildings totaling 267,737 square feet which are 100% leased and occupied. The property is subject to commercial leases with various tenants.

4) Hollander 95 Business Park in Baltimore City, Maryland consists of two buildings totaling 145,590 square feet that were completed in the fourth quarter of 2021and are 69.1% leased and 52.8% occupied.

 

Management focuses on several factors to measure our success on a comparative basis in this segment. The major factors we focus on are (1) net operating income growth, (2) growth in occupancy, (3) average annual occupancy rate (defined as the occupied square feet at the end of each month during a fiscal year divided by the number of months to date in that fiscal year as a percentage of the average number of square feet in the portfolio over that same time period), (4) tenant retention success rate (as a percentage of total square feet to be renewed), (5) building and refurbishing assets to meet Class A and Class B institutional grade classifications, and (6) reducing complexities and deferred capital expenditures to maximize sale price.

 

Mining Royalty Lands Segment.

 

Our Mining Royalty Lands segment owns several properties comprising approximately 16,650 acres currently under lease for mining rents or royalties (excluding the 4,280 acres owned by our Brooksville joint venture with Vulcan Materials). Other than one location in Virginia, all of these properties are located in Florida and Georgia. The Company leases land under long-term leases that grant the lessee the right to mine and sell reserves from our property in exchange for royalty payments. A typical lease has an option to extend the lease for additional terms. The typical lease in this segment requires the tenant to pay us a royalty based on the number of tons of mined materials sold from our property during a given fiscal year multiplied by a percentage of the average annual sales price per ton sold. As a result of this royalty payment structure, we do not bear the cost risks associated with the mining operations, however, we are subject to the cyclical nature of the construction markets in these states as both volumes and prices tend to fluctuate through those cycles. In certain locations, typically where the reserves on our property have been depleted but the tenant still has a need for the leased land, we collect a minimum annual rental amount. We believe strongly in the potential for future growth in construction in Florida, Georgia, and Virginia which would positively benefit our profitability in this segment. In the fiscal year ended December 31, 2021, a total of 8 million tons were mined.

 

The major expenses in this segment are comprised of collection and accounting for royalties, management’s oversight of the mining leases, land entitlement for post-mining uses and property taxes at our non-leased locations and at our Grandin location which, unlike our other leased mining locations, are not entirely paid by the tenant. As such, our costs in this business are very low as a percentage of revenue, are relatively stable and are not affected by increases in production at our locations. Our current mining tenants include Vulcan Materials, Martin Marietta, Cemex, Argos and The Concrete Company. 

21 
 

 

Additionally, these locations provide us with opportunities for valuable “second lives” for these assets through proper land planning and entitlement.

 

Significant “2nd life” Mining Lands: 

 

Location Acreage Status
Brooksville, FL 4,280 +/- Development of Regional of Impact and County Land Use and Master Zoning in place for 5,800 residential unit, mixed-use development
Ft. Myers, FL 1,907 +/- Approval in place for 105, 1 acre, waterfront residential lots after mining completed.
Total 6,187 +/-  

 

 

Development Segment.

 

Through our Development segment, we own and are continuously monitoring for their “highest and best use” several parcels of land that are in various stages of development. Our overall strategy in this segment is to convert all our non-income producing lands into income production through (i) an orderly process of constructing new commercial and residential buildings for us to own and operate or (ii) a sale to, or joint venture with, third parties. Additionally, our Development segment will purchase or form joint ventures on new developments of land not previously owned by the Company.

 

Revenues in this segment are generated predominately from land sales and interim property rents. The significant cash outlays incurred in this segment are for land acquisition costs, entitlement costs, property taxes, design and permitting, the personnel costs of our in-house management team and horizontal and vertical construction costs.

 

Development Segment – Warehouse/Office Land.

 

At June 30, 2022, this segment owned the following development parcels:

1)Six acres of horizontally developed land at Hollander Business Park in Baltimore, City, Maryland with one 101,750 square feet industrial build-to-suit currently under construction.
2)55 acres of land that will be capable of supporting over 690,000 square feet of industrial product located at 1001 Old Philadelphia Road in Aberdeen, Maryland.
3)17 acres of land in Harford County, Maryland that will support 258,545 square feet of industrial development.

 

We also have three properties that were either spun-off to us from Florida Rock Industries in 1986 or acquired by us from unrelated third parties. These properties, as a result of our “highest and best use” studies, are being prepared for income generation through sale or joint venture with third parties, and in certain cases we are leasing these properties on an interim basis for an income stream while we wait for the development market to mature.

 

Development Segment - Significant Investment Lands Inventory:

 

Location Approx. Acreage Status

 

NBV

Riverfront on the Anacostia Phases III-IV 2.5 Conceptual design program ongoing $6,166,000
Hampstead Trade Center, MD 118 Residential zoning applied for in preparation for sale $9,968,000
Square 664E, on the Anacostia River in DC 2 Under lease to Vulcan Materials as a concrete batch plant through 2026 $7,594,000
Total 122.5   $23,728,000

 

22 
 

 

Development Segment - Investments in Joint Ventures

 

The third leg of our Development Segment consists of investments in joint ventures for properties in development. The Company has investments in joint ventures, primarily with other real estate developers which are summarized below:

 

Property JV Partner Status

 

% Ownership

Brooksville Quarry, LLC near Brooksville, Florida Vulcan Materials Company Future planned residential development of 3,500 acres which are currently subject to mining lease 50%
BC FRP Realty, LLC for 35 acres in Maryland St John Properties Development of 329,000 square feet multi-building business park in progress 50%
Bryant Street Partnerships for 5 acres of land in Washington, D.C. MRP Realty Mixed-use development with 487 residential units and 91,661 square feet of retail partially completed 61.36%
Aberdeen Station residential development in Harford County, Maryland   $31.1 million in exchange for an interest rate of 10% and a 20% preferred return after which the Company is also entitled to a portion of proceeds from sale Financing
Amber Ridge residential development in Prince George’s County, Maryland   $18.5 million in exchange for an interest rate of 10% and a preferred return of 20% after which the Company is also entitled to a portion of proceeds from sale Financing
1800 Half Street property in Buzzard Point area of Washington, D.C. MRP Realty Construction underway on ten-story structure with 344 apartments and 8,356 square feet of ground floor retail 61.37%
.408 Jackson property in Greenville, SC Woodfield Development Construction underway on mixed-use project with 227 multifamily units and 4,539 square feet of retail space began in May 2020 40%
Riverside property 1430 Hampton Avenue, Greenville, SC Woodfield Development Construction underway on 200-unit apartment project began in February 2020 40%

 

Joint ventures where FRP is not the primary beneficiary are reflected in the line “Investment in joint ventures” on the balance sheet and “Equity in loss of joint ventures” on the income statement. The following table summarizes the Company’s investments in unconsolidated joint ventures (in thousands):

                            The  
                            Company's  
                            Share of Profit  
     Common     Total     Total Assets of     Profit (Loss)      (Loss) of the  
    Ownership     Investment     The Partnership     Of the Partnership      Partnership (1)  
                               
As of June 30, 2022                              
Brooksville Quarry, LLC   50.00 %  $ 7,546     14,461     (42 )   (21 )
BC FRP Realty, LLC   50.00 %   5,485     22,115     (90 )   (45 )
Bryant Street Partnerships   61.36 %   58,253     203,480     (4,787 )   (3,186 )
Aberdeen Station Loan         917     917     —      —   
DST Hickory Creek   26.65 %   6,000     45,186     (271 )   171  
Amber Ridge Loan         6,234     6,234     —      —   
1800 Half St. Owner, LLC   61.37 %   39,112     119,957     —      (64 )
Greenville/Woodfield Partnerships   40.00 %   16,108     92,947     (563 )   (225 )
   Total        $ 139,655     505,297       (5,753 )     (3,370 )
23 
 

 

The major classes of assets, liabilities and equity of the Company’s Investments in Joint Ventures as of June 30, 2022, are summarized in the following two tables (in thousands):

 

  As of June 30, 2022   Total
  Riverfront   Bryant Street   DST Hickory   1800 Half St.   Greenville/   Apartment/
  Holdings II, LLC   Partnership   Creek   Partnership   Woodfield   Mixed Use
                       
Investments in real estate, net 0       195,633       43,124       119,311       92,149      $ 450,217  
Cash and cash equivalents   0       2,831       579       646       466       4,522  
Unrealized rents & receivables   0       4,859       1,181       0       14       6,054  
Deferred costs   0       157       302       0       318       777  
   Total Assets 0       203,480       45,186       119,957       92,947     $ 461,570  
                                             

 

 

Secured notes payable 0       128,697       29,360       47,128       51,148     $ 256,333  
Other liabilities   0       3,077       144       11,876       3,402       18,499  
Capital - FRP   0       54,814       4,179       37,414       15,359       111,766  
Capital – Third Parties   0       16,892       11,503       23,539       23,038       74,972  
   Total Liabilities and Capital 0       203,480       45,186       119,957       92,947     $ 461,570  

 

 

  As of June 30, 2022    
  Brooksville   BC FRP   Aberdeen   Amber Ridge   Apartment/   Grand
  Quarry, LLC   Realty, LLC   Loan   Loan   Mixed Use   Total
                       
Investments in real estate, net  $ 14,279       21,305       917       6,234       450,217      $ 492,952  
Cash and cash equivalents   178       224       0       0       4,522       4,924  
Unrealized rents & receivables   0       431       0       0       6,054       6,485  
Deferred costs   4       155       0       0       777       936  
   Total Assets  $ 14,461       22,115       917       6,234       461,570     $ 505,297  
                                               
Secured notes payable  $ 0       11,093       0       0       256,333     $ 267,426  
Other liabilities   42       164       0       0       18,499       18,705  
Capital - FRP   7,546       5,429       917       6,234       111,766       131,892  
Capital - Third Parties   6,873       5,429       0       0       74,972       87,274  
   Total Liabilities and Capital  $ 14,461       22,115       917       6,234       461,570     $ 505,297  
                                               

 

 

 

Stabilized Joint Venture Segment.

 

Currently the segment includes three stabilized joint ventures which own, lease and manage buildings. These assets create revenue and cash flows through tenant rental payments, and reimbursements for building operating costs. The Company’s residential spaces generally lease for 12 – 15-month lease terms and 90 days prior to the expiration, as long as there is no balance due, the tenant is offered a renewal. If no notice to move out or renew is made, then the leases go to month to month until notification of termination or renewal is received. Renewal terms are typically 9 – 12 months. From March 2020 through the end of 2021, we were prohibited from increasing rent on renewals by emergency measures in Washington, DC designed to ease the burden of the pandemic on its citizens. These measures expired at the end of 2021. The Company also leases retail spaces at apartment/mixed-use properties. The retail leases are typically 10 -15-year leases with options to renew for another 5 years. Retail leases at these properties also include percentage rents which average 3-6% of annual sales for the tenant that exceed a breakpoint stipulated by each individual lease. All base rent revenue is recognized on a straight-line basis. The major cash outlays incurred in this segment are for property taxes, full service maintenance, property management, utilities and marketing. The three stabilized joint venture properties are as follows:

 

 

 

24 
 

 

Property and Occupancy JV Partner Method of Accounting

 

% Ownership

Dock 79 apartments Washington, D.C.

305 apartment units and 14,430 square feet of retail

MRP Realty Consolidated 66%
The Maren apartments Washington, D.C. 264 residential units and 6,758 square feet of retail MRP Realty Consolidated as of March 31, 2021 70.41%
DST Hickory Creek 294 apartment units in Henrico County, MD Capital Square Cost Method 26.6%

 

 

Second Quarter Operational Highlights

·Dock 79 ended the reporting period with average residential occupancy above 95% for the fifth straight quarter
·7.33% increase on renewals at Dock 79
·Best second quarter of revenue for mining royalties in segment’s history
·55.1% increase in Asset Management Revenue versus same period last year
·16.0% increase in NOI ($6.94 million vs $5.98 million) compared to same period last year

 

Comparative Results of Operations for the Three months ended June 30, 2022 and 2021

 

Consolidated Results

(dollars in thousands)  Three Months Ended June 30, 
  2022   2021   Change   %
Revenues:                              
  Lease Revenue $ 6,745     $ 5,861     $ 884       15.1 %
  Mining lands lease revenue   2,883       2,634       249       9.5 %
 Total Revenues   9,628       8,495       1,133       13.3 %
                               
Cost of operations:                              
  Depreciation/Depletion/Amortization   2,868       4,388       (1,520     -34.6 %
  Operating Expenses   1,541       1,394       147       10.5 %
  Property Taxes   1,041       1,000       41       4.1 %
  Management company indirect   805       822       (17     -2.1 %
  Corporate Expense   1,307       1,050       257       24.5 %
Total cost of operations   7,562       8,654       (1,092 )     -12.6 %
                               
Total operating profit (loss)   2,066       (159 )     2,225       -1399.4 %
                               
Net investment income   1,120       1,048       72       6.9 %
Interest Expense   (739 )     (446 )     (293 )     65.7 %
Equity in loss of joint ventures   (1,766 )     (1,118 )     (648 )     58.0 %
Gain on sale of real estate   —         805       (805 )     -100.0 %
Income before income taxes   681       130       551       423.8 %
Provision for (benefit from) income taxes   99       (151 )     250       -165.6 %
                               
Net income   582       281       301       107.1 %
Gain (loss) attributable to noncontrolling interest   (75 )     199       (274 )     -137.7 %
Net income attributable to the Company $ 657     $ 82     $ 575       701.2 %
                               
                                 

 

 

25 
 

Net income for the second quarter of 2022 was $657,000 or $.07 per share versus $82,000 or $.01 per share in the same period last year. The second quarter of 2022 was impacted by the following items:

 

 

Asset Management Segment Results

 

    Three months ended June 30        
(dollars in thousands)   2022   %   2021   %   Change   %
                         
Lease revenue   $ 912       100.0 %     588       100.0 %     324       55.1 %
                                                 
Depreciation, depletion and amortization     230       25.2 %     134       22.8 %     96       71.6 %
Operating expenses     111       12.2 %     74       12.6 %     37       50.0 %
Property taxes     52       5.7 %     42       7.1 %     10       23.8 %
Management company indirect     100       10.9 %     210       35.7 %     (110     -52.4 %
Corporate expense     225       24.7 %     288       49.0 %     (63     -21.9 %
                                                 
Cost of operations     718       78.7 %     748       127.2 %     (30     -4.0 %
                                                 
Operating profit (loss)   $ 194       21.3 %     (160     -27.2 %     354       -221.3 %

 

 

Total revenues in this segment were $912,000, up $324,000 or 55.1%, over the same period last year. Operating profit was $194,000, up $354,000 from an operating loss of $(160,000) in the same quarter last year. Operating profit is up primarily because Cranberry Run is now 100% leased and occupied compared to 77.6% leased and 59.7% occupied at the end of the same quarter last year. Revenues are up because of Cranberry Run as well as the addition of our two most recent spec buildings at Hollander Business Park which were under construction during the same period last year.

 

Mining Royalty Lands Segment Results

    Three months ended June 30        
(dollars in thousands)   2022   %   2021   %   Change   %
                         
Mining lands lease revenue   $ 2,883       100.0 %     2,634       100.0 %     249       9.5 %
                                                 
Depreciation, depletion and amortization     189       6.6 %     58       2.2 %     131       225.9 %
Operating expenses     17       0.6 %     12       0.5 %     5       41.7 %
Property taxes     69       2.4 %     68       2.6 %     1       1.5 %
Management company indirect     110       3.8 %     96       3.6 %     14       14.6 %
Corporate expense     148       5.1 %     108       4.1 %     40       37.0 %
                                                 
Cost of operations     533       18.5 %     342       13.0 %     191       55.8 %
                                                 
Operating profit   $ 2,350       81.5 %     2,292       87.0 %     58       2.5 %

 

 

Total revenues in this segment were $2,883,000 versus $2,634,000 in the same period last year. Total operating profit

26 
 

in this segment was $2,350,000, an increase of $58,000 versus $2,292,000 in the same period last year. This increase is primarily the result of the additional royalties from the acquisition in Astatula, FL which we completed at the beginning of this quarter.

 

Development Segment Results

    Three months ended June 30  
(dollars in thousands)   2022   2021   Change  
               
Lease revenue   408       451       (43  
                           
Depreciation, depletion and amortization     47       53       (6  
Operating expenses     80       45       35    
Property taxes     356       364       (8 )  
Management company indirect     506       400       106    
Corporate expense     816       522       294    
                           
Cost of operations     1,805       1,384       421    
                           
Operating loss   $ (1,397 )     (933 )     (464 )  

 

With respect to ongoing projects:

 

 

Stabilized Joint Venture Segment Results

    Three months ended June 30        
(dollars in thousands)   2022   %   2021   %   Change   %
                         
Lease revenue   $ 5,425       100.0 %     4,822       100.0 %     603       12.5 %
                                                 
Depreciation, depletion and amortization     2,402       44.3 %     4,143       85.9 %     (1,741     -42.0 %
Operating expenses     1,333       24.6 %     1,263       26.2 %     70       5.5 %
Property taxes     564       10.4 %     526       10.9 %     38       7.2 %
Management company indirect     89       1.6 %     116       2.4 %     (27     -23.3 %
Corporate expense     118       2.2 %     132       2.8 %     (14     -10.6 %
                                                 
Cost of operations     4,506       83.1 %     6,180       128.2 %     (1,674     -27.1 %
                                                 
Operating profit (loss)   $ 919       16.9 %     (1,358     -28.2 %     2,277       -167.7 %
27 
 

 

Total revenues in this segment were $5,425,000, an increase of $603,000 versus $4,822,000 in the same period last year. The Maren’s revenue was $2,457,000 and Dock 79 revenues increased $307,000. Total operating profit in this segment was $919,000 an increase of $2,277,000 versus an operating loss of $(1,358,000) in the same period last year. Net Operating Income this quarter for this segment was $3,533,000, up $496,000 or 16.3% compared to the same quarter last year.

 

At the end of June, The Maren was 93.93% leased and 96.21% occupied. Average residential occupancy for the quarter was 95.34%, and 65.38% of expiring leases renewed with an average rent increase on renewals of 4.60%. The Maren is a joint venture between the Company and MRP, in which FRP Holdings, Inc. is the majority partner with 70.41% ownership.

 

Dock 79’s average residential occupancy for the quarter was 96.39%, and at the end of the quarter, Dock 79’s residential units were 94.8% leased and 94.1% occupied. This quarter, 60.78% of expiring leases renewed with an average rent increase on renewals of 7.33%. Dock 79 is a joint venture between the Company and MRP, in which FRP Holdings, Inc. is the majority partner with 66% ownership.

 

Second quarter distributions from our CS1031 Hickory Creek DST investment were $86,000.

 

 

Six Months Operational Highlights

·34.7% increase in asset management revenue versus first six months of last year
·Highest six-month total of mining royalties revenue in segment’s history
·65.52% renewal rate at Dock 79 with 6.41% increase on renewals through first six months
·24.0% increase in NOI ($12.67 million vs $10.22 million) compared to first six months last year

 

Comparative Results of Operations for the Six months ended June 30, 2022 and 2021

 

Consolidated Results

(dollars in thousands)  Six Months Ended June 30, 
  2022   2021   Change   %
Revenues:                              
  Lease Revenue $ 13,027     $ 9,399     $ 3,628       38.6 %
  Mining lands lease revenue   5,308       4,949       359       7.3 %
 Total Revenues   18,335       14,348       3,987       27.8 %
                               
Cost of operations:                              
  Depreciation/Depletion/Amortization   5,766       5,831       (65     -1.1 %
  Operating Expenses   3,349       2,235       1,112       49.8 %
  Property Taxes   2,069       1,778       291       16.4 %
  Management company indirect   1,579       1,392       187       13.4 %
  Corporate Expense   2,142       1,829       313       17.1 %
Total cost of operations   14,905       13,065       1,840       14.1 %
                               
Total operating profit   3,430       1,283       2,147       167.3 %
                               
Net investment income   2,018       2,423       (405 )     -16.7 %
Interest Expense   (1,477 )     (1,371 )     (106 )     7.7 %
Equity in loss of joint ventures   (3,370 )     (2,753 )     (617 )     22.4 %

Gain on remeasurement of investment in real estate

partnership

  —         51,139       (51,139 )     -100.0 %
Gain on sale of real estate   733       805       (72 )     -8.9 %
Income before income taxes   1,334       51,526       (50,192     -97.4 %
Provision for income taxes   348       10,370       (10,022     -96.6 %
                               
Net income   986       41,156       (40,170 )     -97.6 %
Gain (loss) attributable to noncontrolling interest   (343 )     12,701       (13,044 )     -102.7 %
Net income attributable to the Company $ 1,329     $ 28,455     $ (27,126 )     -95.3 %
                               

28 
 

 

 

Net income attributable to the Company for the first half of 2022 was $1,329,000 or $.14 per share versus $28,455,000 or $3.03 per share in the same period last year. The first half of 2022 was impacted by the following items:

 

 

Net income for the first half of 2021 included a gain of $51.1 million on the remeasurement of investment in The Maren real estate partnership, which is included in Income before income taxes. This gain on remeasurement was mitigated by a $10.1 million provision for taxes and $14.0 attributable to noncontrolling interest.

 

 

Asset Management Segment Results

    Six months ended June 30        
(dollars in thousands)   2022   %   2021   %   Change   %
                         
Lease revenue   $ 1,751       100.0 %     1,300       100.0 %     451       34.7 %
                                                 
Depreciation, depletion and amortization     464       26.5 %     271       20.8 %     193       71.2 %
Operating expenses     279       15.9 %     213       16.4 %     66       31.0 %
Property taxes     105       6.0 %     80       6.2 %     25       31.3 %
Management company indirect     192       11.0 %     377       29.0 %     (185     -49.1 %
Corporate expense     369       21.1 %     502       38.6 %     (133     -26.5 %
                                                 
Cost of operations     1,409       80.5 %     1,443       111.0 %     (34     -2.4 %
                                                 
Operating profit (loss)   $ 342       19.5 %     (143     -11.0 %     485       -339.2 %

 

Total revenues in this segment were $1,751,000, up $451,000 or 34.7%, over the same period last year. Operating profit was $342,000, up $485,000 from an operating loss of $(143,000) in the same period last year.

 

 

Mining Royalty Lands Segment Results

    Six months ended June 30        
(dollars in thousands)   2022   %   2021   %   Change   %
                         
Mining lands lease revenue   $ 5,308       100.0 %     4,949       100.0 %     359       7.3 %
                                                 
Depreciation, depletion and amortization     244       4.6 %     123       2.5 %     121       98.4 %
Operating expenses     32       0.6 %     23       0.5 %     9       39.1 %
Property taxes     134       2.5 %     131       2.6 %     3       2.3 %
Management company indirect     217       4.1 %     178       3.6 %     39       21.9 %
Corporate expense     242       4.6 %     189       3.8 %     53       28.0 %
                                                 
Cost of operations     869       16.4 %     644       13.0 %     225       34.9 %
                                                 
Operating profit   $ 4,439       83.6 %     4,305       87.0 %     134       3.1 %

 

29 
 

 

 

Total revenues in this segment were $5,308,000 versus $4,949,000 in the same period last year. Total operating profit in this segment was $4,439,000, an increase of $134,000 versus $4,305,000 in the same period last year.

 

 

Development Segment Results

    Six months ended June 30  
(dollars in thousands)   2022   2021   Change  
               
Lease revenue   791       768       23    
                           
Depreciation, depletion and amortization     92       106       (14  
Operating expenses     291       71       220    
Property taxes     711       727       (16 )  
Management company indirect     996       661       335    
Corporate expense     1,337       941       396    
                           
Cost of operations     3,427       2,506       921    
                           
Operating loss   $ (2,636 )     (1,738 )     (898 )  

 

 

Stabilized Joint Venture Segment Results

    Six months ended June 30        
(dollars in thousands)   2022   %   2021   %   Change   %
                         
Lease revenue   $ 10,485       100.0 %     7,331       100.0 %     3,154       43.0 %
                                                 
Depreciation, depletion and amortization     4,966       47.4 %     5,331       72.7 %     (365     -6.8 %
Operating expenses     2,747       26.2 %     1,928       26.3 %     819       42.5 %
Property taxes     1,119       10.7 %     840       11.5 %     279       33.2 %
Management company indirect     174       1.6 %     176       2.4 %     (2     -1.1 %
Corporate expense     194       1.8 %     197       2.7 %     (3     -1.5 %
                                                 
Cost of operations     9,200       87.7 %     8,472       115.6 %     728       8.6 %
                                                 
Operating profit (loss)   $ 1,285       12.3 %     (1,141     -15.6 %     2,426       -212.6 %

 

In March 2021, we reached stabilization on Phase II (The Maren) of the development known as RiverFront on the Anacostia in Washington, D.C. As such, as of March 31, 2021, the Company consolidated the assets (at current fair value based on appraisal), liabilities and operating results of the joint venture. Up through the first quarter of the prior year, accounting for The Maren was reflected in Equity in loss of joint ventures on the Consolidated Statements of Income. Starting April 1, 2021, all the revenue and expenses are accounted for in the same manner as Dock 79 in the stabilized joint venture segment.

 

Total revenues in this segment were $10,485,000, an increase of $3,154,000 versus $7,331,000 in the same period last year. The Maren’s revenue was $4,866,000 and Dock 79 revenues increased $450,000. Total operating profit in this segment was $1,285,000, an increase of $2,426,000 versus an operating loss of $(1,141,000) in the same period last year. Net Operating Income for this segment was $6,670,000, up $2,099,000 or 45.92% compared to the same period last year. All of these increases over the first six months last year are primarily due to the Maren’s consolidation into this segment in March 31, 2021.

 

The Maren’s average residential occupancy for the first six months of 2022 was 95.24%, and 63.53% of expiring leases renewed with an average rent increase on renewals of 3.69%. The Maren is a joint venture between the

30 
 

Company and MRP, in which FRP Holdings, Inc. is the majority partner with 70.41% ownership.

 

Dock 79’s average residential occupancy for the first six months of 2022 was 95.79%. Through the first six months of the year, 65.52% of expiring leases renewed with a 6.41% increase on renewals. Dock 79 is a joint venture between the Company and MRP, in which FRP Holdings, Inc. is the majority partner with 66% ownership.

 

Distributions from our CS1031 Hickory Creek DST investment were $171,000 for the first six months of the year.

 

 

Liquidity and Capital Resources. The growth of the Company’s businesses requires significant cash needs to acquire and develop land or operating buildings and to construct new buildings and tenant improvements. As of June 30, 2022, we had $159,262,000 of cash and cash equivalents. As of June 30, 2022, we had no debt borrowed under our $20 million Wells Fargo revolver, $506,000 outstanding under letters of credit and $19,494,000 available to borrow under the revolver. On March 19, 2021, the Company refinanced Dock 79 and The Maren projects pursuant to separate Loan Agreements and Deed of Trust Notes entered into with Teachers Insurance and Annuity Association of America, LLC. Dock 79 and The Maren borrowed principal sums of $92,070,000 and $88,000,000 respectively, in connection with the refinancing.

 

Cash Flows - The following table summarizes our cash flows from operating, investing and financing activities for each of the periods presented (in thousands of dollars):

 

    Six months
    Ended June 30,
    2022   2021
Total cash provided by (used for):                
Operating activities   $ 8,807       10,963  
Investing activities     (9,950 )     52,438  
Financing activities     (1,116     844  
Increase (decrease) in cash and cash equivalents   $ (2,259 )     64,245  
                 
Outstanding debt at the beginning of the period     178,409       89,964  
Outstanding debt at the end of the period     178,483       178,334  

 

 

Operating Activities - Net cash provided by operating activities for the six months ended June 30, 2022 was $8,807,000 versus $10,963,000 in the same period last year. In the prior year the Gain on remeasurement of investment in real estate partnership and related deferred income taxes were both non-cash adjustments to net income to arrive at net cash provided by operating activities.

 

At June 30, 2022, the Company was invested in U.S. Treasury notes valued at $140,883,000 maturing in late 2022 through 2024. The unrealized loss on these investments of $1,699,000 was recorded as part of comprehensive income and based on the market value (Level 1).

 

Investing Activities - Net cash used in investing activities for the six months ended June 30, 2022 was $9,950,000 versus cash provided by investing activities of $52,438,000 in the same period last year. The $62 million decrease was primarily due to a $10.6 million increase in the purchase of property, $38.2 million decrease on maturities and sales of our corporate bond portfolio, a $10.4 million decrease on the return of our preferred equity financing with the prior year including interest of $16.1 million from The Maren, and the prior year including $3.7 million for cash on the books of The Maren upon consolidation.

 

Financing Activities – Net cash used in investing activities was $1,116,000 versus cash provided of $844,000 in the same period last year primarily due to the prior year refinancing of Dock 79 for $1.4 million more net of debt issuance costs than the amount matured.

 

 

31 
 

Credit Facilities - On February 6, 2019, the Company entered into a First Amendment to the 2015 Credit Agreement (the "Credit Agreement") with Wells Fargo Bank, N.A. (Wells Fargo”). The Credit Agreement modifies the Company’s prior Credit Agreement with Wells Fargo, dated January 30, 2015. The Credit Agreement establishes a five-year revolving credit facility with a maximum facility amount of $20 million. The interest rate under the Credit Agreement will be a maximum of 1.50% over Daily 1-Month LIBOR, which may be reduced quarterly to 1.25% or 1.0% over Daily 1-Month LIBOR if the Company meets a specified ratio of consolidated total debt to consolidated total capital. A commitment fee of 0.25% per annum is payable quarterly on the unused portion of the commitment but the amount may be reduced to 0.20% or 0.15% if the Company meets a specified ratio of consolidated total debt to consolidated total capital. The credit agreement contains certain conditions and financial covenants, including a minimum tangible net worth and dividend restriction. As of June 30, 2022, these covenants would have limited our ability to pay dividends to a maximum of $246 million combined.

 

On March 19, 2021, the Company refinanced Dock 79 and The Maren projects pursuant to separate Loan Agreements and Deed of Trust Notes entered into with Teachers Insurance and Annuity Association of America, LLC. Dock 79 and The Maren borrowed principal sums of $92,070,000 and $88,000,000 respectively, in connection with the refinancing. The loans are separately secured by the Dock 79 and The Maren real property and improvements, bear a fixed interest rate of 3.03% per annum, and require monthly payments of interest only with the principal in full due April 1, 2033. Either loan may be prepaid subsequent to April 1, 2024, subject to yield maintenance premiums. Either loan may be transferred to a qualified buyer as part of a one-time sale subject to a 60% loan to value, minimum of 7.5% debt yield and a 0.75% transfer fee. Effective March 31, 2021, the Company consolidated the assets (at current fair value), liabilities and operating results of our Riverfront Investment Partners II, LLC partnership (The Maren) which was previously accounted for under the equity method. As such the full amount of our mortgage loan was recorded in the consolidated financial statements.

 

Cash Requirements – The Company currently expects its capital expenditures for the remainder of 2022 to include approximately $36.4 million for real estate including investments in joint ventures, which will be funded mostly out of cash and investments on hand, cash generated from operations and property sales, or borrowings under our credit facilities.

 

Impact of the COVID-19 Pandemic. We have continued operations throughout the pandemic and have made every effort to act in accordance with national, state, and local regulations and guidelines. During 2020, Dock 79 and The Maren most directly suffered the impacts to our business from the pandemic due to our retail tenants being unable to operate at capacity, the lack of attendance at the Washington Nationals baseball park and the rent freeze imposed by the District. In 2021, the Delta and Omicron variants of the virus impacted our businesses, but because of the vaccine and efforts to reopen the economy, while still affected, they were not impacted to the extent that they were in 2020. Bryant Street has continued to experience the impact of the pandemic as result of low ridership on the DC Metro, easy access to which was one of the principal features/amenities of the development. It is possible that this version of the virus and its succeeding variants may impact our ability to lease retail spaces in Washington, D.C. and Greenville. We expect our business to be affected by the pandemic for as long as government intervention and regulation is required to combat the threat.

 

Summary and Outlook. Royalty revenue for the quarter was up 9.44% versus the same period last year and revenue for the first six months increased 7.26% versus the same period the year before. This is the highest second-quarter revenue total in this segment’s history, the highest six-month revenue total in the segment’s history, and the first time we have ever eclipsed $5 million in revenue in the first six months (or any six-month period). As mentioned previously, this jump in revenue is primarily the result of the acquisition we completed at the beginning of this quarter of a new mining royalty property in Astatula, FL. The additional royalties along with increased infrastructure spending and pressure on supply should continue to help push price and volumes and drive this segment forward.

 

This is the first full quarter where we have had the ability to raise rents on renewals at Dock 79 and the Maren. Both properties performed well with 65.38% of expiring leases at the Maren renewing with an average increase of 4.60%, and 60.78% of expiring leases at Dock 79 renewing with an average of 7.33%. When we could not renew an existing residential lease and instead signed a new tenant, we saw in increase in rent on these “trade-outs” of 11.75% at Dock 79 and 10.58% at The Maren. Dock 79 experienced the effects of the rent freeze to a greater extent than the Maren, so it is not surprising that a return to market rents has had a greater effect on its renewal increases as well as these trade-

32 
 

outs. Increased inflation has also played a part in driving these increases. However, we believe that this also speaks to the demand these assets generate in a competitive market and confirms our “long” position in this submarket with these assets as well as the ones we have in our development pipeline.

 

Demand for industrial space remains high and Asset Management’s performance this quarter speaks to that. Cranberry Run is 100% leased and occupied for the second straight quarter and as a result achieved first six-month revenues 34.19% higher than last year. Our other two properties (our home office in Maryland and Vulcan’s former Jacksonville office) remain essentially unchanged and fully leased. As to the immediate future of this segment, we anticipate shell completion of our final building at Hollander by the end of 2022. This 101,750 square foot warehouse is a build-to-suit with a 10-year lease, which will positively impact revenue, operating profit, and NOI for some time.

 

Looking back on the first six months, the numbers speak to both organic growth in all our income producing segments as well as the benefit of two full quarters of a stabilized and consolidated Maren. The one major headwind in our income statement is the increase in equity in loss in joint venture. This is both a function of the equity method of accounting and the nature of our multifamily assets prior to stabilization. What one line item encompassing several properties simply cannot tell you, and perhaps where an NOI number is more illustrative, is how we are incrementally growing the value of this Company. Development and lease-up are always going to be expensive and a damper on earnings, and, good, bad, or indifferent, are simply the price you pay for future income and cashflow. We count ourselves extremely fortunate to have a shareholder base that can see the big picture and understands what we are building towards.

 

We have several meaningful events and milestones heading our way with what remains of the year: the stabilization of both Bryant Street; stabilization and permanent financing for Riverside; completion of construction on and the commencement of leasing for both .408 Jackson in Greenville and The Verge in Washington, DC. We are working diligently to conservatively convert our existing cash into new investments, cautiously optimistic as ever, but ever mindful of our duty to be responsible stewards of your capital.

 

 

Non-GAAP Financial Measure.

 

To supplement the financial results presented in accordance with GAAP, FRP presents certain non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. The non-GAAP financial measure included in this quarterly report is net operating income (NOI). FRP uses this non-GAAP financial measure to analyze its operations and to monitor, assess, and identify meaningful trends in its operating and financial performance. This measure is not, and should not be viewed as, a substitute for GAAP financial measures.

 

Net Operating Income Reconciliation                      
Six months ended 06/30/22 (in thousands)                      
          Stabilized            
  Asset       Joint   Mining   Unallocated   FRP
  Management   Development   Venture   Royalties   Corporate   Holdings
  Segment   Segment   Segment   Segment   Expenses   Totals
Net Income (loss) 249       (3,351 )     (92 )     3,758       422       986  
Income Tax Allocation   93       (1,242 )     92     1,393       12       348  
Income (loss) before income taxes   342       (4,593 )     —         5,151       434       1,334  
                                               
Less:                                              
 Unrealized rents   196       —         —         105       —         301  
 Gain on sale of real estate   —         —         —         733       —         733  
 Equity in gain of Joint Ventures   —         —         171       —         —         171  
 Interest income   —         1,563       —         —         455       2,018  
Plus:                                              
 Unrealized rents   —         —         51       —         —         51  
 Equity in loss of Joint Ventures   —         3,520       —         21       —         3,541  
 Interest Expense   —         —         1,456       —         21       1,477  
 Depreciation/Amortization   464       92       4,966       244       —         5,766  
 Management Co. Indirect   192       996       174       217       —         1,579  
 Allocated Corporate Expenses   369       1,337       194       242       —         2,142  
                                               
Net Operating Income (loss) 1,171       (211 )     6,670       5,037       —         12,667  
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Net Operating Income Reconciliation                      
Six months ended 06/30/21 (in thousands)                      
          Stabilized            
  Asset       Joint   Mining   Unallocated   FRP
  Management   Development   Venture   Royalties   Corporate   Holdings
  Segment   Segment   Segment   Segment   Expenses   Totals
Net Income (loss) (123     (1,629 )     38,591       3,731       586       41,156  
Income Tax Allocation   (46     (604 )     9,601       1,383       36       10,370  
Income (loss) before income taxes   (169     (2,233 )     48,192       5,114       622       51,526  
                                               
Less:                                              
 Gain on remeasurement of real estate investment   —         —         51,139       —         —         51,139  
 Gain on investment land sold   —         —         —         831       —         831  
 Unrealized rents   11       —         —         113       —         124  
 Interest income   —         1,779       —         —         644       2,423  
Plus:                                              
 Unrealized rents   —         —         8       —         —         8  
 Loss on sale of land   26       —         —         —         —         26  
 Equity in loss of Joint Venture   —         2,274       457       22       —         2,753  
 Interest Expense   —         —         1,349       —         22       1,371  
 Depreciation/Amortization   271       106       5,331       123       —         5,831  
 Management Co. Indirect   377       661       176       178       —         1,392  
 Allocated Corporate Expenses   502       941       197       189       —         1,829  
                                               
Net Operating Income (loss) 996       (30 )     4,571       4,682       —         10,219  

 

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

 

Interest Rate Risk - We are exposed to the impact of interest rate changes through our variable-rate borrowings under our Credit Agreement with Wells Fargo.

 

Under the Wells Fargo Credit Agreement, the applicable margin for borrowings at June 30, 2022 was Daily 1-Month LIBOR plus 1.0%. The applicable margin for such borrowings will be increased in the event that our debt to capitalization ratio as calculated under the Wells Fargo Credit Agreement Facility exceeds a target level.

 

The Company did not have any variable rate debt at June 30, 2022, so a sensitivity analysis was not performed to determine the impact of hypothetical changes in interest rates on the Company’s results of operations and cash flows.

 

 

ITEM 4. CONTROLS AND PROCEDURES

 

CONCLUSION REGARDING THE EFFECTIVENESS OF DISCLOSURE CONTROLS AND PROCEDURES

 

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure.

 

The Company also maintains a system of internal accounting controls over financial reporting that are designed to provide reasonable assurance to the Company’s management and Board of Directors regarding the preparation and fair presentation of published financial statements.

 

All control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving the desired control objectives.

 

As of June 30, 2022, the Company, under the supervision and with the participation of the Company's management, including the CEO, CFO and CAO, carried out an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on this evaluation, the Company’s CEO, CFO and CAO concluded that the Company's disclosure controls and procedures are effective in alerting them in a timely manner to material information required to be included in periodic SEC filings.

 

There have been no changes in the Company’s internal controls over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

 

PART II. OTHER INFORMATION

 

Item 1A. RISK FACTORS

 

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

 

35 
 

 

 

Item 2. PURCHASES OF EQUITY SECURITIES BY THE ISSUER

            (c)    
            Total    
            Number of    
            Shares   (d)
            Purchased   Approximate
    (a)       As Part of   Dollar Value of
    Total   (b)   Publicly   Shares that May
    Number of   Average   Announced   Yet Be Purchased
    Shares   Price Paid   Plans or   Under the Plans
Period   Purchased   per Share   Programs   or Programs (1)
  April 1 through April 30       —       $ —         —       $ 9,363,000  
                                     
  May 1 through May 31       —       $ —         —       $ 9,363,000  
                                     
  June 1 through June 30       —       $ —         —       $ 9,363,000  
                                     
  Total       —       $ —         —            

 

 

 

(1)On February 4, 2015, the Board of Directors authorized management to expend up to $5,000,000 to repurchase shares of the Company’s common stock from time to time as opportunities arise. On December 5, 2018, the Board of Directors approved a $10,000,000 increase in the Company’s stock repurchase authorization. On August 5, 2019, the Board of Directors approved a $10,000,000 increase in the Company’s stock repurchase authorization. On May 6, 2020, the Board of Directors approved a $10,000,000 increase in the Company’s stock repurchase authorization. On August 26, 2020, the Board of Directors approved a $10,000,000 increase in the Company’s stock repurchase authorization.

 

 

 

Item 6. EXHIBITS

 

(a)Exhibits. The response to this item is submitted as a separate Section entitled "Exhibit Index", on page 38.

 

 

 

36 
 

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

 

      FRP Holdings, Inc.
         
         
Date:  August 12, 2022   By JOHN D. BAKER II  
      John D. Baker II  
      Chief Executive Officer
      (Principal Executive Officer)
         
         
    By JOHN D. BAKER III  
      John D. Baker III.  
      Treasurer and Chief Financial Officer
      (Principal Financial Officer)
         
         
    By JOHN D. KLOPFENSTEIN  
      John D. Klopfenstein  
      Controller and Chief Accounting
      Officer (Principal Accounting Officer)
37 
 

FRP HOLDINGS, INC.

FORM 10-Q FOR THE THREE MONTHS ENDED JUNE 30, 2022

EXHIBIT INDEX

 

 

(31)(a) Certification of John D. Baker II.
(31)(b) Certification of John D. Baker III.
(31)(c) Certification of John D. Klopfenstein.
(32) Certification of Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer under Section 906 of the Sarbanes-Oxley Act of 2002.
   
101.XSD XBRL Taxonomy Extension Schema 
101.CAL XBRL Taxonomy Extension Calculation Linkbase
101.DEF XBRL Taxonomy Extension Definition Linkbase
101.LAB XBRL Taxonomy Extension Label Linkbase
101.PRE XBRL Taxonomy Extension Presentation Linkbase
104. Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

 

38