8-K/A 1 frphform8ka_explanote_ex.txt EXPLANATORY NOTE UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A (Amendment No. 1) CURRENT REPORT Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): August 6, 2018 FRP HOLDINGS, INC. (Exact name of registrant as specified in its charter) FLORIDA 001-36769 47-2449198 ---------------- ----------- ------------------- (State or other (Commission (I.R.S. Employer jurisdiction File Number) Identification No.) of incorporation 200 W. Forsyth Street, 7th Floor Jacksonville, Florida 32202 --------------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (904) 858-9100 --------------------------------------------------------------------------- (Former name or former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (s. 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (s. 240.12b-2 of this chapter). 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. [_] EXPLANATORY NOTE As reported in a Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission by FRP Holdings, Inc., a Florida corporation (the "Company"), on May 24, 2018 (the "Original Form 8-K"), on May 21, 2018, the Company and certain of its subsidiaries completed its previously announced disposition of 40 industrial warehouse properties and three additional land parcels to BRE Foxtrot Parent, LLC, an affiliate of Blackstone Real Estate (the "Transaction"), pursuant to an Agreement of Purchase and Sale of Assets dated March 22, 2018. This amendment is filed to provide the pro forma financial information of the Company giving effect to the Transaction as required by Item 9.01. Except as set forth herein, no other information contained in the Original Form 8-K has been amended. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS (b) Pro Forma Financial Information The following unaudited pro forma financial information of the Company giving effect to the Transaction is filed as Exhibit 99.1 hereto and incorporated by reference herein: * Condensed consolidated balance sheet as of March 31, 2018; * Condensed consolidated statement of income for the three months ended March 31, 2018; and * Condensed consolidated statement of income for the fiscal year ended December 31, 2017. 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 hereunto duly authorized. FRP HOLDINGS, INC. Date: August 6, 2018 By: /s/ John D. Milton, Jr. ------------------------------------------- John D. Milton, Jr. Chief Financial Officer EXHIBIT INDEX Ex No. Description ----- ----------- 99.1 Unaudited pro forma condensed consolidated balance sheet of FRP Holdings, Inc. as of March 31, 2018, and the unaudited pro forma condensed consolidated statements of income for the three months ended March 31, 2018 and fiscal year ended December 31, 2017 99.1 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION On May 21, 2018, FRP Holdings, Inc., a Florida corporation (the "Company"), and certain of its subsidiaries completed its previously announced disposition of 40 industrial warehouse properties and 3 additional land parcels to BRE Foxtrot Parent, LLC, an affiliate of Blackstone Real Estate (the "Transaction"). The following unaudited pro forma condensed consolidated financial statements, which have been prepared to comply with Article 11 of Regulation S-X, as promulgated by the SEC, are for illustrative purposes only and should be read in conjunction with the financial statements of the Company and notes thereto presented in the Company's Quarterly Report on Form 10-Q for the three months ended March 31, 2018, and Annual Report on Form 10-K for the year ended December 31, 2017. The unaudited pro forma balance sheet and income statements are not necessarily indicative of what the actual financial position and operating results would have been had the Transaction occurred on March 31, 2018, or December 31, 2016, respectively, nor are they indicative of future operating results of the Company. The following unaudited pro forma consolidated balance sheet of the Company was derived from the Company's historical consolidated financial statements and is being presented to give effect to the Transaction as if it had occurred on March 31, 2018. March 31, Pro Forma Adjusted Assets: 2018 Adjustments March 31, 2018
-------------- -------------- -------------- Real estate investments at cost: Land $ 127,700 (40,465) 87,235 Buildings and improvements 334,850 (187,360) 147,490 Projects under construction 9,443 (6,841) 2,602 -------------- -------------- -------------- Total investments in properties 471,993 (234,666) 237,327 Less accumulated depreciation and depletion 97,838 (69,734) 28,104 -------------- -------------- -------------- Net investments in properties 374,155 (164,932) 209,223 -------------- -------------- -------------- Real estate held for investment, at cost 7,176 - 7,176 Land held for sale - 4,298 4,298 Investment in joint ventures 13,422 - 13,422 -------------- -------------- -------------- Net real estate investments 394,753 (160,634) 234,119 -------------- -------------- -------------- Cash and cash equivalents 6,961 251,347 258,308 Cash held in escrow 269 - 269 Accounts receivable, net 907 (494) 413 Federal and state income taxes receivable 2,377 - 2,377 Unrealized rents 4,805 (4,236) 569 Deferred costs 7,729 (5,719) 2,010 Other assets 183 - 183 -------------- -------------- -------------- Total assets $ 417,984 80,264 498,248 ============== ============== ==============
Liabilities: Line of credit payable $ - - - Secured notes payable, current portion 4,248 (4,248) - Secured notes payable, less current portion 112,983 (24,343) 88,640 Accounts payable and accrued liabilities 4,411 (800) 3,611 Environmental remediation liability 2,037 - 2,037 Bank overdraft - - - Federal and state income taxes payable - - - Deferred revenue 591 (518) 73 Deferred income taxes 25,982 (9,743) 16,239 Deferred compensation 1,459 - 1,459 Deferred lease intangible, net - - - Tenant security deposits 875 (828) 47 -------------- -------------- -------------- Total liabilities 152,586 (40,480) 112,106 ============== ============== ============== Equity: Common stock 1,001 - 1,001 Capital in excess of par value 55,678 - 55,678 Retained earnings 188,415 120,744 309,159 Other comprehensive income 38 - 38 -------------- -------------- -------------- Total shareholders' equity 245,132 120,744 365,876 Noncontrolling interest MRP 20,266 - 20,266 -------------- -------------- -------------- Total equity 265,398 120,744 386,142 -------------- -------------- -------------- Total liabilities and shareholders' equity $ 417,984 80,264 498,248 ============== ============== ==============
Below are the assumptions included in the pro forma adjustments to the above consolidated balance sheet. Sales price less transaction costs $ 342,407 Book value of PP&E (163,380) Unrealized rents (4,236) Deferred costs and deferred revenues (5,201) Debt prepayment penalty and deferred loan fees (4,074) -------------- 165,516 Income taxes 44,772 -------------- Gain $ 120,744 ============== Sales price $ 347,200 Transaction costs (4,793) Cash income taxes paid (54,515) Debt prepayment including $4 million in prepayment penalties (32,665) Holdback funds (2,746) Collect A/R, pay AP, pay security deposits (1,134) -------------- Cash generated $ 251,347 ==============
The following unaudited pro forma consolidated income statements of the Company were derived from the Company's historical consolidated financial statements and are being presented to give effect to the Transaction as if it had occurred on March 31, 2018, and December 31, 2016, respectively, and the proceeds had been issued as a dividend to shareholders on that date and no alternative investments had been made. Pro Forma Quarter ended Pro Forma Quarter ended March 31, 2018 Adjustments March 31, 2018 -------------- -------------- -------------- Revenues: Rental revenue $ 9,165 (6,018) $ 3,147 Mining Royalty and rents 1,750 - 1,750 Revenue - reimbursements 1,707 (1,529) 178 -------------- -------------- -------------- Total Revenues 12,622 (7,547) 5,075 Cost of operations: Depreciation, depletion and amortization 4,283 (1,886) 2,397 Operating expenses 2,043 (1,134) 909 Environmental remediation recovery - - - Property taxes 1,473 (798) 675 Management company indirect 539 - 539 Corporate expenses 1,426 (747) 679 -------------- -------------- -------------- Total cost of operations 9,764 (4,565) 5,199 Total operating profit 2,858 (2,982) (124) Interest income 5 - 5 Interest expense (1,243) 290 (953) Equity in loss of joint ventures (12) - (12) Gain (Loss) on investment land sold - - - -------------- -------------- -------------- Income (loss) from continuing operations before income taxes 1,608 (2,692) (1,084) Provision for income taxes 579 (729) (150) -------------- -------------- -------------- Income (loss) from continuing operations 1,029 (1,963) (934) Gain from discontinued transportation operations, net of taxes - - - -------------- -------------- -------------- Net income (loss) 1,029 (1,963) (934) Loss attributable to noncontrolling interest (531) - (531) -------------- -------------- -------------- Net income (loss) attributable to the Company $ 1,560 (1,963) $ (403) ============== ============== ==============
Pro Forma Year ended Pro Forma Year ended December 31, 2017 Adjustments December 31, 2017 -------------- -------------- -------------- Revenues: Rental revenue $ 30,385 (22,570) $ 7,815 Mining Royalty and rents 7,153 - 7,153 Revenue - reimbursements 5,653 (5,019) 634 -------------- -------------- -------------- Total Revenues 43,191 (27,589) 15,602 Cost of operations: Depreciation, depletion and amortization 13,532 (7,583) 5,949 Operating expenses 5,621 (3,320) 2,301 Environmental remediation recovery - - - Property taxes 5,024 (3,008) 2,016 Management company indirect 2,029 - 2,029 Corporate expenses 3,380 - 3,380 -------------- -------------- -------------- Total cost of operations 29,586 (13,911) 15,675 Total operating profit 13,605 (13,678) (73) Interest income - - - Interest expense (4,323) 1,340 (2,983) Equity in loss of joint ventures (1,598) - (1,598) Gain (Loss) on investment land sold 60,196 - 60,196 -------------- -------------- -------------- Income from continuing operations before income taxes 67,880 (12,338) 55,542 Provision for income taxes 7,329 (1,842) 5,487 -------------- -------------- -------------- Income from continuing operations 60,551 (10,496) 50,055 Gain from discontinued transportation operations, net of taxes - - - -------------- -------------- -------------- Net income 60,551 (10,496) 50,055 Income attributable to noncontrolling interest 18,801 - 18,801 -------------- -------------- -------------- Net income attributable to the Company $ 41,750 (10,496) $ 31,254 ============== ============== ==============
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