FRP Holdings, Inc. (Nasdaq: FRPH) Announces Results for the Fourth Quarter and Year Ended December 31, 2020

Jacksonville, Florida, UNITED STATES


JACKSONVILLE, Fla., March 01, 2021 (GLOBE NEWSWIRE) -- FRP Holdings, Inc. (NASDAQ-FRPH) 

Fourth Quarter Operational Highlights

  • Finished shell construction and began lease-up on The Coda, the first building in our Bryant Street joint venture in Washington, DC
  • Purchased 55 acres for future industrial development in Aberdeen, MD

Fourth Quarter Consolidated Results of Operations

Net income for the fourth quarter of 2020 was $393,000 or $.04 per share versus $2,453,000 or $.25 per share in the same period last year. The fourth quarter of 2020 was impacted by the following items:

  • Operating expense includes a $250,000 credit for settlement of environmental claims on our Anacostia property while the same quarter last year had $463,000 of related professional fees.
  • Interest income decreased $1,062,000 primarily due to $441,000 reduced bond interest and the same quarter last year including $358,000 realized gains on bond sales and $302,000 interest income on federal and state tax refunds.
  • Interest expense increased $893,000 due to accelerated amortization of deferred loan fees at Dock 79 in anticipation of early refinancing in the first quarter of 2021. Loss attributed to non-controlling interest included our partner’s share of this cost.
  • Loss on joint ventures increased $1,245,000 primarily due to an $885,000 increased loss at the Maren (including $792,000 depreciation and $189,000 accelerated deferred loan fees in anticipation of early refinancing in 2021) and a $369,000 increased loss at Bryant Street from completion of construction of the first phase and lease-up efforts during the quarter.

Fourth Quarter Segment Operating Results

Asset Management Segment:

Most of the Asset Management Segment was reclassified to discontinued operations leaving two commercial properties as well as Cranberry Run, which we purchased in the first quarter of 2019, and 1801 62nd Street which joined this segment on April 1 of 2019 and sold last quarter. Cranberry Run is a five-building industrial park in Harford County, MD totaling 268,010 square feet of industrial/ flex space and at quarter end was 87.6% leased and occupied. Total revenues in this segment were $658,000, up $201,000 or 44.0%, over the same period last year. Operating profit was $36,000, up $249,000 from an operating loss of ($213,000) in the same quarter last year. This improvement is primarily due to an $81,000 loss at 1801 62nd St in the same quarter last year prior to being fully leased and occupied as well as improved leasing and occupancy at Cranberry compared to the same quarter last year.

Mining Royalty Lands Segment:

Total revenues in this segment were $2,383,000 versus $2,274,000 in the same period last year. Total operating profit in this segment was $2,089,000, an increase of $50,000 versus $2,039,000 in the same period last year.

Development Segment:

The Development segment is responsible for (i) seeking out and identifying opportunistic purchases of income producing warehouse/office buildings, and (ii) developing our non-income producing properties into income production.

With respect to ongoing projects:

  • We are in the PUD entitlement process for our 118-acre tract in Hampstead, Maryland, now known as “Hampstead Overlook.”  Hampstead Overlook received Concept Plan approval from the Town of Hampstead for 164 single and 91 town home residential units in February 2020, and the project is currently under Preliminary Plan review with the governing agencies.
  • Last quarter we received permit entitlements for two industrial buildings at Hollander Business Park totaling 145,750 square feet.  We have started construction and anticipate shell completion in the third quarter of 2021.
  • We finished shell building construction in December 2018 on the two office buildings in the first phase of our joint venture with St. John Properties.  Shell building construction of the two retail buildings was completed in January 2019. We are now in the process of leasing these four single-story buildings totaling 100,030 square feet of office and retail space.  At quarter end, Phase I was 46.7% leased and 44.3% occupied.
  • We are the principal capital source of a residential development venture in Baltimore County, Maryland known as “Hyde Park.”  We have committed up to $3.5 million in exchange for an interest rate of 10%. Additional proceeds and interest payments above a 20% preferred return on capital determine a split of profits.  Entitlements for the development of the property are complete, and a homebuilder is under contract to purchase all the 126 recorded building lots.  The first phase of settlement occurred in May 2020, resulting in a $2.67 million principal and interest payment, with subsequent payments of $1.13 million in principal and interest payments in the third quarter. Currently all principal and $322,605 in accrued interest has been repaid.
  • We are the principal capital source of a residential development venture in Prince George’s County, Maryland known as “Amber Ridge.”  We have committed up to $18.5 million in exchange for an interest rate of 10%.   Additional proceeds and interest payments above a 20% preferred return on capital determine a split of profits.  Amber Ridge will hold 187 town homes.  We are currently pursuing entitlements, mass grading the site, and have two homebuilders under contract to purchase all 187 units upon completion of development infrastructure.
  • In April 2018, we began construction on Phase II of our RiverFront on the Anacostia project, now known as “The Maren,” a 14-story project with 264 residential units and 6,937 net leasable square feet of ground floor retail. Lease-up commenced in earnest in the second week of March 2020, and the building received its final certificate of occupancy at the end of September 2020.  At the end of the quarter, the Maren’s residential units were 87.02% leased, and 82.44% occupied.
  • In December 2018, the Company entered into a joint venture agreement with MidAtlantic Realty Partners (MRP) for the development of the first phase of a multifamily, mixed-use development in northeast Washington, DC known as “Bryant Street.”  The project is comprised of four buildings, with 487 units and 85,681 net leasable square feet of retail.  FRP contributed $32 million in common equity and another $23 million in preferred equity to the joint venture.  Construction began in February 2019 and as of the end of the quarter was 92% complete.  Bryant Street is currently on time, within budget, and expected to be complete in the fourth quarter of 2021. The Coda, the first of our four buildings at Bryant Street received a temporary certificate of occupancy in December, and leasing efforts are under way.  This project is located in an opportunity zone and has allowed the Company to defer $14.9 million in taxes associated with the sale of our industrial assets.
  • In December 2019, the Company entered into a joint venture agreement with MRP for the development of a mixed-use project known as “1800 Half Street.”  The development is located in the Buzzard Point area of Washington, DC, less than half a mile downriver from Dock 79 and the Maren.  It lies directly between our two acres on the Anacostia, currently under lease by Vulcan, and Audi Field, the home stadium of the DC United. The 10-story structure will have 344 apartments and 11,246 square feet of ground floor retail.  FRP contributed $37.3 million in common equity.  The project is a qualified opportunity zone investment and will defer just over $10 million in taxes associated with the sale of our industrial assets.  In June 2020, we closed on a $74 million construction loan. We began construction at the end of August 2020 and expect the building to be complete in the third quarter of 2022.
  • In December 2019, the company entered into two joint ventures in Greenville, SC with a new partner, Woodfield Development.  Woodfield specializes in Class-A multi-family, mixed use developments primarily in the Carolinas and DC.  Our first joint venture with them is a 200-unit multifamily project known as “Riverside.”  FRP contributed $6.2 million in common equity for a 40% ownership interest.  Construction began in February 2020 and should be complete in the third quarter of 2021.  The second joint venture in Greenville with Woodfield is a 227-unit multifamily development known as “.408 Jackson.”  It will have 4,700 square feet of retail and is located across the street from Greenville’s minor league baseball stadium.  FRP contributed $9.7 million in common equity for a 40% ownership interest.  Construction began in May 2020 and should be complete in the third quarter of 2022.  Both projects are qualified opportunity investments and will defer a combined $4.3 million in taxes.
  • In November 2020, the Company purchased 55 acres in Aberdeen, Maryland adjacent to our Cranberry Run Business Center for $10.5 million. The project is undergoing a 12-month annexation process into the Town of Aberdeen with annexation expected in 2022. Upon annexation, the project will be entitled for industrial development capable of supporting over 625,000 square feet of industrial product.  The acquisition was a part of 1031 exchange from the sale proceeds of 1801 62nd street which deferred $3.8 million in taxable gain. This will expand our land bank and allow the Company to continue its industrial development program after we finish developing our remaining inventory at Hollander Business Park

Stabilized Joint Venture Segment:

Dock 79’s average residential occupancy for the quarter was 94.17%, and at the end of the quarter, Dock 79’s residential units were 94.10% leased and 95.70% occupied. This quarter, 60.38% of expiring leases renewed with no increase in rent due to the mandated rent freeze on renewals in DC. Net Operating Income this quarter for this segment was $1,552,000, down $269,000 or 14.77% compared to the same quarter last year. Dock 79 is a joint venture between the Company and MRP, in which FRP Holdings, Inc. is the majority partner with 66% ownership.

In July 2019, the Company completed a like-kind exchange by reinvesting $6,000,000 into a Delaware Statutory Trust (DST) known as CS1031 Hickory Creek DST. The DST owns a 294-unit garden-style apartment community known as Hickory Creek consisting of 19 three-story apartment buildings containing 273,940 rentable square feet.  Hickory Creek was constructed in 1984 and substantially renovated in 2016 and is located in suburban Richmond, Virginia. The Company is 26.649% beneficial owner and receives monthly distributions.   Fourth quarter distributions were $85,000. The project is a qualified 1031 like-kind exchange investment and will defer $790,000 in taxes associated with the sales of 7030 Dorsey Road and 1502 Quarry Drive.

Impact of the COVID-19 Pandemic. 
The COVID-19 pandemic is having an extraordinary impact on the world economy and the markets in which we operate. As an essential business, we have continued to operate throughout the pandemic in accordance with White House guidance and orders issued by state and local authorities. We have implemented social distancing and other measures to protect the health of our employees and customers. Our Dock 79 and The Maren properties in Washington, D.C. suffered the principal impacts to our business from the pandemic during 2020 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. It is possible that these same conditions may impact our ability lease retail spaces at Bryant Street. We anticipate that these impacts will continue for at least the first half of 2021.  

Calendar Year Operational Highlights

  • Highest revenue total in mining royalties segment history
  • Sold four properties for a total of $20.8 million and a gain on sale of $9.3 million
  • Began construction on Half Street joint venture in Washington, DC and our two joint ventures in Greenville, SC
  • Completed construction on The Maren joint venture in Washington, DC and the building is 87.02% leased, and 82.44% occupied  
  • Finished shell construction and began lease-up on The Coda, the first building in our Bryant Street joint venture in Washington, DC
  • Purchased 55 acres for future industrial development in Aberdeen, MD

Calendar Year 2020 Consolidated Results of Operations.

Net income for 2020 was $11,615,000 or $1.21 per share versus $16,177,000 or $1.63 per share in the same period last year. Income from discontinued operations for 2019 was $6,856,000 or $.69 per share. Income from continuing operations increased $1,800,000 or 20% and was impacted by the following items:

  • Operating expense includes a $250,000 credit for settlement of environmental claims on our Anacostia property while related professional fees decreased $161,000.
  • Corporate expense stock compensation of $1,372,000 compared to $232,000 in the same period last year due the timing of stock grants.
  • Loss on joint ventures increased $3,736,000. This is primarily due to $3,036,000 increased loss at the Maren and a $1,557,000 increased loss at Bryant Street. Included in this loss is:
    • $1,946,000 depreciation at the Maren
    • $189,000 accelerated deferred loan fees at the Maren in anticipation of early refinancing in 2021
    • $702,000 for our share of preferred interest in Bryant Street,
    • $511,000 loss on phase 1 of Bryant Street due to completion of construction of the first building as well and lease-up efforts during the quarter,
    • $254,000 of interest income in 2019 prior to the funds being deployed,
    • This loss was partially offset by improved results at our joint venture with St. John Properties of $384,000, an increase in Hickory Creek distributions of $216,000, and $255,000 interest income generated in our opportunity zone investments prior to the funds being deployed.
  • Gain on sale of $9,170,000 compared to $661,000 in the same period last year primarily due to the sale of the three remaining lots at our Lakeside Business Park, 1801 62nd Street, Gulf Hammock, and 87 acres from our Ft. Myers property.

Calendar Year 2020 Segment Operating Results

Asset Management Segment:

Most of the Asset Management Segment was reclassified to discontinued operations leaving two commercial properties as well as Cranberry Run, which we purchased in the first quarter of 2019, and 1801 62nd Street which joined this segment on April 1 of 2019, but was sold in July 2020. Cranberry Run is a five-building industrial park in Harford County, MD totaling 268,010 square feet of industrial/ flex space and at quarter end was 87.6% leased and occupied. Total revenues in this segment were $2,747,000, up $557,000 or 25.4%, over the same period last year. Operating loss was ($2,000), down $448,000 from an operating loss of ($450,000) in the same period last year. This improvement is primarily due to profits at 1801 62nd Street this year prior to its sale compared to losses during lease-up in the prior year as well as improved leasing and occupancy at Cranberry Run, partially offset by higher allocation of corporate expenses.

Mining Royalty Lands Segment:

Total revenues in this segment were $9,477,000 versus $9,438,000 in the same period last year. Total operating profit in this segment was $8,341,000, a decrease of $180,000 versus $8,521,000 in the same period last year. The primary reason for this decrease is an increase in overall corporate expenses as well as the allocation of these expenses due to discontinued operations.

Stabilized Joint Venture Segment:

Dock 79’s average residential occupancy for 2020 was 93.13%, and at the end of the year, Dock 79’s residential units were 94.10% leased and 95.70% occupied. Through 2020, 57.14% of expiring leases renewed with an average increase in rent on those renewals of 0.31% due to the mandated rent freeze on renewals that went into effect in March. Net Operating Income for this segment was $6,652,000, down $515,000 or 7.2% compared to the same period last year. Dock 79 is a joint venture between the Company and MRP, in which FRP Holdings, Inc. is the majority partner with 66% ownership.

Distributions for Hickory Creek were $339,000 in 2020. The project is a qualified 1031 like-kind exchange investment in a Delaware Statutory Trust of which the Company is a 26.659% beneficial owner.

Summary and Outlook

Looking back on a very strange and very sad year, we count ourselves fortunate to have fared as well as we did. Aggregates royalties had its best year ever in 2019, and under the best of circumstances, we would have considered it a challenge to match those numbers in 2020. Yet despite a pandemic and negative economic growth, and despite losing double minimums at Lake Louisa, this segment surpassed 2019’s record revenue and was within 2.5% of last year’s operating profit.
    
Like our royalties business, the lease-up of the Maren exceeded the expectations we had prior to the pandemic. In a pre-COVID world, we expected the process to take roughly a year and a half. Yet in less than a year, we are 87.02% leased and 82.44% occupied and closing in on stabilization.

We have not been immune to the realities and financial consequences of life in a pandemic. Of all our assets, Dock 79 was most affected. For most of 2020, the District of Columbia has enforced COVID-related emergency protocols, which, among other things, have frozen rents in place on any apartment renewals. Because our apartments come up for renewal two months prior to the end of the lease, the effects of this rent freeze will extend at least through the first quarter of 2021. The current environment has been less than ideal for our three retail tenants. After reopening, there was no baseball attendance to drive traffic to their businesses and winter weather has mitigated the appeal and availability of outdoor seating. They are, however, still operating, and occupancy at Dock 79 remains above 90% and renewals are in line with where they were prior to the pandemic. We believe that the rapid lease-up of the Maren and the continued success of Dock 79 speak to the quality of these assets and the desirability of their location. Despite major construction and no baseball, waterfront real estate still demands a premium, and as working from home becomes more and more common, it is possible that the environment afforded by these assets has only served to increase their appeal.
    
Industrial has responded well to the pandemic, as evidenced by the sale in July of 1801 62nd Street at Hollander Business Park for $12.3 million. We had no issues with tenants paying rent and do not expect to. We had some concerns regarding our office tenants, but every tenant is currently paying rent and the only issue we had with back rent is one tenant who owes $6,500 for the month of April.
   
We are nearly a year into this pandemic, and we have been extremely fortunate. This year saw the completion and accelerated lease up of our next phase on the Anacostia; we completed four property sales for a total of $20.8 million; and for the third year in a row we had our highest ever mining royalties revenue. Like everyone else, we have encountered pandemic-related headwinds that we will continue to grapple with. It is unclear when people will again be able to congregate at Dock 79 before a baseball game. The appeal of the amenities at Bryant Street—access to public transportation and a movie theater—has been altered significantly. As we approach the second year of a post-COVID world, the future is decidedly murky. Will government assistance be enough to hold economic distress at bay? Will single-party control of congress finally usher in a long-awaited infrastructure bill? Will a vaccine send COVID-19 into the dustbin of history alongside SARS and Swine Flu, or will it be with us forever like the common cold or the flu? Only time will tell on these questions and countless others. What is comforting is that this company has the safety net of substantial cash reserves to weather nearly any storm. We also believe strongly in the long-term viability of our business and its assets. To that end, in 2020, the Company repurchased 510,145 shares at an average cost of $41.78 per share.

Subsequent Event

The Company has a pending transaction set to finalize in March 2021 to refinance the mortgage currently in place at Dock 79 and place permanent financing on The Maren. If completed, the $92 million loan for Dock 79 will have a term of 12 years and will reduce the interest rate on the current Dock 79 loan from 4.125% to 3.03% but will require a prepayment penalty of $900,000 on the existing $90 million loan. Under its current mortgage, Dock 79 is set to begin principal payments in November 2021. This is an interest-only loan and would defer any principal payments until at least 2033. This transaction would also secure $88 million in long-term, interest-only financing for The Maren for a term of 12 years and an interest rate of 3.03%. As a result of this transaction, the Company would also be repaid the $13.75 million in preferred equity that it supplied the joint venture along with roughly $2.3 million in accrued interest payments.

Conference Call

The Company will host a conference call on Thursday, March 4, 2021 at 9:00 a.m. (EST).   Analysts, stockholders and other interested parties may access the teleconference live by calling 1-877-271-1828 (passcode 16539702) within the United States.  International callers may dial 1-334-323-9871 (passcode 16539702). Computer audio live streaming is available via the Internet through this link http://stream.conferenceamerica.com/frp030421. For the archived audio via the internet, click on the following link http://archive.conferenceamerica.com/archivestream/frp030421.mp3. An audio replay will be available for sixty days following the conference call. To listen to the audio replay, dial toll free 1-877-919-4059, international callers dial 1-334-323-0140.  The passcode of the audio replay is 98897780. Replay options: “1” begins playback, “4” rewind 30 seconds, “5” pause, “6” fast forward 30 seconds, “0” instructions, and “9” exits recording.  There may be a 30-40 minute delay until the archive is available following the conclusion of the conference call.

Investors are cautioned that any statements in this press release which relate to the future are, by their nature, subject to risks and uncertainties that could cause actual results and events to differ materially from those indicated in such forward-looking statements. These 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 reinvestment opportunities for the proceeds from the Sale Transaction; 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. and Richmond, Virginia; 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; cybersecurity 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.

FRP Holdings, Inc. is a holding company engaged in the real estate business, namely (i) leasing and management of commercial properties owned by the Company, (ii) leasing and management of mining royalty land owned by the Company, (iii) real property acquisition, entitlement, development and construction primarily for apartment, retail, warehouse, and office, (iv) leasing and management of a residential apartment building.


FRP HOLDINGS, INC. AND SUBSIDIARIES

      CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share amounts)
(Unaudited)

  THREE MONTHS ENDED TWELVE MONTHS ENDED
  DECEMBER 31, DECEMBER 31,
  2020 2019 2020 2019
Revenues:                
     Lease revenue $3,470   3,522   14,106   14,318 
     Mining lands lease revenue  2,383   2,274   9,477   9,438 
 Total Revenues  5,853   5,796   23,583   23,756 
                 
Cost of operations:                
     Depreciation, depletion and amortization  1,422   1,465   5,828   5,855 
     Operating expenses  735   1,390   3,333   4,134 
     Property taxes  737   735   2,826   2,941 
     Management company indirect  743   642   2,951   2,514 
     Corporate expenses  661   628   3,511   2,556 
Total cost of operations  4,298   4,860   18,449   18,000 
                 
Total operating profit  1,555   936   5,134   5,756 
                 
Net investment income, including realized gains of $1, $358, $298 and $949, respectively  1,500   2,562   7,415   8,375 
Interest expense  (958)  (65)  (1,100)  (1,054)
Equity in loss of joint ventures  (1,917)  (672)  (5,690)  (1,954)
Gain (loss) on sale of real estate  (159)  (1)  9,170   661 
                 
Income from continuing operations before income taxes  21   2,760   14,929   11,784 
Provision for income taxes  146   433   4,307   2,962 
Income (loss) from continuing operations   (125)  2,327   10,622   8,822 
                 
Income from discontinued operations, net     7      6,856 
                 
Net income (loss)  (125)  2,334   10,622   15,678 
Loss attributable to noncontrolling interest  (518)  (119)  (993)  (499)
Net income attributable to the Company $393   2,453   11,615   16,177 
                 
Earnings per common share:                
Income from continuing operations-                
    Basic $(0.01)  0.24   1.11   0.89 
    Diluted $(0.01)  0.24   1.11   0.89 
Discontinued operations-                
    Basic $         0.69 
    Diluted $         0.69 
Net income attributable to the Company-                
    Basic $0.04   0.25   1.21   1.64 
    Diluted $0.04   0.25   1.21   1.63 
                 
Number of shares (in thousands) used in computing:           
    -basic earnings per common share  9,384   9,823   9,580   9,883 
    -diluted earnings per common share  9,412   9,866   9,609   9,926 



FRP HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(Unaudited) (In thousands, except share data)

  December 31 December 31
Assets: 2020 2019
Real estate investments at cost:        
Land $91,744   84,383 
Buildings and improvements  141,241   147,019 
Projects under construction  4,879   1,056 
     Total investments in properties  237,864   232,458 
Less accumulated depreciation and depletion  34,724   30,271 
     Net investments in properties  203,140   202,187 
         
Real estate held for investment, at cost  9,151   8,380 
Investments in joint ventures  167,071   160,452 
     Net real estate investments  379,362   371,019 
         
Cash and cash equivalents  73,909   26,607 
Cash held in escrow  196   186 
Accounts receivable, net  923   546 
Investments available for sale at fair value  75,609   137,867 
Federal and state income taxes receivable  3,994    
Unrealized rents  531   554 
Deferred costs  707   890 
Other assets  502   479 
Total assets $535,733   538,148 
         
Liabilities:        
Secured notes payable $89,964   88,925 
Accounts payable and accrued liabilities  3,635   2,431 
Other liabilities  1,886   1,978 
Deferred revenue  542   790 
Federal and state income taxes payable     504 
Deferred income taxes  56,579   50,111 
Deferred compensation  1,242   1,436 
Tenant security deposits  332   328 
    Total liabilities  154,180   146,503 
         
Commitments and contingencies         
         
Equity:        
Common stock, $.10 par value
25,000,000 shares authorized,
9,363,717 and 9,817,429 shares issued
and outstanding, respectively
  936   982 
Capital in excess of par value  56,279   57,705 
Retained earnings  308,664   315,278 
Accumulated other comprehensive income, net  675   923 
Total shareholders’ equity  366,554   374,888 
Noncontrolling interest MRP  14,999   16,757 
Total equity  381,553   391,645 
Total liabilities and shareholders’ equity $535,733   538,148 


Asset Management Segment
:

  Three months ended December 31    
(dollars in thousands) 2020 % 2019 % Change %
             
Lease revenue $658   100.0%  457   100.0%  201   44.0%
                         
Depreciation, depletion and amortization  123   18.7%  181   39.6%  (58)  -32.0%
Operating expenses  98   14.9%  158   34.6%  (60)  -38.0%
Property taxes  33   5.0%  70   15.3%  (37)  -52.9%
Management company indirect  197   29.9%  85   18.6%  112   131.8%
Corporate expense  171   26.0%  176   38.5%  (5)  -2.8%
                         
Cost of operations  622   94.5%  670   146.6%  (48)  -7.2%
                         
Operating profit $36   5.5%  (213)  -46.6%  249   -116.9%


Mining Royalty Lands Segment
:

  Three months ended December 31    
(dollars in thousands) 2020 % 2019 % Change %
             
Mining lands lease revenue $2,383   100.0%  2,274   100.0%  109   4.8%
                         
Depreciation, depletion and amortization  58   2.4%  47   2.1%  11   23.4%
Operating expenses  31   1.3%  24   1.0%  7   29.2%
Property taxes  76   3.2%  68   3.0%  8   11.8%
Management company indirect  75   3.1%  50   2.2%  25   50.0%
Corporate expense  54   2.3%  46   2.0%  8   17.4%
                         
Cost of operations  294   12.3%  235   10.3%  59   25.1%
                         
Operating profit $2,089   87.7%  2,039   89.7%  50   2.5%


Development Segment
:

  Three months ended December 31 
(dollars in thousands) 2020 2019 Change 
        
Lease revenue $290   272   18  
              
Depreciation, depletion and amortization  54   53   1  
Operating expenses  (96)  522   (618) 
Property taxes  356   308   48  
Management company indirect  416   459   (43) 
Corporate expense  398   362   36  
              
Cost of operations  1,128   1,704   (576) 
              
Operating loss $(838)  (1,432)  594  
              
Equity in loss of Joint Venture  (1,996)  (813)  (1,183) 
Gain on sale of real estate          
Interest earned  987   1,214   (227) 
              
Loss from continuing operations before income taxes $(1,847)  (1,031)  (816) 


Stabilized Joint Venture Segment
:

  Three months ended December 31    
(dollars in thousands) 2020 % 2019 % Change %
             
Lease revenue $2,522   100.0%  2,793   100.0%  (271)  -9.7%
                         
Depreciation, depletion and amortization  1,187   47.1%  1,184   42.4%  3   0.3%
Operating expenses  702   27.8%  686   24.6%  16   2.3%
Property taxes  272   10.8%  289   10.3%  (17)  -5.9%
Management company indirect  55   2.2%  48   1.7%  7   14.6%
Corporate expense  38   1.5%  44   1.6%  (6)  -13.6%
                         
Cost of operations  2,254   89.4%  2,251   80.6%  3   0.1%
                         
Operating profit $268   10.6%  542   19.4%  (274)  -50.6%

Asset Management Segment:

  Twelve months ended December 31    
(dollars in thousands) 2020 % 2019 % Change %
             
Lease revenue $2,747   100.0%  2,190   100.0%  557   25.4%
                         
Depreciation, depletion and amortization  652   23.7%  708   32.3%  (56)  -7.9%
Operating expenses  430   15.7%  650   29.7%  (220)  -33.8%
Property taxes  124   4.5%  286   13.0%  (162)  -56.6%
Management company indirect  634   23.1%  350   16.0%  284   81.1%
Corporate expense  909   33.1%  646   29.5%  263   40.7%
                         
Cost of operations  2,749   100.1%  2,640   120.5%  109   4.1%
                         
Operating profit $(2)  -0.1%  (450)  -20.5%  448   -99.6%

Mining Royalty Lands Segment:

  Twelve months ended December 31    
(dollars in thousands) 2020 % 2019 % Change %
             
Mining lands lease revenue $9,477   100.0%  9,438   100.0%  39   0.4%
                         
Depreciation, depletion and amortization  218   2.3%  177   1.9%  41   23.2%
Operating expenses  74   0.8%  99   1.0%  (25)  -25.3%
Property taxes  267   2.8%  271   2.9%  (4)  -1.5%
Management company indirect  289   3.1%  201   2.1%  88   43.8%
Corporate expense  288   3.0%  169   1.8%  119   70.4%
                         
Cost of operations  1,136   12.0%  917   9.7%  219   23.9%
                         
Operating profit $8,341   88.0%  8,521   90.3%  (180)  -2.1%

Development Segment:

  Twelve months ended December 31 
(dollars in thousands) 2020 2019 Change 
        
Lease revenue $1,152   1,164   (12) 
              
Depreciation, depletion and amortization  214   214     
Operating expenses  319   768   (449) 
Property taxes  1,375   1,226   149  
Management company indirect  1,820   1,773   47  
Corporate expense  2,108   1,581   527  
              
Cost of operations  5,836   5,562   274  
              
Operating loss $(4,684)  (4,398)  (286) 
              
Equity in loss of Joint Venture  (5,990)  (2,035)  (3,955) 
Gain on sale of real estate  1,877      1,877  
Interest earned  4,133   2,337   1,796  
              
Loss from continuing operations before income taxes $(4,664)  (4,096)  (568) 

Stabilized Joint Venture Segment:

  Twelve months ended December 31    
(dollars in thousands) 2020 % 2019 % Change %
             
Lease revenue $10,207   100.0%  10,964   100.0%  (757)  -6.9%
                         
Depreciation, depletion and amortization  4,744   46.5%  4,756   43.4%  (12)  -0.3%
Operating expenses  2,510   24.6%  2,617   23.9%  (107)  -4.1%
Property taxes  1,060   10.4%  1,158   10.6%  (98)  -8.5%
Management company indirect  208   2.0%  190   1.7%  18   9.5%
Corporate expense  206   2.0%  160   1.4%  46   28.8%
                         
Cost of operations  8,728   85.5%  8,881   81.0%  (153)  -1.7%
                         
Operating profit $1,479   14.5%  2,083   19.0%  (604)  -29.0%

Discontinued Operations:

  Three months ended Twelve months ended
  December 31, December 31,
  2019 2019
 Lease Revenue $   460 
         
Cost of operations:        
     Depreciation, depletion and amortization     17 
     Operating expenses  2   248 
     Property taxes  (5)  41 
     Management company indirect      
     Corporate expenses      
Total cost of operations  (3)  306 
         
Total operating profit  3   154 
         
Interest expense      
Gain on sale of buildings  6   9,244 
         
Income before income taxes  9   9,398 
Provision for income taxes  2   2,542 
         
Income from discontinued operations $7   6,856 
         
Earnings per common share:        
 Income (loss) from discontinued operations-        
    Basic $0.00   0.69 
    Diluted $0.00   0.69 

Non-GAAP Financial Measures.

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 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.

Net Operating Income Reconciliation           
Twelve months ended 12/31/20 (in thousands)           
     Stabilized      
 Asset   Joint Mining Unallocated FRP
 Management Development Venture Royalties Corporate Holdings
 Segment Segment Segment Segment Expenses Totals
Income (loss) from continuing operations 2,690   (3,402)  291   8,685   2,358   10,622 
Income Tax Allocation 997   (1,262)  476   3,221   875   4,307 
Income (loss) from continuing operations before income taxes 3,687   (4,664)  767   11,906   3,233   14,929 
                        
Less:                       
Equity in profit of Joint Ventures       339         339 
Gains on sale of buildings 3,689   1,877      3,604      9,170 
Unrealized rents 153         235      388 
Interest income    4,133         3,282   7,415 
Plus:                       
Unrealized rents       15         15 
Equity in loss of Joint Venture    5,990      39      6,029 
Interest Expense       1,051      49   1,100 
Depreciation/Amortization 652   214   4,744   218      5,828 
Management Co. Indirect 634   1,820   208   289      2,951 
Allocated Corporate Expenses 909   2,108   206   288      3,511 
                        
Net Operating Income (loss) 2,040   (542)  6,652   8,901      17,051 


Net Operating Income Reconciliation           
Twelve months ended 12/31/19 (in thousands)           
     Stabilized      
 Asset   Joint Mining Unallocated FRP
 Management Development Venture Royalties Corporate Holdings
 Segment Segment Segment Segment Expenses Totals
Income (loss) from continuing operations 63   (2,988)  736   6,277   4,734   8,822 
Income Tax Allocation 23   (1,108)  458   2,327   1,262   2,962 
Income (loss) from continuing operations before income taxes 86   (4,096)  1,194   8,604   5,996   11,784 
                        
Less:                       
Gains on sale of buildings 536         125      661 
Unrealized rents 5      22         27 
Interest income    2,337         6,038   8,375 
Equity in gain of Joint Venture       123         123 
Plus:                       
Unrealized rents          123      123 
Equity in loss of Joint Venture    2,035      42      2,077 
Interest Expense       1,012      42   1,054 
Depreciation/Amortization 708   214   4,756   177      5,855 
Management Co. Indirect 350   1,773   190   201      2,514 
Allocated Corporate Expenses 646   1,581   160   169      2,556 
                        
Net Operating Income (loss) 1,249   (830)  7,167   9,191      16,777 


Contact:John D. Baker III 
 Chief Financial Officer904/858-9100