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FRP Holdings, Inc. (NASDAQ: FRPH) Announces Results for the Second Quarter and Six Months Ended June 30, 2022
Источник: Nasdaq GlobeNewswire / 11 авг 2022 12:38:27 America/New_York
JACKSONVILLE, Fla., Aug. 11, 2022 (GLOBE NEWSWIRE) -- FRP Holdings, Inc. (NASDAQ-FRPH) –
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
Second Quarter Consolidated Results of Operations
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:
- The quarter includes $152,000 amortization expense compared to $1,868,000 in the same quarter last year of the $4,750,000 fair value of The Maren’s leases-in-place established when we booked this asset as part of the gain on remeasurement upon consolidation of this Joint Venture.
- Interest expense increased $293,000 compared to the same quarter last year due to capitalizing less interest due to the lower amount of in-house and joint venture projects under development.
- Equity in loss of Joint Ventures increased $648,000 primarily due to increased depreciation and amortization at our joint ventures due to buildings placed in service.
- The same quarter last year included $805,000 for an easement and sale of excess land in the Mining Royalty Lands Segment.
Second Quarter Segment Operating Results
Asset Management Segment:
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:
Total revenues in this segment were $2,883,000 versus $2,634,000 in the same period last year. Total operating profit 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:
With respect to ongoing projects:
- We are the principal capital source of a residential development venture in Prince George’s County, Maryland known as “Amber Ridge.” Of the $18.5 million in committed capital to the project, $16.8 million in principal draws have taken place to date. Through the end of the first half of 2022, 99 of the 187 units have been sold, and we have received $13,040,000 in preferred interest and principal to date.
- Bryant Street is a mixed-use joint venture between the Company and MRP in Washington, DC consisting of four buildings, The Coda, The Chase 1A, The Chase 1B, and one commercial building 90% leased to an Alamo Draft House movie theater. At quarter end, the Coda was 96.75% leased and 95.45% occupied, The Chase 1B was 85.71% leased and 78.26% occupied, and The Chase 1A was 72.67% leased and 62.79% occupied. In total, at quarter end, Bryant Street’s 487 residential units were 84.6% leased and 78.2% occupied. Its commercial space was 82.5% leased and 69.2% occupied at quarter end.
- We began construction on our 1800 Half Street joint venture project, now known as The Verge, at the end of August 2020. We expect the building to be complete in the third quarter of 2022. As of the end of the second quarter, the project was 91.34% complete. This is our third mixed use project in the Anacostia waterfront submarket in Washington, DC.
- Leasing began on Riverside in the third quarter 2021 and the building was 97% leased and 91% occupied at the end of the quarter. .408 Jackson is our second joint venture project in Greenville and is currently under construction. This project is 94.09% complete and we expect to complete construction and begin leasing in fourth quarter of 2022.
Stabilized Joint Venture Segment:
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
Six Months Consolidated Results of Operations
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:
- The period includes $468,000 amortization expense compared to $1,868,000 in the same period last year of the $4,750,000 fair value of The Maren’s leases-in-place established when we booked this asset as part of the gain on remeasurement upon consolidation of this Joint Venture.
- The period includes $733,000 gain on sales of excess property at Brooksville while the same quarter last year included $805,000 for a Grandin easement and sale of Brooksville excess land.
- Interest income decreased $405,000 due to bond maturities and the repayment of the Company’s preferred interest in The Maren upon the building’s refinancing.
- Equity in loss of Joint Ventures increased $617,000 primarily due to increased depreciation and amortization at our joint ventures due to buildings placed in service.
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.
Six Months Segment Operating Results
Asset Management Segment:
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:
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.
Stabilized Joint Venture Segment:
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 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.
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. 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 raise to 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 increase of 7.33%. When we could not renew an existing residential lease and instead signed a new tenant, we saw a year-to-date 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-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.
Conference Call
The Company will host a conference call on Friday, August 12, 2022 at 10:00 a.m. (EDT). Analysts, stockholders and other interested parties may access the teleconference live by calling 1-800-343-4849 (passcode 91003) within the United States. International callers may dial 1-203-518-9848 (passcode 91003). Audio replay will be available until August 26, 2022 by dialing 1-800-943-2127 (passcode 17717) within the United States. International callers may dial 1-402-220-1139 (passcode 17717). An audio replay will also be available on the Company’s investor relations page (https://www.frpdev.com/investor-relations/) following the 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 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; 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 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 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, including realized gains of $0, $0, $0 and $0, respectively 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 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 Asset Management Segment:
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 % Mining Royalty Lands Segment:
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 % Development Segment:
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 ) Stabilized Joint Venture Segment:
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 % Asset Management Segment:
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 % Mining Royalty Lands Segment:
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 % Development Segment:
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:
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 % 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 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 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 Contact: John D. Baker III Chief Financial Officer 904/858-9100