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 ~~September~~June 30, ~~2017~~2020

[ ]

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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes [x] No [_]

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

Large accelerated filer [_]		Accelerated filer ~~[x]~~
		[_]
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 ~~September 30, 2017~~July 31, 2020
	Common Stock, $.10 par value per share				~~10,007,167~~9,548,308 shares

FRP HOLDINGS, INC.

FORM 10-Q

QUARTER ENDED ~~SEPTEMBER~~JUNE 30, ~~2017~~2020

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	67
	Consolidated Statements of Shareholders’ Equity	8
	Condensed Notes to Consolidated Financial Statements	89

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	1821

Item 3.	Quantitative and Qualitative Disclosures about Market Risks	3537

Item 4.	Controls and Procedures	3538

	Part II. Other Information

Item 1A.	Risk Factors	3639

Item 2.	Purchase of Equity Securities by the Issuer	3640

Item 6.	Exhibits	3640

Signatures		3741

Exhibit 31	Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	3943

Exhibit 32	Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	4246

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-Q 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,~~properties; demand for ~~flexible warehouse/office facilities~~apartments in ~~the Baltimore-Washington-Northern Virginia area,~~Washington D.C. and Richmond, Virginia; our ability to obtain zoning and entitlements necessary for property ~~development,~~development; the impact of lending and capital market conditions on our liquidity, our ability to finance projects or repay our ~~debt,~~debt; general real estate investment and development ~~risks,~~risks; vacancies in our ~~properties,~~properties; risks associated with developing and managing properties in partnership with ~~others, competition,~~others; competition; our ability to renew leases or re-lease spaces as leases ~~expire,~~expire; illiquidity of real estate ~~investments,~~investments; bankruptcy or defaults of ~~tenants,~~tenants; the impact of restrictions imposed by our credit ~~facility,~~facility; the level and volatility of interest ~~rates,~~rates; environmental ~~liabilities,~~liabilities; inflation ~~risks, cybersecurity risks,~~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. In addition, if we elect REIT status these risk factors also would include our ability to qualify or to remain qualified as a REIT, our ability to satisfy REIT distribution requirements, the impact of issuing equity, debt or both, and selling assets to satisfy our future distributions required as a REIT or to fund capital expenditures, future growth and expansion initiatives, the impact of the amount and timing of any future distributions, the impact from complying with REIT qualification requirements limiting our flexibility or causing us to forego otherwise attractive opportunities, our lack of experience operating as a REIT, legislative, administrative, regulatory or other actions affecting REITs, including positions taken by the Internal Revenue Service, the possibility that our Board of Directors will unilaterally revoke our REIT election, the possibility that the anticipated benefits of qualifying as a REIT will not be realized, or will not be realized within the expected time period, 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.

These forward-looking statements are made as of the date hereof based on management’s current expectations, and the Company does not undertake an obligation to update such statements, whether as a result of new information, future events or otherwise. 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.

PART I. FINANCIAL INFORMATION, ITEM 1. FINANCIAL STATEMENTS

FRP HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited) (In thousands, except share data)

	September 30		December 31		June 30		December 31
Assets:	2017		2016		2020		2019
Real estate investments at cost:
Land	$	127,744		99,417	$	81,679		84,383
Buildings and improvements		332,694		195,443		147,819		147,019
Projects under construction		5,959		11,779		888		1,056
Total investments in properties		466,397		306,639		230,386		232,458
Less accumulated depreciation and depletion		91,788		82,392		32,634		30,271
Net investments in properties		374,609		224,247		197,752		202,187

Real estate held for investment, at cost		7,176		7,176		8,788		8,380
Investments in joint ventures		13,345		22,901		159,779		160,452
Net real estate investments		395,130		254,324		366,319		371,019

Cash and cash equivalents		2,630		—		30,742		26,607
Cash held in escrow		186		—		3,739		186
Accounts receivable, Net		1,033		710
Federal and state income taxes receivable		1,852		—
Accounts receivable, net						1,323		546
Investments available for sale at fair value						130,058		137,867
Unrealized rents		4,299		4,562		657		554
Deferred costs		10,781		6,786		791		890
Other assets		181		178		488		479
Total assets	$	416,092		266,560	$	534,117		538,148

Liabilities:
Lines of credit payable	$	6,440		6,665
Secured notes payable, current portion		4,674		4,526
Secured notes payable, less current portion		103,999		29,554
Secured notes payable					$	88,993		88,925
Accounts payable and accrued liabilities		4,825		3,747		2,155		2,431
Environmental remediation liability		2,037		2,037
Bank overdraft		—		254
Other liabilities						1,886		1,978
Deferred revenue						627		790
Federal and state income taxes payable		—		887		2,651		504
Deferred revenue		1,397		1,126
Deferred income taxes		36,075		16,455		50,212		50,111
Deferred compensation		1,485		1,475		1,430		1,436
Deferred lease intangible, net		2		9
Tenant security deposits		940		1,005		362		328
Total liabilities		161,874		67,740		148,316		146,503

Commitments and contingencies (Note 8)
Commitments and contingencies
		��
Equity:
Common stock, $.10 par value 25,000,000 shares authorized, 10,007,167 and 9,914,054 shares issued and outstanding, respectively		1,001		991
Common stock, $.10 par value 25,000,000 shares authorized, 9,563,144 and 9,817,429 shares issued and outstanding, respectively						956		982
Capital in excess of par value		55,341		52,647		57,107		57,705
Retained earnings		173,652		145,168		310,486		315,278
Accumulated other comprehensive income, net		14		14		1,194		923
Total shareholders’ equity		230,008		198,820		369,743		374,888
Noncontrolling interest MRP		24,210		—		16,058		16,757
Total equity		254,218		198,820		385,801		391,645
Total liabilities and shareholders’ equity	$	416,092		266,560	$	534,117		538,148

See accompanying notes.

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,
	2020			2019			2020			2019
Revenues:
Lease revenue	$	3,447			3,730			7,045			7,215
Mining lands lease revenue		2,402			2,633			4,587			4,862
Total Revenues		5,849			6,363			11,632			12,077

Cost of operations:
Depreciation, depletion and amortization		1,500			1,472			2,968			2,959
Operating expenses		781			910			1,706			1,792
Property taxes		646			713			1,383			1,466
Management company indirect		692			610			1,364			1,202
Corporate expenses		1,026			551			2,213			1,196
Total cost of operations		4,645			4,256			9,634			8,615

Total operating profit		1,204			2,107			1,998			3,462

Net investment income, including realized gains of $134, $328, $242 and $447, respectively		2,110			1,984			4,101			3,794
Interest expense		(45	)		(272	)		(96	)		(860	)
Equity in loss of joint ventures		(1,343	)		(272	)		(1,985	)		(536	)
Gain on sale of real estate		3,589			536			3,597			536

Income from continuing operations before income taxes		5,515			4,083			7,615			6,396
Provision for income taxes		1,538			1,131			2,139			1,803
Income from continuing operations		3,977			2,952			5,476			4,593

Income from discontinued operations, net		—			6,776			—			6,862

Net income		3,977			9,728			5,476			11,455
Loss attributable to noncontrolling interest		(172	)		(97	)		(291	)		(268	)
Net income attributable to the Company	$	4,149			9,825			5,767			11,723

Earnings per common share:
Income from continuing operations-
Basic	$	0.41			0.30			0.56			0.46
Diluted	$	0.41			0.30			0.56			0.46
Discontinued operations-
Basic	$	—			0.68			—			0.69
Diluted	$	—			0.68			—			0.69
Net income attributable to the Company-
Basic	$	0.43			0.99			0.59			1.18
Diluted	$	0.43			0.99			0.59			1.17

Number of shares (in thousands) used in computing:
-basic earnings per common share		9,620			9,915			9,712			9,933
-diluted earnings per common share		9,649			9,960			9,744			9,978

THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2017 2016 2017 2016
Revenues:
     Rental revenue $ 8,738 6,259 21,243 18,430
     Mining Royalty and rents 1,763 2,016 5,311 5,805
     Revenue – reimbursements 1,553 1,501 4,182 4,399
Total Revenues 12,054 9,776 30,736 28,634

Cost of operations:
     Depreciation, depletion and amortization 4,769 2,160 9,030 6,155
     Operating expenses 1,879 1,146 3,882 3,651
     Environmental remediation expense —   —   —   2,000
     Property taxes 1,401 1,087 3,592 3,357
     Management company indirect 560 419 1,504 1,340
     Corporate expenses (Note 4 Related Party) 617 656 2,510 2,348
Total cost of operations 9,226 5,468 20,518 18,851

Total operating profit 2,828 4,308 10,218 9,783

Interest income —   —   —   1
Interest expense (1,251 ) (273 ) (1,870 ) (1,080 )
Equity in loss of joint ventures (12 ) (652 ) (1,589 ) (924 )
Gain on remeasurement of investment in real estate partnership
60,196 —   60,196 —
Loss on investment land sold —   (148 ) —   (257 )

Income before income taxes 61,761 3,235 66,955 7,523
Provision for income taxes 16,577 1,278 18,615 2,972

Net income 45,184 1,957 48,340 4,551
Income attributable to noncontrolling interest 19,793 —   19,793 —
Net income attributable to the Company $ 25,391 1,957 28,547 4,551

Earnings per common share:
    Basic $ 2.54 0.20 2.86 0.46
    Diluted $ 2.52 0.20 2.84 0.46

Number of shares (in thousands) used in computing:
    -basic earnings per common share 10,004 9,865 9,967 9,860
    -diluted earnings per common share 10,066 9,908 10,035 9,902

See accompanying notes.

FRP HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands except per share amounts)

(Unaudited)

THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2017 2016 2017 2016
Comprehensive income $ 45,184 1,957 48,340 4,551
Less: comprehensive income attributable to noncontrolling interests 19,793 — 19,793 —
Comprehensive income attributable to the Company $ 25,391 1,957 28,547 4,551

	THREE MONTHS ENDED						SIX MONTHS ENDED
	JUNE 30,						JUNE 30,
	2020			2019			2020			2019
Net income	$	3,977			9,728			5,476			11,455
Other comprehensive income net of tax:
Unrealized gain on investments available for
sale, net of income tax effect of $518, $129, $101 and $708		1,397			351			271			1,911
Comprehensive income	$	5,374			10,079			5,747			13,366

Less comp. income attributable to
Noncontrolling interest	$	(172	)		(97	)		(291	)		(268	)

Comprehensive income attributable to the Company	$	5,546			10,176			6,038			13,634

See accompanying notes

FRP HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

~~NINE~~SIX MONTHS ENDED ~~SEPTEMBER~~JUNE 30, ~~2017~~2020 AND ~~2016~~2019

(In thousands) (Unaudited)

2017 2016
Cash flows from operating activities:
Net income $ 48,340 4,551
Adjustments to reconcile net income to net cash
  provided by operating activities:
   Depreciation, depletion and amortization 9,228 6,329
   Deferred income taxes 19,620 (1,551 )
   Equity in loss of joint ventures 1,589 924
   Gain on remeasurement of investment in real estate partnership (60,196 ) —
   Loss on sale of equipment and property 12 238
   Stock-based compensation 588 506
   Net changes in operating assets and liabilities:
     Accounts receivable (283 ) (418 )
     Deferred costs and other assets (1,221 ) (1,066 )
     Accounts payable and accrued liabilities 444 5,141
     Income taxes payable and receivable (2,739 ) (1,026 )
     Other long-term liabilities (61 ) 34
Net cash provided by operating activities 15,321 13,662

Cash flows from investing activities:
Investments in properties (12,595 ) (17,015 )
Investments in joint ventures (621 ) (715 )
Proceeds from sale of assets 16 2,147
Cash at consolidation of real estate partnership 2,295 —
Cash held in escrow (15 ) 1,174
Net cash used in investing activities (10,920 ) (14,409 )

Cash flows from financing activities:
Decrease in bank overdrafts (254 ) (63 )
Proceeds from long-term debt 43 —
Repayment of long-term debt (3,367 ) (3,159 )
Proceeds from borrowing on revolving credit facility 12,845 18,042
Payment on revolving credit facility (13,070 ) (14,163 )
Debt issue costs (21 ) (139 )
Repurchase of company stock (74 ) (43 )
Exercise of employee stock options 2,127 272
Net cash (used in) provided by financing activities (1,771 ) 747

Net increase in cash and cash equivalents 2,630 —
Cash and cash equivalents at beginning of period — —
Cash and cash equivalents at end of the period $ 2,630 —

	2020			2019
Cash flows from operating activities:
Net income	$	5,476			11,455
Adjustments to reconcile net income to
net cash provided by continuing operating activities:
Income from discontinued operations, net		—			(6,862	)
Deferred income taxes		101			22,458
Depreciation, depletion and amortization		3,084			3,082
Equity in loss of joint ventures		1,985			536
Gain on sale of equipment and property		(3,611	)		(531	)
Stock-based compensation		1,171			57
Realized gain on available for sale investments		(242	)		(447	)
Net changes in operating assets and liabilities:
Accounts receivable		(777	)		(219	)
Deferred costs and other assets		28			(1,092	)
Accounts payable and accrued liabilities		(439	)		(670	)
Income taxes payable and receivable		2,147			(17,352	)
Other long-term liabilities		187			187
Net cash provided by operating activities of continuing operations		9,110			10,602
Net cash used in operating activities of discontinued operations		—			(2,441	)
Net cash provided by operating activities		9,110			8,161

Cash flows from investing activities:
Investments in properties		(1,167	)		(8,176	)
Investments in joint ventures		(1,315	)		(6,592	)
Purchases of investments available for sale		(24,748	)		(33,846	)
Proceeds from sales of investments available for sale		32,703			79,937
Proceeds from the sale of assets		5,867			8,153
Cash held in escrow		(3,553	)		(19,864	)
Net cash provided by investing activities of continuing operations		7,787			19,612
Net cash provided by investing activities of discontinued operations		—			11,526
Net cash provided by investing activities		7,787			31,138

Cash flows from financing activities:
Distribution to noncontrolling interest		(408	)		(510	)
Repurchase of company stock		(12,354	)		(5,312	)
Exercise of employee stock options		—			145
Net cash used in financing activities of continuing operations		(12,762	)		(5,677	)
Net cash used in financing activities of discontinued operations		—			—
Net cash used in financing activities		(12,762	)		(5,677	)

Net increase in cash and cash equivalents		4,135			33,622
Cash and cash equivalents at beginning of year		26,607			22,547
Cash and cash equivalents at end of the period	$	30,742			56,169

See accompanying notes.

FRP HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

SIX MONTHS ENDED JUNE 30, 2020 AND 2019

(In thousands, except share amounts)

													Accumu-
													lated
													Other
													Compre-			Total
							Capital in						hensive			Share			Non-
	Common Stock						Excess of			Retained			Income, net			Holders’			Controlling			Total
	Shares			Amount			Par Value			Earnings			of tax			Equity			Interest			Equity
Balance at December 31, 2019		9,817,429		$	982		$	57,705		$	315,278		$	923		$	374,888		$	16,757		$	391,645

Exercise of stock options
Stock option grant compensation								47									47						47
Restricted stock compensation								94									94						94
Shares granted to Employees		11,448			1			529									530						530
Shares granted to Directors		12,050			1			499									500						500
Restricted stock award		20,520			2			(2	)								—						—
Shares purchased and cancelled		(298,303	)		(30	)		(1,765	)		(10,559	)					(12,354	)					(12,354	)
Net income											5,767						5,767			(291	)		5,476
Distributions to partners																				(408	)		(408	)
Unrealized gain on investment, net														271			271						271

Balance at June 30, 2020		9,563,144		$	956		$	57,107		$	310,486		$	1,194		$	369,743		$	16,058		$	385,801



Balance at December 31, 2018		9,969,174		$	997		$	58,004		$	306,307		$	(701	)	$	364,607		$	18,648		$	383,255

Exercise of stock options		4,804						145									145						145
Stock option compensation								57									57						57
Shares purchased and cancelled		(110,527	)		(11	)		(644	)		(4,657	)					(5,312	)					(5,312	)
Net income											11,723						11,723			(268	)		11,455
Distributions to partners																				(510	)		(510	)
Unrealized gain on investment, net														1,911			1,911						1,911

Balance at June 30, 2019		9,863,451		$	986		$	57,562		$	313,373		$	1,210		$	373,131		$	17,870		$	391,001

FRP HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~SEPTEMBER~~JUNE 30, ~~2017~~2020

(Unaudited)

(1) Description of Business and Basis of Presentation.

FRP Holdings, Inc. ~~(“FRP” or the “Company”)~~ is a holding company engaged in the real estate business, namely (i) ~~warehouse/office/residential building ownership, leasing and management, (ii)~~ mining royalty land ownership and leasing, ~~and (iii)~~(ii) land acquisition, entitlement and development primarily for future warehouse/office or residential building ~~construction.~~construction, (iii) ownership, leasing, and management of a residential apartment building, 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”). and RiverFront Investment Partners I, LLC. Our investment in the Brooksville joint venture, ~~and~~ BC FRP Realty joint venture, RiverFront Holdings II joint venture, 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 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.

~~Effective July 1, 2017~~On May 21, 2018, the Company completed the disposition of 40 industrial warehouse properties and three additional land parcels to an affiliate of Blackstone Real Estate Partners VIII, L.P. for $347.2 million. One warehouse property valued at $11.7 million was excluded from the sale due to the tenant exercising its right of first refusal to purchase the property. On June 28, 2019, the Company completed the sale of the excluded property to the same buyer for $11.7 million. This resulted in the disposition of all of the Company’s industrial flex/office warehouse properties prior to the sale date and constituted a major strategic shift and as a result, these properties have been reclassified as discontinued operations for all periods presented. The Asset Management segment currently contains four commercial properties.

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, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. The accompanying consolidated financial statements and the ~~assets (at fair value)~~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, 2019.

(2) Recently Issued Accounting Standards.

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)”, ~~liabilities~~which requires lessees to recognize a right-to-use asset and a lease obligation for all leases. The Company is not a significant lessee. Lessors will account for leases using an approach that is substantially equivalent to existing accounting standards. The Company's existing leases will continue to be classified as operating ~~results~~leases. Leases entered into after the effective date of the new standard may be classified as operating or sales-type leases, based on specific classification criteria. Operating leases will continue to have a similar pattern of recognition as under current GAAP. Sales-type lease accounting, however, will result in the recognition of selling profit at lease commencement, with interest income recognized over the life of the lease. The new standard also includes a change to the treatment of internal leasing costs and legal costs, which can no longer be capitalized. Only incremental costs of a lease that would not have been incurred if the lease had not been obtained may be deferred as initial direct costs. The new standard also requires lessors to exclude from variable

payments certain lessor costs, such as real estate taxes, that the lessor contractually requires the lessee to pay directly to a third party on its behalf. The new standard requires our expected credit loss related to the collectability of lease receivables to be reflected as an adjustment to the line item Lease Revenue. For the year ended December 31, 2019, the credit loss related to the collectibility of lease receivables was recognized in the line item Operating expenses and was not significant. Additionally, the new standard requires lessors to allocate the consideration in a contract between the lease component (right to use an underlying asset) and non-lease component (transfer of a good or service that is not a lease). However, lessors are provided with a practical expedient, elected by class of underlying asset, to account for lease and non-lease components of a contract as a single lease component if certain criteria are met. The terms of the Company's leases generally provide that the Company is entitled to receive reimbursements from tenants for operating expenses such as real estate taxes, insurance and common area maintenance, in addition to the base rental payments for use of the underlying asset. Under the new standard, common area maintenance is considered a nonlease component of a lease contract, which would be accounted for under Topic 606. However, the Company will apply the practical expedient to account for its lease and non-lease components as a single, combined operating lease component. While the timing of recognition should remain the same, the Company is no longer presenting reimbursement revenue from tenants separately in our Consolidated Statements of Income beginning January 1, 2019. The new standard along with the adoption of ASU No. 2018-11, Leases - Targeted Improvements which the FASB issued in July 2018, was adopted effective January 1, 2019 and we have elected to use January 1, 2019 as our date of initial application. We elected the package of practical expedients permitted under the transition guidance within the new standard. By adopting these practical expedients, we were not required to reassess (1) whether an existing contract meets the definition of a lease; (2) the lease classification for existing leases; or (3) costs previously capitalized as initial direct costs. The adoption of this guidance did not have a material impact on our financial statements.

(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. The flex/office warehouses in the Asset Management Segment were sold and reclassified to discontinued operations leaving only two commercial properties, one recent industrial acquisition, Cranberry Run, which we purchased in 2019, and 1801 62^nd Street, our most recent spec building in Hollander Business Park, which joined Asset Management April 1, 2019.

Our Mining Royalty Lands segment owns several properties comprising approximately 13,400 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.

The Company operates a residential apartment building Riverfront Investment Partners I, LLC partnership (“Dock 79”) ~~which was previously accounted for under the equity method.~~. The ownership of Dock 79 attributable to our partner MRP Realty 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 amounts of consolidated net income attributable to the noncontrolling interest is clearly identified on the accompanying Consolidated Statements of Income.

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 nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. 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 September 30, 2016.

~~On December 19, 2016, the Company changed its fiscal year end from September 30 to December 31. The quarter ended December 31, 2016 was a transition period.~~

~~(2) Recently Issued Accounting Standards.~~In February 2016, the FASB issued ASU No. 2016-02, “Leases”, which requires lessees to recognize a right-to-use asset and a lease obligation for all leases. Lessees are permitted to make an accounting policy election to not recognize an asset and liability for leases with a term of twelve months or less. Additional qualitative and quantitative disclosures, including significant judgments made by management, will be required. Lessors will account for leases using an approach that is substantially equivalent to existing accounting standards. The new standard will become effective for the Company beginning with the first quarter 2019 and requires a modified retrospective transition approach and includes a number of practical expedients. Early adoption of the standard is permitted. As the Company is primarily a lessor the adoption of this guidance is not expected to have a material impact on its financial statements.

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” which replaces existing revenue recognition standards and significantly expand the disclosure requirements for revenue arrangements. It may be adopted either retrospectively or on a modified retrospective basis to new contracts and existing contracts with

remaining performance obligations as of the effective date. While lease contracts with customers, which constitute a vast majority of our revenues, are a specific scope exception, certain of our revenue streams may be impacted by the new guidance. The new standard is effective beginning with the first quarter of 2018. The Company currently does not expect the adoption of this guidance to result in a material impact on its financial statements.

In March 2016, the FASB issued ASU No. 2016-09, “Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”. The ASU includes multiple provisions intended to simplify various aspects of the accounting for share-based payments. Excess tax benefits for share-based payments are recorded as a reduction of income taxes and reflected in operating cash flows upon the adoption of this ASU. Excess tax benefits were recorded in equity and as financing activity prior to adoption of this ASU. In addition, the guidance allows for a policy election to account for forfeitures as they occur rather than on an estimated basis. The Company adopted this guidance prospectively as of October 1, 2016. As a result of this adoption in the nine months of 2017 we recorded a $14,000 reduction of income tax expense from excess tax benefits on stock option exercises.

In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business”, to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions of assets or businesses. To be considered a business, an acquisition would have to include an input and a substantive process that together significantly contribute to the ability to create outputs. The new guidance provides a framework to evaluate when an input and a substantive process are present. To be a business without outputs, there will now need to be an organized workforce. ASU 2017-01 further states that when substantially all of the fair value of gross assets acquired is concentrated in a single asset (or a group of similar assets), the assets acquired would not represent a business. The Company adopted this guidance prospectively as of July 1, 2017. The Company expects this standard to result in building acquisitions being considered an asset rather than a business. This change will result in acquisition costs being capitalized as part of the asset acquisition, whereas prior treatment has them recognized in earnings in the period incurred.

~~(3) Business Segments.~~ The Company is reporting its financial performance based on four reportable segments, Asset Management, Mining Royalty Lands, Land Development and Construction and RiverFront on the Anacostia, as described below.

~~The Asset Management segment owns, leases and manages warehouse/office buildings located predominately in the Baltimore/Northern Virginia/Washington, DC market area.~~

Our Mining Royalty Lands segment owns several properties comprising approximately 15,000 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 Land Development and Construction 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 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.

In July 2017, Phase I (Dock 79) of the development known as RiverFront on the Anacostia in Washington, D.C., a 300,000 square foot residential apartment building developed by a joint venture between the Company and MRP SE Waterfront Residential, LLC (“MRP”), reached stabilization, meaning 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 value of the development at the time of stabilization. The attainment of stabilization also resulted 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 July 1, 2017, the Company consolidated the assets (at current fair value), liabilities and operating results of the joint venture as a new segment called RiverFront on the Anacostia.

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

Three Months ended Nine Months ended
September 30, September 30,
2017 2016 2017 2016
Revenues:
Asset management $ 7,578 7,323 22,057 21,824
Mining royalty lands 1,786 2,037 5,381 5,874
Land development and construction 323 416 931 936
RiverFront on the Anacostia 2,367 —   2,367 —
12,054 9,776 30,736 28,634

Operating profit:
Before corporate expenses:
  Asset management $ 3,336 3,245 10,071 9,986
   Mining royalty lands 1,667 1,915 4,993 5,504
   Land development and construction (390 ) (196 ) (1,168 ) (3,359 )
   RiverFront on the Anacostia (1,168 ) —   (1,168 ) —
Corporate expenses:
  Allocated to asset management (350 ) (339 ) (1,424 ) (1,213 )
  Allocated to mining royalty lands (30 ) (49 ) (124 ) (176 )
  Allocated to land development and construction (210 ) (268 ) (935 ) (959 )
  Allocated to RiverFront on the Anacostia (27 ) —   (27 ) —
(617 ) (656 ) (2,510 ) (2,348 )
$ 2,828 4,308 10,218 9,783

Interest expense:
Asset management $ 374 273 993 1,080
RiverFront on the Anacostia 877 —   877 —
$ 1,251 273 1,870 1,080

Depreciation, depletion and amortization:
Asset management $ 2,090 2,071 6,112 5,891
Mining royalty lands 17 24 91 70
Land development and construction 98 65 263 194
RiverFront on the Anacostia 2,564 —   2,564 —
$ 4,769 2,160 9,030 6,155
Capital expenditures:
Asset management $ 1,273 10,276 6,061 11,510
Mining royalty lands —   99 —   205
Land development and construction 2,852 4,210 6,203 5,300
RiverFront on the Anacostia 331 — 331 —
$ 4,456 14,585 12,595 17,015

September 30, December 31,
Identifiable net assets 2017 2016

Asset management $ 180,827 169,736
Mining royalty lands 38,744 39,259
Land development and construction 44,162 57,126
RiverFront on the Anacostia 146,718 —
Cash items 2,630 —
Unallocated corporate assets 3,011 439
$ 416,092 266,560

	Three Months ended						Six Months ended
	June 30,						June 30,
	2020			2019			2020			2019
Revenues:
Asset management	$	716			662			1,368			1,303
Mining royalty lands		2,402			2,633			4,587			4,862
Development		279			316			572			585
Stabilized Joint Venture		2,452			2,752			5,105			5,327
		5,849			6,363			11,632			12,077

Operating profit (loss):
Before corporate expenses:
Asset management	$	323			128			500			225
Mining royalty lands		2,194			2,458			4,195			4,502
Development		(703	)		(565	)		(1,477	)		(1,118	)
Stabilized Joint Venture		416			637			993			1,049
Operating profit before corporate expenses		2,230			2,658			4,211			4,658
Corporate expenses:
Allocated to asset management		(265	)		(139	)		(573	)		(302	)
Allocated to mining royalty lands		(84	)		(36	)		(181	)		(79	)
Allocated to development		(617	)		(341	)		(1,329	)		(740	)
Allocated to stabilized joint venture		(60	)		(35	)		(130	)		(75	)
Total corporate expenses		(1,026	)		(551	)		(2,213	)		(1,196	)
	$	1,204			2,107			1,998			3,462

Interest expense	$	45			272			96			860

Depreciation, depletion and amortization:
Asset management	$	200			196			392			373
Mining royalty lands		62			42			100			94
Development		53			49			107			107
Stabilized Joint Venture		1,185			1,185			2,369			2,385
	$	1,500			1,472			2,968			2,959
Capital expenditures:
Asset management	$	341			1,352			554			7,818
Mining royalty lands		—			—			—			—
Development		320			(122	)		617			248
Stabilized Joint Venture		19			227			(4	)		110
	$	680			1,457			1,167			8,176

June 30, December 31,
Identifiable net assets 2020 2019

Asset management $ 18,813 18,468
Mining royalty lands 37,911 38,409
Development 173,334 179,357
Stabilized Joint Venture 131,652 133,956
Investments available for sale at fair value 130,058 137,867
Cash items 34,481 26,793
Unallocated corporate assets 7,868 3,298
$ 534,117 538,148
11

(4) Related Party Transactions.

The Company is a party to a Transition Services Agreement which resulted from our January 30, 2015 spin-off of Patriot Transportation Holding, Inc. (Patriot). The Transition 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, ~~2017.~~2020.

The consolidated statements of income reflect charges and/or allocation from Patriot for these services of ~~$352,000~~$290,000 and ~~$362,000~~$328,000 for the three months ended ~~September~~June 30, ~~2017~~2020 and ~~2016,~~2019 and ~~$1,229,000~~$580,000 and ~~$1,156,000~~$629,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016,~~2019, respectively. Included in the charges above are amounts recognized for corporate executive stock-based compensation expense. These charges are reflected as part of corporate expenses.

To determine these allocations between FRP and Patriot as set forth in the Transition Services Agreement, we ~~generally employed the same methodology historically used by the Company pre Spin-off~~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 as the terms were negotiated while Patriot was still a subsidiary of FRP.~~basis.

(5) Long-Term Debt.

Long-term debt is summarized as follows (in thousands):

September 30, December 31,
2017 2016
Revolving credit (uncollateralized) $ 6,440 6,665
5.6% to 7.9% mortgage notes
  due in installments through 2027 30,792 34,080
RiverFront construction loan 60,881 —
RiverFront EB5 secondary financing 17,000 —
115,113 40,745
Less portion due within one year 4,674 4,526
$ 110,439 36,219

	June 30,		December 31,
	2020		2019
Riverfront permanent loan	$	88,993		88,925
Less portion due within one year		—		—
	$	88,993		88,925

On ~~January 30, 2015,~~February 6, 2019, the Company entered into a ~~five year credit agreement~~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 "Credit Agreement").~~million. The interest rate under the Credit Agreement will be a maximum of 1.50% over LIBOR, which may be reduced quarterly to 1.25% or 1.0% over 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 ~~provides a revolving credit facility (the “Revolver”) with a $10 million sublimit available for standby letters of credit.~~contains certain conditions, affirmative financial covenants and negative covenants. As of ~~September~~June 30, ~~2017,~~2020, there was ~~$5,687,000~~no debt outstanding on ~~the~~this revolver, ~~$2,266,000~~$411,000 outstanding under letters of credit and ~~$12,047,000~~$19,589,000 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 ~~Revolver bears~~letter of credit fee is 1% and applicable interest ~~at a~~ rate ~~of 1.4% over the selected LIBOR, which may change quarterly based~~would have been 1.17825% on the Company’s ratio of Consolidated Total Debt to Consolidated Total Capital, as defined which excludes FRP RiverFront. A commitment fee of 0.15% per annum is payable quarterly on the unused portion of the commitment. The commitment fee may also change quarterly based upon the ratio described above.June 30, 2020. The credit agreement contains certain conditions and financial covenants, including a minimum ~~$110 million tangible net worth. As of September 30, 2017, the~~ tangible net worth ~~covenant~~and dividend restriction. As of June 30, 2020, these covenants would have limited our ability to pay dividends ~~or repurchase stock with borrowed funds~~ to a maximum of ~~$77.5~~$219 million combined. The Company was in compliance with all covenants as of ~~September~~June 30, ~~2017.~~2020.

On ~~July 24, 2015~~November 17, 2017, Riverfront Holdings I, LLC (the "Joint Venture") refinanced the Dock 79 project pursuant to a Loan Agreement and Deed of Trust Note entered into with EagleBank ("Loan Documents"). The Joint Venture, which was formed between the Company ~~closed on a five year, $20 million secured revolver~~and MRP in 2014 in connection with ~~First Tennessee Bank with a twenty-four month window to convert up to~~ the ~~full amount~~development of the ~~facility into a ten year term loan. Interest accrues at 1.90% over one month LIBOR plus an annual commitment fee of 0.10%. As of September 30, 2017, there was $753,000 outstanding~~Riverfront on the ~~revolver and $19,247,000 available for borrowing.~~Anacostia property, borrowed a principal sum of $90,000,000 in connection with the refinancing. The ~~Company expects to close on a second facility with First Tennessee Bank with a $20 million ten year term~~ loan is secured by ~~to-be-determined collateral.~~the Dock 79 real property and improvements, bears a fixed interest rate of 4.125% per annum and has a term of 120 months. During the first 48 months of the loan term, the Joint Venture will make monthly payments of interest only, and thereafter, make monthly payments of principal and interest in equal installments based upon a 30-year amortization period. The ~~purpose~~loan is a non-recourse loan. However, all amounts due under the Loan Documents will become immediately due upon an event of ~~these loans is to facilitate growth through new construction in~~default by the ~~Land Development and Construction segment and/~~Joint Venture, such events including, without limitation, Joint Venture's (i) failure to: pay, permit inspections or ~~acquisition~~observe covenants under the Loan Documents, (ii) breach of ~~existing, operating buildings to be added to the Asset Management segment.~~

1112

Effective July 1, 2017 the Company consolidated the assets (at current fair value), liabilities and operating results of our Riverfront Investment Partners I, LLC partnership (“Dock 79”) which was previously accounted forrepresentations made under the ~~equity method. As such~~Loan Documents (iii) voluntary or involuntary bankruptcy, and (iv) dissolution, or the ~~full amount~~dissolution of ~~our construction loan and secondary financing were recorded~~the guarantor. MidAtlantic Realty Partners, LLC, an affiliate of MRP, has executed a carve-out guaranty in connection with the ~~consolidated financial statements and described below. Both these financing sources are non-recourse to FRP.~~loan.

~~Effective August 7, 2014, the Dock 79 obtained a commitment for a construction loan from a financial institution in the principal amount~~Debt cost amortization of ~~$65,000,000 to fund certain development~~$34,000 and construction costs of the Dock 79. The initial maturity date of the loan is the earlier of (i) August 7, 2018, or (ii) the date to which the loan is accelerated pursuant to certain terms as outlined in the agreement. Dock 79 has the option to extend the initial maturity date for one extension period of four years (Extension Term) upon the compliance with and satisfaction of certain conditions as defined in the agreement. The interest rate on the loan through the initial maturity date is based on the 2.35% over one month LIBOR and the interest rate$68,000 was recorded during the Extension Term (if any) until the maturity date will be based on a fixed-interest rate swap or interest rate cap, as applicable, for the applicable LIBOR-based rate on the then applicable market terms. Accrued interest is payable in arrears on the first day of each calendar monththree and on the maturity date. The outstanding principal balance on all loans shall be due and payable in full on the maturity date. After maturity, accrued interest on all loans shall be payable on demand. The loan is secured by any real and personal property of Dock 79. The agreement contains certain conditions, affirmative financial covenants and negative covenants including the maintenance of a debt service ratio of not less than 1.25 to 1.00 during the Extension Term.

Effective August 7, 2014, Dock 79 partnership member EB5 Capital-Jobs Fund 8, L.P. made an initial capital contribution of $17 million in cash into an escrow account with a financial institution all of which have been used for construction. Associated with the $17 million cash contribution, EB5 is entitled to earn an investment return. The investment return requires the Dock 79 to pay interest monthly based on an annual rate of 4.95% for the first 5 years and 8% thereafter, on the balance remaining of the initial capital contributed. Dock 79 is required to repay or redeem EB5's membership interest for a purchase price equal to the sum of the balance of EB5's contribution account, plus any accrued by unpaid investment return sixtysix months after the initial capital contribution, unless extended for an additional twelve months in accordance with the agreement. Subsequent to the repayment of the investment return, EB5 will no longer be a partner in the Dock 79. Due to the mandatory redemption requirements associated with the EB5 financing arrangement, the related investment is classified as a liability on the balance sheets.

ended June 30, 2020, respectively. During the three months ended ~~September~~June 30, ~~2017~~2020 and ~~September~~June 30, ~~2016~~2019 the Company capitalized interest costs of ~~$210,000~~$940,000 and ~~$382,000,~~$705,000, respectively. During the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~September~~June 30, ~~2016~~2019 the Company capitalized interest costs of ~~$812,000~~$1,875,000 and ~~$864,000,~~$1,090,000, respectively.

(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,
	2020		2019		2020		2019
Weighted average common shares
outstanding during the period
- shares used for basic
earnings per common share		9,620		9,915		9,712		9,933

Common shares issuable under
share based payment plans
which are potentially dilutive		29		45		32		45

Common shares used for diluted
earnings per common share		9,649		9,960		9,744		9,978

Income from continuing operations	$	3,977		2,952		5,476		4,593
Discontinued operations	$	—		6,776		—		6,862
Net income attributable to the Company	$	4,149		9,825		5,767		11,723

Basic earnings per common share:
Income from continuing operations	$	0.41		0.30		0.56		0.46
Discontinued operations	$	—		0.68		—		0.69
Net income attributable to the Company	$	0.43		0.99		0.59		1.18

Diluted earnings per common share:
Income from continuing operations	$	0.41		0.30		0.56		0.46
Discontinued operations	$	—		0.68		—		0.69
Net income attributable to the Company	$	0.43		0.99		0.59		1.17

Three Months ended Nine Months ended
September 30, September 30,
2017 2016 2017 2016
Weighted average common shares
outstanding during the period
- shares used for basic
earnings per common share 10,004 9,865 9,967 9,860

Common shares issuable under
share based payment plans
which are potentially dilutive 62 43 68 42

Common shares used for diluted
earnings per common share 10,066 9,908 10,035 9,902

Net income attributable to the Company $ 25,391 1,957 28,547 4,551

Basic earnings per common share:
Basic $ 2.54 0.20 2.86 0.46
Diluted $ 2.52 0.20 2.84 0.46

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2017, 13,610~~2020, 2020, 74,065 and ~~22,422~~53,545 shares attributable to outstanding stock options were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2016, 42,040 and 72,090~~2019, 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 the Company repurchased 298,303 shares at an average cost of $41.41.

(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 number of common shares available for future issuance was 569,917 at September 30, 2017.~~

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 ~~35%~~29% and ~~46%~~41%, risk-free interest rate of ~~.3%~~1.0% to ~~4.2%~~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.

~~As previously disclosed, Thompson S. Baker II resigned from his position~~In March 2020, 20,520 shares of restricted stock were granted to employees as ~~CEO and from~~part of a long-term incentive plan that will vest over the ~~board~~next five years. The number of ~~directors on~~common shares available for future issuance was 443,820 at June 30, 2020. In March ~~13, 2017. In recognition~~2020, 11,448 shares of ~~his outstanding service~~stock were granted to ~~the Company, the Board approved the vesting of all of Mr. Baker's outstanding FRP~~employees rather than stock options ~~which expired 90 days following the termination of his employment. The vesting of Mr. Baker’s outstanding FRP options that were issued~~as in prior to the spin-off required Patriot to record modification stock compensation expense of $150,000. FRP reimbursed Patriot for this cost under the transition services agreement. The vesting of Mr. Baker’s outstanding FRP options that were issued subsequent to the spin-off required modified stock compensation expense of $41,000.years.

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

Three Months ended Nine Months ended
September 30, September 30,
2017 2016 2017 2016
Stock option grants $ 33 31 143 94
Annual director stock award — — 445 412
$ 33 31 588 506

	Three Months ended				Six Months ended
	June 30,				June 30,
	2020		2019		2020		2019
Stock option grants	$	23		28		47		57
Restricted stock awards granted in 2020		47		—		94		—
Employee stock grant		—		—		530		—
Annual director stock award		500		—		500		—
	$	570		28		1,171		57

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

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, 2017 236,385 $ 25.35 6.1 $ 2,440
    Granted 4,555 $ 37.55 $ 75
    Modification —   $ 30.21 $ (137 )
    Exercised (84,630 ) $ 25.13 $ (783 )
Outstanding at
  September 30, 2017 156,310 $ 25.82 5.5 $ 1,595
Exercisable at
  September 30, 2017 114,020 $ 23.83 4.7 $ 1,010
Vested during
  nine months ended
  September 30, 2017 26,839 $ 223

			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, 2020		132,504	$	33.82	5.8	$	1,631
Granted		—	$	—		$	—
Exercised		—	$	—		$	—
Outstanding at June 30, 2020		132,504	$	33.82	5.3	$	1,631

Exercisable at June 30, 2020		114,189	$	32.11	4.8	$	1,333
Vested during six months ended
June 30, 2020		—				$	—

The aggregate intrinsic value of exercisable in-the-money options was ~~$2,442,000~~$1,131,000 and the aggregate intrinsic value of outstanding in-the-money options was ~~$3,037,000~~$1,148,000 based on the market closing price of ~~$45.25~~$40.58 on ~~September 29, 2017~~June 30, 2020 less

exercise prices.

The unrecognized compensation cost of options granted to FRP employees but not yet vested as of ~~September~~June 30, ~~2017~~2020 was ~~$343,000,~~$243,000, which is expected to be recognized over a weighted-average period of ~~3.5~~3.3 years.

~~Gains~~A summary of ~~$1,474,000 were realized by option holders during the nine months ended September~~changes in restricted stock awards is presented below (in thousands, except share and per share amounts):

Weighted

Number

Average

Exercise

Remaining

Grant Date

Restricted stock

Price

Term (yrs)

Fair Value(000's)

Outstanding at January 1, 2020

Granted

20,520

46.30

950

Outstanding at June 30, 2020

20,520

46.30

3.9

950

Total compensation cost of restricted stock granted but not yet vested as of June 30, ~~2017. Patriot realized the tax benefits~~2020 was $856,000 which is expected to be recognized over a weighted-average period of ~~$1,365,000 of these gains because these options were exercised by Patriot employees for options granted prior to the spin-off.~~3.9 years.

(8) Contingent Liabilities.

Certain of the Company’s subsidiaries are involved in litigation on a number of matters and are 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. The liability at any point in time depends upon the relative ages and amounts of the individual open claims. 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.

Preliminary testing on the site of the Company's four phase master development known as RiverFront on the Anacostia in Washington, D.C. indicated the presence of contaminated material that will have to be specially handled upon excavation in conjunction with construction. The Company agreed with our joint venture partner to bear the cost of handling the contaminated materials on the first phase of this development up to a cap of $1.871 million.~~As of September 30, 2016, the excavation and foundation work for Phase 1 were substantially complete and the total remediation expense was $1.833 million.~~During the quarter ending December 31, 2015, management successfully completed negotiations and entered into a $3,000,000 settlement of environmental claims on all four phases against our former tenant at the Riverfront on the Anacostia property and continues to pursue settlement negotiations with other potentially responsible parties. The Company executed a letter of intent with MRP ~~Realty~~ in May 2016 to develop Phase II of the Riverfront on the Anacostia project and recorded an estimated environmental remediation expense of $2.0 million for the Company’s estimated liability under the proposed agreement. The Company substantially completed the remediation and reduced the estimated liability in the quarter ending September 30, 2018 by $465,000 and further reduced the liability $92,000 to zero in 2020. The Company has no obligation to remediate ~~this~~any known contamination on Phases III and IV of the development until such time as it makes a commitment to commence construction on each phase. ~~The Company's actual expense to address this issue may be materially higher or lower than the expense previously recorded depending upon the actual costs incurred.~~

(9) Concentrations. ~~One tenant accounts for 11% of the Company’s consolidated revenues during the quarter ended September 30, 2017.~~

The mining royalty lands segment has a total of ~~four~~five tenants currently leasing mining locations and one lessee that accounted for ~~15.4%~~31.5% of the Company’s consolidated revenues during the ~~nine~~six months ended

~~September~~ June 30, ~~2017~~2020 and ~~$106,769~~$419,000 of accounts receivable at ~~September~~June 30, ~~2017.~~2020. 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 ~~Tennessee~~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.

~~As of September~~At June 30, ~~2017~~2020 the Company ~~had no assets~~ was invested in 59 corporate bonds with individual maturities ranging from 2020 through 2022. The unrealized gain on these bonds of $1,584,000 was recorded as part of comprehensive income and

was based on the estimated market value by National Financial Services, LLC (“NFS”) obtained from sources that may include pricing vendors, broker/dealers who clear through NFS and/or ~~liabilities measured at fair value on~~other sources (Level 2). The Company recorded a ~~recurring or non-recurring basis. Footnote 12 describes a remeasurement~~realized gain of $242,000 in its net investment income related to bonds that were sold in 2020. The amortized cost of the investments was $128,474,000 and the carrying amount and fair value of ~~certain assets at July 1, 2017.~~ such bonds were $130,058,000 as of June 30, 2020.

At ~~September~~June 30, ~~2017~~2020 and ~~2016,~~2019, the carrying amount reported in the consolidated balance sheets for cash and cash equivalents ~~short-term notes payable~~ and revolving credit approximate their fair value based upon the short-term nature of these items.

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 ~~September~~June 30, ~~2017,~~2020, the carrying amount and fair value of such other long-term debt was ~~$115,113,000~~$88,993,000 and ~~$117,827,000,~~$95,606,000, respectively. At ~~December 31, 2016,~~June 30, 2019, the carrying amount and fair value of such other long-term debt was ~~$40,745,000~~$88,857,000 and ~~$43,747,000,~~$92,541,000, respectively.

(11) Investments in Joint ~~Ventures (Equity Method).~~Ventures.

Brooksville.In 2006, the Company entered into a Joint Venture Agreement with Vulcan Materials Company to jointly own and develop approximately 4,300 acres of land near Brooksville, Florida. Under the terms of the joint venture, FRP contributed its fee interest in approximately 3,443 acres formerly leased to Vulcan under a long-term mining lease which had a net book value of $2,548,000. Vulcan is entitled to mine a portion of the property until 2032 and pay royalties to the Company. FRP also contributed $3,018,000 for one-half of the acquisition costs of a 288-acre contiguous parcel. Vulcan contributed 553 acres that it owned as well as its leasehold interest in the 3,443 acres that it leased from FRP and $3,018,000 for one-half of the acquisition costs of the 288-acre contiguous parcel. The joint venture is jointly controlled by Vulcan and FRP. Distributions will be made on a 50-50 basis except for royalties and depletion specifically allocated to the Company. Other income for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 includes a loss of ~~$31,000~~$21,000 representing the Company’s portion of the loss of this joint venture.

BC FRP Realty (Windlass Run). ~~During~~In 2016, the ~~quarter ending March 2016, we~~Company entered into an agreement with a Baltimore development company (St. John Properties, Inc.) to jointly develop the remaining lands of our Windlass Run Business Park. The 50/50 partnership initially calls for FRP to combine its 25 acres (valued at $7,500,000) with St. John Properties’ adjacent 10 acres fronting on a major state highway (valued at $3,239,536) which resulted in an initial cash distribution of $2,130,232 to FRP in May 2016. Thereafter, the venture will jointly develop the combined properties into a multi-building business park to consist of approximately 329,000 square feet of ~~single story~~single-story office space. On September 28, 2017 BC FRP Realty, LLC obtained $17,250,000 of construction financing commitments for four buildings through September 15, 2022 from BB&T at 2.5% over LIBOR. The balance outstanding on these loans at June 30, 2020 was $12,160,000.

~~Investments in Joint Ventures (in thousands):~~

The
Company's
Total Assets Net Loss Share of Net
Total of the of the Loss of the
Ownership Investment Partnership Partnership Partnership

As of September 30, 2017
RiverFront Holdings I, LLC (1) —   —   —   $   (2,019 ) $   (1,558 )
Brooksville Quarry, LLC 50.00 % $   7,487 $ 14,445 (62 ) (31 )
BC FRP Realty, LLC 50.00 % 5,858 12,298 — —
   Total $ 13,345 $ 26,743 $  (2,081 ) $  (1,589 )

As of December 31, 2016
RiverFront Holdings I, LLC 77.14 % $10,151 $90,420 $ (1,446 ) $ (1,115 )
Brooksville Quarry, LLC 50.00 % 7,522 14,341 (8 ) (4 )
BC FRP Realty, LLC 50.00 % 5,228 10,784 — —
Total $ 22,901 $ 115,545 $ (1,454 ) $ (1,119 )

~~(1)~~

~~The Company consolidated this joint venture effective July 1, 2017 (see Footnote 12).~~

~~Balance Sheet at December 31, 2016 (in thousands):~~

As of December 31, 2016
Riverfront Brooksville BC FRP
Holdings I, LLC Quarry, LLC Realty, LLC Total

Cash $ 1,023 $ 18 $ 21 $ 1,062
Cash held in escrow 88 —   —   88
Investments in real estate, net 89,309 14,323 10,763 114,395
     Total Assets $ 90,420 $ 14,341 $ 10,784 $ 115,545

Other Liabilities $ 6,348 $ 1 $ 47 $ 6,396
Long-term Debt 69,042 — — 69,042
Capital – FRP 10,151 7,522 5,228 22,901
Capital - Third Parties 4,879 6,818 5,509 17,206
     Total Liabilities and Capital $ 90,420 $ 14,341 $ 10,784 $ 115,545

~~Income statements for the~~ RiverFront Holdings ~~I, LLC, prior to consolidation July 1, 2017 (in thousands):~~

Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
Revenues:
    Rental Revenue $ —   —   $ 3,053 127
    Revenue – Reimbursements —   127 33 —
Total Revenues —   127 3,086 127
Cost of operations:
     Depreciation and amortization —   228 1,958 325
     Operating expenses —   405 1,096 621
     Property taxes —   41 459 41
Total cost of operations —   674 3,513 987
Total operating profit —   (547 ) (427 ) (860 )
Interest expense —   (280 ) (1,592 ) (280 )
Net loss of the Partnership $ —   (827 ) $ (2,019 ) (1,140 )
~~The amount of consolidated accumulated deficit for these joint ventures was $(2,633,000) and $(1,667,000) as of September 30, 2017 and December 31, 2016 respectively.~~

~~(12) Consolidation of RiverFront Investment Partners I,~~II, LLC.On ~~March 30, 2012~~May 4, 2018, the Company ~~entered into~~and MRP formed a ~~Contribution Agreement with MRP SE Waterfront Residential, LLC. (“MRP”) to form a joint venture~~partnership to develop ~~the first phase only~~Phase II of ~~the four phase master development known as~~our RiverFront on the Anacostia ~~in Washington, D.C. The purpose of the Joint Venture is to develop~~project and ~~own an approximately 300,000 square foot residential apartment~~

~~building (including approximately 18,000 square feet of retail)~~closed on ~~approximately 2 acres of the roughly 5.82 acre site. The joint venture, RiverFront Investment Partners I, LLC (“RiverFront I”) was formed in June 2013 as contemplated.~~construction financing with Eagle Bank. The Company has contributed its land with an agreed to value of ~~$13,500,000~~$16.3 million (cost basis of ~~$6,165,000)~~$4.6 million) and ~~contributed cash~~$6.2 million of ~~$4,866,000 to the Joint Venture for a 77.14% stake in the venture.~~cash. MRP contributed capital of ~~$5,553,000~~$5.6 million to the ~~joint venture~~partnership including development costs paid prior to the formation of the ~~joint venture. The Joint Venture closed on $17,000,000 of EB5 secondary financing~~partnership and a ~~nonrecourse~~$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 through June 30, 2019. The Company records interest income for this loan and a loss in equity in ventures for our 80% equity in the partnership. The loan from Eagle Bank allows draws of up to $71 million during construction at an interest rate of 3.25% over LIBOR. The loan is interest only and matures in 36 months with a 12-month extension assuming completion of construction and at least one occupancy. There is a provision for ~~$65,000,000 on August 8, 2014. Both these financing sources are non-recourse to FRP. At the time~~an additional 60 months extension with a 30-year amortization of ~~these financings, RiverFront Holdings I, LLC.~~principal at 2.15% over seven-year US Treasury Constant if NOI is sufficient for a 9% yield. The loan balance at June 30, 2020 was formed as a parent to RiverFront Investment Partners I, LLC with EB5 as an equity partner in Riverfront Holdings I, LLC. Construction commenced in October 2014, first occupancy was in August 2016. As of September 30, 2017 96.4% of the units were leased.$60,704,000. The Company’s equity interest in the joint venture ~~was previously~~is accounted for under the equity method of accounting through the construction and lease up period as MRP acts as the administrative agent of the joint venture and oversees and controls the day to day operations of the project.

~~In July 2017, Phase I (Dock 79) reached stabilization, meaning 90%~~Bryant Street Partnerships. On December 24, 2018 the Company and MRP formed four partnerships to purchase and develop approximately five acres of land at 500 Rhode Island Ave NE, Washington, D.C. This property is the first

phase of the ~~individual apartments have been leased~~Bryant Street Master Plan. The property is located in an Opportunity Zone, which provides tax benefits in the new communities development program as established by Congress in the Tax Cuts and ~~are occupied by third party tenants. Upon reaching stabilization, the~~Jobs Act of 2017. The Company ~~has,~~contributed cash of $32 million in exchange for a ~~period~~61.36% common equity in the partnership. The Company also contributed cash of $23 million as preferred equity financing at 8.0% interest rate. The Company records interest income for this loan and a loss in equity in ventures for our 61.36% equity in the partnership. On March 13, 2019 the partnerships closed on a construction loan with a group of lenders for up to $132 million at an interest rate of 2.25% over LIBOR. The loan matures March 13, 2023 with up to two extensions of one year each upon certain conditions including, for the ~~exclusive right~~first, a debt service coverage of at least 1.10 and a loan-to-value that does not exceed 65% and for the second, a debt service coverage of 1.25 and a maximum loan-to-value of 65%. Borrower may prepay a portion of the unpaid principal to ~~(i) cause~~satisfy such tests. The loan balance at June 30, 2020 was $38,660,000. The Company and MRP guaranteed $26 million of the ~~joint venture to sell the property or (ii) cause~~loan 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 ~~MRP’s percentage interests~~is amortized to expense over the 48 months. The Company’s equity interest in the joint venture is accounted for under the equity method of accounting as all the major decisions are shared equally.

Hyde Park. On January 27, 2018 the Company entered into a loan agreement with a Baltimore developer to be ~~adjusted so~~the principal capital source of a residential development venture in Essexshire now known as “Hyde Park.” We have committed up to ~~take into account~~$3.5 million in exchange for an interest rate of 10% and a preferred return of 20% after which the ~~contractual payouts assuming~~Company is also entitled to a ~~sale at~~portion of proceeds from sale. Entitlements for the ~~value~~development of the property are complete, a homebuilder is under contract to purchase all of the 126 recorded building lots. The first phase of settlement occurred in May 2020, resulting in a $2.67 million principal and interest payment.

DST Hickory Creek. In July 2019, the Company invested $6 million in 1031 proceeds from two sales in 2019 into a Delaware Statutory Trust (DST) known as CS1031 Hickory Creek Apartments, DST. The Company is 26.65% beneficial owner and receives monthly distributions. The DST owns a 294-unit garden-style apartment community consisting of 19 three-story apartment buildings containing 273,940 rentable square feet on approximately 20.4 acres of land. The property was constructed in 1984 and substantially renovated in 2016. The DST purchased the property in April, 2019 for $45,600,000 with ten-year financing obtained for $29,672,000 at 3.74% with a 30 year amortization period, interest only for five years. The Company’s equity interest in the trust is accounted for under the cost method because we do not have significant influence over the operating and financial policies. Monthly distributions are recorded as equity in gain or loss of joint ventures. Distributions of $168,000 were received in the first six months of 2020.

Amber Ridge. On June 26, 2019 the Company entered into a loan agreement with a Baltimore developer to be the principal capital source of a residential development venture in Prince Georges County, Maryland known as “Amber Ridge.” We have committed up to $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. This project will hold 187 single-family town homes. We are currently pursuing entitlements and have two homebuilders under contract to purchase all of the 187 units upon completion of development infrastructure.

1800 Half Street. On December 20, 2019 the Company and MRP formed a joint venture to acquire and develop a mixed-use project located at 1800 Half Street, Washington, D.C. This property is located in the ~~time~~Buzzard Point area of ~~this “Conversion election”.~~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 to Vulcan and Audi Field, the home stadium of the DC United. The project is located in an Opportunity Zone, which provides tax benefits in the new communities’ development program as established by Congress in the Tax Cuts and Jobs Act of 2017. The Company contributed cash of $37.3 million. MRP will contribute the remainder of its equity in 2020. The land was acquired in two pieces over first half of 2020. On June 26, 2020 the partnership closed on a construction loan with Truist Bank for up to $74 million at an interest rate of 2.25% over LIBOR. The loan matures June 26, 2024 with one extension of two years requiring a .25% fee, paying principal monthly under a 30-year amortization schedule, and meeting a 9.9% debt yield after the first year. The ten-story structure will have 344 apartments and 11,246 square feet of ground floor retail. The Company’s equity interest in the joint venture is accounted for under the equity method of accounting because all major decisions are shared equally.

Greenville/Woodfield Partnerships. On December 23, 2019 the Company and Woodfield Development formed a joint venture to develop a mixed-use project in Greenville SC known as .408 Jackson located across the street from Greenville’s minor league baseball stadium. The project will hold 227 multifamily units and 4,700 square feet of retail space. It is located in an Opportunity Zone, which provides tax benefits in the new communities’ development program as established by Congress in the Tax Cuts and Jobs Act of 2017. The Company contributed cash of $9.7 million in exchange for a 40% common equity in the joint venture. The Company’s equity interest in the joint venture is accounted for under the equity method of accounting through the construction and lease up period. Woodfield personally guaranteed the loan and will be managing the projects day to day operations. Major decisions for the entity must be made unanimously between both members.

On December 23, 2019 the Company and Woodfield formed a joint venture to develop a 200-unit multifamily apartment project located at 1430 Hampton Avenue, Greenville, SC. The project is located in an Opportunity Zone, which provides tax benefits in the new communities’ development program as established by Congress in the Tax Cuts and Jobs Act of 2017. The Company contributed $6.2 million in exchange for a 40% common equity in the joint venture. The Company’s equity interest in the joint venture is accounted for under the equity method of accounting through the construction and lease up period. Woodfield personally guaranteed the loan and will be managing the projects day to day operations. Major decisions for the entity must be made unanimously between both members.

Investments in 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

As of June 30, 2020
Brooksville Quarry, LLC	50.00	%	$	7,476	14,310	(42	)	(21	)
BC FRP Realty, LLC	50.00	%		5,286	22,689	(210	)	(104	)
RiverFront Holdings II, LLC	80.00	%		25,484	104,426	(1,326	)	(1,409	)
Bryant Street Partnerships	61.36	%		59,549	133,553	—		(825	)
Hyde Park				1,214	1,214	—		—
DST Hickory Creek	26.65	%		6,000	48,651	(162	)	168
Amber Ridge Loan				1,183	1,183	—		—
1800 Half St. Owner, LLC	61.37	%		37,537	39,327	126		126
Greenville/Woodfield Partnerships	40.00	%		16,050	43,095	158		80
Total			$	159,779	408,448	(1,456	)	(1,985	)

As of December 31, 2019
Brooksville Quarry, LLC	50.00	%	$	7,499	14,316	(84	)	(42	)
BC FRP Realty, LLC	50.00	%		5,391	22,969	(1,114	)	(591	)
RiverFront Holdings II, LLC	80.00	%		25,975	88,235	(95	)	(871	)
Bryant Street Partnerships	61.36	%		58,353	96,477	260		(573	)
Hyde Park				3,492	3,492	—		—
DST Hickory Creek	26.65	%		6,000	49,369	(168	)	123
Amber Ridge Loan				509	509	—		—
1800 Half St. Owner, LLC	59.73	%		37,314	40,161	—		—
Greenville/Woodfield Partnerships	40.00	%		15,919	19,214	—		—
Total			$	160,452	334,742	(1,201	)	(1,954	)

Summarized Financial Information for the Investments in Joint Ventures (in thousands):

	As of June 30, 2020										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	$	103,602		132,932		46,106		27,603		20,845	$	331,088
Cash and cash equivalents		720		512		1,483		8,917		21,878		33,510
Unrealized rents & receivables		78		95		622		0		0		795
Deferred costs		26		14		440		2,807		372		3,659
Total Assets	$	104,426		133,553		48,651		39,327		43,095	$	369,052

Secured notes payable	$	60,252		35,770		29,268		0		0	$	125,290
Other liabilities		2,094		19,405		171		392		3,213		25,275
Capital - FRP		36,732		58,224		5,120		37,460		15,953		153,489
Capital - Third Parties		5,348		20,154		14,092		1,475		23,929		64,998
Total Liabilities and Capital	$	104,426		133,553		48,651		39,327		43,095	$	369,052

	As of June 30, 2020
	Brooksville		BC FRP				Amber Ridge		Apartment/		Grand
	Quarry, LLC		Realty, LLC		Hyde Park		Loan		Mixed Use		Total

Investments in real estate, net.	$	14,290		22,187		1,214		1,183		331,088	$	369,962
Cash and cash equivalents		18		59		0		0		33,510		33,587
Unrealized rents & receivables		0		230		0		0		795		1,025
Deferred costs		2		213		0		0		3,659		3,874
Total Assets	$	14,310		22,689		1,214		1,183		369,052	$	408,448

Secured notes payable	$	0		12,130		0		0		125,290	$	137,420
Other liabilities		41		105		0		0		25,275		25,421
Capital - FRP		7,476		5,227		1,214		1,183		153,489		168,589
Capital - Third Parties		6,793		5,227		0		0		64,998		77,018
Total Liabilities and Capital	$	14,310		22,689		1,214		1,183		369,052	$	408,448

	As of December 31, 2019										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	$	87,521		95,903		46,685		14,391		1,889	$	246,389
Cash and cash equivalents		630		387		1,764		25,770		17,325		45,876
Unrealized rents & receivables		82		158		446		0		0		686
Deferred costs		2		29		474		0		0		505
Total Assets	$	88,235		96,477		49,369		40,161		19,214	$	293,456

Secured notes payable	$	38,564		1,660		29,246		0		0	$	69,470
Other liabilities		6,771		17,183		120		1,363		1,889		27,326
Capital - FRP		37,284		57,479		6,000		37,314		15,919		153,996
Capital - Third Parties		5,616		20,155		14,003		1,484		1,406		42,664
Total Liabilities and Capital	$	88,235		96,477		49,369		40,161		19,214	$	293,456

	As of December 31, 2019
	Brooksville		BC FRP				Amber Ridge		Apartment/		Grand
	Quarry, LLC		Realty, LLC		Hyde Park		Loan		Mixed Use		Total

Investments in real estate, net.	$	14,293		22,423		3,492		509		246,389	$	287,106
Cash and cash equivalents		18		15		0		0		45,876		45,909
Unrealized rents & receivables		0		220		0		0		686		906
Deferred costs		5		311		0		0		505		821
Total Assets	$	14,316		22,969		3,492		509		293,456	$	334,742

Secured notes payable	$	0		12,103		0		0		69,470	$	81,573
Other liabilities		2		196		0		0		27,326		27,524
Capital - FRP		7,500		5,335		3,492		509		153,996		170,832
Capital - Third Parties		6,814		5,335		0		0		42,664		54,813
Total Liabilities and Capital	$	14,316		22,969		3,492		509		293,456	$	334,742

The Company’s capital recorded by the unconsolidated Joint Ventures is $8,809,000 more than the Investment in Joint Ventures reported in the Company’s consolidated balance sheet due to the lower basis in property contributed.

The ~~attainment~~amount of ~~stabilization results in a change~~consolidated retained earnings for these joint ventures was $(5,574,000) and $(4,127,000) as of ~~control~~June 30, 2020 and December 31, 2019 respectively.

(12) Discontinued Operations.

On May 21, 2018, the Company completed the disposition of 40 industrial warehouse properties and three additional land parcels to an affiliate of Blackstone Real Estate Partners VIII, L.P. for ~~accounting purposes~~$347.2 million. One warehouse property valued at $11.7 million was excluded from the sale due to the tenant exercising its right of first refusal to purchase the property. These properties comprised substantially all the assets of our Asset Management segment and have been reclassified as discontinued operations for all periods presented. On June 28, 2019, the ~~veto rights~~Company completed the sale of the ~~minority shareholder lapsed~~excluded property to the same buyer for $11.7 million. The results of operations associated with discontinued operations for the three and six months ended June 30, 2019 were as follows (in thousands):

	Three months ended		Six months ended
	June 30,		June 30,
	2019		2019
Lease Revenue	$	222		460

Cost of operations:
Depreciation, depletion and amortization		12		41
Operating expenses		139		234
Property taxes		26		46
Management company indirect		—		—
Corporate expenses		—		—
Total cost of operations		177		321

Total operating profit		45		139

Interest expense		—		—
Gain on sale of buildings		9,245		9,268

Income before income taxes		9,290		9,407
Provision for income taxes		2,514		2,545

Income from discontinued operations	$	6,776		6,862

Earnings per common share:
Income from discontinued operations-
Basic	$	0.68		0.69
Diluted	$	0.68		0.69

(13) Subsequent Event.

In July 2020 the Company ~~became~~sold its fully leased building in the ~~primary beneficiary. As such, beginning July 1, 2017, the Company consolidated the assets (at fair value), liabilities and operating results of the joint venture. This consolidation resulted~~Hollander Business Park at 1801 62^nd Street for $12.3 million resulting in a gain ~~on remeasurement~~ of ~~investment~~$3.8 million before income taxes. The proceeds were placed in real estate partnership of $60,196,000 of which $20,469,000 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 July 1, 2017 the Company ownership is based upon this substantive profit sharing arrangement and is estimated at 66.0% on a ~~prospective basis.~~1031 exchange fund.

As of July 1, 2017
Riverfront Gain on Remeasure-
Holdings I, LLC ment Revised

Land $ 7,220 $ 21,107 $ 28,327
Building and improvements, net 81,773 34,362 116,135
Value of leases in place — 4,727 4,727
Cash 2,295 —   2,295
Cash held in escrow 171 —   171
Accounts receivable 40 —   40
Prepaid expenses 142 —   142
     Total Assets $ 91,641 $ 60,196 $ 151,837

Long-term Debt $ 78,587 $ —   $ 78,587
Amortizable debt costs (852 ) —   (852 )
Other liabilities 905 —   905
Equity – FRP 8,583 39,727 48,310
Equity - MRP 4,418 20,469 24,887
     Total Liabilities and Capital $ 91,641 $ 60,196 $ 151,837

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

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.

Overview -FRP Holdings, Inc. ~~(“FRP” or the “Company”)~~ is a holding company engaged in the real estate business, namely (i) ~~warehouse/office building ownership, leasing and management, (ii)~~ mining royalty land ownership and leasing, ~~and (iii)~~(ii) land acquisition, entitlement and development primarily for future warehouse/office or residential building ~~construction.~~construction, (iii) ownership, leasing, and management of a residential apartment building, and (iv) warehouse/office building ownership, leasing and management.

The Company’s operations are influenced by a number of external and internal factors. External factors include levels of economic and industrial activity in the United States and the Southeast, construction activity and costs, aggregates sales by lessees from the Company’s mining properties, interest rates, market conditions in the Baltimore/Northern Virginia/Washington DC area, and our ability to obtain zoning and entitlements necessary for property development. Internal factors include administrative costs, success in leasing efforts and ~~group health claims experience.~~construction cost management.

~~Potential REIT Conversion.~~

~~Whether through strategic acquisitions, organic growth, joint ventures, or putting our non-income producing~~On May 21, 2018, the Company completed the disposition of 40 industrial warehouse properties and three additional land parcels to ~~work, our constant aim is to create and grow shareholder value. To that end, we have for some time explored the possibility~~an affiliate of ~~converting this company into a~~Blackstone Real Estate ~~Investment Trust (REIT), with~~Partners VIII, L.P. for $347.2 million. One warehouse property valued at $11.7 million was excluded from the ~~idea that this may be a more efficient structure given~~sale due to the ~~nature~~tenant exercising its right of first refusal to purchase the property. On June 28, 2019, the Company completed the sale of the excluded property to the same buyer for $11.7 million. These properties comprised substantially all the assets of our ~~business. In order to have the option to convert to~~Asset Management segment and constituted a ~~REIT,~~strategic shift for the Company ~~has already elected to change from our previous fiscal year (ending September 30), to a fiscal year that follows the calendar year~~and have been reclassified as is required of a REIT. This change went into effect January 1, 2017 and required one-time additional auditing expenses of $120,000 which were reflected in fiscal year 2017. Thus, this past quarter, and every quarter ended September 30 will now be the third quarter of our fiscal year. Finally, consistent with having the option to elect REIT status, we have contributed our mining reserves into a wholly owned subsidiary. Because the parent company still retains control of the land itself, the portion of the mining royalties’ income that is not attributable to the reserves, but instead more closely resembles ground rents, will be retained by the parent company and will qualify as “REIT-able” income. The subsidiary will receive only the income attributable to the reserves it now controls. This structure is intended to assure that we will meet the asset and income tests applicable to REITs. These preliminary steps will not have a material impact on ourdiscontinued operations ~~if the Company does not elect REIT status.~~

for all periods presented.

Asset Management Segment.

The Asset Management segment owns, leases and manages warehouse/office buildings located predominately in the Baltimore/Northern Virginia/Washington, DC market area. We focus primarily on owning flexible type facilities that cater to the maximum number of tenant types. As most of our buildings are less than 150,000 square feet, we focus on local and regional vs. national tenants. Hands-on service provided by our in-house construction and property management teams keeps us close to our tenant base. These practices are the cornerstone of our mission to provide the highest quality product and services at competitive rates resulting in tenant satisfaction and ultimately, retention.

commercial properties. These assets create revenue and cash flows through tenant rental payments, lease management fees and reimbursements for building operating costs. 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. Of

As of June 30, 2020, the ~~43 buildings we own today, 28 were constructed~~Asset Management Segment owned four commercial properties 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 ~~through what is now known~~for use as our ~~Land Development~~Baltimore headquarters).

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 Office Park consists of five office buildings totaling 268,010 square feet which are 71.9% occupied at June 30, 2020.

4) 1801 62^nd Street consists of 94,350 square feet and ~~Construction segment. Additionally, over~~was completed in the ~~years, we have opportunistically acquired 15 existing operating buildings, typically~~second quarter of 2019. The building was 100.0% occupied at June 30, 2020. The Company sold this property in ~~connection~~July 2020 for $12.3 million. The decision to sell was in keeping with a ~~deferred like-kind (Section 1031)~~departure from our previous “develop and hold” business model. The sale resulted in a gain of $3.8 million before taxes and the proceeds were placed in a 1031 exchange ~~opportunity. Today, this segment consists of 4 million square feet.~~fund.

~~Management~~To take advantage of market cycles and attract a wide range of top tier buyers, management focuses on several factors ~~to measure our success on a comparative basis~~ in this ~~segment.~~segment to facilitate a successful and profitable sale. The major factors we focus on are (1) ~~revenue~~net operating

income growth, (2) ~~net operating income, (3)~~ growth in ~~occupied square feet, (4) actual~~ occupancy, ~~rate, (5) average annual occupied square feet, (6)~~(3) average annual occupancy rate (defined as the occupied sfsquare 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), ~~(7)~~(4) growth of our portfolio (in square feet), ~~and (8)~~(5) tenant retention success rate (as a percentage of total square feet to be renewed).

Asset Management segment – nine months ended September 30, 2017 September 30, 2016
Revenues $22,057,000 21,824,000
Net Operating Income (Cash Basis) $16,715,000 16,554,000
Occupied square feet 3,637,236 3,486,681
Overall occupancy rate 91.3% 89.9%
Average YTD occupied square feet 3,529,911 3,383,261
Average YTD occupancy rate 89.4% 89.5%
Portfolio square feet 3,983,813 3,880,365
Retention Success rate 81% 64%

, (6) building and refurbishing assets to meet Class A and Class B institutional grade classifications, and (7) reducing complexities and deferred capital expenditures to maximize sale price.

Mining Royalty Lands Segment.

Our Mining Royalty Lands segment owns several properties comprising approximately ~~15,000~~13,400 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. 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~~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 ~~fixed~~minimum annual rental amount. We believe ~~that~~strongly in the ~~number of tons and the price per ton will rise on the aggregates under lease as~~potential for future growth in construction ~~continues to grow~~ in Florida, Georgia, and Virginia which would positively benefit our profitability in this segment. Our mining properties had estimated remaining reserves of ~~415~~516 million tons as of ~~September 30, 2016~~December 31, 2019 after a total of ~~6.9~~8.1 million tons were consumed in ~~fiscal 2016.~~2019.

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 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~~are Vulcan Materials, Martin Marietta, Cemex, Argos and ~~Cemex, among others.~~The Concrete Company.

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

Significant “2^nd life” Mining Lands:

Location	Acreage	Status
Brooksville, FLFl	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	1,993 +/-	Approval in place for 105, 1 acre, waterfront residential lots after mining completed.
~~Gulf Hammock, FL~~	~~1,600 +/-~~	~~Currently on the market for $4.5 million~~
Total	~~7,873~~6,273 +/-

~~Land~~ Development ~~and Construction~~ Segment.

Through our ~~Land~~ Development ~~and Construction~~ 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 of our non-income producing lands into income production through (i) an orderly process of constructing new ~~warehouse/office~~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.

Since 1990, one of our primary strategies in this segment has been to acquire, entitle and ultimately develop commercial/industrial business parks providing 5–15 building pads which we typically convert into warehouse/office buildings. To date, our management team has converted 2830 of these pads into developed ~~buildings that we continue to own and manage through the Asset Management segment.~~buildings. Our typical practice has been to transfer these assets to the Asset Management segment on the earlier to occur of (i) commencement of rental revenue or (ii) issuance of the certificate of occupancy. We have also ~~opportunistically~~occasionally sold several of these pad sites over time to third ~~party “users”.~~ parties.

The remaining pad sites in our inventory today are fully entitled, located in business parks in four different submarkets in the DC/Baltimore/Northern Virginia area, and can support an additional +/- 876,000 sf. of warehouse/office buildings. Development Segment – Warehouse/Office Land.

~~Summary of Our Remaining Lot Inventory:~~ At June 30, 2020 this segment owned the following future development parcel:

Location Acreage SF +/- Status
Lakeside, MD 20 286,500 Horizontal development completed. Ready for vertical permitting.
Windlass Run
Business Park, MD
17.5
(50%
Interest)
164,500
(50%
Interest)
Company owns a 50% in a joint venture formed in April 2016 with St. John Properties. The joint venture owns the 35 acres and plans to develop the land into 12 office buildings for a total of 329,000 sq. ft.
Patriot Business Center, Manassas, VA 18 96,047 Building permit process ongoing for the remaining 96,047 s.f. Includes 12 acres storm water management.
Hollander 95 Business Park, MD 33 328,740 Horizontal development completed. Building permit process ongoing for 94,290 sf.
Total 88.5 875,787

25 acres of horizontally developed land capable of supporting 226,750 square feet of warehouse, office, and flex buildings at Hollander 95 Business Park in Baltimore City, Maryland.

Having sites ready for vertical construction has rewarded us in the past. It is the main reason why we were able to convert 3 of our finished pads at Patriot Business Park into build-to-suit opportunities in 2012, 2013 and 2014. We completed construction on a 103,448 square foot building at Patriot Business Park that was put into service in April 2017. We completed construction on a 79,550 square foot spec building at Hollander Business Park that was put into service in the third quarter of fiscal 2016. In April, 2016 we entered into a joint venture agreement to develop 12 office buildings on our remaining lots at Windlass Run and on adjacent frontage property owned by St. John Properties. We will continue to actively monitor these submarkets where we have lots ready for construction and take advantage of the

opportunities presented to us. We will also look for new parcels to place into development.

~~In addition to the inventory of finished building lots, we~~We have ~~several other~~three properties that were either spun-off to us from Florida Rock Industries in 1986 or acquired by us from unrelated ~~3rd~~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.

Our strategy when selling parcels outright is to attempt to convert the proceeds into income producing real estate for our Asset Management segment through a Section 1031 tax-deferred exchange. An example of this is the Windlass Run 179 acre tract purchased for $5.2 million in 2002. When purchased, the entire parcel was zoned for commercial/industrial uses. Today, some 70 acres of this original tract makes up our Windlass Run Business Park. We successfully rezoned the remaining acreage for medium density residential development and on April 17, 2013, we entered into a contract to sell the residential portion of the property for $19 million. The first phase of the Windlass Run residential land was sold for $8 million and the proceeds were used in a Section 1031 exchange to acquire our Transit Business Park in 2013. Phase 2 was sold in November, 2015 for $11.1 million and we used $9.9 million of the proceeds to acquire the fully leased Port Capital Building.

An example of property in this segment being developed through joint venture is Phase I of our RiverFront on the Anacostia project which was contributed to a joint venture with MRP in 2014 to construct a 305 unit apartment building including 18,000 sf of ground floor retail.

Significant Investment Lands Inventory:

Location	Approx. Acreage	Status	NBV	Approx. Acreage	Status	NBV
RiverFront on the Anacostia Phases II-IV	3.7	Phase II final design approval hearings ongoing.	$10,468,000
RiverFront on the Anacostia Phases III-IV				2.5	Conceptual design program ongoing.	$6,062,000
Hampstead Trade Center, MD	118	Residential conceptual design program ongoing.	$7,169,000	73	Residential conceptual design program ongoing	$8,709,000
Square 664E,on the Anacostia River in DC	2	Under lease to Vulcan Materials as a concrete batch plant through 2021 with one 5 year renewal option.	$8,343,000	2	Under lease to Vulcan Materials as a concrete batch plant through 2021 with one 5-year renewal option.	$7,927,000
Total	126		$25,980,000	77.5		$22,698,000

RIVERFRONT ON THE ~~ANACOSTIA:~~

ANACOSTIA PHASES III-IV: This property consists of ~~5.8~~2.5 acres on the Anacostia River and is immediately adjacent to the Washington National’s baseball park in the SE Central Business District of Washington, DC. Once zoned for industrial use and under a ground lease, this property is no longer under lease and has been rezoned for the construction of approximately ~~1.1M~~600,000 square feet of “mixed-use” development in ~~four~~two phases. ~~In 2014, approximately 2.1 acres (Phase I)~~See “Stabilized Joint Venture Segment” below for discussion on Phase I and Development Joint Ventures below for discussion of the total 5.8 acres was contributed to a joint venture owned by the Company (77%) and our partner, MRP Realty (23%), and construction commenced in October 2014 on a 305 unit residential apartment building with approximately 18,000 sq. ft. of first floor retail space. Lease up commenced in May 2016 and rent stabilization was achieved in the third quarter of 2017. The attainment of stabilization resulted 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 July 1, 2017, the Company consolidated the assets (at fair value), liabilities and operating results of the joint venture and the property was transferred from the Land Development and Construction Segment to a new segment, RiverFront on the Anacostia.Phase II. Phases ~~II,~~ III and IV are slated for ~~residential,~~ office, and hotel/residential buildings, respectively, all with permitted first floor retail uses. The company and MRP Realty executed a letter of intent in May 2016 and a Contribution Agreement in February 2017 to develop Phase II but the joint venture is not yet formed. In February, the D.C. Zoning Commission voted 5-0 in favor of the Planned Unit Development (PUD) of Phase II of our RiverFront on the Anacostia project. After formal publishing of the record and a 35 day appeal period we anticipate formal approval in the fourth quarter of this calendar year.

On August 24, 2015, in anticipation of commencing construction of the new Frederick Douglass bridge at a location immediately to the ~~West~~west of the existing bridge, the District of Columbia filed a Declaration of Taking for a total of 7,390 square feet of permanent easement and a ~~5,022 square foot~~5,022-square-foot temporary construction easement on land along the western boundary of the land that will ultimately hold Phase III and IV. Previously, the Company and the District had conceptually agreed to a land swap with no compensation that would have permitted the proposed new bridge, including construction easements, to be on property wholly owned by the District. As a result, the Planned Unit Development was designed and ultimately approved by the Zoning Commission as if the land swap would occur once the District was ready to move forward with the new bridge construction. In September 2016 the Company received $1,115,400 as settlement for the easement. The Company will continue to seek an agreement from the District that the existing bridge easement will terminate when the new bridge has been placed in service and the existing bridge has

been removed. The Company’s position is that otherwise Phase IV will be adversely impacted, and additional compensation or other relief will be due the Company.

HAMPSTEAD TRADE CENTER:We purchased this ~~118 acre~~118-acre tract in 2005 for $4.3 million in a Section 1031 exchange with plans of developing it as a commercial business park. The “great recession” caused us to reassess our plans for this property. As a result, Management has determined that the prudent course of action is to attempt to rezone the property for residential uses and sell the entire tract to another developer such that we can redeploy this capital into assets with more near-term income producing potential. ~~In the fourth quarter of fiscal 2016, the Company received approval from the~~On December 22, 2018, The Town of Hampstead ~~and has rezoned~~re-awarded FRP its request for rezoning with a 30-day appeal period. No appeal was filed, therefore, FRP can now move forward with its residential concept plan. We are fully engaged in the ~~property~~formal process of seeking PUD entitlements for ~~residential use.~~this 118-acre tract in Hampstead, Maryland, now known as “Hampstead Overlook”.

SQUARE 664E, WASHINGTON, DC

DC: This property sits on the Anacostia River at the base of South Capitol Street in an area ~~named~~known as Buzzard Point, ~~approximately 1~~less than half a mile down river from our RiverFront on the Anacostia property. The Square 664E property ~~consists of~~is approximately 2two acres and is currently under lease to Vulcan Materials for use as a concrete batch plant. The lease terminates on August 31, 2021 and Vulcan has the option to renew for one additional period of five ~~(5)~~ years. In July 2018, Audi Field, the ~~quarter ending December 31, 2014, the District of Columbia announced that it had selected Buzzard Point for the future site~~home of the ~~new~~ DC United ~~major league~~professional soccer ~~stadium.~~club, opened its doors to patrons in Buzzard Point. Under normal circumstances the 20,000 seat stadium hosts 17 home games each year in addition to other outdoor events. The ~~selected~~ stadium ~~location~~ is separated from our property by ~~just one small industrial lot.~~1800 Half Street, the property acquired in a joint venture between the Company and MRP in December 2019.

The third leg of our Development Segment consists of investments in joint venture for properties in development as described below:

Development Segment - Investments in Joint Ventures (in thousands):

	As of June 30, 2020										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	$	103,602		132,932		46,106		27,603		20,845	$	331,088
Cash and cash equivalents		720		512		1,483		8,917		21,878		33,510
Unrealized rents & receivables		78		95		622		0		0		795
Deferred costs		26		14		440		2,807		372		3,659
Total Assets	$	104,426		133,553		48,651		39,327		43,095	$	369,052

Secured notes payable	$	60,252		35,770		29,268		0		0	$	125,290
Other liabilities		2,094		19,405		171		392		3,213		25,275
Capital - FRP		36,732		58,224		5,120		37,460		15,953		153,489
Capital - Third Parties		5,348		20,154		14,092		1,475		23,929		64,998
Total Liabilities and Capital	$	104,426		133,553		48,651		39,327		43,095	$	369,052

	As of June 30, 2020
	Brooksville		BC FRP				Amber Ridge		Apartment/		Grand
	Quarry, LLC		Realty, LLC		Hyde Park		Loan		Mixed Use		Total

Investments in real estate, net.	$	14,290		22,187		1,214		1,183		331,088	$	369,962
Cash and cash equivalents		18		59		0		0		33,510		33,587
Unrealized rents & receivables		0		230		0		0		795		1,025
Deferred costs		2		213		0		0		3,659		3,874
Total Assets	$	14,310		22,689		1,214		1,183		369,052	$	408,448

Secured notes payable	$	0		12,130		0		0		125,290	$	137,420
Other liabilities		41		105		0		0		25,275		25,421
Capital - FRP		7,476		5,227		1,214		1,183		153,489		168,589
Capital - Third Parties		6,793		5,227		0		0		64,998		77,018
Total Liabilities and Capital	$	14,310		22,689		1,214		1,183		369,052	$	408,448

Brooksville Quarry, LLC.. In 2006, the Company entered into a Joint Venture Agreement with Vulcan Materials Company to jointly own and develop approximately 4,300 acres of land near Brooksville, Florida. Under the terms of the joint venture, FRP contributed its fee interest in approximately 3,443 acres formerly leased to Vulcan under a long-term mining lease which had a net book value of $2,548,000. Vulcan is entitled to mine a portion of the property until 2032 and pay royalties to the Company. FRP also contributed $3,018,000 for one-half of the acquisition costs of a 288-acre contiguous parcel. Vulcan contributed 553 acres that it owned as well as its leasehold interest in the 3,443 acres that it leased from FRP and $3,018,000 for one-half of the acquisition costs of the 288-acre contiguous parcel. The joint venture is jointly controlled by Vulcan and FRP. Distributions will be made on a 50-50 basis except for royalties and depletion specifically allocated to the Company. Other income for the year ended June 30, 2020 includes a loss of $21,000 representing the Company’s portion of the loss of this joint venture (not including FRP’s royalty revenues).

BC Realty, LLC (Windlass Run). In March ~~2017 reconstruction~~2016, we entered into an agreement with a Baltimore development company (St. John Properties, Inc.) to jointly develop the remaining lands of our Windlass Run Business Park. The 50/50 partnership initially calls for FRP to combine its 25 acres (valued at $7,500,000) with St. John Properties’ adjacent 10 acres fronting on a major state highway (valued at $3,239,536) which resulted in an initial cash distribution of $2,130,232 to FRP in May 2016. Thereafter, the venture will jointly develop the combined properties into a multi-building business park to consist of approximately 329,000 square feet of single-story office space. The project will take place in several phases, with construction of the ~~bulkhead~~first phase, which includes two office buildings and two retail buildings totaling 100,030-square-feet (inclusive of 27,950 retail), commenced in the fourth quarter of 2017 and projected to stabilize in the fourth quarter of 2020. The start of subsequent phases will follow with the final phase commencing in the 4th quarter of 2024. On September 28, 2017 BC FRP Realty, LLC obtained $17,250,000 of construction financing commitments for 4 buildings through September 15, 2022 from BB&T at 2.5% over LIBOR. The balance outstanding on these loans at June 30, 2020 was $12,160,000. Shell building construction of the two office buildings and two retail buildings in the first phase of our joint venture with St. John Properties was completed in December 2018.

RiverFront Holdings II, LLC. On May 4, 2018, the Company and MRP formed a Joint Venture to develop Phase II and closed on construction financing with Eagle Bank. Phase II on the Anacostia known as The Maren is a 250,000-square-foot mixed-use development which supports 264 residential units and 6,937 SF of retail. The Company has contributed its land with an agreed value of $16.3 million (cost basis of $4.6 million) and $6.2 million of cash. MRP contributed capital of $5.6 million to the joint venture including development costs paid prior to the 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 through December 31, 2019. The loan from Eagle Bank allows draws of up to $71 million during construction at an interest rate of 3.25% over LIBOR. The loan is interest only and matures in 36 months with a ~~cost~~12-month extension assuming completion of $4construction and at least one occupancy. There is a provision for an additional 60 months extension with a 30-year amortization of principal at 2.15% over seven-year US Treasury Constant if NOI is sufficient for a 9% yield. The Company’s equity interest in the joint venture is 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. Construction began in April 2018, with substantial completion in March 2020, and stabilization (meaning 90% of the individual apartments are leased and occupied by third party tenants) in late 2021.

Bryant Street Partnerships: On December 24, 2018 the Company and MRP formed four partnerships to purchase and develop approximately five acres of land at 500 Rhode Island Ave NE, Washington, D.C. This property is the first phase of the Bryant Street Master Plan. The property is located in an Opportunity Zone, which provides tax benefits in the new communities development program as established by Congress in the Tax Cuts and Jobs Act of 2017. This first phase is a mixed-use development which supports 487 residential units and 85,681 SF of first floor and stand-alone retail on approximately five acres of the roughly 12-acre site. The Company contributed cash of $32 million in ~~anticipation~~exchange for a 61.36% common equity in the partnership. The Company also contributed cash of ~~future high rise~~$23

million as preferred equity financing at 8.0% interest rate. The Company records interest income for this loan and a loss in equity in joint ventures for our 61.36% equity in the partnership. On March 13, 2019 the partnerships closed on a construction loan with a group of lenders for up to $132 million at an interest rate of 2.25% over LIBOR. The loan matures March 13, 2023 with up to two extensions of one year each upon certain conditions including, for the first, a debt service coverage of at least 1.1 and a loan-to-value that does not exceed 65% and for the second, a debt service coverage of 1.25 and a maximum loan-to-value of 65%. The Company and MRP guaranteed $26 million of the loan 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. The Company’s equity interest in the joint venture is accounted for under the equity method of accounting as all the major decisions are shared equally. Construction began in February 2019, with substantial completion estimated in 3rd quarter 2021, and stabilization (meaning 88% of the individual apartments and retail are leased and occupied by third party tenants) in late 2022.

Hyde Park. On January 27, 2018 the Company entered into a loan agreement with a Baltimore developer to be the principal capital source of a residential development venture in Essexshire now known as “Hyde Park.” We have committed up to $3.5 million in exchange for an interest rate of 10% and a preferred return of 20% after which a “waterfall” determines the split of proceeds from sale. Entitlements for the development of the property are complete and a homebuilder is under contract to purchase all of the 126 recorded building lots. The first phase of settlement occurred in May 2020, resulting in a $2.67 million principal and interest payment.

Amber Ridge. On June 26, 2019 the Company entered into a loan agreement with a Baltimore developer to be the principal capital source of a residential development venture in Prince Georges County, Maryland known as “Amber Ridge.” We have committed up to $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. This project will hold 187 single-family town homes. We are currently pursuing entitlements and have two homebuilders under contract to purchase all of the 187 units upon completion of infrastructure development.

~~RiverFront~~1800 Half Street. On December 20, 2019 the Company and MRP formed a joint venture to acquire and develop a mixed-use project located at 1800 Half Street, Washington, D.C. This property 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 project is located in an Opportunity Zone, which provides tax benefits in the new communities’ development program as established by Congress in the Tax Cuts and Jobs Act of 2017. The Company contributed cash of $37.3 million. The land was acquired in two pieces over first half of 2020. On June 26, 2020 the partnership closed on a construction loan with Truist Bank for up to $74 million at an interest rate of 2.25% over LIBOR. The loan matures June 26, 2024 with one extension of two years requiring a .25% fee, paying principal monthly under a 30 year amortization schedule, and meeting a 9.9% debt yield after the first year. The ten-story structure will have 344 apartments and 11,246 square feet of ground floor retail. The Company’s equity interest in the joint venture is accounted for under the equity method of accounting as all major decisions are shared equally.

Greenville Partnerships. On December 23, 2019 the Company and Woodfield Development formed a joint venture to develop a mixed-use project in Greenville SC known as ..408 Jackson located across the street from Greenville’s minor league baseball stadium. The project will hold 227 multifamily units and 4,700 square feet of retail space. It is located in an Opportunity Zone, which provides tax benefits in the new communities’ development program as established by Congress in the Tax Cuts and Jobs Act of 2017. The Company contributed cash of $9.7 million in exchange for a 40% common equity in the joint venture. The Company’s equity interest in the joint venture is accounted for under the equity method of accounting through the construction and lease up period. Woodfield personally guaranteed the loan and will be managing the projects day to day operations. Major decisions for the entity must be made unanimously between both members.

On December 23, 2019 the Company and Woodfield formed a joint venture to develop a 200-unit multifamily

apartment project located at 1430 Hampton Avenue, Greenville, SC. The project is located in an Opportunity Zone, which provides tax benefits in the new communities’ development program as established by Congress in the Tax Cuts and Jobs Act of 2017. The Company contributed $6.2 million in exchange for a 40% common equity in the joint venture. The Company’s equity interest in the joint venture is accounted for under the equity method of accounting through the construction and lease up period. Woodfield personally guaranteed the loan and will be managing the projects day to day operations. Major decisions for the entity must be made unanimously between both members.

Stabilized Joint Venture Segment.

~~In 2014, approximately 2.1 acres (Phase I)~~Currently the segment includes two 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 major cash outlays incurred in this segment are for property taxes, full service maintenance, property management, utilities, marketing and our management.

Dock 79. This first phase of ~~the total 5.8 acres was contributed to~~our RiverFront on The Anacostia project is a joint venture owned by the Company ~~(77%~~(66%) and our partner, MRP Realty ~~(23%~~(34%), and ~~construction commenced in October 2014 on~~is a ~~305 unit~~305-unit residential apartment building with approximately 18,000 sq. ft. of first floor retail space. ~~Lease up commenced in May 2016 and rent stabilization of the residential units of 90% occupied was achieved in the third quarter of 2017.~~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”.

The attainment of stabilization also 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 July 1, 2017, the Company consolidated the assets (at current fair value based on a third party opinion), liabilities and operating results of the joint venture. This consolidation resulted in a gain on remeasurement of investment in real estate partnership of $60,196,000 of which $20,469,000 was attributed to the noncontrolling interest. The Company used the fair value amount to calculate adjusted ownership under the Conversion election. As such forFor financial reporting purposes ~~effective July 1, 2017~~ the Company ~~ownership~~consolidates this venture as it is ~~based upon this substantive profit sharing arrangement and is estimated at 66.0% on a prospective basis.~~

considered the primary beneficiary of the Variable Interest Entity. As of ~~September~~June 30, 2020, the residential units were ~~95.4%~~90.16% occupied and ~~96.4%~~92.13% leased, while retail units are ~~80.0%~~76% leased with just one space remaining.

DST Hickory Creek. In July 2019, the Company invested $6 million in 1031 proceeds from two sales in 2019 into a Delaware Statutory Trust (DST) known as CS1031 Hickory Creek Apartments, DST. The Company is 26.649% beneficial owner and receives monthly distributions. The DST owns a 294-unit garden-style apartment community consisting of 19 three-story apartment buildings containing 273,940 rentable square feet. The property was constructed in 1984 and substantially renovated in 2016. The property is located in suburban Richmond, Virginia, providing residents convenient access to some of the largest employment and economic drivers in Metro Richmond, including ten Fortune 1,000 companies. The Company’s equity interest in the trust is accounted for under the cost method of accounting and monthly distributions net of depreciation are recorded as equity in loss of joint ventures.

Comparative Results of Operations for the Three months ended ~~September~~June 30, ~~2017~~2020 and ~~2016~~2019

Consolidated Results

Three months ended
(dollars in thousands) September 30,
2017 2016 Change %
Revenues:
  Rental Revenue $ 8,738 $ 6,259 $ 2,479 39.6 %
  Mining Royalty and rents 1,763 2,016 (253 ) -12.5 %
  Revenue-Reimbursements 1,553 1,501 52 3.5 %
Total Revenues 12,054 9,776 2,278 23.3 %

Cost of operations:
  Depreciation/Depletion/Amortization 4,769 2,160 2,609 120.8 %
  Operating Expenses 1,879 1,146 733 64.0 %
  Property Taxes 1,401 1,087 314 28.9 %
  Mgmt Co Allocation-In 560 419 141 33.7 %
  Corporate Expense 617 656 (39 ) -5.9 %
Total cost of operations 9,226 5,468 3,758 68.7 %

Total operating profit 2,828 4,308 (1,480 ) -34.4 %

Interest Expense (1,251 ) (273 ) (978 ) 358.2 %
Equity in loss of joint ventures (12 ) (652 ) 640 -98.2 %
Gain on remeasurement of investment in real estate
partnership
60,196 —   60,196 0.0 %
Loss on investment land sold —   (148 ) 148 -100.0 %

Income before income taxes 61,761 3,235 58,526 1809.1 %
Provision for income taxes 16,577 1,278 15,299 1197.1 %

Net income 45,184 1,957 43,227 2208.8 %
Gain attributable to noncontrolling interest 19,793 —   19,793 0.0 %
Net income attributable to the Company $ 25,391 $ 1,957 $ 23,434 1197.4 %

(dollars in thousands)		Three Months Ended June 30,
	2020				2019			Change			%
Revenues:
Lease Revenue	$		3,447		$	3,730		$	(283	)		-7.6	%
Mining lands lease revenue			2,402			2,633			(231	)		-8.8	%
Total Revenues			5,849			6,363			(514	)		-8.1	%

Cost of operations:
Depreciation/Depletion/Amortization			1,500			1,472			28			1.9	%
Operating Expenses			781			910			(129	)		-14.2	%
Property Taxes			646			713			(67	)		-9.4	%
Management company indirect			692			610			82			13.4	%
Corporate Expense			1,026			551			475			86.2	%
Total cost of operations			4,645			4,256			389			9.1	%

Total operating profit			1,204			2,107			(903	)		-42.9	%

Net investment income, including realized gains
of $134 and $328			2,110			1,984			126			6.4	%
Interest Expense			(45	)		(272	)		227			-83.5	%

Equity in loss of joint ventures		(1,343	)		(272	)		(1,071	)	393.8	%
Gain on sale of real estate		3,589			536			3,053		569.6	%

Income before income taxes		5,515			4,083			1,432		35.1	%
Provision for income taxes		1,538			1,131			407		36.0	%
Income from continuing operations		3,977			2,952			1,025		34.7	%

Income from discontinued operations, net		—			6,776			(6,776	)	-100.0	%

Net income		3,977			9,728			(5,751	)	-59.1	%
Loss attributable to noncontrolling interest		(172	)		(97	)		(75	)	77.3	%
Net income attributable to the Company	$	4,149		$	9,825		$	(5,676	)	-57.8	%

Net income for the ~~third~~second quarter of ~~2017~~2020 was ~~$25,391,000~~$4,149,000 or ~~$2.52~~$.43 per share versus ~~$1,957,000~~$9,825,000 or ~~$.20~~$.99 per share in the same period last year. The ~~majority~~second quarter of ~~this uptick in income is~~2020 was impacted by the ~~result~~following items:

Corporate expense stock compensation of a gain on remeasurement of investment of $60.2 million in its Dock 79 real estate partnership, which is included in Income from continuing operations before income taxes. As a result of the stabilization of Dock 79, the Company is now deemed for accounting purposes to have control of the partnership without the transfer of any consideration. As such the non-taxable gain on remeasurement was calculated based on the difference between the carrying value and the fair value of all the assets and liabilities of the partnership. The gain included $4,727,000 related to the value of leases in place resulting in amortization expense of $1,326,000 for the quarter. The lease value is amortized over the life of the leases, 89% of that value is scheduled to be expensed by June 30, 2018. The gain included $34 million related to the building and improvements which will result in additional deprecation of $220,000 quarterly. The total gain related depreciation and amortization was $1,546,000 which explains the majority of the $1,480,000 reduction in operating profit$570,000 compared to ~~the same quarter last year. Total revenues were $12,054,000, up 23.3%, versus~~$28,000 in the same period last year due the timing of stock grants.
Interest expense decreased $227,000 as we capitalized more interest on our joint venture construction projects.
Loss on joint ventures increased $1,071,000 primarily ~~because~~due to our share of the ~~addition~~Bryant Street preferred interest, $118,000 amortization of ~~rental revenues~~guarantee liability related to the Bryant Street loan, $809,000 operating loss at the Maren due to pre-leasing efforts, partially offset by interest income generated in our opportunity zone investments prior to the funds being deployed.
Gain on sale of $3,589,000 from ~~Dock 79.~~the sale of the three remaining lots at our Lakeside Business Park and our Gulf Hammock Property compared to $536,000 in the same period last year

Income from discontinued operations for the second quarter of 2019 was $6,776,000 or $.68 per share and included the sale of our property at 1502 Quarry Drive for $11.7 million. This asset was excluded from the original sale due to the tenant potentially exercising its right of first refusal to purchase the property. The second quarter of 2019 included a $328,000 realized gain on the sale of bonds.

Asset Management Segment Results

	Three months ended June 30
(dollars in thousands)	2020			%			2019			%			Change			%

Lease revenue	$	716			100.0	%		662			100.0	%		54			8.2	%

Depreciation, depletion and amortization		200			27.9	%		196			29.6	%		4			2.0	%
Operating expenses		96			13.4	%		175			26.5	%		(79	)		-45.1	%
Property taxes		(24	)		-3.3	%		90			13.6	%		(114	)		-126.7	%
Management company indirect		121			16.9	%		73			11.0	%		48			65.8	%
Corporate expense		265			37.0	%		139			21.0	%		126			90.6	%

Cost of operations		658			91.9	%		673			101.7	%		(15	)		-2.2	%

Operating profit	$	58			-8.1	%		(11	)		-1.7	%		69			-627.3	%

~~Highlights~~

Most of the ~~Three Months ended September 30, 2017:~~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 62^nd Street which joined this segment on April 1 of 2019. Cranberry Run is a five-building industrial park in Harford County, MD

2328

~~Total revenue~~
totaling 268,010 square feet of industrial/ flex space and at quarter end was ~~up $255,000, or 3.5%~~

Three Months Ended September 30
(dollars in thousands) 2017 % 2016 % Change %

Rental revenue $ 6,174 81.5 % $ 5,977 81.6 % $ 197 3.3 %
Revenue-reimbursements 1,404 18.5 % 1,346 18.4 % 58 4.3 %

Total revenue 7,578 100.0 % 7,323 100.0 % 255 3.5 %

Depreciation, depletion and amortization 2,090 27.6 % 2,071 28.3 % 19 .9 %
Operating expenses 1,123 14.8 % 1,102 15.0 % 21 1.9 %
Property taxes 792 10.5 % 729 10.0 % 63 8.6 %
Management company indirect 237 3.1 % 176 2.4 % 61 34.7 %
Corporate expense 350 4.6 % 339 4.6 % 11 3.2 %

Cost of operations 4,592 60.6 % 4,417 60.3 % 175 4.0 %

Operating profit $ 2,986 39.4 % $ 2,906 39.7 % $ 80 2.8 %

71.9% leased and occupied. 1801 62^nd Street is our most recent spec building in Hollander Business Park and is our first warehouse with a 32-foot clear-height ceiling. We completed construction on this building in 2019 and it is now 100% leased and occupied. Total revenues in this segment were ~~$7,578,000,~~$716,000, up ~~$255,000~~$54,000 or ~~3.5%~~8.2%, over the same period last year. ~~Net~~ Operating ~~Income (NOI) in this segment for the third quarter declined slightly to $5,614,000, compared to $5,627,000~~profit was $58,000, up $69,000 from an operating loss of $11,000 in the same ~~period last year. Several factors caused revenue to increase while NOI remained stable. Revenues inclusive of reimbursables and unrealized rents have increased over the same period~~quarter last year ~~as a result of new buildings~~due to 1801 62^nd St being fully leased and increased occupancy. However, the uptick in reimbursable expenses increased revenue without increasing NOI, and the non-reimbursable expenses did nothing for revenue and adversely affected NOI. Additionally, cash-based NOI as calculatedoccupied, improved leasing at Cranberry offset by the ~~Company excludes unrealized rents which are the result~~sale of “straight-lining” rental revenue over the life of a lease, i.e. averaging the total rent of the lease over the term. Thus, though revenue as calculated by GAAP may be up because of new leases, cash-based NOI is not as positively affected because the actual rent paid by the tenant7030 Dorsey Road in the beginning of a lease is less than the GAAP-based straight-lined rent. We ended the third quarter with total occupied square feet of 3,637,236 versus 3,486,681 at the end of the same period last year, an increase of 4.3% or 150,555 square feet. Our overall occupancy rate was 91.3%.June 2019.

Mining Royalty Lands Segment Results

~~Highlights of the Three Months ended September 30, 2017:~~

~~Mining Royalty and rents revenue were down $251,000, or 12.5%.~~

Three Months Ended September 30
(dollars in thousands) 2017 % 2016 %

Mining Royalty and rents $ 1,763 98.7 % 2,014 98.9 %
Revenue-reimbursements 23 1.3 % 23 1.1 %

Total revenue 1,786 100.0 % 2,037 100.0 %

Depreciation, depletion and amortization 17 .9 % 24 1.2 %
Operating expenses 43 2.4 % 40 2.0 %
Property taxes 59 3.3 % 58 2.8 %
Corporate expense 30 1.7 % 49 2.4 %

Cost of operations 149 8.3 % 171 8.4 %

Operating profit $ 1,637 91.7 % $ 1,866 91.6 %

	Three months ended June 30
(dollars in thousands)	2020		%			2019		%			Change			%

Mining lands lease revenue	$	2,402		100.0	%		2,633		100.0	%		(231	)		-8.8	%

Depreciation, depletion and amortization		62		2.6	%		42		1.6	%		20			47.6	%
Operating expenses		14		0.6	%		15		0.6	%		(1	)		-6.7	%
Property taxes		65		2.7	%		69		2.6	%		(4	)		-5.8	%
Management company indirect		67		2.8	%		49		1.8	%		18			36.7	%
Corporate expense		84		3.5	%		36		1.4	%		48			133.3	%

Cost of operations		292		12.2	%		211		8.0	%		81			38.4	%

Operating profit	$	2,110		87.8	%		2,422		92.0	%		(312	)		-12.9	%

Total revenues in this segment were ~~$1,786,000, a decrease of 12%,~~$2,402,000 versus ~~$2,037,000~~$2,633,000 in the same period last year. This drop is primarily due a $127,000 decrease in royalties at our Manassas, Va. quarry, a $47,000 decrease in royalties at our Newberry, Fl. location, a $29,000 decrease in royalties at our Keuka, Fl. location, a $23,000 decrease in royalties at our Tyrone, Ga. quarry, as well as a $41,000 decrease in royalties at our Lake Sand, Fl. location. Royalties are down in Manassas because of a $107,000 downward adjustment in last year’s royalties that we recorded in September. Royalties were down in Newberry because of lower volumes than the previous year. 2016 saw a 300,000 ton increase in production at Newberry over the previous year because operational issues in Argos’ cement plants in South Carolina and Alabama caused Newberry to increase production to absorb the volumes of those plants. Those issues have been fixed and production at Newberry has returned to a level more in line with the growth rate of years prior to 2016. The dip in royalties at Keuka, like at Newberry, is the result of a return to more normal volumes when compared to the previous year. In 2016, several golf course construction projects led to increased golf sand production. Those projects have been completed, and so 2017 golf sand shipments have been reflective of maintenance activities. Thus Keuka has had lower volumes than the previous year. Like last quarter, royalties were down in Tyrone compared to last year because of excessive rainfall. Finally, as stated the last several quarters, royalties have fallen off in Lake Sand as a consequence of Vulcan having fully depleted our proven reserves there. Further capital expenditures would be required by our tenant to change their mining plan at Lake Sand and realize more than three million tons of possible reserves, which we do not anticipate any time soon. Total operating profit in this segment was ~~$1,637,000,~~$2,110,000, a decrease of ~~$229,000~~$312,000 versus ~~$1,866,000~~$2,422,000 in the same period last year. The primary reason for the decrease is that we are no longer receiving double minimums at our Lake Louisa property, because our tenant, Cemex, received its final permit to begin mining the property in July 2019.

~~Land~~ Development ~~and Construction~~ Segment Results

~~Highlights of the Three Months ended September 30, 2017:~~

~~The Company continues to work with MRP Realty to develop Phase II of the Riverfront on the Anacostia.~~

	Three Months ended September 30									Three months ended June 30
(dollars in thousands)	2017			2016			Change			2020			2019			Change

Rental revenue	$	207			282			(75	)
Royalty and rents		—			2			(2	)
Revenue-reimbursements		116			132			(16	)

Total revenue		323			416			(93	)
Lease revenue										$	279			316			(37	)

Depreciation, depletion and amortization		98			65			33			53			49			4
Operating expenses		52			4			48			144			95			49
Property taxes		282			300			(18	)		330			295			35
Management company indirect		281			243			38			455			442			13
Corporate expense		210			268			(58	)		617			341			276

Cost of operations		923			880			43			1,599			1,222			377

Operating loss	$	(600	)		(464	)		(136	)	$	(1,320	)		(906	)		(414	)

The ~~Land~~ Development ~~and Construction~~ 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:

PUD entitlements for our 118-acre tract in Hampstead, Maryland, now known as “Hampstead Overlook,” are ongoing. 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.

2529

~~Our new spec building at Patriot Business Center was placed in service this past April and is currently 100% leased and occupied~~

~~In February, the D.C. Zoning Commission voted 5-0 in favor of the Planned Unit Development (PUD)~~

We are currently pursuing permit entitlements for two industrial buildings at Hollander Business Park totaling 145,750 square feet. Construction is anticipated to begin the third quarter of 2020 with 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 44% leased and 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% and a preferred return of 20% after which a “waterfall” determines the split of proceeds from sale. Entitlements for the development of the property are complete, and a homebuilder is under contract to purchase all of the 126 recorded building lots. The first phase of settlement occurred in May 2020, resulting in a $2.67M principal and interest payment.

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% and a preferred return of 20% after which a “waterfall” determines the split of proceeds from sale. Amber Ridge will hold 187 town homes. We are currently pursuing entitlements 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. After formal publishing of the record and a 35 day appeal period we anticipate formal approval by the end of the year~~

~~We are fully engaged in the formal process of seeking PUD entitlements for our 118 acre tract in Hampstead, Md~~

We made major progress this quarter in our joint venture with St. John Properties on what remained of our Windlass Run Business Park. The JV secured financing on a $17,580,000 construction and development loan and began construction on what will be a multi-building business park consisting of approximately 329,000 square feet of office and retail space.

~~Equity in loss of joint ventures was $12,000 because of the Brooksville Joint Venture.~~

RiverFront on the Anacostia project, now known as “The Maren.” The 14-story project will have 264 units and 6,937 square feet of ground floor retail and was 98% complete at quarter end. Lease-up commenced in earnest in the second week of March. At the end of the quarter, the Maren was 45% leased, and 23% 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 square feet of retail. FRP contributed $32 million for common equity and another $23 million for preferred equity to the joint venture. Construction began in February 2019 and as of the end of the quarter was 67% complete. Bryant Street is currently on time, within budget, and expected to be complete in the fourth quarter of 2021, with the first of the four buildings delivering in the fourth quarter of 2020. This project is located in an opportunity zone and has allowed us 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, and we anticipate starting construction during the third quarter of this year.
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 second quarter of 2022. Both projects are qualified opportunity investments and will defer a combined $4.3 million in taxes.

Stabilized Joint Venture Segment Results

Three months ended June 30
(dollars in thousands) 2020 % 2019 % Change %

Lease revenue $ 2,452 100.0 % 2,752 100.0 % (300 ) -10.9 %

Depreciation, depletion and amortization 1,185 48.3 % 1,185 43.0 % —   0.0 %
Operating expenses 527 21.5 % 625 22.7 % (98 ) -15.7 %
Property taxes 275 11.2 % 259 9.4 % 16 6.2 %
Management company indirect 49 2.0 % 46 1.7 % 3 6.5 %
Corporate expense 60 2.5 % 35 1.3 % 25 71.4 %

Cost of operations 2,096 85.5 % 2,150 78.1 % (54 ) -2.5 %

Operating profit $ 356 14.5 % 602 21.9 % (246 ) -40.9 %

~~Highlights~~Dock 79’s average occupancy for the quarter was 91.50%, and at the end of the ~~Three Months ended September 30, 2017:~~
~~Beginning July 1, 2017,~~quarter, Dock 79 was 92.13% leased and 90.16% occupied. This quarter, 62.30% of expiring leases renewed with no increase in rent due to the ~~Company consolidated~~mandated rent freeze on renewals in DC. Net Operating Income this quarter for this segment was $1,654,000, down $213,000 or 11.41% compared to the assets (at current fair value), liabilities and operating results of the joint venture and established the RiverFront on the Anacostia segment as its fourth segment. FRP’s share of prior period results are included in the line Equity in loss of joint ventures in the Company’s overall Consolidated Statements of Income.
Three Months Ended September 30
(dollars in thousands) 2017 % 2016 %

Rental revenue $ 2,357 99.6 % — — %
Revenue-reimbursements 10 .4 % — — %

Total revenue 2,367 100.0 % — — %

Depreciation and amortization 2,564 108.3 % — — %
Operating expenses 661 27.9 % — — %
Property taxes 268 11.3 % — — %
Management company indirect 42 1.8 % —
Corporate expense 27 1.2 % — — %

Cost of operations 3,562 150.5 % — — %

Operating profit $ (1,195 ) -50.5 % $ — — %
~~In July 2017, Phase I (Dock 79) of the development known as RiverFront on the Anacostia in Washington, D.C., a 300,000 square foot residential apartment building developed by~~same quarter last year. Dock 79 is a joint venture between the Company and MRP, ~~reached stabilization, meaning 90% of~~in which FRP Holdings, Inc. is the ~~individual apartments have been leased and are occupied by third party tenants. Upon reaching stabilization,~~majority partner with 66% ownership.
In July 2019, the Company ~~has, for~~completed a ~~period~~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 ~~one year,~~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. Second 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 ~~exclusive right to (i) cause the joint venture to sell the property or (ii) cause the Company’s~~sales of 7030 Dorsey Road and MRP’s percentage interests in the joint venture to be adjusted so as to take into account the value of the development at the time of stabilization. The attainment of stabilization also resulted 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 July 1, 2017, the Company consolidated the assets (at current fair value), liabilities and operating results of the joint venture and established the RiverFront on the Anacostia segment as its fourth segment.1502 Quarry Drive.

26
At the end of September, Dock 79 was 96.4% leased and 95.4% occupied. As the first “generation” of leases came up for renewal this quarter, the renewal rate of 53% is in line with expectations while the average rent increase of 3.89% is stronger than we budgeted.

Comparative Results of Operations for the ~~Nine~~Six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016~~2019

Consolidated Results

Nine months ended
(dollars in thousands) September 30,
2017 2016 Change %
Revenues:
  Rental Revenue $ 21,243 $ 18,430 $ 2,813 15.3 %
  Mining Royalty and rents 5,311 5,805 (494 ) -8.5 %
  Revenue-Reimbursements 4,182 4,399 (217 ) -4.9 %
Total Revenues 30,736 28,634 2,102 7.3 %

Cost of operations:
  Depreciation/Depletion/Amortization 9,030 6,155 2,875 46.7 %
  Operating Expenses 3,882 3,651 231 6.4 %
  Environmental remediation expense —   2,000 (2,000 ) -100.0 %
  Property Taxes 3,592 3,357 235 7.0 %
  Mgmt Co Allocation-In 1,504 1,340 164 12.2 %
  Corporate Expense 2,510 2,348 162 6.9 %
Total cost of operations 20,518 18.851 1,667 8.8 %

Total operating profit 10,218 9,783 435 4.4 %

Interest income and other —   1 (1 ) -100.0 %
Interest Expense (1,870 ) (1,080 ) (790 ) 73.1 %
Equity in loss of joint ventures (1,589 ) (924 ) (665 ) 72.0 %
Gain on remeasurement of investments in real estate
Partnership
60,196 —   60,196 0.0 %
Loss on investment land sold —   (257 ) 257 -100.0 %

Income before income taxes 66,955 7,523 59,432 790.0 %
Provision for income taxes 18,615 2,972 15,643 526.3 %

Net income 48,340 4,551 43,789 962.2 %
Gain attributable to noncontrolling interest 19,793 —   19,793 0.0 %
Net income attributable to the Company $ 28,547 $ 4,551 $ 23,996 527.3 %

Net income for the first nine months of 2017 was $28,547,000 or $2.84 per share versus $4,551,000 or $.46 per share in the first nine months last year. The majority of this uptick in income is the result of a gain on remeasurement of investment of $60.2 million in its Dock 79 real estate partnership, which is included in Income from continuing operations before income taxes. As a result of the stabilization of Dock 79, the Company is now deemed for accounting purposes to have control of the partnership without the transfer of any consideration. As such the non-taxable gain on remeasurement was calculated based on the difference between the carrying value and the fair value of all the assets and liabilities of the partnership. This increase in net income when compared to last year was also augmented by a prior year $2,000,000 remediation expense offset by a $665,000 increase this year in equity in loss of joint ventures, primarily as a result of expenses and depreciation during the lease up of Phase I (Dock 79) of RiverFront. Total revenues were $30,736,000, up 7.3%, versus the first nine months last year. Consolidated total operating profit was up 4.4%.
(dollars in thousands) Six Months Ended June 30,
2020 2019 Change %
Revenues:
  Lease Revenue $ 7,045 $ 7,215 $ (170 ) -2.4 %
  Mining lands lease revenue 4,587 4,862 (275 ) -5.7 %
Total Revenues 11,632 12,077 (445 ) -3.7 %

Cost of operations:
  Depreciation/Depletion/Amortization 2,968 2,959 9 0.3 %
  Operating Expenses 1,706 1,792 (86 ) -4.8 %
  Property Taxes 1,383 1,466 (83 ) -5.7 %
  Management company indirect 1,364 1,202 162 13.5 %
  Corporate Expense 2,213 1,196 1,017 85.0 %
Total cost of operations 9,634 8,615 1,019 11.8 %

Total operating profit 1,998 3,462 (1,464 ) -42.3 %

Net investment income, including realized gains
of $242 and $447 4,101 3,794 307 8.1 %
Interest Expense (96 ) (860 ) 764 -88.8 %

2731

Equity in loss of joint ventures (1,985 ) (536 ) (1,449 ) 270.3 %
Gain on real estate investments 3,597 536 3,061 571.1 %

Income (loss) before income taxes 7,615 6,396 1,219 19.1 %
Provision for (benefit from) income taxes 2,139 1,803 336 18.6 %
Income (loss) from continuing operations 5,476 4,593 883 19.2 %

Income from discontinued operations, net —   6,862 (6,862 ) -100.0 %

Net income 5,476 11,455 (5,979 ) -52.2 %
Loss attributable to noncontrolling interest (291 ) (268 ) (23 ) 8.6 %
Net income attributable to the Company $ 5,767 $ 11,723 $ (5,956 ) -50.8 %`

Net income for first half of 2020 was $5,767,000 or $.59 per share versus $11,723,000 or $1.17 per share in the same period last year. Income from discontinued operations for the first half of 2019 was $6,862,000 or $.69 per share. Income from continuing operations increased $883,000 or 19% and was impacted by the following items:
Corporate expense stock compensation of $1,171,000 compared to $57,000 in the same period last year due the timing of stock grants.
Interest expense decreased $764,000 as we capitalized more interest on our joint venture construction projects.
Loss on joint ventures increased $1,449,000 primarily due to our share of the Bryant Street preferred interest, $236,000 amortization of guarantee liability related to the Bryant Street loan, $992,000 operating loss at the Maren due to pre-leasing efforts, partially offset by interest income generated in our opportunity zone investments prior to the funds being deployed.
Gain on sale of $3,597,000 from the sale of the three remaining lots at our Lakeside Business Park and our Gulf Hammock Property compared to $536,000 in the same period last year
Asset Management Segment Results

Six months ended June 30
(dollars in thousands) 2020 % 2019 % Change %

Lease revenue $ 1,368 100.0 % 1,303 100.0 % 65 5.0 %

Depreciation, depletion and amortization 392 28.6 % 373 28.6 % 19 5.1 %
Operating expenses 193 14.1 % 384 29.5 % (191 ) -49.7 %
Property taxes 48 3.5 % 146 11.2 % (98 ) -67.1 %
Management company indirect 235 17.2 % 175 13.4 % 60 34.3 %
Corporate expense 573 41.9 % 302 23.2 % 271 89.7 %

Cost of operations 1,441 105.3 % 1,380 105.9 % 61 4.4 %

Operating profit $ (73 ) -5.3 % (77 ) -5.9 % 4 -5.2 %
~~Highlights~~
Most of the ~~Nine Months ended September 30, 2017:~~
~~Rental revenue~~Asset Management Segment was ~~up $398,000, or 2.2%~~
reclassified to discontinued operations leaving two commercial properties as well as Cranberry Run, which we purchased in the first quarter of 2019, and 1801 62^nd Street which joined this segment on April 1 of 2019. 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 71.9% leased and occupied. 1801 62^nd Street is our most recent spec building in Hollander Business Park and is our first warehouse with a 32-foot clear-
32
Nine Months Ended September 30
(dollars in thousands) 2017 % 2016 % Change %

Rental revenue $ 18,285 82.9 % $ 17,887 82.0 % $ 398 2.2 %
Revenue-reimbursements 3,772 17.1 % 3,937 18.0 % (165 ) -4.2 %

Total revenue 22,057 100.0 % 21,824 100.0 % 233 1.1 %

Depreciation, depletion and amortization 6,112 27.7 % 5,891 27.0 % 221 3.8 %
Operating expenses 2,941 13.3 % 3,306 15.1 % (365 ) -11.0 %
Property taxes 2,317 10.5 % 2,059 9.4 % 258 12.5 %
Management company indirect 616 2.8 % 582 2.7 % 34 5.8 %
Corporate expense 1,424 6.5 % 1,213 5.6 % 211 17.4 %

Cost of operations 13,410 60.8 % 13,051 59.8 % 359 2.8 %

Operating profit $ 8,647 39.2 % $ 8,773 40.2 % $ (126 ) -1.4 %

height ceiling. We completed construction on this building in 2019 and it is now 100% leased and occupied. Total revenues in this segment were ~~$22,057,000,~~$1,368,000, up ~~$233,000~~$65,000 or ~~1.1%~~5.0%, over the ~~first nine months~~same period last year. ~~The increase~~Operating loss was $73,000, down $4,000 from an operating loss of $77,000 in ~~revenue is~~the same period last year due to ~~the addition~~higher allocation of new buildings and increased total occupancy. Net Operating Income in this segment for the first nine months of 2017 was $16,715,000, compared to $16,555,000 in the first nine months of 2016, an increase of 1%.corporate expenses.
Depreciation and amortization expense increased primarily because of the purchase of the Gilroy Center in Baltimore County in July of 2016 and the completion of a 79,550 square foot warehouse at Hollander Business Park in April 2016 and a 103,448 square foot warehouse at Patriot Business Center in April of 2017.
Corporate expense increased due to a first quarter stock option modification expense of $191,000 and increased internal and external audit expense incurred as a result of the conversion from the previous fiscal year (ending September 30) to one that follows the calendar year.

Mining Royalty Lands Segment Results
Six months ended June 30
(dollars in thousands) 2020 % 2019 % Change %

Mining lands lease revenue $ 4,587 100.0 % 4,862 100.0 % (275 ) -5.7 %

Depreciation, depletion and amortization 100 2.2 % 94 1.9 % 6 6.4 %
Operating expenses 27 0.6 % 31 0.7 % (4 ) -12.9 %
Property taxes 132 2.9 % 137 2.8 % (5 ) -3.6 %
Management company indirect 133 2.9 % 98 2.0 % 35 35.7 %
Corporate expense 181 3.9 % 79 1.6 % 102 129.1 %

Cost of operations 573 12.5 % 439 9.0 % 134 30.5 %

Operating profit $ 4,014 87.5 % 4,423 91.0 % (409 ) -9.2 %

~~Highlights of the Nine Months ended September 30, 2017:~~
~~Mining Royalty and rents revenue were down $494,000, or 8.5%.~~
Nine Months Ended September 30
(dollars in thousands) 2017 % 2016 %

Mining Royalty and rents $ 5,311 98.7 % 5,805 98.8 %
Revenue-reimbursements 70 1.3 % 69 1.2 %

Total revenue 5,381 100.0 % 5,874 100.0 %

Depreciation, depletion and amortization 91 1.7 % 70 1.2 %
Operating expenses 121 2.2 % 124 2.1 %
Property taxes 176 3.3 % 176 3.0 %
Corporate expense 124 2.3 % 176 3.0 %

Cost of operations 512 9.5 % 546 9.3 %

Operating profit $ 4,869 90.5 % $ 5,328 90.7 %
Total revenues in this segment were ~~$5,381,000, a decrease of 8.4%,~~$4,587,000 versus ~~$5,874,000~~$4,862,000 in the ~~first nine months~~same period last year. This drop is due to a $260,000 decrease in royalties at our Manassas, Va. location, a $154,000 decrease at our Tyrone, Ga. Location, a $127,000 decrease at our Newberry, Fl. location, a $101,000 decrease at our Keuka, Fl. location, and a $197,000 decrease in royalties at our Lake Sand, Fl. location. Royalties are down in Manassas because of Vulcan’s mining a portion of the quarry not owned by the Company for two months in our second quarter as well as a $107,000 downward adjustment in last year’s royalties that we recorded in September. Vulcan has returned to our portion of the quarry and will be mining there the remainder of the year. Royalties were down in Tyrone compared to last year because of excessive rainfall the past two quarters. Royalties were down in Newberry because of lower volumes than the previous year. 2016 saw a 300,000 ton increase in production at Newberry over the previous year because operational issues in Argos’ cement plants in South Carolina and Alabama caused Newberry to increase production to absorb the volumes of those plants. Those issues have been fixed and production at Newberry has returned to a level more in line with the growth rate of years prior to 2016. The dip in royalties at Keuka, like at Newberry, is the result of a return to more normal volumes when compared to the previous year. In 2016, several golf course construction projects led to increased golf sand production. Those projects were completed so as a result, 2017 golf sand shipments have been reflective of maintenance activities and thus Keuka has had lower volumes than the previous year.    As stated previously, royalties have fallen off in Lake Sand as a consequence of Vulcan having fully depleted our proven reserves there. Further capital expenditures would be required by our tenant to change their mining plan at Lake Sand and realize more than three million tons of possible reserves, which we do not anticipate any time soon. Total operating profit in this segment was ~~$4,869,000,~~$4,014,000, a decrease of ~~$459,000~~$409,000 versus ~~$5,328,000~~$4,423,000 in the ~~first nine months~~same period last year. The primary reason for this decrease is that we are no longer receiving double minimums at our Lake Louisa property, because our tenant, Cemex, received its final permit to begin mining the property in July 2019.
~~Land~~ Development ~~and Construction~~ Segment Results
~~Highlights of the Nine Months ended September 30, 2017:~~
~~The Company continues to work with MRP Realty to develop Phase II of the Riverfront on the Anacostia.~~
Nine Months ended September 30 Six months ended June 30
(dollars in thousands) 2017 2016 Change 2020 2019 Change

Rental revenue $ 601 543 58
Revenue-reimbursements 330 393 (63 )

Total revenue 931 936 (5 )
Lease revenue $ 572 585 (13 )

Depreciation, depletion and amortization 263 194 69 107 107 —
Operating expenses 159 221 (62 ) 353 141 212
Environmental remediation expense —   2,000 (2,000 )
Property taxes 831 1,122 (291 ) 689 618 71
Management company indirect 846 758 88 900 837 63
Corporate expense 935 959 (24 ) 1,329 740 589

Cost of operations 3,034 5,254 (2,220 ) 3,378 2,443 935

Operating loss $ (2,103 ) (4,318 ) 2,215 $ (2,806 ) (1,858 ) (948 )

The ~~Land~~ Development ~~and Construction~~ segment is responsible for (i) seeking out and identifying opportunistic
29
purchases of income producing warehouse/office buildings, and (ii) developing our non-income producing properties into income production.

~~With respect to ongoing projects:~~
· ~~During the first quarter, we completed construction of the bulkhead at our 664E property on the Anacostia ahead of schedule and under budget.~~33
· ~~Our new spec building at Patriot Business Center was placed in service this past April and is currently 100% leased and occupied~~
· In February, the D.C. Zoning Commission voted 5-0 in favor of the Planned Unit Development (PUD) of Phase II of our RiverFront on the Anacostia project. After formal publishing of the record and a 35 day appeal period we anticipate formal approval by the end of the year
· ~~We are fully engaged in the formal process of seeking PUD entitlements for our 118 acre tract in Hampstead, Md~~
· We made major progress during the third quarter in our joint venture with St. John Properties on what remained of our Windlass Run Business Park. The JV secured financing on a $17,580,000 construction and development loan and began construction on what will be a multi-building business park consisting of approximately 329,000 square feet of office and retail space.
~~Because of operating losses and depreciation during the lease up of Dock 79, equity in loss of joint ventures was $1,589,000 (including a loss of $31,000 in the Brooksville~~Stabilized Joint ~~Venture).~~
~~RiverFront on the Anacostia~~Venture Segment Results
Six months ended June 30
(dollars in thousands) 2020 % 2019 % Change %

Lease revenue $ 5,105 100.0 % 5,327 100.0 % (222 ) -4.2 %

Depreciation, depletion and amortization 2,369 46.4 % 2,385 44.8 % (16 ) -0.7 %
Operating expenses 1,133 22.2 % 1,236 23.2 % (103 ) -8.3 %
Property taxes 514 10.1 % 565 10.6 % (51 ) -9.0 %
Management company indirect 96 1.9 % 92 1.7 % 4 4.3 %
Corporate expense 130 2.5 % 75 1.4 % 55 73.3 %

Cost of operations 4,242 83.1 % 4,353 81.7 % (111 ) -2.5 %

Operating profit $ 863 16.9 % 974 18.3 % (111 ) -11.4 %

~~Highlights~~Dock 79’s average occupancy for the first six months was 92.56%, and at the end of the ~~Nine Months ended September 30, 2017:~~
~~Beginning July 1, 2017,~~second quarter, Dock 79 was 92.13% leased and 90.16% occupied. For the ~~Company consolidated~~first six months, 58.33% of expiring leases renewed with an average increase in rent on those renewals of 0.60% due to the ~~assets (at current fair value), liabilities and operating results of~~mandated rent freeze on renewals that went into effect in March. Net Operating Income for this segment was $3,466,000, down $31,000 or .9% compared to the ~~joint venture and established the RiverFront on the Anacostia segment as its fourth segment. FRP’s share of prior~~same period ~~results are included in the line Equity in loss of joint ventures in the Company’s overall Consolidated Statements of Income.~~
Nine Months Ended September 30
(dollars in thousands) 2017 % 2016 %

Rental revenue $ 2,357 99.6 % — — %
Revenue-reimbursements 10 .4 % — — %

Total revenue 2,367 100.0 % — — %

Depreciation and amortization 2,564 108.3 % — — %
Operating expenses 661 27.9 % — — %
Property taxes 268 11.3 % — — %
Management company indirect 42 1.8 % —
Corporate expense 27 1.2 % — — %

Cost of operations 3,562 150.4 % — — %

Operating profit $ (1,195 ) -50.4 % $ — — %
~~In July 2017, Phase I (Dock 79) of the development known as RiverFront on the Anacostia in Washington, D.C., a 300,000 square foot residential apartment building developed by~~last year. Dock 79 is a joint venture between the Company and MRP, ~~reached stabilization, meaning 90%~~in which FRP Holdings, Inc. is the majority partner with 66% ownership.
Distributions for Hickory Creek were $168,000 for the first six months. The project is a qualified 1031 like-kind exchange investment in a Delaware Statutory Trust of ~~the individual apartments have been leased and are occupied by third party tenants. Upon reaching stabilization,~~which the Company ~~has, for~~is a ~~period of one year, the exclusive right to (i) cause the joint~~
30
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 value of the development at the time of stabilization. The attainment of stabilization also resulted 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 July 1, 2017, the Company consolidated the assets (at current fair value), liabilities and operating results of the joint venture and established the RiverFront on the Anacostia segment as its fourth segment.26.659% beneficial owner.

At the end of September, Dock 79 was 96.42% leased and 95.4% occupied. As the first “generation” of lease came up for renewal this quarter, the renewal rate of 53% is in line with expectations while the average rent increase of 3.89% is stronger than we budgeted.

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 ~~September~~June 30, ~~2017,~~2020, we had ~~$5,687,000~~$34,481,000 of cash and cash equivalents along with $130,058,000 of investments available for sale. As of June 30, 2020, we had no debt borrowed under our $20 million Wells Fargo revolver, ~~$2,266,000~~$411,000 outstanding under letters of credit and ~~$12,047,000~~$19,589,000 available to borrow under the revolver. ~~The Company closed on a $20 million secured revolver with First Tennessee Bank on July 24, 2015 and as of September 30,~~In November 2017, we ~~had $753,000 borrowed and $19,247,000 available~~secured $90 million in permanent financing for Dock 79 from EagleBank, the proceeds of which were used to ~~borrow under the revolver. First Tennessee has also committed to provide an additional $20~~pay off $79 million of ~~secured financing to~~construction and mezzanine debt. The remainder was distributed pari passu between the Company ~~on a ten year term loan amortizing on a twenty five (25) year basis. We expect to close on this second loan with First Tennessee during 2017.~~and our partners.

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):
Nine months Six months
Ended September 30, Ended June 30,
2017 2016 2020 2019
Total cash provided by (used for):
Operating activities $ 15,321 13,662 $ 9,110 8,161
Investing activities (10,920 ) (14,409 ) 7,787 31,138
Financing activities (1,771 ) 747 (12,762 ) (5,677 )
Increase in cash and cash equivalents $ 2,630 —
Increase (decrease) in cash and cash equivalents $ 4,135 33,622

Outstanding debt at the beginning of the period $ 40,745 42,099 $ 88,925 88,789
Outstanding debt at the end of the period $ 115,113 37,081 $ 88,993 88,857

Operating Activities -Net cash provided by operating activities ~~increased $1,659,000 to $15,321,000~~ for the ~~nine~~six months ended ~~September~~June 30, ~~2017. The total of net income plus depreciation, depletion and amortization less gains on sales of property and equipment less gain on remeasurement decreased $13,734,000~~2020 was $9,110,000 versus $8,161,000 in the same period last ~~year due to the net income~~year. Net cash used in noncontrolling interest offset by the gain on remeasurement of real estate partnership upon consolidation of the assets (at current fair value), liabilities and operating results of the RiverFront joint venture . These changes are described above under “Comparative Results of Operations”. Equity in the loss of joint ventures was $1,589,000 in the first nine months of 2017 primarily as a result of expenses and depreciation during the lease up of Dock 79. Deferred income tax liabilities increased by $19,620,000 primarily due to consolidation of the assets (at current fair value), liabilities and operating results of the RiverFront joint venture. Income tax receivable was $1,852,000 at September 30, 2017 compared to income tax payable of $887,000 at December 31, 2016 resulting in a negative impact to net cash provided by operating activities of ~~$2,739,000 primarily due to~~discontinued operations for the ~~bonus depreciation on Dock 79.~~six months ended June 30, 2019 was $2,441,000.

Investing Activities - ~~For the nine months ended September 30, 2017,~~Net cash ~~required~~provided by investing activities ~~decreased $3,489,000 to $10,920,000.~~
~~Financing Activities~~ ~~– For~~for the ~~nine~~six months ended ~~September~~June 30, ~~2017, cash required by financing activities~~2020 was ~~$1,771,000~~$7,787,000 versus ~~cash provided by financing activities of $747,000~~$31,138,000 in ~~2016~~the same period last year. The decrease was due primarily ~~due~~ to ~~lower borrowing~~the proceeds on the ~~revolver~~sale investments available for sale offset by ~~higher exercises~~the purchase of ~~employee stock options.~~investments available for sale, while the prior year included the acquisition of Cranberry Business Park, and the preferred equity contribution to the RiverFront Holdings II joint venture.
3134

At June 30, 2020 the Company was invested in 59 corporate bonds with individual maturities ranging from 2020 through 2022. The unrealized gain on these bonds of $1,584,000 was recorded as part of comprehensive income and was based on the estimated market value by National Financial Services, LLC (“NFS”) obtained from sources that may include pricing vendors, broker/dealers who clear through NFS and/or other sources (Level 2). The Company recorded a realized gain of $242,000 in its net investment income related to bonds that were sold in 2020.
Financing Activities – Net cash used in investing activities was $12,762,000 versus $5,677,000 in the same period last year due primarily due to the increased purchase of company stock in the six months ended June 30, 2020.

Credit Facilities - On ~~January 30, 2015, in connection with the Spin-off,~~February 6, 2019 the Company ~~terminated its $55 million credit facility~~ entered into a First Amendment to the 2015 Credit Agreement (the "Credit Agreement") with Wells Fargo Bank, N.A. ~~in 2012 and simultaneously entered into a new five year credit agreement~~(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 (“Revolver”) with a maximum facility amount of $20 ~~million (the "Credit Agreement").~~million. The interest rate under the Credit Agreement ~~provides~~will be a ~~revolving credit facility (the “Revolver”) with a $10 million sublimit available for standby letters~~maximum of credit. At the time of the Spin-off, the Company refinanced $10,483,000 of borrowings then outstanding on the terminated revolver. As of September 30, 2017, there was $5,687,000 outstanding on the revolver and $2,266,000 outstanding under letters of credit and $12,047,000 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 Revolver bears interest at a rate of 1.4%1.50% over ~~the selected~~ LIBOR, which may ~~change~~be reduced quarterly ~~based on~~to 1.25% or 1.0% over LIBOR if the ~~Company’s~~Company meets a specified ratio of ~~Consolidated Total Debt~~consolidated total debt to ~~Consolidated Total Capital, as defined.~~consolidated total capital. A commitment fee of ~~0.15%~~0.25% per annum is payable quarterly on the unused portion of the ~~commitment. The~~ commitment ~~fee~~but the amount may ~~also change quarterly based upon~~be reduced to 0.20% or 0.15% if the Company meets a specified ratio ~~described above.~~of consolidated total debt to consolidated total capital. The credit agreement contains certain conditions and financial covenants, including a minimum ~~$110 million tangible net worth. As of September 30, 2017, the~~ tangible net worth ~~covenant~~and dividend restriction. As of June 30, 2020, these covenants would have limited our ability to pay dividends ~~or repurchase stock with borrowed funds~~ to a maximum of ~~$77.5~~$219 million combined. ~~The Company was in compliance with all covenants as of September 30, 2017.~~

On November 17, 2017, Riverfront Holdings I, LLC (the "Joint Venture") refinanced the Dock 79 project pursuant to a Loan Agreement and Deed of Trust Note entered into with EagleBank ("Loan Documents"). The Joint Venture, which was formed between the Company and MRP in 2014 in connection with the development of the Riverfront on the Anacostia property, borrowed a principal sum of $90,000,000 in connection with the refinancing. The loan is secured by the Dock 79 real property and improvements, bears a fixed interest rate of 4.125% per annum and has a term of 120 months. During the first quarter of fiscal 2015, the Company announced the execution of a commitment from First Tennessee Bank to provide up to $40 million dollars of mortgage backed financing in two separate facilities. On July 24, 2015 the Company closed on a five year, $20 million secured revolver with a twenty-four month window to convert up to the full amount48 months of the ~~facility into~~loan term, the Joint Venture will make monthly payments of interest only, and thereafter, make monthly payments of principal and interest in equal installments based upon a ten year term loan. Interest accrues at 1.90% over one month LIBOR plus an annual commitment fee of 0.10%. As of September 30, 2017, there was $753,000 outstanding on the revolver and $19,247,000 available for borrowing.30-year amortization period. The ~~second facility~~loan is a ~~$20 million ten year term loan secured~~non-recourse loan. However, all amounts due under the Loan Documents will become immediately due upon an event of default by ~~to-be-determined collateral. The purpose~~the Joint Venture, such events including, without limitation, Joint Venture's (i) failure to: pay, permit inspections or observe covenants under the Loan Documents, (ii) breach of ~~these loans is to facilitate growth through new construction~~representations made under the Loan Documents (iii) voluntary or involuntary bankruptcy, and (iv) dissolution, or the dissolution of the guarantor. MidAtlantic Realty Partners, LLC, an affiliate of MRP, has executed a carve-out guaranty in connection with the ~~Land Development and Construction segment and/or acquisition of existing, operating buildings to be added to the Asset Management segment.~~loan.

Cash Requirements – The Board of Directors has authorized Management to repurchase shares of the Company’s common stock from time to time as opportunities arise. ~~During~~On May 6, 2020, the ~~nine months ended September 30, 2017~~Board of Directors approved a $10,000,000 increase in the ~~Company repurchased 2,000 shares of stock.~~Company’s stock repurchase authorization. As of ~~September~~June 30, ~~2017, $4,883,000~~2020, $8,585,000 was authorized for future repurchases of common stock. The Company does not currently pay any cash dividends on common stock.

The Company currently expects its ~~2017~~ capital expenditures for the remainder of 2020 to include approximately ~~$19,165,000~~$37.8 million for real estate development ~~and acquisitions, of which $12,595,000 has been expended to date,~~including investments in joint ventures, which will be funded mostly out of cash ~~generation~~and investments on hand, cash generated from operations and property sales, or ~~partly from~~ borrowings under our credit facilities.

~~REIT Conversion~~ ~~– Due to~~Impact of the ~~pending tax reform proposals now~~COVID-19 Pandemic. The COVID-19 pandemic is having an extraordinary impact on the world economy and the markets in ~~Congress,~~which we operate. As an essential business, we have ~~decided~~continued to ~~defer~~operate throughout the ~~REIT election decision until 2018. If we elect REIT status, we would be required~~pandemic in accordance with White House guidance and orders issued by state and local authorities. We have implemented social distancing and other measures to ~~distribute to our shareholders an amount equal to at least 90%~~protect the health of our ~~REIT taxable income, determined without regard~~employees and customers. While we recognize the importance of social distancing, stay at home and telework measures to ~~the dividends paid deduction~~protect human health, these measures will adversely affect our retail tenants as long as they remain in place. We are negotiating with our retail tenants on rent abatements and ~~excluding any net capital gains. Since we~~cash flow adjustments that will not elect REIT status for the 2017 calendar year, we would not expect to commence paying regular distributions until 2019 at the earliest. The amount, timing and frequency of future distributions, however, will be at the sole discretion ofadversely affect our Board of Directors and will be declared based upon various factors, many of which are beyond our control, including, our financial condition and operating cash flows, the amount required to maintain REIT status and reduce any income and excise taxes that we otherwise would be required to pay, limitations on distributions in our existing and future debt instruments, limitations on our ability to fund distributions using cash generated through taxable REIT subsidiaries and other factors that our Board of Directors may deem relevant.
We currently operate as a C corporation. A REIT is not permitted to retain earnings and profits (“E&P”) accumulated during the periods when the company or its predecessor was taxed as a C corporation. If we elect REIT status for the year ending December 31, 2018, we would issue a special distribution to our shareholders of accumulated earnings and profits on or prior to December 31, 2018 (the “E&P Distribution”). The E&P Distribution would be taxable to our shareholders. We have not yet determined the amount of our accumulated earnings and profits.NOI. We anticipate that the ~~E&P Distribution would be made~~pandemic will continue to have negative impacts on the overall economy that is likely to have a negative impact on many of our tenants. During this period, we will continue to fulfill our duty to operate while managing our business in ~~the form of 75% FRP common stock and 25% cash, although no decision has been~~a prudent fashion.
3235

made as to the composition of any E&P Distribution. The timing of the planned E&P Distribution, which may or may not occur, may be affected by potential changes in tax law, the completion of various phases of the REIT conversion process and other factors beyond our control.

Summary and Outlook. This ~~past~~is the first quarter ~~was a momentous one across all~~where the Company had to reckon with the full effects of COVID-19, and the ensuing economic shutdown and effects associated with it. Beyond the internal practical issues of working from home, ensuring the safety of our ~~segments. Thanks~~employees and tenants, running a shareholder and board meeting virtually, there were the larger issues of rent freezes at Dock 79, the lease-up of the Maren during a pandemic, and general uncertainty on how this would affect our tenants, construction, and our royalties business. The fallout from this extraordinary situation has been mixed. Even in midst of the pandemic, we were able to sell our three remaining lots at Lakeside Business Park for $3.75 million, and our Gulf Hammock property for $2.51 million. Royalties are down compared to last year, though how much of it is COVID-related is debatable at this point. Some locations are down compared to 2019, while others doing markedly better than last year. The bulk of the decrease can be attributed to no longer receiving double minimums at Lake Louisa. Even with the decreases, our outlook in the short and long term remains positive regarding this segment. Our annualized revenue ($9,174,000) and revenue for the last twelve months ($9,163,000) would still be the second-best year in the history of this segment.
We have been fortunate that none of the local governments where we currently have projects under development have halted construction. We have had problems getting our certificates of occupancy on the final floors of the Maren, simply because local restrictions have made it difficult to get the inspectors on site. Beyond the economic headwinds caused by the pandemic, there are the necessary but still problematic logistical issues with trying to lease up a building during this unusual situation—virtual tours, an inability to showcase the property with events, no baseball etc. Even with all that, we signed 91 leases this quarter, including 44 in May. At quarter end, the Maren was 45% leased and 23% occupied, putting us well ahead of schedule on lease-up. The building itself is very close to the ~~amazing efforts~~finish line in terms of completion. We have conditional certificates of occupancy in place for all floors with actual units in them. All that remains are the certificates of occupancy for the amenity spaces along with the final certificate of occupancy for the building itself.
Dock 79 remains a source of some concern. The rent freeze on renewals will be in effect at least until October. Because our ~~Baltimore office, Asset Management increased occupancy from 86.8% at~~apartments come up for renewal two months prior to the end of ~~June~~the lease, an October end to the rent freeze with a 60-day tail means that there will more than likely be no increases on renewals for the rest of the year. A shortened baseball season without fans compounds a difficult situation for our ~~present~~retail tenants and consequently Dock 79. However, all three businesses have been able to resume operating to the extent that they can. Two of our tenants were able to resume paying rent in June. We are still working with all three on a payment plan for the back rent. During a pandemic, during the construction of the Maren next door, without baseball, occupancy remains above 90% at quarter end.
Industrial remains strong as an asset class. 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 ~~91.3%,~~April.
We issued our first quarter earnings and consequently our outlook during a ~~remarkable 4.5% increase~~period of heightened concern and uncertainty. This company along with our country and the entire world was struggling to comprehend the immediate and long-term effects of something none of us had any familiarity with. It would be inaccurate to suggest that we are any less concerned or any more certain than we were three months ago. We have not seen the end of COVID-19 nor its effects, but we have at least seen how our business responds to it. This quarter could have gone any number of ways, and thankfully, we have more good things to report than bad, more cause for confidence than unease. A conservative balance sheet and substantial cash reserves are one reason for our confidence. However, we believe strongly in our business and its assets which is why we continue to put money back into the company in the ~~span~~form of ~~three months. After twenty years of work by Florida Rock Industries and Vulcan Materials to get our Ft. Myers property fully entitled, Mining Royalties saw~~share buybacks. During the first ~~tons extracted from that quarry. Though production this past~~six months of 2020, the Company repurchased 298,303 shares at an average cost of $41.41 per share.
Finally, subsequent to the end of the quarter, ~~was offset by prepaid royalties, going forward, Vulcan’s ability finally to realize~~on July 31, the ~~16,000,000 tons~~Company sold its warehouse at 1801 62nd Street in Hollander Business Park for $12.3 million. This 94,350 square-foot warehouse came on line in second quarter of reserves at this site should positively impact revenue and income as it creates an opportunity to collect more than the minimums from this location. Land Development and Construction got the latest building at Patriot2019, was fully leased and occupied ~~way ahead~~in the fourth quarter of ~~schedule, secured financing for~~2019, and was our ~~joint venture~~first building with ~~St. John properties,~~a 32-foot clear. The decision to sell was in keeping with a departure from our previous “develop and ~~began construction on the project as well.~~hold” business model. The ~~ability~~sale resulted in a gain of this segment to turn vacant land into income production is essential for the growth of the Company. Finally, and perhaps most importantly, this past quarter saw the stabilization and our subsequent consolidation of Dock 79 as the joint venture achieved occupancy greater than 90%. That this consolidation happened ahead of schedule and with stronger rents than expected or budgeted is a testament to the efforts of our partner$3.8 million before taxes and the ~~high quality of the asset.~~proceeds were placed in a 1031 exchange fund.

During the remainder of this year, we expect to find permanent financing for Dock 79 and continue pre-development activities for Phase II with the expectation that we will break ground in the last quarter of this year or the first quarter of 2018. Finally, we have for some time been debating the merits of converting this company into a REIT. Given the White House’s stated intention to overhaul our federal tax code, and because a change in the corporate income tax rate would mitigate many of the advantages of becoming a REIT, we are delaying our decision to elect REIT status until it is clear either way whether there will be meaningful change in the corporate income tax rate.
36
Non-GAAP Financial ~~Measures.~~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 continuing operations and to monitor, assess, and identify meaningful trends in its operating and financial performance. ~~These measures are~~This measure is not, and should not be viewed as, ~~substitutes~~a substitute for GAAP financial measures.

Net Operating Income Reconciliation
Three months ended 09/30/17 (in thousands)
Asset Land RiverFront Mining FRP
Management Development Anacostia Royalties Holdings
Segment Segment Segment Segment Totals
Income from continuing operations 1,581 580 42,040 983 45,184
Income Tax Allocation 1,031 378 14,526 642 16,577
Income  from continuing operations before income taxes 2,612 958 56,566 1,625 61,761

Less:
Gain on remeasurement of investment in real estate partnership —   —   60,196
Equity in Joint Venture —   1,558 —
Lease intangible rents 1 —   —
Unrealized rents 48 —   50
Plus:
Equity in loss of Joint Venture —   —   1,558
Interest Expense 374 —   877
Depreciation/Amortization 2,090 98 2,564
Management Co. Indirect 237 281 42
Allocated Corporate Expenses 350 210 27

Net Operating Income (loss) 5,614 (11 ) 1,388
Net Operating Income Reconciliation
Three months ended 09/30/16 (in thousands)

Asset Land Mining FRP
Management Development Royalties Holdings
Segment Segment Segment Totals
Income (loss) from continuing operations 1,592 (758 ) 1,123 1,957
Income Tax Allocation 1,039 (495 ) 734 1,278
Inc. (loss) from continuing operations before income taxes 2,631 (1,253 ) 1,857 3,235

Less:
Lease intangible rents 4 —
Plus:
Unrealized rents 139 —
Equity in loss of Joint Venture —   642
Loss on investment land sold 1 148
Interest Expense 274 —
Depreciation/Amortization 2,071 65
Management Co. Indirect 176 243
Allocated Corporate Expenses 339 267

Net Operating Income 5,627 112
Net Operating Income Reconciliation
Six months ended 06/30/20 (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 (47 ) (739 ) 622 4,162 1,478 5,476
Income Tax Allocation (18 ) (274 ) 338 1,543 550 2,139
Income (loss) from continuing operations before income taxes (65 ) (1,013 ) 960 5,705 2,028 7,615

Less:
Equity in profit of Joint Ventures —   —   168 —   —   168
Gains on sale of buildings 8 1,877 — 1,712 — 3,597
Unrealized rents 114 —   —   121 —   235
Interest income —   2,048 —   —   2,053 4,101
Plus:
Unrealized rents —   —   8 —   —   8
Equity in loss of Joint Venture —   2,132 —   21 —   2,153
Interest Expense —   —   71 —   25 96
Depreciation/Amortization 392 107 2,369 100 —   2,968
Management Co. Indirect 235 900 96 133 —   1,364
Allocated Corporate Expenses 573 1,329 130 181 —   2,213

Net Operating Income (loss) 1,013 (470 ) 3,466 4,307 —   1,998

Net Operating Income Reconciliation
Nine months ended 09/30/17 (in thousands)
Asset Land RiverFront Mining FRP
Management Development Anacostia Royalties Holdings
Segment Segment Segment Segment Totals
Income (loss) from continuing operations 4,645 (1,280 ) 42,040 2,935 48,340
Income Tax Allocation 3,009 (823 ) 14,526 1,903 18,615
Inc. (loss) from continuing operations before income taxes 7,654 (2,103 ) 56,566 4,838 66,955

Less:
Gain on remeasurement of investment in real estate partnership —   —   60,196
Lease intangible rents 5 —   —
Unrealized rents 79 —   50
Plus:
Unrealized rents —   —   —
Equity in loss of Joint Venture —   —   1,558
Interest Expense 993 —   877
Depreciation/Amortization 6,112 263 2,564
Management Co. Indirect 616 846 42
Allocated Corporate Expenses 1,424 935 27

Net Operating Income (loss) 16,715 (59 ) 1,388
Net Operating Income Reconciliation Net Operating Income Reconciliation
Nine months ended 09/30/16 (in thousands)
Six months ended 06/30/19 (in thousands)
Stabilized
Asset Land Mining FRP Asset Joint Mining Unallocated FRP
Management Development Royalties Holdings Management Development Venture Royalties Corporate Holdings
Segment Segment Segment Totals Segment Segment Segment Segment Expenses Totals
Income (loss) from continuing operations 4,654 (3,316 ) 3,213 4,551 335 (1,347 ) 25 3,211 2,369 4,593
Income Tax Allocation 3,038 (2,165 ) 2,099 2,972 124 (499 ) 109 1,190 879 1,803
Inc. (loss) from continuing operations before income taxes 7,692 (5,481 ) 5,312 7,523
Income (loss) from continuing operations before income taxes 459 (1,846 ) 134 4,401 3,248 6,396

Less:
Lease intangible rents 13 —
Other income —   1
Gains on sale of buildings 536 — — — — 536
Unrealized rents — —   29 —   —   29
Interest income —   526 —   —   3,268 3,794
Plus:
Unrealized rents 109 —   3 —   —   228 —   231
Equity in loss of Joint Venture —   893 —   514 —   22 —   536
Loss on investment land sold 1 271
Interest Expense 1,080 —   —   —   840 —   20 860
Depreciation/Amortization 5,891 194 373 107 2,385 94 —   2,959
Management Co. Indirect 582 758 175 837 92 98 —   1,202
Allocated Corporate Expenses 1,213 959 302 740 75 79 —   1,196

Net Operating Income (loss) 16,555 (2,407 )
Net Operating Income 776 (174 ) 3,497 4,922 —   9,021

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 ~~Agreements~~Agreement with Wells ~~Fargo and First Tennessee Bank.~~Fargo.

37
Under the Wells Fargo Credit Agreement, the applicable ~~spread~~margin for borrowings at ~~September~~June 30, ~~2017~~2020 was ~~1.4% over libor.~~LIBOR plus 1.0%. The applicable ~~spread~~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 ~~applicable borrowing spread above libor~~Company did not have any variable rate debt at ~~September~~June 30, ~~2017 with First Tennessee Bank~~2020, so a sensitivity analysis was ~~1.9%.~~
~~At September 30, 2017 a 1% increase~~not performed to determine the impact of hypothetical changes in the current per annum interest rate would result in $56,872 of additional interest expense during the next 12 months under the Wells Fargo Credit Agreement. The foregoing calculation assumes an instantaneous 1% increase in the rates under the Credit Agreement and that the principal amount under the Credit Agreement is the amount outstanding as of September 30, 2017. The calculation, therefore, does not account for the differences in the market rates upon which the interest rates on the Company’s results of ~~our indebtedness are based or possible actions, such as prepayment, which we may take in response to any rate increase.~~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 ~~September~~June 30, ~~2017,~~2020, 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.

3538

PART II. OTHER INFORMATION
~~Item 1A.~~ ~~RISK FACTORS~~
Item 1A. RISK FACTORS

In addition to the other information set forth in this report, ~~and the Risks related to our potential REIT election,~~ 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 ~~September 30, 2016,~~December 31, 2019, 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.
The following risk factor set forth below is in addition to the risk factors discussed under Part I, Item 1A (Risk Factors) of the Company’s most recent annual report on Form 10-K.
The current pandemic of the novel coronavirus COVID-19 could materially and adversely impact or disrupt our financial condition, results of operations, cash flows and performance.

Since being reported in December 2019, the novel coronavirus (COVID-19) pandemic has had repercussions across regional and global economies and financial markets. The outbreak of COVID-19 has significantly adversely impacted global economic activity, contributed to significant volatility and negative pressure in financial markets and increased economic uncertainty. In response to the pandemic, many states and cities in which we own properties have instituted quarantines, restrictions on travel, “shelter in place” rules, restrictions on types of business that may continue to operate, and/or restrictions on the types of construction projects that may continue. In response to these restrictions and to protect employee safety, many of our employees are working remotely.
As a result, the COVID-19 pandemic is negatively impacting many industries, especially the commercial real estate business which has mixed use tenants including apartment dwellers, small businesses and restaurants. The significance, extent and duration of the impacts of the COVID-19 pandemic remains largely uncertain and dependent on future developments that cannot be accurately predicted at this time, such as the continued severity and spread of the virus, the period of time during which mandated social distancing or other mitigation measures remain in place, the timetable for developing effective treatments and a vaccine and the trajectory of the economic recovery.
At this time, the Company anticipates that the pandemic could have material and adverse effects on our ability to successfully operate and on our financial condition, results of operations and cash flows due to, among other factors:

● Our ability to continue to collect rents, on a timely basis or at all, without reductions or other concessions, from tenants of the Asset Management and Stabilized Joint Ventures segments;

● Our ability to renew leases on favorable terms with tenants of the Asset Management and Stabilized Joint Ventures segments;

● A decline in royalties collected by our Mining Royalties section in the event that the pandemic results in a decline in construction activity;
● Our ability to complete pending and planned construction projects in a timely manner due to restrictions imposed on construction activities, delays in the permitting process or delays in the supply of materials or labor necessary for construction.

● Difficulty in obtaining debt financing for our development projects on favorable terms or an inability to comply with financial covenants of our credit facility and other debt agreements and result in a default and potentially an acceleration of indebtedness;

39
● Any impairment in value of our tangible or intangible assets which could be recorded as a result of a weaker economic conditions;

● the potential negative impact on the health of our personnel, particularly if a significant number of them are impacted, could result in a deterioration in our ability to ensure business continuity during this disruption.

The rapid development and fluidity of this situation precludes any prediction as to the full adverse impact of the COVID-19 pandemic.

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)
July 1
Through
July 31 —   $ —   —   $ 4,883,000

August 1
Through
August 31 —   $ —   —   $ 4,883,000

September 1
Through
September 30 —   $ —   — $ 4,883,000

Total —   $ —   —
(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 30 105,834 $ 42.28 105,834 $ 3,044,000

May 1
Through
May 31 65,206 $ 41.30 65,206 $ 10,350,000

June 1
Through
June 30 44,772 $ 39.43 44,772 $ 8,585,000

Total 215,812 $ 41.39 215,812

~~(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.~~
(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.

Item 6. EXHIBITS

(a) Exhibits. The response to this item is submitted as a separate Section entitled "Exhibit Index", on page ~~38.~~42.

3640

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:  ~~November 8, 2017~~August 14, 2020 By JOHN D. BAKER II
John D. Baker II
Chief Executive Officer
(Principal Executive Officer)

By JOHN D. ~~MILTON, JR.~~BAKER III
John D. ~~Milton, Jr.~~Baker III.
~~Executive Vice President,~~ Treasurer
~~Secretary~~ and Chief Financial Officer
(Principal Financial Officer)

By JOHN D. KLOPFENSTEIN
John D. Klopfenstein
Controller and Chief Accounting
Officer (Principal Accounting Officer)
3741

FRP HOLDINGS, INC.
FORM 10-Q FOR THE ~~THREE~~SIX MONTHS ENDED ~~SEPTEMBER~~JUNE 30, ~~2017~~2020
EXHIBIT INDEX

(14) Financial Code of Ethical Conduct between the Company, Chief Executive Officers and Financial Managers, adopted December 3, 2014, incorporated by reference to Exhibit 14 to the Company’s Form 10-Q filed ~~herewith.~~on November 9, 2017.
(31)(a) Certification of John D. Baker II.
(31)(b) Certification of John D. ~~Milton, Jr.~~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.INS XBRL Instance Document
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3842

	THREE MONTHS ENDED						NINE MONTHS ENDED
	SEPTEMBER 30,						SEPTEMBER 30,
	2017			2016			2017			2016
Revenues:
Rental revenue	$	8,738			6,259			21,243			18,430
Mining Royalty and rents		1,763			2,016			5,311			5,805
Revenue – reimbursements		1,553			1,501			4,182			4,399
Total Revenues		12,054			9,776			30,736			28,634

Cost of operations:
Depreciation, depletion and amortization		4,769			2,160			9,030			6,155
Operating expenses		1,879			1,146			3,882			3,651
Environmental remediation expense		—			—			—			2,000
Property taxes		1,401			1,087			3,592			3,357
Management company indirect		560			419			1,504			1,340
Corporate expenses (Note 4 Related Party)		617			656			2,510			2,348
Total cost of operations		9,226			5,468			20,518			18,851

Total operating profit		2,828			4,308			10,218			9,783

Interest income		—			—			—			1
Interest expense		(1,251	)		(273	)		(1,870	)		(1,080	)
Equity in loss of joint ventures		(12	)		(652	)		(1,589	)		(924	)
Gain on remeasurement of investment in real estate partnership		60,196			—			60,196			—
Loss on investment land sold		—			(148	)		—			(257	)

Income before income taxes		61,761			3,235			66,955			7,523
Provision for income taxes		16,577			1,278			18,615			2,972

Net income		45,184			1,957			48,340			4,551
Income attributable to noncontrolling interest		19,793			—			19,793			—
Net income attributable to the Company	$	25,391			1,957			28,547			4,551


Earnings per common share:
Basic	$	2.54			0.20			2.86			0.46
Diluted	$	2.52			0.20			2.84			0.46

Number of shares (in thousands) used in computing:
-basic earnings per common share		10,004			9,865			9,967			9,860
-diluted earnings per common share		10,066			9,908			10,035			9,902

	September 30,		December 31,
Identifiable net assets	2017		2016

Asset management	$	180,827		169,736
Mining royalty lands		38,744		39,259
Land development and construction		44,162		57,126
RiverFront on the Anacostia		146,718		—
Cash items		2,630		—
Unallocated corporate assets		3,011		439
	$	416,092		266,560

							The
							Company's
				Total Assets	Net Loss		Share of Net
			Total	of the	of the		Loss of the
	Ownership		Investment	Partnership	Partnership		Partnership

As of September 30, 2017
RiverFront Holdings I, LLC (1)	—		—	—	$ (2,019	)	$ (1,558	)
Brooksville Quarry, LLC	50.00	%	$ 7,487	$ 14,445	(62	)	(31	)
BC FRP Realty, LLC	50.00	%	5,858	12,298	—		—
Total			$ 13,345	$ 26,743	$ (2,081	)	$ (1,589	)

As of December 31, 2016
RiverFront Holdings I, LLC	77.14	%	$10,151	$90,420	$ (1,446	)	$ (1,115	)
Brooksville Quarry, LLC	50.00	%	7,522	14,341	(8	)	(4	)
BC FRP Realty, LLC	50.00	%	5,228	10,784	—		—
Total			$ 22,901	$ 115,545	$ (1,454	)	$ (1,119	)

	As of July 1, 2017
	Riverfront			Gain on Remeasure-
	Holdings I, LLC			ment		Revised

Land	$	7,220		$	21,107		$	28,327
Building and improvements, net		81,773			34,362			116,135
Value of leases in place		—			4,727			4,727
Cash		2,295			—			2,295
Cash held in escrow		171			—			171
Accounts receivable		40			—			40
Prepaid expenses		142			—			142
Total Assets	$	91,641		$	60,196		$	151,837

Long-term Debt	$	78,587		$	—		$	78,587
Amortizable debt costs		(852	)		—			(852	)
Other liabilities		905			—			905
Equity – FRP		8,583			39,727			48,310
Equity - MRP		4,418			20,469			24,887
Total Liabilities and Capital	$	91,641		$	60,196		$	151,837

Asset Management segment – nine months ended	September 30, 2017	September 30, 2016
Revenues	$22,057,000	21,824,000
Net Operating Income (Cash Basis)	$16,715,000	16,554,000
Occupied square feet	3,637,236	3,486,681
Overall occupancy rate	91.3%	89.9%
Average YTD occupied square feet	3,529,911	3,383,261
Average YTD occupancy rate	89.4%	89.5%
Portfolio square feet	3,983,813	3,880,365
Retention Success rate	81%	64%

Location	Acreage	SF +/-	Status
Lakeside, MD	20	286,500	Horizontal development completed. Ready for vertical permitting.
Windlass Run Business Park, MD	17.5 (50% Interest)	164,500 (50% Interest)	Company owns a 50% in a joint venture formed in April 2016 with St. John Properties. The joint venture owns the 35 acres and plans to develop the land into 12 office buildings for a total of 329,000 sq. ft.
Patriot Business Center, Manassas, VA	18	96,047	Building permit process ongoing for the remaining 96,047 s.f. Includes 12 acres storm water management.
Hollander 95 Business Park, MD	33	328,740	Horizontal development completed. Building permit process ongoing for 94,290 sf.
Total	88.5	875,787

(dollars in thousands)		Six Months Ended June 30,
	2020				2019			Change			%
Revenues:
Lease Revenue	$		7,045		$	7,215		$	(170	)		-2.4	%
Mining lands lease revenue			4,587			4,862			(275	)		-5.7	%
Total Revenues			11,632			12,077			(445	)		-3.7	%

Cost of operations:
Depreciation/Depletion/Amortization			2,968			2,959			9			0.3	%
Operating Expenses			1,706			1,792			(86	)		-4.8	%
Property Taxes			1,383			1,466			(83	)		-5.7	%
Management company indirect			1,364			1,202			162			13.5	%
Corporate Expense			2,213			1,196			1,017			85.0	%
Total cost of operations			9,634			8,615			1,019			11.8	%

Total operating profit			1,998			3,462			(1,464	)		-42.3	%

Net investment income, including realized gains
of $242 and $447			4,101			3,794			307			8.1	%
Interest Expense			(96	)		(860	)		764			-88.8	%

	Six months ended June 30
(dollars in thousands)	2020			%			2019			%			Change			%

Lease revenue	$	1,368			100.0	%		1,303			100.0	%		65			5.0	%

Depreciation, depletion and amortization		392			28.6	%		373			28.6	%		19			5.1	%
Operating expenses		193			14.1	%		384			29.5	%		(191	)		-49.7	%
Property taxes		48			3.5	%		146			11.2	%		(98	)		-67.1	%
Management company indirect		235			17.2	%		175			13.4	%		60			34.3	%
Corporate expense		573			41.9	%		302			23.2	%		271			89.7	%

Cost of operations		1,441			105.3	%		1,380			105.9	%		61			4.4	%

Operating profit	$	(73	)		-5.3	%		(77	)		-5.9	%		4			-5.2	%

	Nine Months Ended September 30
(dollars in thousands)	2017		%			2016		%			Change			%

Rental revenue	$	18,285		82.9	%	$	17,887		82.0	%	$	398			2.2	%
Revenue-reimbursements		3,772		17.1	%		3,937		18.0	%		(165	)		-4.2	%

Total revenue		22,057		100.0	%		21,824		100.0	%		233			1.1	%

Depreciation, depletion and amortization		6,112		27.7	%		5,891		27.0	%		221			3.8	%
Operating expenses		2,941		13.3	%		3,306		15.1	%		(365	)		-11.0	%
Property taxes		2,317		10.5	%		2,059		9.4	%		258			12.5	%
Management company indirect		616		2.8	%		582		2.7	%		34			5.8	%
Corporate expense		1,424		6.5	%		1,213		5.6	%		211			17.4	%

Cost of operations		13,410		60.8	%		13,051		59.8	%		359			2.8	%

Operating profit	$	8,647		39.2	%	$	8,773		40.2	%	$	(126	)		-1.4	%

		Nine months						Six months
		Ended September 30,						Ended June 30,
		2017		2016				2020		2019
Total cash provided by (used for):
Operating activities	$	15,321			13,662		$	9,110			8,161
Investing activities		(10,920	)		(14,409	)		7,787			31,138
Financing activities		(1,771	)		747			(12,762	)		(5,677	)
Increase in cash and cash equivalents	$	2,630			—
Increase (decrease) in cash and cash equivalents							$	4,135			33,622

Outstanding debt at the beginning of the period	$	40,745			42,099		$	88,925			88,789
Outstanding debt at the end of the period	$	115,113			37,081		$	88,993			88,857

Net Operating Income Reconciliation
Three months ended 09/30/17 (in thousands)
	Asset		Land			RiverFront		Mining		FRP
	Management		Development			Anacostia		Royalties		Holdings
	Segment		Segment			Segment		Segment		Totals
Income from continuing operations		1,581		580			42,040		983		45,184
Income Tax Allocation		1,031		378			14,526		642		16,577
Income from continuing operations before income taxes		2,612		958			56,566		1,625		61,761

Less:
Gain on remeasurement of investment in real estate partnership		—		—			60,196
Equity in Joint Venture		—		1,558			—
Lease intangible rents		1		—			—
Unrealized rents		48		—			50
Plus:
Equity in loss of Joint Venture		—		—			1,558
Interest Expense		374		—			877
Depreciation/Amortization		2,090		98			2,564
Management Co. Indirect		237		281			42
Allocated Corporate Expenses		350		210			27

Net Operating Income (loss)		5,614		(11	)		1,388

Net Operating Income Reconciliation
Three months ended 09/30/16 (in thousands)

	Asset	Land		Mining	FRP
	Management	Development		Royalties	Holdings
	Segment	Segment		Segment	Totals
Income (loss) from continuing operations	1,592	(758	)	1,123	1,957
Income Tax Allocation	1,039	(495	)	734	1,278
Inc. (loss) from continuing operations before income taxes	2,631	(1,253	)	1,857	3,235

Less:
Lease intangible rents	4	—
Plus:
Unrealized rents	139	—
Equity in loss of Joint Venture	—	642
Loss on investment land sold	1	148
Interest Expense	274	—
Depreciation/Amortization	2,071	65
Management Co. Indirect	176	243
Allocated Corporate Expenses	339	267

Net Operating Income	5,627	112

Net Operating Income Reconciliation
Six months ended 06/30/20 (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		(47	)		(739	)		622		4,162		1,478		5,476
Income Tax Allocation		(18	)		(274	)		338		1,543		550		2,139
Income (loss) from continuing operations before income taxes		(65	)		(1,013	)		960		5,705		2,028		7,615

Less:
Equity in profit of Joint Ventures		—			—			168		—		—		168
Gains on sale of buildings		8			1,877			—		1,712		—		3,597
Unrealized rents		114			—			—		121		—		235
Interest income		—			2,048			—		—		2,053		4,101
Plus:
Unrealized rents		—			—			8		—		—		8
Equity in loss of Joint Venture		—			2,132			—		21		—		2,153
Interest Expense		—			—			71		—		25		96
Depreciation/Amortization		392			107			2,369		100		—		2,968
Management Co. Indirect		235			900			96		133		—		1,364
Allocated Corporate Expenses		573			1,329			130		181		—		2,213

Net Operating Income (loss)		1,013			(470	)		3,466		4,307		—		1,998

Net Operating Income Reconciliation
Nine months ended 09/30/17 (in thousands)
	Asset		Land			RiverFront		Mining		FRP
	Management		Development			Anacostia		Royalties		Holdings
	Segment		Segment			Segment		Segment		Totals
Income (loss) from continuing operations		4,645		(1,280	)		42,040		2,935		48,340
Income Tax Allocation		3,009		(823	)		14,526		1,903		18,615
Inc. (loss) from continuing operations before income taxes		7,654		(2,103	)		56,566		4,838		66,955

Less:
Gain on remeasurement of investment in real estate partnership		—		—			60,196
Lease intangible rents		5		—			—
Unrealized rents		79		—			50
Plus:
Unrealized rents		—		—			—
Equity in loss of Joint Venture		—		—			1,558
Interest Expense		993		—			877
Depreciation/Amortization		6,112		263			2,564
Management Co. Indirect		616		846			42
Allocated Corporate Expenses		1,424		935			27

Net Operating Income (loss)		16,715		(59	)		1,388

Net Operating Income Reconciliation	Net Operating Income Reconciliation
Nine months ended 09/30/16 (in thousands)
Six months ended 06/30/19 (in thousands)
											Stabilized
	Asset	Land		Mining	FRP	Asset					Joint		Mining		Unallocated		FRP
	Management	Development		Royalties	Holdings	Management		Development			Venture		Royalties		Corporate		Holdings
	Segment	Segment		Segment	Totals	Segment		Segment			Segment		Segment		Expenses		Totals
Income (loss) from continuing operations	4,654	(3,316	)	3,213	4,551		335		(1,347	)		25		3,211		2,369		4,593
Income Tax Allocation	3,038	(2,165	)	2,099	2,972		124		(499	)		109		1,190		879		1,803
Inc. (loss) from continuing operations before income taxes	7,692	(5,481	)	5,312	7,523
Income (loss) from continuing operations before income taxes							459		(1,846	)		134		4,401		3,248		6,396

Less:
Lease intangible rents	13	—
Other income	—	1
Gains on sale of buildings							536		—			—		—		—		536
Unrealized rents							—		—			29		—		—		29
Interest income							—		526			—		—		3,268		3,794
Plus:
Unrealized rents	109	—					3		—			—		228		—		231
Equity in loss of Joint Venture	—	893					—		514			—		22		—		536
Loss on investment land sold	1	271
Interest Expense	1,080	—					—		—			840		—		20		860
Depreciation/Amortization	5,891	194					373		107			2,385		94		—		2,959
Management Co. Indirect	582	758					175		837			92		98		—		1,202
Allocated Corporate Expenses	1,213	959					302		740			75		79		—		1,196

Net Operating Income (loss)	16,555	(2,407	)
Net Operating Income							776		(174	)		3,497		4,922		—		9,021

		FRP Holdings, Inc.


Date: ~~November 8, 2017~~August 14, 2020	By	JOHN D. BAKER II
		John D. Baker II
		Chief Executive Officer
		(Principal Executive Officer)


	By	JOHN D. ~~MILTON, JR.~~BAKER III
		John D. ~~Milton, Jr.~~Baker III.
		~~Executive Vice President,~~ Treasurer
		~~Secretary~~ and Chief Financial Officer
		(Principal Financial Officer)


	By	JOHN D. KLOPFENSTEIN
		John D. Klopfenstein
		Controller and Chief Accounting
		Officer (Principal Accounting Officer)

(14)	Financial Code of Ethical Conduct between the Company, Chief Executive Officers and Financial Managers, adopted December 3, 2014, incorporated by reference to Exhibit 14 to the Company’s Form 10-Q filed ~~herewith.~~on November 9, 2017.
(31)(a)	Certification of John D. Baker II.
(31)(b)	Certification of John D. ~~Milton, Jr.~~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.INS	XBRL Instance Document
101.XSD	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
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101.PRE	XBRL Taxonomy Extension Presentation Linkbase