FRP HOLDINGS, INC. 10-Q

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 March 31, 2022 or [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from_________ to _________ Commission File Number: 001-36769 _____________________ FRP HOLDINGS, INC. (Exact name of registrant as specified in its charter) _____________________ Florida 47-2449198 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 200 W. Forsyth St. , 7th Floor , Jacksonville , FL 32202 (Address of principal executive offices) (Zip Code) 904 - 396-5733 (Registrant’s telephone number, including area code) Title of each class Trading Symbol Name of each exchange on which registered Common Stock, $.10 par value FRPH NASDAQ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [x] No [_] Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [x] No [_] Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer [_] Accelerated filer [_] Non-accelerated filer [x] Smaller reporting company [x] Emerging growth company [_] If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [_] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [_] No [x] Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. Class Outstanding at May 10, 2022 Common Stock, $.10 par value per share 9,431,994 shares 1 FRP HOLDINGS, INC. FORM 10-Q QUARTER ENDED MARCH 31, 2022 CONTENTS Page No. Preliminary Note Regarding Forward-Looking Statements 3 Part I. Financial Information Item 1. Financial Statements Consolidated Balance Sheets 4 Consolidated Statements of Income 5 Consolidated Statements of Comprehensive Income 6 Consolidated Statements of Cash Flows 7 Consolidated Statements of Shareholders’ Equity 8 Condensed Notes to Consolidated Financial Statements 9 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 20 Item 3. Quantitative and Qualitative Disclosures about Market Risks 32 Item 4. Controls and Procedures 32 Part II. Other Information Item 1A. Risk Factors 32 Item 2. Purchase of Equity Securities by the Issuer 32 Item 6. Exhibits 33 Signatures 34 Exhibit 31 Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 36 Exhibit 32 Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 39 2 Preliminary Note Regarding Forward-Looking Statements. This Quarterly Report on Form 10-Q, together with other statements and information publicly disseminated by us, contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words or phrases “anticipate,” “estimate,” “believe,” “budget,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “seek,” “should,” “will,” “would,” “expect,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target” and similar expressions identify forward-looking statements. Such statements reflect management’s current views with respect to financial results related to future events and are based on assumptions and expectations that may not be realized and are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual results, financial or otherwise, may differ, perhaps materially, from the results discussed in the forward-looking statements. Risk factors discussed in Item 1A of this Form 10-K and other factors that might cause differences, some of which could be material, include, but are not limited to: the impact of the Covid-19 Pandemic on our operations and financial results; the possibility that we may be unable to find appropriate investment opportunities; levels of construction activity in the markets served by our mining properties; demand for flexible warehouse/office facilities in the Baltimore-Washington-Northern Virginia area; demand for apartments in Washington D.C., Richmond, Virginia and Greenville, South Carolina; our ability to obtain zoning and entitlements necessary for property development; the impact of lending and capital market conditions on our liquidity, our ability to finance projects or repay our debt; general real estate investment and development risks; vacancies in our properties; risks associated with developing and managing properties in partnership with others; competition; our ability to renew leases or re-lease spaces as leases expire; illiquidity of real estate investments; bankruptcy or defaults of tenants; the impact of restrictions imposed by our credit facility; the level and volatility of interest rates; environmental liabilities; inflation risks; cyber security risks; as well as other risks listed from time to time in our SEC filings, including but not limited to, our annual and quarterly reports. We have no obligation to revise or update any forward-looking statements, other than as imposed by law, as a result of future events or new information. Readers are cautioned not to place undue reliance on such forward-looking statements. 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. 3 PART I. FINANCIAL INFORMATION, ITEM 1. FINANCIAL STATEMENTS FRP HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except share data) March 31, 2022 December 31, 2021 Assets: Real estate investments at cost: Land $ 123,400 123,397 Buildings and improvements 266,642 265,278 Projects under construction 10,821 8,668 Total investments in properties 400,863 397,343 Less accumulated depreciation and depletion 49,240 46,678 Net investments in properties 351,623 350,665 Real estate held for investment, at cost 9,829 9,722 Investments in joint ventures 143,005 145,443 Net real estate investments 504,457 505,830 Cash and cash equivalents 164,523 161,521 Cash held in escrow 548 752 Accounts receivable, net 1,105 793 Investments available for sale at fair value — 4,317 Federal and state income taxes receivable 767 1,103 Unrealized rents 720 620 Deferred costs 2,212 2,726 Other assets 535 528 Total assets $ 674,867 678,190 Liabilities: Secured notes payable $ 178,446 178,409 Accounts payable and accrued liabilities 3,810 6,137 Other liabilities 1,886 1,886 Deferred revenue 324 369 Deferred income taxes 64,047 64,047 Deferred compensation 1,305 1,302 Tenant security deposits 819 790 Total liabilities 250,637 252,940 Commitments and contingencies — — Equity: Common stock, $ .10 par value 25,000,000 shares authorized, 9,431,994 and 9,411,028 shares issued and outstanding, respectively 943 941 Capital in excess of par value 57,812 57,617 Retained earnings 338,424 337,752 Accumulated other comprehensive income (loss), net ( 737 ) 113 Total shareholders’ equity 396,442 396,423 Noncontrolling interest MRP 27,788 28,827 Total equity 424,230 425,250 Total liabilities and equity $ 674,867 678,190 See accompanying notes. 4 FRP HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In thousands except per share amounts) (Unaudited) THREE MONTHS ENDED MARCH 31, 2022 2021 Revenues: Lease revenue $ 6,282 3,538 Mining lands lease revenue 2,425 2,315 Total revenues 8,707 5,853 Cost of operations: Depreciation, depletion and amortization 2,898 1,443 Operating expenses 1,808 841 Property taxes 1,028 778 Management company indirect 774 570 Corporate expenses 835 779 Total cost of operations 7,343 4,411 Total operating profit 1,364 1,442 Net investment income 898 1,375 Interest expense ( 738 ) ( 925 ) Equity in loss of joint ventures ( 1,604 ) ( 1,635 ) Gain on remeasurement of investment in real estate partnership — 51,139 Gain on sale of real estate 733 — Income before income taxes 653 51,396 Provision for income taxes 249 10,521 Net income 404 40,875 Gain (loss) attributable to noncontrolling interest ( 268 ) 12,502 Net income attributable to the Company $ 672 28,373 Earnings per common share: Net income attributable to the Company- Basic $ 0.07 3.04 Diluted $ 0.07 3.03 Number of shares (in thousands) used in computing: -basic earnings per common share 9,366 9,341 -diluted earnings per common share 9,417 9,376 See accompanying notes. 5 FRP HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands except per share amounts) (Unaudited) THREE MONTHS ENDED MARCH 31, 2022 2021 Net income $ 404 40,875 Other comprehensive income net of tax: Unrealized loss on investments available for sale, net of income tax effect of $ ( 315 ) and $ ( 90 ) ( 850 ) ( 242 ) Comprehensive income (loss) $ ( 446 ) 40,633 Less comp. income (loss) attributable to noncontrolling interest ( 268 ) 12,502 Comprehensive income (loss) attributable to the Company $ ( 178 ) 28,131 See accompanying notes 6 FRP HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS THREE MONTHS ENDED MARCH 31, 2022 AND 2021 (In thousands) (Unaudited) 2022 2021 Cash flows from operating activities: Net income $ 404 40,875 Adjustments to reconcile net income to net cash provided by continuing operating activities: Depreciation, depletion and amortization 2,961 1,502 Deferred income taxes — 10,314 Equity in loss of joint ventures 1,604 1,635 Gain on remeasurement of invest in real estate partnership — ( 51,139 ) Gain on sale of equipment and property ( 733 ) — Stock-based compensation 197 202 Net changes in operating assets and liabilities: Accounts receivable ( 312 ) 99 Deferred costs and other assets ( 803 ) 243 Accounts payable and accrued liabilities ( 2,372 ) ( 613 ) Income taxes payable and receivable 336 112 Other long-term liabilities 32 190 Net cash provided by operating activities 1,314 3,420 Cash flows from investing activities: Investments in properties ( 3,636 ) ( 3,387 ) Investments in joint ventures ( 2,394 ) ( 1,918 ) Return of capital from investments in joint ventures 3,227 16,426 Proceeds from sales of investments available for sale 4,317 23,701 Cash at consolidation of real estate partnership — 3,704 Proceeds from the sale of assets 741 — Cash held in escrow 204 ( 2 ) Net cash provided by investing activities 2,459 38,524 Cash flows from financing activities: Proceeds from long-term debt — 92,070 Repayment of long-term debt — ( 90,000 ) Debt issue costs — ( 679 ) Distribution to noncontrolling interest ( 771 ) ( 170 ) Repurchase of company stock — ( 264 ) Exercise of employee stock options — 33 Net cash (used in) provided by financing activities ( 771 ) 990 Net increase in cash and cash equivalents 3,002 42,934 Cash and cash equivalents at beginning of year 161,521 73,909 Cash and cash equivalents at end of the period $ 164,523 116,843 Supplemental disclosure of cash flow information: Cash paid (received) during the period for: Interest 736 925 Income taxes ( 401 ) 6 See accompanying notes. 7 FRP HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY THREE MONTHS ENDED MARCH 31, 2022 AND 2021 (In thousands, except share amounts) (Unaudited) Accumulated Other Comp- Total Capital in rehensive Share Non- Common Stock Excess of Retained Income holders’ Controlling Total Shares Amount Par Value Earnings (loss), net Equity Interest Equity Balance at January 1, 2022 9,411,028 $ 941 $ 57,617 $ 337,752 $ 113 $ 396,423 $ 28,827 $ 425,250 Stock option grant compensation — — 17 — — 17 — 17 Restricted stock compensation — — 130 — — 130 — 130 Shares granted to Employees 865 — 50 — — 50 — 50 Restricted stock award 21,464 2 ( 2 ) — — — — — Forfeiture of restricted stock award ( 1,363 ) — — — — — — — Net income — — — 672 — 672 ( 268 ) 404 Distributions to partners — — — — — — ( 771 ) ( 771 ) Unrealized loss on investment, net — — — — ( 850 ) ( 850 ) — ( 850 ) Balance at March 31, 2022 9,431,994 $ 943 $ 57,812 $ 338,424 $ ( 737 ) $ 396,442 $ 27,788 $ 424,230 Balance at January 1, 2021 9,363,717 $ 936 $ 56,279 $ 309,764 $ 675 $ 367,654 $ 14,999 $ 382,653 Stock option grant compensation — — 17 — — 17 — 17 Restricted stock compensation — — 135 — — 135 — 135 Shares granted to Employees 1,098 — 50 — — 50 — 50 Restricted stock award 27,778 3 ( 3 ) — — — — — Exercise of stock options 1,234 — 33 — — 33 — 33 Shares purchased and cancelled ( 6,004 ) — ( 37 ) ( 227 ) — ( 264 ) — ( 264 ) Contributions from partners — — — — — — 4,548 4,548 Net income — — — 28,373 — 28,373 12,502 40,875 Distributions to partners — — — — — — ( 170 ) ( 170 ) Unrealized loss on investment, net — — — — ( 242 ) ( 242 ) — ( 242 ) Balance at March 31, 2021 9,387,823 $ 939 $ 56,474 $ 337,910 $ 433 $ 395,756 $ 31,879 $ 427,635 8 FRP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2022 (Unaudited) (1) Description of Business and Basis of Presentation . FRP Holdings, Inc. is a holding company engaged in various real estate businesses, namely (i) mining royalty land ownership and leasing, (ii) land acquisition, entitlement and development primarily for future warehouse/office or residential building construction, (iii) ownership, leasing, and management of residential apartment buildings, and (iv) warehouse/office building ownership, leasing and management. The accompanying consolidated financial statements include the accounts of FRP Holdings, Inc. (the “Company” or “FRP”) inclusive of our operating real estate subsidiaries, FRP Development Corp. (“Development”) and Florida Rock Properties, Inc. (“Properties”), Riverfront Investment Partners I, LLC, and commencing March 31, 2021 also Riverfront Investment Partners II, LLC (See Note 12). Our investment in the Brooksville joint venture, BC FRP Realty joint venture, Riverfront Investment Partners II, LLC prior to March 31, 2021, Bryant Street Partnerships, 1800 Half Street and Greenville/Woodfield are accounted for under the equity method of accounting (See Note 11). Our ownership of Riverfront Investment Partners I, LLC and Riverfront Investment Partners II, LLC includes a non-controlling interest representing the ownership of our partner. The Company uses the cost method to account for its investment in DST Hickory Creek because it does not have significant influence over operating and financial policies. These statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the instructions to Form 10-Q and do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (primarily consisting of normal recurring accruals) considered necessary for a fair statement of the results for the interim periods have been included. Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. The accompanying consolidated financial statements and the information included under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" should be read in conjunction with the Company's consolidated financial statements and related notes included in the Company’s Form 10-K for the year ended December 31, 2021. (2) Recently Issued Accounting Standards . None. (3) Business Segments . The Company is reporting its financial performance based on four reportable segments, Asset Management, Mining Royalty Lands, Development and Stabilized Joint Venture, as described below. The Asset Management segment owns, leases and manages commercial properties. The flex/office warehouses in the Asset Management Segment were sold and reclassified to discontinued operations leaving only two commercial properties and one recent industrial acquisition, Cranberry Run Business Park, which we purchased in 2019. In July 2020 we sold our property located at 1801 62 nd Street in Hollander Business Park, which had joined Asset Management April 1, 2019. During the fourth quarter of 2021 we completed construction on two buildings in our Hollander Business Park. 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. 9 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 Stabilized Joint Venture segment includes joint ventures which own, lease and manage buildings that have met our initial lease up criteria. Two of our joint ventures in the segment, Riverfront Investment Partners I, LLC (“Dock 79”) and Riverfront Investment Partners II, LLC (“The Maren”) are consolidated. The Maren was consolidated effective March 31, 2021 and prior periods are still reflected under the equity method. The ownership of Dock 79 and The Maren (commencing March 31, 2021) attributable to our partner MidAtlantic Realty Partners, LLC (MRP) is reflected on our consolidated balance sheet as a noncontrolling interest. Such noncontrolling interests are reported on the Consolidated Balance Sheets within equity but separately from shareholders' equity. On the Consolidated Statements of Income, all of the revenues and expenses from Dock 79 are reported in net income, including both the amounts attributable to the Company and the noncontrolling interest. The Maren is reflected in Equity in loss of joint ventures on the Consolidated Statements of Income for the periods up to March 31, 2021 but is reflected like Dock 79 for periods commencing April 1, 2021. The amounts of consolidated net income attributable to the noncontrolling interest is clearly identified on the accompanying Consolidated Statements of Income. Operating results and certain other financial data for the Company’s business segments are as follows (in thousands): Three Months ended March 31, 2022 2021 Revenues: Revenues Asset management $ 839 712 Revenues Mining royalty lands 2,425 2,315 Revenues Development 383 317 Revenues Stabilized Joint Venture 5,060 2,509 Revenues 8,707 5,853 Operating profit (loss): Before corporate expenses: Operating profit before corporate expenses Asset management $ 292 231 Operating profit before corporate expenses Mining royalty lands 2,183 2,094 Operating profit before corporate expenses Development ( 718 ) ( 386 ) Operating profit before corporate expenses Stabilized Joint Venture 442 282 Operating profit before corporate expenses Operating profit before corporate expenses 2,199 2,221 Corporate expenses: Corporate expenses Allocated to asset management ( 144 ) ( 214 ) Corporate expenses Allocated to mining royalty lands ( 94 ) ( 81 ) Corporate expenses Allocated to development ( 521 ) ( 419 ) Corporate expenses Allocated to Stabilized Joint Venture ( 76 ) ( 65 ) Corporate expenses Total corporate expenses ( 835 ) ( 779 ) Operating profit $ 1,364 1,442 Interest expense Interest expense $ 738 925 Depreciation, depletion and amortization: Depreciation, depletion and amortization Asset management $ 234 137 Depreciation, depletion and amortization Mining royalty lands 55 65 Depreciation, depletion and amortization Development 45 53 Depreciation, depletion and amortization Stabilized Joint Venture 2,564 1,188 10 Depreciation, depletion and amortization $ 2,898 1,443 Capital expenditures: Capital expenditures Asset management $ 450 79 Capital expenditures Mining royalty lands 91 — Capital expenditures Development 2,953 3,299 Capital expenditures Stabilized Joint Venture 142 9 Capital expenditures $ 3,636 3,387 Identifiable net assets March 31, December 31, Identifiable net assets 2022 2021 Assets Asset management $ 24,339 23,897 Assets Mining royalty lands 37,840 37,627 Assets Development 176,887 176,386 Assets Stabilized Joint Venture 263,586 266,429 Investments available for sale Investments available for sale at fair value — 4,317 Cash Cash items 165,071 162,273 Assets Unallocated corporate assets 7,144 7,261 Assets $ 674,867 678,190 (4) Related Party Transactions . The Company is a party to an Administrative Services Agreement which resulted from our January 30, 2015 spin-off of Patriot Transportation Holding, Inc. (Patriot). The Administrative Services Agreement sets forth the terms on which Patriot will provide to FRP certain services that were shared prior to the Spin-off, including the services of certain shared executive officers. The boards of the respective companies amended and extended this agreement for one year effective April 1, 2022. The consolidated statements of income reflect charges and/or allocation from Patriot for these services of $ 223,000 and $ 256,000 for the three months ended March 31, 2022 and 2021, respectively. These charges are reflected as part of corporate expenses. To determine these allocations between FRP and Patriot as set forth in the Administrative Services Agreement, we employ an allocation method to allocate said expenses and thus we believe that the allocations to FRP are a reasonable approximation of the costs related to FRP’s operations, but any such related-party transactions cannot be presumed to be carried out on an arm’s-length basis. (5) Long-Term Debt . The Company’s Outstanding debt , net of unamortized debt issuance costs, consisted of the following (in thousands): March 31, December 31, 2022 2021 Fixed rate mortgage loans, 3.03 % interest only, matures 4/1/2033 $ 180,070 180,070 Unamortized debt issuance costs ( 1,624 ) ( 1,661 ) Credit agreement — — Long term debt $ 178,446 178,409 On February 6, 2019, the Company entered into a First Amendment to the 2015 Credit Agreement (the “Credit Agreement”) with Wells Fargo Bank, N.A. (“Wells Fargo”), effective February 6, 2019. The Credit Agreement modifies the Company’s prior Credit Agreement with Wells Fargo dated January 30, 2015. The Credit Agreement establishes a five -year revolving credit facility with a maximum facility amount of $ 20 million . The interest rate under the Credit Agreement will be a maximum of 1.50 % over Daily 1-Month LIBOR, which may be reduced quarterly to 11 1.25 % or 1.0 % over Daily 1-Month LIBOR if the Company meets a specified ratio of consolidated debt to consolidated total capital, as defined which excludes FRP Riverfront. A commitment fee of 0.25 % per annum is payable quarterly on the unused portion of the commitment but the amount may be reduced to 0.20 % or 0.15 % if the Company meets a specified ratio of consolidated total debt to consolidated total capital. The Credit Agreement contains certain conditions, affirmative financial covenants and negative covenants. As of March 31, 2022, there was no debt outstanding on this revolver, $ 506,000 outstanding under letters of credit and $ 19,494,000 available for borrowing. The letters of credit were issued to guarantee certain obligations to state agencies related to real estate development. Most of the letters of credit are irrevocable for a period of one year and typically are automatically extended for additional one-year periods. The letter of credit fee is 1 % and applicable interest rate would have been 1.45514 % on March 31, 2022. The credit agreement contains certain conditions and financial covenants, including a minimum tangible net worth and dividend restriction. As of March 31, 2022, these covenants would have limited our ability to pay dividends to a maximum of $ 246 million combined. On November 17, 2017, Dock 79 borrowed a principal sum of $ 90,000,000 pursuant to a Loan Agreement and Deed of Trust Note entered into with EagleBank. The loan was secured by the Dock 79 real property and improvements, bore a fixed interest rate of 4.125 % per annum and had a term of 120 months . The loan was paid in full on March 19, 2021. A prepayment penalty of $ 900,000 was recorded into interest expense in the quarter ending March 31, 2021. Effective March 31, 2021, the Company consolidated the assets (at current fair value), liabilities and operating results of our Riverfront Investment Partners II, LLC partnership (“The Maren”) which was previously accounted for under the equity method. As such the full amount of our mortgage loan was recorded in the consolidated financial statements. On March 19, 2021, the Company refinanced Dock 79 and The Maren projects pursuant to separate Loan Agreements and Deed of Trust Notes entered into with Teachers Insurance and Annuity Association of America, LLC. Dock 79 and The Maren borrowed principal sums of $ 92,070,000 and $ 88,000,000 respectively, in connection with the refinancing. The loans are separately secured by the Dock 79 and The Maren real property and improvements, bear a fixed interest rate of 3.03 % per annum, and require monthly payments of interest only with the principal in full due April 1, 2033. Either loan may be prepaid subsequent to April 1, 2024, subject to yield maintenance premiums. Either loan may be transferred to a qualified buyer as part of a one-time sale subject to a 60% loan to value, minimum of 7.5% debt yield and a 0.75% transfer fee . Debt cost amortization of $ 37,000 and $ 38,000 was recorded during the three months ended March 31, 2022 and March 31, 2021, respectively. During the three months ended March 31, 2022 and March 31, 2021 the Company capitalized interest costs of $ 674,000 and $ 928,000 , respectively. The Company was in compliance with all debt covenants as of March 31, 2022. (6) Earnings per Share . The following details the computations of the Basic and diluted earnings per common share (in thousands, except per share amounts): Three Months ended March 31, 2022 2021 Weighted average common shares outstanding during the period – shares used for basic earnings per common share 9,366 9,341 Common shares issuable under share based payment plans which are potentially dilutive 51 35 Common shares used for diluted earnings per common share 9,417 9,376 12 Net income attributable to the Company $ 672 28,373 Earnings per common share: -basic $ .07 3.04 -diluted $ .07 3.03 For the three months ended March 31, 2022, 51,083 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 months ended March 31, 2021, 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 three months of 2021 the Company repurchased 6,004 shares at an average cost of $ 43.95 . (7) Stock-Based Compensation Plans . The Company has two Stock Option Plans (the 2006 Stock Incentive Plan and the 2016 Equity Incentive Option Plan) under which options for shares of common stock were granted to directors, officers and key employees. The 2016 plan permits the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock units, or stock awards. The options awarded under the plans have similar characteristics. All stock options are non-qualified and expire ten years from the date of grant. Stock based compensation awarded to directors, officers and employees are exercisable immediately or become exercisable in cumulative installments of 20% or 25% at the end of each year following the date of grant. When stock options are exercised, the Company issues new shares after receipt of exercise proceeds and taxes due, if any, from the grantee. The Company utilizes the Black-Scholes valuation model for estimating fair value of stock compensation for options awarded to officers and employees. Each grant is evaluated based upon assumptions at the time of grant. The assumptions were no dividend yield, expected volatility between 29 % and 41 %, risk-free interest rate of 1.0 % to 2.9 % and expected life of 3.0 to 7.0 years. The dividend yield of zero is based on the fact that the Company does not pay cash dividends and has no present intention to pay cash dividends. Expected volatility is estimated based on the Company’s historical experience over a period equivalent to the expected life in years. The risk-free interest rate is based on the U.S. Treasury constant maturity interest rate at the date of grant with a term consistent with the expected life of the options granted. The expected life calculation is based on the observed and expected time to exercise options by the employees. In January 2022, 7,448 shares of restricted stock were granted to employees that will vest over the next four years . In January 2022, 14,016 shares of restricted stock were granted to employees as part of a long-term incentive plan that will vest over the next five years . In January 2021, 8,896 shares of restricted stock were granted to employees that will vest over the next four years . In January 2021, 18,882 shares of restricted stock were granted to employees as part of a long-term incentive plan that will vest over the next five years . In March 2020, 20,520 shares of restricted stock were granted to employees as part of a long-term incentive plan that will vest over the next five years . The number of common shares available for future issuance was 377,650 at March 31, 2022. In March 2022 and March 2021, 865 and 1,098 shares of stock, respectively, were granted to employees rather than stock options as in prior years. The Company recorded the following Stock compensation expense in its consolidated statements of income (in thousands): Three Months ended March 31, 2022 2021 Stock option grants $ 17 17 Restricted stock awards 130 135 Employee stock grant 50 50 Annual director stock award — — Stock compensation $ 197 202 13 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, 2022 104,755 $ 37.93 4.8 $ 1,416 Outstanding at March 31, 2022 104,755 $ 37.93 4.6 $ 1,416 Exercisable at March 31, 2022 96,586 $ 37.26 4.4 $ 1,281 Vested during three months ended March 31, 2022 — $ — The aggregate intrinsic value of exercisable in-the-money options was $ 1,984,000 and the aggregate intrinsic value of outstanding in-the-money options was $ 2,081,000 based on the market closing price of $ 57.80 on March 31, 2022 less exercise prices. The unrecognized compensation cost of options granted to FRP employees but not yet vested as of March 31, 2022 was $ 111,000 , which is expected to be recognized over a weighted-average period of 1.6 years . A Summary of changes in restricted stock awards is presented below (in thousands, except share and per share amounts): Weighted Weighted Weighted Number Average Average Average Of Exercise Remaining Grant Date Restricted stock Shares Price Term (yrs) Fair Value(000's) Non-vested at January 1, 2022 46,074 $ 45.88 3.1 $ 2,114 Time-based awards granted 7,448 57.80 431 Performance-based awards granted 14,016 57.80 810 Vested ( 7,813 ) 46.30 ( 362 ) Forfeited ( 1,363 ) 46.30 ( 63 ) Non-vested at March 31, 2022 58,362 $ 50.20 3.6 $ 2,930 Total unrecognized compensation cost of restricted stock granted but not yet vested as of March 31, 2022 was $ 2,307,000 which is expected to be recognized over a weighted-average period of 3.8 years . (8) Contingent Liabilities . The Company may be involved in litigation on a number of matters and is subject to certain claims which arise in the normal course of business. The Company has retained certain self-insurance risks with respect to losses for third party liability and property damage. In the opinion of management, none of these matters are expected to have a material adverse effect on the Company’s consolidated financial condition, results of operations or cash flows. The Company is subject to numerous environmental laws and regulations. The Company believes that the ultimate 14 disposition of currently known environmental matters will not have a material effect on its financial position, liquidity, or operations. The Company can give no assurance that previous environmental studies with respect to its properties have revealed all potential environmental contaminants; that any previous owner, occupant or tenant did not create any material environmental condition not known to the Company; that the current environmental condition of the properties will not be affected by tenants and occupants, by the condition of nearby properties, or by unrelated third parties; and that changes in applicable environmental laws and regulations or their interpretation will not result in additional environmental liability to the Company. As of March 31, 2022, there was $ 506,000 outstanding under letters of credit. The letters of credit were issued to guarantee certain obligations to state agencies related to real estate development. The Company and MRP guaranteed $ 26 million of the construction loan on the Bryant Street Partnerships in exchange for a 1 % lower interest rate. The Company and MRP have a side agreement limiting the Company’s guarantee to its proportionate ownership. The value of the guarantee was calculated at $ 1.9 million based on the present value of the 1 % interest savings over the anticipated 48 -month term. This amount is included as part of the Company’s investment basis and is amortized to expense over the 48 months. The Company will evaluate the guarantee liability based upon the success of the project and assuming no payments are made under the guarantee the Company will have a gain for $ 1.9 million when the loan is paid in full. Borrower may prepay a portion of the unpaid principal to satisfy such tests. (9) Concentrations . The mining royalty lands segment has a total of five tenants currently leasing mining locations and one lessee that accounted for 21.3 % of the Company’s consolidated revenues during the three months ended March 31, 2022, and $ 366,000 of accounts receivable at March 31, 2022. The termination of these lessees’ underlying leases could have a material adverse effect on the Company. The Company places its cash and cash equivalents with Wells Fargo Bank and First Horizon Bank. At times, such amounts may exceed FDIC limits. (10) Fair Value Measurements . Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Level 1 means the use of quoted prices in active markets for identical assets or liabilities. Level 2 means the use of values that are derived principally from or corroborated by observable market data. Level 3 means the use of inputs are those that are unobservable and significant to the overall fair value measurement. At March 31, 2022, the Company was invested in U.S. Treasury notes valued at $ 91,559,000 maturing in late 2022 through 2024. The unrealized loss on these investments of $ 1,207,000 was recorded as part of comprehensive income and based on the market value (Level 1). At March 31, 2022 and 2021, the carrying amount reported in the consolidated balance sheets for cash and cash equivalents including U.S. Treasury notes was adjusted to fair value as described above. The fair values of the Company’s other mortgage notes payable were estimated based on current rates available to the Company for debt of the same remaining maturities. At March 31, 2022, the carrying amount and fair value of such other long-term debt was $ 180,070,000 and $ 162,274,000 , respectively. At March 31, 2021, the carrying amount and fair value of such other long-term debt was $ 178,321,000 and $ 169,355,000 , respectively. (11) Investments in Joint Ventures . The Company has investments in joint ventures, primarily with other real estate developers. Joint ventures where FRP is not the primary beneficiary are reflected in the line “Investment in joint ventures” on the balance sheet and “Equity in loss of joint ventures” on the income statement. The assets of these joint ventures are restricted to use by the joint ventures and their obligations can only be settled by their assets or additional contributions by the partners. 15 The following table summarizes the Company’s Investments in unconsolidated joint ventures (in thousands): The Company's Share of Profit Common Total Total Assets of Profit (Loss) (Loss) of the Ownership Investment The Partnership Of the Partnership Partnership (1) As of March 31, 2022 Brooksville Quarry, LLC 50.00 % $ 7,475 14,319 ( 23 ) ( 12 ) BC FRP Realty, LLC 50.00 % 5,494 22,239 ( 72 ) ( 36 ) Bryant Street Partnerships 61.36 % 59,420 203,870 ( 2,251 ) ( 1,509 ) Aberdeen Station Loan 638 638 — — DST Hickory Creek 26.65 % 6,000 45,679 ( 127 ) 85 Amber Ridge Loan 8,912 8,912 — — 1800 Half St. Owner, LLC 61.37 % 38,935 107,219 — — Greenville/Woodfield Partnerships 40.00 % 16,131 90,759 ( 330 ) ( 132 ) Total $ 143,005 493,635 ( 2,803 ) ( 1,604 ) The Company's Share of Profit Common Total Total Assets of Profit (Loss) (Loss) of the Ownership Investment The Partnership Of the Partnership Partnership (1) As of December 31, 2021 Brooksville Quarry, LLC 50.00 % $ 7,488 14,301 ( 82 ) ( 41 ) BC FRP Realty, LLC 50.00 % 5,530 22,470 ( 230 ) ( 115 ) Riverfront Holdings II, LLC (1) — — ( 760 ) ( 628 ) Bryant Street Partnerships 61.36 % 59,558 204,082 ( 6,084 ) ( 4,954 ) Aberdeen Station Loan 514 514 — — DST Hickory Creek 26.65 % 6,000 46,048 ( 481 ) 343 Amber Ridge Loan 11,466 11,466 — — 1800 Half St. Owner, LLC 61.37 % 38,693 93,932 12 20 Greenville/Woodfield Partnerships 40.00 % 16,194 87,731 ( 948 ) ( 379 ) Total $ 145,443 480,544 ( 8,573 ) ( 5,754 ) (1): Riverfront Holdings II, LLC was consolidated on March 31, 2021. Bryant Street Partnerships included $ 234,000 in 2021 for the Company’s share of preferred interest and $ 118,000 in 2022 and $ 118,000 in the first quarter of 2021 for amortization of guarantee liability related to the Bryant Street loan. The major classes of assets, liabilities and equity of the Company’s Investments in Joint Ventures as of March 31, 2022 are summarized in the following two tables (in thousands): Investments in Apartment/Mixed Use Joint Ventures as of March 31, 2022 As of March 31, 2022 Total Riverfront Bryant Street DST Hickory 1800 Half St. Greenville/ Apartment/ Holdings II, LLC Partnership Creek Partnership Woodfield Mixed Use Investments in real estate, net $ 0 197,423 43,567 106,789 90,234 $ 438,013 Cash and cash equivalents 0 1,268 673 430 346 2,717 Unrealized rents & receivables 0 4,923 1,119 0 7 6,049 Deferred costs 0 256 320 0 172 748 Total Assets $ 0 203,870 45,679 107,219 90,759 $ 447,527 Secured notes payable $ 0 123,850 29,348 37,058 48,957 $ 239,213 Other liabilities 0 5,241 180 9,102 3,172 17,695 Capital - FRP 0 56,874 4,304 37,479 15,452 114,109 Capital – Third Parties 0 17,905 11,847 23,580 23,178 76,510 Total Liabilities and Capital $ 0 203,870 45,679 107,219 90,759 $ 447,527 16 Investments in Joint Ventures as of March 31, 2022 As of March 31, 2022 Brooksville BC FRP Aberdeen Amber Ridge Apartment/ Grand Quarry, LLC Realty, LLC Loan Loan Mixed Use Total Investments in real estate, net $ 14,280 21,436 638 8,912 438,013 $ 483,279 Cash and cash equivalents 33 164 0 0 2,717 2,914 Unrealized rents & receivables 0 447 0 0 6,049 6,496 Deferred costs 6 192 0 0 748 946 Total Assets $ 14,319 22,239 638 8,912 447,527 $ 493,635 Secured notes payable $ 0 11,191 0 0 239,213 $ 250,404 Other liabilities 42 162 0 0 17,695 17,899 Capital - FRP 7,475 5,443 638 8,912 114,109 136,577 Capital - Third Parties 6,802 5,443 0 0 76,510 88,755 Total Liabilities and Capital $ 14,319 22,239 638 8,912 447,527 $ 493,635 The Company’s capital recorded by the unconsolidated Joint Ventures is $ 6,429,000 less than the Investment in Joint Ventures reported in the Company’s consolidated balance sheet due primarily to capitalized interest. The major classes of assets, liabilities and equity of the Company’s Investments in Joint Ventures as of December 31, 2021 are summarized in the following two tables (in thousands): Investments in Apartment/Mixed Use Joint Ventures as of December 31, 2021 As of December 31, 2021 Total Riverfront Bryant Street DST Hickory 1800 Half St. Greenville/ Apartment/ Holdings II, LLC Partnership Creek Partnership Woodfield Mixed Use Investments in real estate, net $ 0 199,730 43,840 93,504 87,421 $ 424,495 Cash and cash equivalents 0 1,123 827 428 279 2,657 Unrealized rents & receivables 0 2,925 1,044 0 5 3,974 Deferred costs 0 304 337 0 26 667 Total Assets $ 0 204,082 46,048 93,932 87,731 $ 431,793 Secured notes payable $ 0 119,201 29,337 18,404 44,309 $ 211,251 Other liabilities 0 9,066 115 14,470 4,462 28,113 Capital - FRP 0 57,555 4,423 37,478 15,584 115,040 Capital – Third Parties 0 18,260 12,173 23,580 23,376 77,389 Total Liabilities and Capital $ 0 204,082 46,048 93,932 87,731 $ 431,793 Investments in Joint Ventures as of December 31, 2021 As of December 31, 2021 Brooksville BC FRP Aberdeen Amber Ridge Apartment/ Grand Quarry, LLC Realty, LLC Loan Loan Mixed Use Total Investments in real estate, net $ 14,281 21,561 514 11,466 424,495 $ 472,317 Cash and cash equivalents 18 312 0 0 2,657 2,987 Unrealized rents & receivables 0 368 0 0 3,974 4,342 Deferred costs 2 229 0 0 667 898 Total Assets $ 14,301 22,470 514 11,466 431,793 $ 480,544 Secured notes payable $ 0 11,384 0 0 211,251 $ 222,635 Other liabilities 0 140 0 0 28,113 28,253 Capital - FRP 7,488 5,473 514 11,466 115,040 139,981 Capital - Third Parties 6,813 5,473 0 0 77,389 89,675 Total Liabilities and Capital $ 14,301 22,470 514 11,466 431,793 $ 480,544 17 The amount of consolidated retained earnings (accumulated deficit) for these joint ventures was $ ( 10,112,000 ) and $ ( 8,942,000 ) as of March 31, 2022 and December 31, 2021, respectively. The income statements of the Bryant Street Partnerships are as follows (in thousands): Bryant Street Bryant Street Bryant Street Bryant Street Partnerships Partnerships Partnerships Partnerships Total JV Total JV Company Share Company Share Three Months ended Three Months ended Three Months ended Three Months ended March 31, March 31, March 31, March 31, 2022 2021 2022 2021 Revenues: Rental Revenue $ 1,820 $ 17 $ 1,116 $ 10 Revenue – other 348 19 214 12 Total Revenues 2,168 36 1,330 22 Cost of operations: Depreciation and amortization 1,497 366 919 225 Operating expenses 1,330 507 815 311 Property taxes 127 0 78 0 Total cost of operations 2,954 873 1,812 536 Total operating loss ( 786 ) ( 837 ) ( 482 ) ( 514 ) Interest expense ( 1,465 ) ( 300 ) ( 1,027 ) ( 547 ) Net loss before tax $ ( 2,251 ) $ ( 1,137 ) $ ( 1,509 ) $ ( 1,061 ) The income statements of the Greenville Woodfield Partnership are as follows (in thousands): Woodfield Woodfield Partnership Partnership Total JV Company Share Three Months ended Three Months ended March 31, March 31, 2022 2022 Revenues: Rental Revenue $ 570 $ 228 Revenue – other 36 14 Total Revenues 606 242 Cost of operations: Depreciation and amortization 384 154 Operating expenses 262 104 Property taxes 159 64 Total cost of operations 805 322 Total operating loss (199 ) (80 ) Interest expense ( 131 ) ( 52 ) Net loss before tax $ ( 330 ) $ ( 132 ) 18 (12) Consolidation of Riverfront Investment Partners II, LLC. Riverfront Holdings II, LLC . On May 4, 2018, the Company and MRP Realty formed a Joint Venture to develop the second phase only of the four phase master development known as Riverfront on the Anacostia in Washington, D.C. The purpose of the Joint Venture is to develop and own a 250,000 -square-foot mixed-use development which supports 264 residential units and 6,937 square feet of retail. The Company contributed land with an agreed to value of $ 16,300,000 (cost basis of $ 4.6 million ) and $ 6.2 million of cash to the Joint Venture for an 80 % stake in the venture. MRP contributed capital of $ 5.6 million to the joint venture including development costs paid prior to formation of the joint venture and a $ 725,000 development fee. The Company further agreed to fund $ 13.75 million preferred equity financing at 7.5 % interest rate all of which was advanced and repaid with interest in March 2021. The Company’s equity interest in the joint venture was previously accounted for under the equity method of accounting as MRP acts as the administrative agent of the joint venture and oversees and controls the day-to-day operations of the project. In March 2021, Phase II (The Maren) reached stabilization. Stabilization in this case means 90 % of the individual apartments have been leased and are occupied by third party tenants. Upon reaching stabilization, the Company has, for a period of one year, the exclusive right to (i) cause the joint venture to sell the property or (ii) cause the Company’s and MRP’s percentage interests in the joint venture to be adjusted so as to take into account the contractual payouts assuming a sale at the value of the development at the time of this “Conversion election”. Reaching stabilization results in a change of control for accounting purposes as the veto rights of the minority shareholder lapsed and the Company became the primary beneficiary. As such, beginning March 31, 2021, the Company consolidated the assets (at fair value), liabilities and operating results of the joint venture. This consolidation resulted in a gain on remeasurement of investment in real estate partnership of $ 51,139,000 of which $ 13,965,000 was attributed to the noncontrolling interest. In accordance with the terms of the Joint Venture agreements, the Company used the fair value amount at date of conversion and calculated an adjusted ownership under the Conversion election. As such for financial reporting purposes effective March 31, 2021, the Company ownership is based upon this substantive profit sharing arrangement and is 70.41 % on a prospective basis as agreed to by FRP and MRP. Maren consolidation at stabilization As of March 31, 2021 Riverfront Gain on Holdings II, LLC Remeasurement Revised Land $ 6,472 $ 22,858 $ 29,330 Building and improvements, net 87,269 23,531 110,800 Project under construction 258 — 258 Value of leases in place — 4,750 4,750 Cash 3,704 — 3,704 Cash held in escrow 336 — 336 Accounts receivable 707 — 707 Prepaid expenses 197 — 197 Total Assets $ 98,943 $ 51,139 $ 150,082 Long-term Debt $ 88,000 $ — $ 88,000 Amortizable debt costs ( 1,072 ) — ( 1,072 ) Other liabilities 441 — 441 Equity – FRP 7,026 37,174 44,200 Equity - MRP 4,548 13,965 18,513 Total Liabilities and Capital $ 98,943 $ 51,139 $ 150,082 (13) Subsequent Event . On April 1, 2022, the Company purchased a mining royalty property in Astatula, FL for $ 11.6 million . The property comprises 1,549 acres adjacent to the Company’s existing site in Astatula. It contains approximately 22.5 million tons of sand reserves and is currently under a mining lease to Vulcan Materials. 19 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying unaudited consolidated financial statements and related notes in Item 1 and with the audited consolidated financial statements and the related notes included in our annual report on Form 10-K. The statements in this discussion regarding industry outlook, our expectations regarding our future performance, liquidity and capital resources and other non-historical statements in this discussion are forward-looking statements. These forward-looking statements are subject to risks and uncertainties, including the risks and uncertainties described in “Forward-Looking Statements” below and “Risk Factors” on page 5 of our annual report on Form 10-K. Our actual results may differ materially from those contained in or implied by any forward-looking statements. We assume no obligation to revise or publicly release any revision to any forward-looking statements contained in this quarterly report on Form 10-Q, unless required by law. The following discussion includes a non-GAAP financial measure within the meaning of Regulation G promulgated by the Securities and Exchange Commission to supplement the financial results as reported in accordance with GAAP. The non-GAAP financial measure discussed is net operating income (NOI). The Company uses this metric to analyze its continuing operations and to monitor, assess, and identify meaningful trends in its operating and financial performance. This measure is not, and should not be viewed as, a substitute for GAAP financial measures. Refer to “Non-GAAP Financial Measure” below in this quarterly report for a more detailed discussion, including reconciliations of this non-GAAP financial measure to its most directly comparable GAAP financial measure. Business Overview - FRP Holdings, Inc. is a real estate development, asset management and operating company businesses. Our properties are located in the Mid-Atlantic and southeastern United States and consist of: Lands leased to mining companies, some of which will have second lives as development properties; Residential apartments in Washington, D.C., Greenville, South Carolina and Richmond, Virginia; Warehouse or office properties in the Mid-Atlantic states either existing or under development; Mixed use properties under development in Washington, D.C. or Greenville, South Carolina; and Properties held for sale. We believe our present capital structure, liquidity and land provide us with years of opportunities to increase recurring revenue and long-term value for our shareholders. We intend to focus on our core business activity of real estate development, asset management and operations. We are developing a broad range of asset types that we believe will provide acceptable rates of return, grow recurring revenues and support future business. Capital commitments will be funded with cash proceeds from completed projects, existing cash, owned-land, partner capital and financing arrangements. We do not anticipate immediate benefits from investments. Timing of projects may be subject to delays caused by factors beyond our control. Reportable Segments We conduct primarily all of our business in the following four reportable segments: (1) asset management (2) mining royalty lands (3) development and (4) stabilized joint ventures. For more information regarding our reportable segments, see Note 3. Business Segments of our condensed consolidated financial statements included in this quarterly report. Asset Management Segment. The Asset Management segment owns, leases and manages commercial properties. These assets create revenue and cash flows through tenant rental payments, lease management fees and reimbursements for building operating costs. 20 The Company’s industrial warehouses typically lease for terms ranging from 3 – 10 years often with 1 or 2 renewal options. All base rent revenue is recognized on a straight-lined basis. All of the commercial warehouse leases are triple net and common area maintenance costs (CAM Revenue) are billed monthly, and insurance and real estate taxes are billed annually. 34 Loveton is the only office product wherein all leases are full service therefore there is no CAM revenue. Office leases are also recognized on a straight-lined basis. The major cash outlays incurred in this segment are for operating expenses, real estate taxes, building repairs, lease commissions and other lease closing costs, construction of tenant improvements, capital to acquire existing operating buildings and closing costs related thereto and personnel costs of our property management team. As of March 31, 2022, the Asset Management Segment owned four commercial properties in fee simple as follows: 1) 34 Loveton Circle in suburban Baltimore County, Maryland consists of one office building totaling 33,708 square feet which is 95.1% occupied (16% of the space is occupied by the Company for use as our Baltimore headquarters). The property is subject to commercial leases with various tenants. 2) 155 E. 21 st Street in Duval County, Florida was an office building property that remains under lease through March 2026. We permitted the tenant to demolish all structures on the property during 2018. 3) Cranberry Run Business Park in Hartford County, Maryland consists of five office buildings totaling 267,737 square feet which are 100% leased and occupied. The property is subject to commercial leases with various tenants. 4) Hollander 95 Business Park in Baltimore City, Maryland consists of two buildings totaling 145,590 square feet that were completed in the fourth quarter of 2021and are 69.1% leased and 52.8% occupied. Management focuses on several factors to measure our success on a comparative basis in this segment. The major factors we focus on are (1) net operating income growth, (2) growth in occupancy, (3) average annual occupancy rate (defined as the occupied square feet at the end of each month during a fiscal year divided by the number of months to date in that fiscal year as a percentage of the average number of square feet in the portfolio over that same time period), (4) tenant retention success rate (as a percentage of total square feet to be renewed), (5) building and refurbishing assets to meet Class A and Class B institutional grade classifications, and (6) reducing complexities and deferred capital expenditures to maximize sale price. Mining Royalty Lands Segment. Our Mining Royalty Lands segment owns several properties comprising approximately 15,000 acres currently under lease for mining rents or royalties (excluding the 4,280 acres owned by our Brooksville joint venture with Vulcan Materials). Other than one location in Virginia, all of these properties are located in Florida and Georgia. The Company leases land under long-term leases that grant the lessee the right to mine and sell reserves from our property in exchange for royalty payments. A typical lease has an option to extend the lease for additional terms. The typical lease in this segment requires the tenant to pay us a royalty based on the number of tons of mined materials sold from our property during a given fiscal year multiplied by a percentage of the average annual sales price per ton sold. As a result of this royalty payment structure, we do not bear the cost risks associated with the mining operations, however, we are subject to the cyclical nature of the construction markets in these states as both volumes and prices tend to fluctuate through those cycles. In certain locations, typically where the reserves on our property have been depleted but the tenant still has a need for the leased land, we collect a minimum annual rental amount. We believe strongly in the potential for future growth in construction in Florida, Georgia, and Virginia which would positively benefit our profitability in this segment. In the fiscal year ended December 31, 2021, a total of 8 million tons were mined. The major expenses in this segment are comprised of collection and accounting for royalties, management’s oversight of the mining leases, land entitlement for post-mining uses and property taxes at our non-leased locations and at our Grandin location which, unlike our other leased mining locations, are not entirely paid by the tenant. As such, our costs in this business are very low as a percentage of revenue, are relatively stable and are not affected by increases in production at our locations. Our current mining tenants include Vulcan Materials, Martin Marietta, Cemex, Argos and The Concrete Company. Additionally, these locations provide us with opportunities for valuable “second lives” for these assets through proper land planning and entitlement. 21 Significant “2 nd life” Mining Lands: Location Acreage Status Brooksville, FL 4,280 +/- Development of Regional of Impact and County Land Use and Master Zoning in place for 5,800 residential unit, mixed-use development Ft. Myers, FL 1,907 +/- Approval in place for 105, 1 acre, waterfront residential lots after mining completed. Total 6,187 +/- Development Segment. Through our Development segment, we own and are continuously monitoring for their “highest and best use” several parcels of land that are in various stages of development. Our overall strategy in this segment is to convert all our non-income producing lands into income production through (i) an orderly process of constructing new commercial and residential buildings for us to own and operate or (ii) a sale to, or joint venture with, third parties. Additionally, our Development segment will purchase or form joint ventures on new developments of land not previously owned by the Company. Revenues in this segment are generated predominately from land sales and interim property rents. The significant cash outlays incurred in this segment are for land acquisition costs, entitlement costs, property taxes, design and permitting, the personnel costs of our in-house management team and horizontal and vertical construction costs. Development Segment – Warehouse/Office Land. At March 31, 2022, this segment owned the following development parcels: 1) Six acres of horizontally developed land at Hollander Business Park in Baltimore, City, Maryland with one 101,750 square feet industrial build-to-suit currently under construction. 2) 55 acres of land that will be capable of supporting over 690,000 square feet of industrial product located at 1001 Old Philadelphia Road in Aberdeen, Maryland. 3) 17 acres of land in Harford County, Maryland that will support 245,000 square feet of industrial development. We also have three properties that were either spun-off to us from Florida Rock Industries in 1986 or acquired by us from unrelated third parties. These properties, as a result of our “highest and best use” studies, are being prepared for income generation through sale or joint venture with third parties, and in certain cases we are leasing these properties on an interim basis for an income stream while we wait for the development market to mature. Development Segment - Significant Investment Lands Inventory: Location Approx. Acreage Status NBV Riverfront on the Anacostia Phases III-IV 2.5 Conceptual design program ongoing $6,151,000 Hampstead Trade Center, MD 118 Residential zoning applied for in preparation for sale $9,823,000 Square 664E, on the Anacostia River in DC 2 Under lease to Vulcan Materials as a concrete batch plant through 2026 $7,635,000 Total 122.5 $23,609,000 Development Segment - Investments in Joint Ventures The third leg of our Development Segment consists of investments in joint ventures for properties in development. 22 The Company has investments in joint ventures, primarily with other real estate developers which are summarized below: Property JV Partner Status % Ownership Brooksville Quarry, LLC near Brooksville, Florida Vulcan Materials Company Future planned residential development of 3,500 acres which are currently subject to mining lease 50% BC FRP Realty, LLC for 35 acres in Maryland St John Properties Development of 329,000 square feet multi-building business park in progress 50% Bryant Street Partnerships for 5 acres of land in Washington, D.C. MRP Realty Mixed-use development with 487 residential units and 91,661 square feet of retail partially completed 61.36% Aberdeen Station residential development in Harford County, Maryland $31.1 million in exchange for an interest rate of 10% and a 20% preferred return after which the Company is also entitled to a portion of proceeds from sale Financing Amber Ridge residential development in Prince George’s County, Maryland $18.5 million in exchange for an interest rate of 10% and a preferred return of 20% after which the Company is also entitled to a portion of proceeds from sale Financing 1800 Half Street property in Buzzard Point area of Washington, D.C. MRP Realty Construction underway on ten-story structure with 344 apartments and 8,356 square feet of ground floor retail 61.37% .408 Jackson property in Greenville, SC Woodfield Development Construction underway on mixed-use project with 227 multifamily units and 4,539 square feet of retail space began in May 2020 40% Riverside property 1430 Hampton Avenue, Greenville, SC Woodfield Development Construction underway on 200-unit apartment project began in February 2020 40% Joint ventures where FRP is not the primary beneficiary are reflected in the line “Investment in joint ventures” on the balance sheet and “Equity in loss of joint ventures” on the income statement. The following table summarizes the Company’s investments in unconsolidated joint ventures (in thousands): The Company's Share of Profit Common Total Total Assets of Profit (Loss) (Loss) of the Ownership Investment The Partnership Of the Partnership Partnership (1) As of March 31, 2022 Brooksville Quarry, LLC 50.00 % $ 7,475 14,319 (23 ) (12 ) BC FRP Realty, LLC 50.00 % 5,494 22,239 (72 ) (36 ) Bryant Street Partnerships 61.36 % 59,420 203,870 (2,251 ) (1,509 ) Aberdeen Station Loan 638 638 — — DST Hickory Creek 26.65 % 6,000 45,679 (127 ) 85 Amber Ridge Loan 8,912 8,912 — — 1800 Half St. Owner, LLC 61.37 % 38,935 107,219 — — Greenville/Woodfield Partnerships 40.00 % 16,131 90,759 (330 ) (132 ) Total $ 143,005 493,635 (2,803 ) (1,604 ) The major classes of assets, liabilities and equity of the Company’s Investments in Joint Ventures as of March 31, 2022, are summarized in the following two tables (in thousands): 23 As of March 31, 2022 Total Riverfront Bryant Street DST Hickory 1800 Half St. Greenville/ Apartment/ Holdings II, LLC Partnership Creek Partnership Woodfield Mixed Use Investments in real estate, net $ 0 197,423 43,567 106,789 90,234 $ 438,013 Cash and cash equivalents 0 1,268 673 430 346 2,717 Unrealized rents & receivables 0 4,923 1,119 0 7 6,049 Deferred costs 0 256 320 0 172 748 Total Assets $ 0 203,870 45,679 107,219 90,759 $ 447,527 Secured notes payable $ 0 123,850 29,348 37,058 48,957 $ 239,213 Other liabilities 0 5,241 180 9,102 3,172 17,695 Capital - FRP 0 56,874 4,304 37,479 15,452 114,109 Capital – Third Parties 0 17,905 11,847 23,580 23,178 76,510 Total Liabilities and Capital $ 0 203,870 45,679 107,219 90,759 $ 447,527 As of March 31, 2022 Brooksville BC FRP Aberdeen Amber Ridge Apartment/ Grand Quarry, LLC Realty, LLC Loan Loan Mixed Use Total Investments in real estate, net $ 14,280 21,436 638 8,912 438,013 $ 483,279 Cash and cash equivalents 33 164 0 0 2,717 2,914 Unrealized rents & receivables 0 447 0 0 6,049 6,496 Deferred costs 6 192 0 0 748 946 Total Assets $ 14,319 22,239 638 8,912 447,527 $ 493,635 Secured notes payable $ 0 11,191 0 0 239,213 $ 250,404 Other liabilities 42 162 0 0 17,695 17,899 Capital - FRP 7,475 5,443 638 8,912 114,109 136,577 Capital - Third Parties 6,802 5,443 0 0 76,510 88,755 Total Liabilities and Capital $ 14,319 22,239 638 8,912 447,527 $ 493,635 Stabilized Joint Venture Segment. Currently the segment includes three stabilized joint ventures which own, lease and manage buildings. These assets create revenue and cash flows through tenant rental payments, and reimbursements for building operating costs. The Company’s residential spaces generally lease for 12 – 15-month lease terms and 90 days prior to the expiration, as long as there is no balance due, the tenant is offered a renewal. If no notice to move out or renew is made, then the leases go to month to month until notification of termination or renewal is received. Renewal terms are typically 9 – 12 months. From March 2020 through the end of 2021, we were prohibited from increasing rent on renewals by emergency measures in Washington, DC designed to ease the burden of the pandemic on its citizens. These measures expired at the end of 2021. The Company also leases retail spaces at apartment/mixed-use properties. The retail leases are typically 10 -15-year leases with options to renew for another 5 years. Retail leases at these properties also include percentage rents which average 3-6% of annual sales for the tenant that exceed a breakpoint stipulated by each individual lease. All base rent revenue is recognized on a straight-line basis. The major cash outlays incurred in this segment are for property taxes, full service maintenance, property management, utilities and marketing. The three stabilized joint venture properties are as follows: Property and Occupancy JV Partner Method of Accounting % Ownership Dock 79 apartments Washington, D.C. 305 apartment units and 14,430 square feet of retail MRP Realty Consolidated 66% The Maren apartments Washington, D.C. 264 residential units and 6,758 square feet of retail MRP Realty Consolidated as of March 31, 2021 70.41% 24 DST Hickory Creek 294 apartment units in Henrico County, MD Capital Square Cost Method 26.6% First Quarter Operational Highlights Dock 79 ended the reporting period with residential occupancy above 95% for the fourth straight quarter First rent increases on renewals on multifamily assets in DC since February 2020 Best first quarter of revenue for mining royalties in segment’s history Average residential occupancy of 94.92% for the Maren in its first year post stabilization Comparative Results of Operations for the Three months ended March 31, 2022 and 2021 Consolidated Results (dollars in thousands) Three Months Ended March 31, 2022 2021 Change % Revenues: Lease Revenue $ 6,282 $ 3,538 $ 2,744 77.6 % Mining lands lease revenue 2,425 2,315 110 4.8 % Total Revenues 8,707 5,853 2,854 48.8 % Cost of operations: Depreciation/Depletion/Amortization 2,898 1,443 1,455 100.8 % Operating Expenses 1,808 841 967 115.0 % Property Taxes 1,028 778 250 32.1 % Management company indirect 774 570 204 35.8 % Corporate Expense 835 779 56 7.2 % Total cost of operations 7,343 4,411 2,932 66.5 % Total operating profit 1,364 1,442 (78 ) -5.4 % Net investment income 898 1,375 (477 ) -34.7 % Interest Expense (738 ) (925 ) 187 -20.2 % Equity in loss of joint ventures (1,604 ) (1,635 ) 31 -1.9 % Gain on remeasurement of investment in real estate partnership — 51,139 (51,139 ) -100.0 % Gain on sale of real estate 733 — 733 0.0 % Income before income taxes 653 51,396 (50,743 ) -98.7 % Provision for income taxes 249 10,521 (10,272 ) -97.6 % Net income 404 40,875 (40,471 ) -99.0 % Gain (loss) attributable to noncontrolling interest (268 ) 12,502 (12,770 ) -102.1 % Net income attributable to the Company $ 672 $ 28,373 $ (27,701 ) -97.6 % Net income for the first quarter of 2022 was $672,000 or $.07 per share versus $28,373,000 or $3.03 per share in the same period last year. The first quarter of 2022 was impacted by the following items: The quarter includes $316,000 amortization expense of the $4,750,000 fair value of The Maren’s leases-in-place established when we booked this asset as part of the gain on remeasurement upon consolidation of this Joint Venture. 25 The quarter includes $733,000 gain on sales of excess property at Brooksville. Interest income decreased $477,000 due to bond maturities and the repayment of the Company’s preferred interest in The Maren upon the building’s refinancing. Net income for the first quarter of 2021 included a gain of $51.1 million on the remeasurement of investment in The Maren real estate partnership, which is included in Income before income taxes. This gain on remeasurement was mitigated by a $10.3 million provision for taxes and $13.0 attributable to noncontrolling interest. Asset Management Segment Results Three months ended March 31 (dollars in thousands) 2022 % 2021 % Change % Lease revenue $ 839 100.0 % 712 100.0 % 127 17.8 % Depreciation, depletion and amortization 234 27.9 % 137 19.2 % 97 70.8 % Operating expenses 168 20.0 % 139 19.5 % 29 20.9 % Property taxes 53 6.3 % 38 5.3 % 15 39.5 % Management company indirect 92 11.0 % 167 23.5 % (75 ) -44.9 % Corporate expense 144 17.2 % 214 30.1 % (70 ) -32.7 % Cost of operations 691 82.4 % 695 97.6 % (4 ) -0.6 % Operating profit $ 148 17.6 % 17 2.4 % 131 770.6 % Total revenues in this segment were $839,000, up $127,000 or 17.8%, over the same period last year. Operating profit was $148,000, up $131,000 from an operating profit of $17,000 in the same quarter last year. At quarter end, Cranberry Run, a five-building industrial park in Harford County, Maryland totaling 267,737 square feet of industrial/flex space was 100% leased and occupied compared to 87.6% leased and occupied at the end of the same quarter last year. During the fourth quarter of 2021, we completed construction on two buildings in our Hollander Business Park, totaling 145,590 square feet. At quarter end, these assets were 69.1% leased and 52.8% occupied. Our other two properties remain substantially leased during both periods, with 34 Loveton 95.1% occupied and Vulcan’s former Jacksonville office (now a vacant lot), fully leased through March 2026. Mining Royalty Lands Segment Results Three months ended March 31 (dollars in thousands) 2022 % 2021 % Change % Mining lands lease revenue $ 2,425 100.0 % 2,315 100.0 % 110 4.8 % Depreciation, depletion and amortization 55 2.3 % 65 2.8 % (10 ) -15.4 % Operating expenses 15 0.6 % 11 0.5 % 4 36.4 % Property taxes 65 2.7 % 63 2.7 % 2 3.2 % Management company indirect 107 4.4 % 82 3.5 % 25 30.5 % Corporate expense 94 3.9 % 81 3.5 % 13 16.0 % Cost of operations 336 13.9 % 302 13.0 % 34 11.3 % Operating profit $ 2,089 86.1 % 2,013 87.0 % 76 3.8 % Total revenues in this segment were $2,425,000 versus $2,315,000 in the same period last year. Total operating profit in this segment was $2,089,000, an increase of $76,000 versus $2,013,000 in the same period last year. 26 Development Segment Results Three months ended March 31 (dollars in thousands) 2022 2021 Change Lease revenue $ 383 317 66 Depreciation, depletion and amortization 45 53 (8 ) Operating expenses 211 26 185 Property taxes 355 363 (8 ) Management company indirect 490 261 229 Corporate expense 521 419 102 Cost of operations 1,622 1,122 500 Operating loss $ (1,239 ) (805 ) (434 ) With respect to ongoing projects: We are the principal capital source of a residential development venture in Prince George’s County, Maryland known as “Amber Ridge.” Of the $18.5 million in committed capital to the project, $16.2 million in principal draws have taken place to date. Through the end of the first quarter, 64 of the 187 units have been sold, and we have received $9,589,000 in preferred interest and principal to date. Bryant Street is a mixed use joint venture between the Company and MRP in Washington, DC consisting of four buildings, The Coda, The Chase 1A, The Chase 1B, and one commercial building 90% leased to an Alamo Draft House movie theater. At quarter end, the Coda was 89.61% leased and 92.21% occupied, The Chase 1B was 71.43% leased and 67.70% occupied, and The Chase 1A was 37.79% leased and 25.58% occupied. In total, at quarter end, Bryant Street’s 487 residential units were 65.3% leased and 60.6% occupied. Its commercial space was 82.5% leased and 61.7% occupied at quarter end. We began construction on our 1800 Half Street joint venture project, now known as The Verge, at the end of August 2020. We expect the building to be complete in the third quarter of 2022. As of the end of the first quarter, the project was 79.47% complete. Leasing began on Riverside in the third quarter 2021 and the building was 87% leased and 69% occupied at the end of the quarter. .408 Jackson is our second joint venture project in Greenville and is currently under construction. This project is 89.78% complete and we expect to complete construction and begin leasing in third quarter of 2022. Stabilized Joint Venture Segment Results Three months ended March 31 (dollars in thousands) 2022 % 2021 % Change % Lease revenue $ 5,060 100.0 % 2,509 100.0 % 2,551 101.7 % Depreciation, depletion and amortization 2,564 50.7 % 1,188 47.4 % 1,376 115.8 % Operating expenses 1,414 27.9 % 665 26.5 % 749 112.6 % Property taxes 555 11.0 % 314 12.5 % 241 76.8 % Management company indirect 85 1.7 % 60 2.4 % 25 41.7 % Corporate expense 76 1.5 % 65 2.6 % 11 16.9 % Cost of operations 4,694 92.8 % 2,292 91.4 % 2,402 104.8 % Operating profit $ 366 7.2 % 217 8.6 % 149 68.7 % In March 2021, we reached stabilization on Phase II (The Maren) of the development known as RiverFront on the 27 Anacostia in Washington, D.C. As such, as of March 31, 2021, the Company consolidated the assets (at current fair value based on appraisal), liabilities and operating results of the joint venture. Up through the first quarter of the prior year, accounting for The Maren was reflected in Equity in loss of joint ventures on the Consolidated Statements of Income. Starting April 1, 2021, all the revenue and expenses are accounted for in the same manner as Dock 79 in the stabilized joint venture segment. Total revenues in this segment were $5,060,000, an increase of $2,551,000 versus $2,509,000 in the same period last year. The Maren’s revenue was $2,409,000 and Dock 79 revenues increased $143,000. Total operating profit in this segment was $366,000 an increase of $149,000 versus $217,000 in the same period last year. Net Operating Income this quarter for this segment was $3,137,000, up $1,603,000 or 104.5% compared to the same quarter last year due to The Maren’s consolidation into this segment. At the end of March, The Maren was 93.93% leased and 96.21% occupied. Average residential occupancy for the quarter was 95.13%, and 60.61% of expiring leases renewed with an average rent increase on renewals of 2.32%. The rent increase on renewals was mitigated to some extent by the fact that the renewals for January leases took place in 2021 prior to the expiration of DC’s mandated rent freeze on renewals. The Maren is a joint venture between the Company and MRP, in which FRP Holdings, Inc. is the majority partner with 70.41% ownership. Dock 79’s average residential occupancy for the quarter was 95.18%, and at the end of the quarter, Dock 79’s residential units were 92.46% leased and 95.41% occupied. This quarter, 72.22% of expiring leases renewed with an average rent increase on renewals of 4.69%. The rent increase on renewals was mitigated to some extent by the fact that the renewals for January leases took place in 2021 prior to the expiration of DC’s mandated rent freeze on renewals. Dock 79 is a joint venture between the Company and MRP, in which FRP Holdings, Inc. is the majority partner with 66% ownership. First quarter distributions from our CS1031 Hickory Creek DST investment were $85,000. 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 March 31, 2022, we had $164,523,000 of cash and cash equivalents. As of March 31, 2022, we had no debt borrowed under our $20 million Wells Fargo revolver, $506,000 outstanding under letters of credit and $19,494,000 available to borrow under the revolver. On March 19, 2021, the Company refinanced Dock 79 and The Maren projects pursuant to separate Loan Agreements and Deed of Trust Notes entered into with Teachers Insurance and Annuity Association of America, LLC. Dock 79 and The Maren borrowed principal sums of $92,070,000 and $88,000,000 respectively, in connection with the refinancing. Cash Flows - The following table summarizes our cash flows from operating, investing and financing activities for each of the periods presented (in thousands of dollars): Three months Ended March 31, 2022 2021 Total cash provided by (used for): Operating activities $ 1,314 3,420 Investing activities 2,459 38,524 Financing activities (771 ) 990 Increase in cash and cash equivalents $ 3,002 42,934 Outstanding debt at the beginning of the period 178,409 89,964 Outstanding debt at the end of the period 178,446 178,321 Operating Activities - Net cash provided by operating activities for the three months ended March 31, 2022 was $1,314,000 versus $3,420,000 in the same period last year. In the prior year the Gain on remeasurement of investment in real estate partnership and related deferred income taxes were both non-cash adjustments to net income to arrive at 28 net cash provided by operating activities. At March 31, 2022, the Company was invested in U.S. Treasury notes valued at $91,559,000 maturing in late 2022 through 2024. The unrealized loss on these investments of $1,207,000 was recorded as part of comprehensive income and based on the market value (Level 1). Investing Activities - Net cash provided by investing activities for the three months ended March 31, 2022 was $2,459,000 versus $38,524,000 in the same period last year. The $36 million decrease was primarily due to a $19.4 million decrease on maturities and sales of our corporate bond portfolio, a $13 million decrease on the return of our preferred equity financing with the prior year including interest of $16.1 million from The Maren, and the prior year including $3.7 million for cash on the books of The Maren upon consolidation. Financing Activities – Net cash used in investing activities was $771,000 versus cash provided of $990,000 in the same period last year primarily due to the prior year refinancing of Dock 79 for $1.4 million more net of debt issuance costs than the amount matured. Credit Facilities - On February 6, 2019, the Company entered into a First Amendment to the 2015 Credit Agreement (the "Credit Agreement") with Wells Fargo Bank, N.A. (Wells Fargo”). The Credit Agreement modifies the Company’s prior Credit Agreement with Wells Fargo, dated January 30, 2015. The Credit Agreement establishes a five-year revolving credit facility with a maximum facility amount of $20 million. The interest rate under the Credit Agreement will be a maximum of 1.50% over Daily 1-Month LIBOR, which may be reduced quarterly to 1.25% or 1.0% over Daily 1-Month LIBOR if the Company meets a specified ratio of consolidated total debt to consolidated total capital. A commitment fee of 0.25% per annum is payable quarterly on the unused portion of the commitment but the amount may be reduced to 0.20% or 0.15% if the Company meets a specified ratio of consolidated total debt to consolidated total capital. The credit agreement contains certain conditions and financial covenants, including a minimum tangible net worth and dividend restriction. As of March 31, 2022, these covenants would have limited our ability to pay dividends to a maximum of $246 million combined. On March 19, 2021, the Company refinanced Dock 79 and The Maren projects pursuant to separate Loan Agreements and Deed of Trust Notes entered into with Teachers Insurance and Annuity Association of America, LLC. Dock 79 and The Maren borrowed principal sums of $92,070,000 and $88,000,000 respectively, in connection with the refinancing. The loans are separately secured by the Dock 79 and The Maren real property and improvements, bear a fixed interest rate of 3.03% per annum, and require monthly payments of interest only with the principal in full due April 1, 2033. Either loan may be prepaid subsequent to April 1, 2024, subject to yield maintenance premiums. Either loan may be transferred to a qualified buyer as part of a one-time sale subject to a 60% loan to value, minimum of 7.5% debt yield and a 0.75% transfer fee. Effective March 31, 2021, the Company consolidated the assets (at current fair value), liabilities and operating results of our Riverfront Investment Partners II, LLC partnership (The Maren) which was previously accounted for under the equity method. As such the full amount of our mortgage loan was recorded in the consolidated financial statements. Cash Requirements – The Company currently expects its capital expenditures for the remainder of 2022 to include approximately $39.7 million for real estate including investments in joint ventures, which will be funded mostly out of cash and investments on hand, cash generated from operations and property sales, or borrowings under our credit facilities. Impact of the COVID-19 Pandemic. We have continued operations throughout the pandemic and have made every effort to act in accordance with national, state, and local regulations and guidelines. During 2020, Dock 79 and The Maren most directly suffered the impacts to our business from the pandemic due to our retail tenants being unable to operate at capacity, the lack of attendance at the Washington Nationals baseball park and the rent freeze imposed by the District. In 2021, the Delta and Omicron variants of the virus impacted our businesses, but because of the vaccine and efforts to reopen the economy, while still affected, they were not impacted to the extent that they were in 2020. It is possible that this version of the virus and its succeeding variants may impact our ability to lease retail spaces in Washington, D.C. and Greenville. We expect our business to be affected by the pandemic for as long as government intervention and regulation is required to combat the threat. 29 Summary and Outlook . Royalty revenue for this quarter was up 4.77% over the same period last year. This marks the second year in a row we have begun the year with the best first quarter of revenue in segment history. Revenue for the last twelve months was $9,576,000, an increase of 1.17% over calendar year 2021. More importantly, on April 1, 2022 the Company purchased a mining royalty property in Astatula, FL for $11.6 million. The property comprises 1,549 acres adjacent to the Company’s existing site in Astatula. It contains approximately 22.5 million tons of sand reserves and is currently under a mining lease to Vulcan Materials. This is the first mining royalty acquisition we have made in nearly a decade. We are particularly excited to put our excess cash to work in a segment we believe so strongly in, especially in a market we know with a partner we deeply respect. This purchase should positively impact revenue starting in the second quarter of this year. In Stabilized Joint Ventures, this quarter marked the first time in two years that we were able to raise rents on renewals. Because the renewals for January and part of February took place prior to the end of the year, we did not fully experience a return to market rents on all our renewals this quarter. Despite this headwind, we were able to raise rents on renewals by 2.32% at The Maren and 4.69% at Dock 79. In March, the first full month with rent increases, the average rent increase on renewals were 2.75% and 5.60% respectively. Average occupancy has been strong for both buildings. Dock 79’s average occupancy for the last twelve months was 95.59%. To put that number in perspective, in 2020, there were only three weeks that ended with occupancy above 95.59%. In the first full year post stabilization, the Maren had an average annual occupancy of 94.92%. In our Asset Management Segment, overall occupancy and leasing increased quarter-to-quarter. Cranberry Run was 100% leased and occupied at quarter end versus 100% leased and 81% occupied at the end of 2021. Our most recently completed spec buildings, a two-building project at Hollander Business Park, were 69.1% leased and 52.8% occupied at quarter end versus 29.1% leased at the end of 2021. Our other two properties (our home office in Maryland and Vulcan’s former Jacksonville office) remain essentially unchanged and fully leased. This increase in overall leasing and occupancy accounts for the increase in both total revenue and operating profit. Looking down the pipe for the rest of the year, we have a number of exciting events on the horizon. 2022 will see the completion and the commencement of leasing activity of our remaining multifamily joint ventures (The Verge and .408 Jackson) and the home stretch of the road to stabilization for Bryant Street in DC and Riverside in Greenville. The addition of a new mining royalty property to a portfolio that had its best first quarter of revenue is a heady combination. Furthermore, we are excited to see what the rest of the year holds for Dock 79 and the Maren as they return to market rents on renewals when the District and the Anacostia area are coming out of the winter (literally and figuratively) and entering their peak season of weather and activity. We remain focused on converting our excess cash into new investments, but our fortress balance sheet remains a useful safety net in case the future does not turn out as rosy as it currently feels. Finally, it is with a very heavy heart that we announce the death of our founder, Edward L’Engle Baker. He passed away quietly in his home at the age of 87, and it was perhaps the only thing he did quietly in his entire life. This company was the brainchild of Ted Baker when he was running Florida Rock Industries and he served as its chairman from 1986-2015. It is a testament to a life well lived that both FRP Holdings and Patriot Transportation are footnotes in his CV. He was a monumental figure in the aggregates industry as exemplified by his induction this year into the Pit and Quarry Hall of Fame. More importantly, he worked his entire life to help improve the educational institutions and the North Florida community that helped make him who he was, embodying Abraham Lincoln’s hope for his own life to be thought of as one who “always plucked a thistle and planted a flower where he thought a flower would grow.” Grief is the price we pay for love, and we received a very large bill upon his passing. This Company is forever in his debt and we will continue to work hard to honor this very small part of his incredible legacy. Non-GAAP Financial Measure. To supplement the financial results presented in accordance with GAAP, FRP presents certain non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. The non-GAAP financial measure included in this quarterly report is net operating income (NOI). FRP uses this non-GAAP 30 financial measure to analyze its operations and to monitor, assess, and identify meaningful trends in its operating and financial performance. This measure is not, and should not be viewed as, a substitute for GAAP financial measures. Net Operating Income Reconciliation Three months ended 03/31/22 (in thousands) Stabilized Asset Joint Mining Unallocated FRP Management Development Venture Royalties Corporate Holdings Segment Segment Segment Segment Expenses Totals Net Income (loss) 108 (1,541 ) (274 ) 2,050 61 404 Income Tax Allocation 40 (572 ) (2 ) 760 23 249 Income (loss) before income taxes 148 (2,113 ) (276 ) 2,810 84 653 Less: Unrealized rents 128 — — 53 — 181 Gain on sale of real estate — — — 733 — 733 Equity in gain of Joint Ventures — — 85 — — 85 Interest income — 803 — — 95 898 Plus: Unrealized rents — — 46 — — 46 Equity in loss of Joint Ventures — 1,677 — 12 — 1,689 Interest Expense — — 727 — 11 738 Depreciation/Amortization 234 45 2,564 55 — 2,898 Management Co. Indirect 92 490 85 107 — 774 Allocated Corporate Expenses 144 521 76 94 — 835 Net Operating Income (loss) 490 (183 ) 3,137 2,292 — 5,736 Net Operating Income Reconciliation Three months ended 03/31/21 (in thousands) Stabilized Asset Joint Mining Unallocated FRP Management Development Venture Royalties Corporate Holdings Segment Segment Segment Segment Expenses Totals Net Income (loss) 12 (643 ) 39,775 1,460 271 40,875 Income Tax Allocation 5 (238 ) 10,112 542 100 10,521 Income (loss) before income taxes 17 (881 ) 49,887 2,002 371 51,396 Less: Gain on remeasurement of real estate investment — — 51,139 — — 51,139 Unrealized rents 6 — — 58 — 64 Interest income — 993 — — 382 1,375 Plus: Unrealized rents — — 4 — — 4 Equity in loss of Joint Venture — 1,069 555 11 — 1,635 Interest Expense — — 914 — 11 925 Depreciation/Amortization 137 53 1,188 65 — 1,443 Management Co. Indirect 167 316 60 82 — 625 Allocated Corporate Expenses 214 419 65 81 — 779 Net Operating Income (loss) 529 (17 ) 1,534 2,183 — 4,229 31 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS Interest Rate Risk - We are exposed to the impact of interest rate changes through our variable-rate borrowings under our Credit Agreement with Wells Fargo. Under the Wells Fargo Credit Agreement, the applicable margin for borrowings at March 31, 2022 was Daily 1-Month LIBOR plus 1.0%. The applicable margin for such borrowings will be increased in the event that our debt to capitalization ratio as calculated under the Wells Fargo Credit Agreement Facility exceeds a target level. The Company did not have any variable rate debt at March 31, 2022, so a sensitivity analysis was not performed to determine the impact of hypothetical changes in interest rates on the Company’s results of operations and cash flows. ITEM 4. CONTROLS AND PROCEDURES CONCLUSION REGARDING THE EFFECTIVENESS OF DISCLOSURE CONTROLS AND PROCEDURES The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure. The Company also maintains a system of internal accounting controls over financial reporting that are designed to provide reasonable assurance to the Company’s management and Board of Directors regarding the preparation and fair presentation of published financial statements. All control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving the desired control objectives. As of March 31, 2022, the Company, under the supervision and with the participation of the Company's management, including the CEO, CFO and CAO, carried out an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on this evaluation, the Company’s CEO, CFO and CAO concluded that the Company's disclosure controls and procedures are effective in alerting them in a timely manner to material information required to be included in periodic SEC filings. There have been no changes in the Company’s internal controls over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. PART II. OTHER INFORMATION Item 1A. RISK FACTORS In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results. 32 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) January 1 through January 31 — $ — — $ 9,363,000 February 1 through February 28 — $ — — $ 9,363,000 March 1 through March 31 — $ — — $ 9,363,000 Total — $ — — (1) On February 4, 2015, the Board of Directors authorized management to expend up to $5,000,000 to repurchase shares of the Company’s common stock from time to time as opportunities arise. On December 5, 2018, the Board of Directors approved a $10,000,000 increase in the Company’s stock repurchase authorization. On August 5, 2019, the Board of Directors approved a $10,000,000 increase in the Company’s stock repurchase authorization. On May 6, 2020, the Board of Directors approved a $10,000,000 increase in the Company’s stock repurchase authorization. On August 26, 2020, the Board of Directors approved a $10,000,000 increase in the Company’s stock repurchase authorization. Item 6. EXHIBITS (a) Exhibits. The response to this item is submitted as a separate Section entitled "Exhibit Index", on page 35. 33 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: May 16, 2022 By JOHN D. BAKER II John D. Baker II Chief Executive Officer (Principal Executive Officer) By JOHN D. BAKER III John D. Baker III. Treasurer and Chief Financial Officer (Principal Financial Officer) By JOHN D. KLOPFENSTEIN John D. Klopfenstein Controller and Chief Accounting Officer (Principal Accounting Officer) 34 FRP HOLDINGS, INC. FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31, 2022 EXHIBIT INDEX (31)(a) Certification of John D. Baker II. (31)(b) Certification of John D. Baker III. (31)(c) Certification of John D. Klopfenstein. (32) Certification of Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer under Section 906 of the Sarbanes-Oxley Act of 2002. 101.XSD XBRL Taxonomy Extension Schema 101.CAL XBRL Taxonomy Extension Calculation Linkbase 101.DEF XBRL Taxonomy Extension Definition Linkbase 101.LAB XBRL Taxonomy Extension Label Linkbase 101.PRE XBRL Taxonomy Extension Presentation Linkbase 104. Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) 35