UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________

FORM 10-Q

_________________

(Mark One)

[X ]

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, ~~2019~~2020

[ ]

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from_________ to _________

Commission File Number: 001-36769

_____________________

FRP HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

_____________________

Florida		47-2449198
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

200 W. Forsyth St., 7th Floor, Jacksonville, FL		32202
(Address of principal executive offices)		(Zip Code)

904-396-5733

(Registrant’s telephone number, including area code)

Title of each class		Trading Symbol		Name of each exchange on which registered
Common Stock, $.10 par value		FRPH		NASDAQ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [x] No [_]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [x] No [_]

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

Large accelerated filer [_]		Accelerated filer ~~[x]~~
		[_]
Non-accelerated filer ~~[_]~~[x]		Smaller reporting company [x]

Emerging growth company [_]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [_]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [_] No [x]

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

	Class				Outstanding at ~~September 30, 2019~~October 29, 2020
	Common Stock, $.10 par value per share				~~9,823,668~~9,418,385 shares

FRP HOLDINGS, INC.

FORM 10-Q

QUARTER ENDED SEPTEMBER 30, ~~2019~~2020

CONTENTS

Page No.

Preliminary Note Regarding Forward-Looking Statements		3

	Part I. Financial Information

Item 1.	Financial Statements
	Consolidated Balance Sheets	4
	Consolidated Statements of Income	5
	Consolidated Statements of Comprehensive Income	6
	Consolidated Statements of Cash Flows	7
	Consolidated Statements of Shareholders’ Equity	8
	Condensed Notes to Consolidated Financial Statements	810

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	1922

Item 3.	Quantitative and Qualitative Disclosures about Market Risks	3438

Item 4.	Controls and Procedures	3438

	Part II. Other Information

Item 1A.	Risk Factors	3640

Item 2.	Purchase of Equity Securities by the Issuer	3641

Item 6.	Exhibits	3641

Signatures		3742

Exhibit 31	Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	3944

Exhibit 32	Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	4247

Preliminary Note Regarding Forward-Looking Statements.

This Quarterly Report on Form 10-Q, together with other statements and information publicly disseminated by us, contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words or phrases “anticipate,” “estimate,” ”believe,” “budget,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “seek,” “should,” “will,” “would,” “expect,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target” and similar expressions identify forward-looking statements. Such statements reflect management’s current views with respect to financial results related to future events and are based on assumptions and expectations that may not be realized and are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual results, financial or otherwise, may differ, perhaps materially, from the results discussed in the forward-looking statements. Risk factors discussed in Item 1A of this Form 10-Q and other factors that might cause differences, some of which could be material, include, but are not limited to: the impact of the Covid-19 Pandemic on our operations and financial results; the possibility that we may be unable to find appropriate investment opportunities; levels of construction activity in the markets served by our mining properties; demand for apartments in Washington D.C. and Richmond, Virginia; our ability to obtain zoning and entitlements necessary for property development; the impact of lending and capital market conditions on our liquidity, our ability to finance projects or repay our debt; general real estate investment and development risks; vacancies in our properties; risks associated with developing and managing properties in partnership with others; competition; our ability to renew leases or re-lease spaces as leases expire; illiquidity of real estate investments; bankruptcy or defaults of tenants; the impact of restrictions imposed by our credit facility; the level and volatility of interest rates; environmental liabilities; inflation risks; 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.

PART I. FINANCIAL INFORMATION, ITEM 1. FINANCIAL STATEMENTS

FRP HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited) (In thousands, except share data)

September 30 December 31
Assets: 2019 2018
Real estate investments at cost:
Land $ 84,383 83,721
Buildings and improvements 145,690 144,543
Projects under construction 1,461 6,683
     Total investments in properties 231,534 234,947
Less accumulated depreciation and depletion 28,871 28,394
     Net investments in properties 202,663 206,553

Real estate held for investment, at cost 8,283 7,167
Investments in joint ventures 103,822 88,884
     Net real estate investments 314,768 302,604

Cash and cash equivalents 69,246 22,547
Cash held in escrow 6,734 202
Accounts receivable, net 919 564
Investments available for sale at fair value 115,308 165,212
Federal and state income taxes receivable 27,189 9,854
Unrealized rents 548 53
Deferred costs 1,079 773
Other assets 474 455
Assets of discontinued operations 32 3,224
Total assets $ 536,297 505,488

Liabilities:
Secured notes payable $ 88,891 88,789
Accounts payable and accrued liabilities 1,488 3,545
Other liabilities 1,978 100
Deferred revenue 831 27
Deferred income taxes 51,104 27,981
Deferred compensation 1,439 1,450
Tenant security deposits 334 53
Liabilities of discontinued operations 18 288
    Total liabilities 146,083 122,233

Commitments and contingencies

Equity:
Common stock, $.10 par value
25,000,000 shares authorized,
9,823,668 and 9,969,174 shares issued
and outstanding, respectively
982 997
Capital in excess of par value 57,627 58,004
Retained earnings 313,262 306,307
Accumulated other comprehensive income, net 1,161 (701 )
     Total shareholders’ equity 373,032 364,607
Noncontrolling interest MRP 17,182 18,648
     Total equity 390,214 383,255
Total liabilities and shareholders’ equity $ 536,297 505,488

	September 30		December 31
Assets:	2020		2019
Real estate investments at cost:
Land	$	80,494		84,383
Buildings and improvements		141,146		147,019
Projects under construction		2,442		1,056
Total investments in properties		224,082		232,458
Less accumulated depreciation and depletion		33,684		30,271
Net investments in properties		190,398		202,187

Real estate held for investment, at cost		9,101		8,380
Investments in joint ventures		167,586		160,452
Net real estate investments		367,085		371,019

Cash and cash equivalents		46,289		26,607
Cash held in escrow		15,259		186
Accounts receivable, net		923		546
Investments available for sale at fair value		104,624		137,867
Unrealized rents		530		554
Deferred costs		921		890
Other assets		499		479
Total assets	$	536,130		538,148

Liabilities:
Secured notes payable	$	89,027		88,925
Accounts payable and accrued liabilities		3,052		2,431
Other liabilities		1,886		1,978
Deferred revenue		609		790
Federal and state income taxes payable		164		504
Deferred income taxes		52,532		50,111
Deferred compensation		1,240		1,436
Tenant security deposits		314		328
Total liabilities		148,824		146,503

Commitments and contingencies

Equity:
Common stock, $.10 par value 25,000,000 shares authorized, 9,481,638 and 9,817,429 shares issued and outstanding, respectively		948		982
Capital in excess of par value		56,690		57,705
Retained earnings		313,103		315,278
Accumulated other comprehensive income, net		996		923
Total shareholders’ equity		371,737		374,888
Noncontrolling interest MRP		15,569		16,757
Total equity		387,306		391,645
Total liabilities and shareholders’ equity	$	536,130		538,148

See accompanying notes.

FRP HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In thousands except per share amounts)

(Unaudited)

		THREE MONTHS ENDED						NINE MONTHS ENDED							THREE MONTHS ENDED						NINE MONTHS ENDED
		SEPTEMBER 30,						SEPTEMBER 30,							SEPTEMBER 30,						SEPTEMBER 30,
		2019			2018			2019			2018				2020			2019			2020			2019
Revenues:
Lease revenue		$	3,581			3,617			10,796			10,418			$	3,591			3,581			10,636			10,796
Mining lands lease revenue			2,302			2,125			7,164			5,952				2,507			2,302			7,094			7,164
Total Revenues			5,883			5,742			17,960			16,370				6,098			5,883			17,730			17,960

Cost of operations:
Depreciation, depletion and amortization			1,431			1,821			4,390			6,350				1,438			1,431			4,406			4,390
Operating expenses			952			983			2,744			2,951				892			952			2,598			2,744
Environmental remediation			—			(465	)		—			(465	)
Property taxes			740			663			2,206			1,949				706			740			2,089			2,206
Management company indirect			670			550			1,872			1,366				844			670			2,208			1,872
Corporate expenses			732			522			1,928			2,910				637			732			2,850			1,928
Total cost of operations			4,525			4,074			13,140			15,061				4,517			4,525			14,151			13,140

Total operating profit			1,358			1,668			4,820			1,309				1,581			1,358			3,579			4,820

Net investment income, including realized gains of $144, $0, $591 and $0, respectively			2,019			1,654			5,813			1,875
Net investment income, including realized gains of $55, $144, $297 and $591, respectively																1,814			2,019			5,915			5,813
Interest expense			(129	)		(768	)		(989	)		(2,418	)			(46	)		(129	)		(142	)		(989	)
Equity in loss of joint ventures			(746	)		(13	)		(1,282	)		(36	)			(1,788	)		(746	)		(3,773	)		(1,282	)
Gain (loss) on real estate investments			126			(3	)		662			(3	)
Gain on sale of real estate																5,732			126			9,329			662

Income from continuing operations before income taxes			2,628			2,538			9,024			727				7,293			2,628			14,908			9,024
Provision for income taxes			726			508			2,529			269				2,022			726			4,161			2,529
Income from continuing operations			1,902			2,030			6,495			458				5,271			1,902			10,747			6,495

Income (loss) from discontinued operations, net			(13	)		(78	)		6,849			122,109				—			(13	)		—			6,849

Net income			1,889			1,952			13,344			122,567				5,271			1,889			10,747			13,344
Loss attributable to noncontrolling interest			(112	)		(272	)		(380	)		(1,199	)			(184	)		(112	)		(475	)		(380	)
Net income attributable to the Company		$	2,001			2,224			13,724			123,766			$	5,455			2,001			11,222			13,724

Earnings per common share:
Income from continuing operations-
Basic		$	0.19			0.20			0.66			0.05			$	0.55			0.19			1.11			0.66
Diluted		$	0.19			0.20			0.65			0.05			$	0.55			0.19			1.11			0.65
Discontinued operations-
Basic		$	0.00			(0.01	)		0.69			12.17			$	—			—			—			0.69
Diluted		$	0.00			(0.01	)		0.69			12.08			$	—			—			—			0.69
Net income attributable to the Company-
Basic		$	0.20			0.22			1.39			12.33			$	0.57			0.20			1.16			1.39
Diluted		$	0.20			0.22			1.38			12.24			$	0.57			0.20			1.16			1.38

Number of shares (in thousands) used in computing:	Number of shares (in thousands) used in computing:													Number of shares (in thousands) used in computing:
-basic earnings per common share			9,843			10,062			9,903			10,037				9,517			9,843			9,646			9,903
-diluted earnings per common share			9,886			10,135			9,945			10,110				9,545			9,886			9,681			9,945

See accompanying notes.

FRP HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands except per share amounts)

(Unaudited)

THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2019 2018 2019 2018
Net income $ 1,889 1,952 13,344 122,567
Other comprehensive income net of tax:
  Unrealized gain (loss)on investments available for sale,
   Net of income tax effect of ($18), ($154), $691 and
     and ($154) (48 ) (413 ) 1,862 (413 )
Comprehensive income $ 1,841 1,539 15,206 122,154

Less comp. income attributable to
  Noncontrolling interest $ (112 ) (272 ) (380 ) (1,199 )

Comprehensive income attributable to the Company $ 1,953 1,811 15,586 123,353

	THREE MONTHS ENDED						NINE MONTHS ENDED
	SEPTEMBER 30,						SEPTEMBER 30,
	2020			2019			2020			2019
Net income	$	5,271			1,889			10,747			13,344
Other comprehensive income net of tax:
Minimum pension liability, net of income
tax effect of $53, $0, $53 and $0		143			—			143			—
Unrealized gain (loss) on investments available for
sale, net of income tax effect of ($126), ($18), ($26) and $691		(341	)		(49	)		(70	)		1,862
Comprehensive income	$	5,073			1,840			10,820			15,206

Less comp. income attributable to
Noncontrolling interest	$	(184	)		(112	)		(475	)		(380	)

Comprehensive income attributable to the Company	$	5,257			1,952			11,295			15,586

See accompanying notes

FRP HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED SEPTEMBER 30, ~~2019~~2020 AND ~~2018~~2019

(In thousands) (Unaudited)

	2019			2018			2020			2019
Cash flows from operating activities:
Net income	$	13,344			122,567		$	10,747			13,344
Adjustments to reconcile net income to
net cash provided by continuing operating activities:
Income from discontinued operations, net		(6,849	)		(122,109	)		—			(6,849	)
Deferred income taxes		23,123			(2,187	)		2,421			23,123
Depreciation, depletion and amortization		4,635			6,597			4,572			4,635
Equity in loss of joint ventures		1,282			36			3,773			1,282
Gain on sale of equipment and property		(657	)		(19	)		(9,343	)		(657	)
Stock-based compensation		206			1,169			1,241			206
Realized gain on available for sale investments		(591	)		290			(297	)		(591	)
Net changes in operating assets and liabilities:
Accounts receivable		(355	)		(123	)		(377	)		(355	)
Deferred costs and other assets		(922	)		(909	)		(178	)		(922	)
Accounts payable and accrued liabilities		(1,252	)		673			440			(1,252	)
Income taxes payable and receivable		(17,335	)		940			(340	)		(17,335	)
Other long-term liabilities		2,148			(1,943	)		694			2,148
Net cash provided by operating activities of continuing operations		16,777			4,982			13,353			16,777
Net cash used in operating activities of discontinued operations		(1,756	)		(46,642	)		—			(1,756	)
Net cash provided by (used in) operating activities		15,021			(41,660	)
Net cash provided by operating activities								13,353			15,021

Cash flows from investing activities:
Investments in properties		(9,360	)		(5,729	)		(3,200	)		(9,360	)
Investments in joint ventures		(16,226	)		(7,160	)		(10,911	)		(16,226	)
Purchases of investments available for sale		(36,941	)		(313,306	)		(24,584	)		(36,941	)
Proceeds from sales of investments available for sale		89,260			121,161			57,240			89,260
Proceeds from the sale of assets								19,257			8,405
Cash held in escrow		(6,532	)		(33,937	)		(15,073	)		(6,532	)
Proceeds from the sale of assets		8,405			77
Net cash provided by (used in) investing activities of continuing operations		28,606			(238,894	)
Net cash provided by investing activities of continuing operations								22,729			28,606
Net cash provided by investing activities of discontinued operations		11,525			340,744			—			11,525
Net cash provided by investing activities		40,131			101,850			22,729			40,131

Cash flows from financing activities:
Distribution to noncontrolling interest		(1,086	)		(765	)		(713	)		(1,086	)
Repayment of long-term debt		—			(1,552	)
Repurchase of company stock		(7,714	)		—			(15,687	)		(7,714	)
Exercise of employee stock options		347			1,231			—			347
Net cash used in financing activities of continuing operations		(8,453	)		(1,086	)		(16,400	)		(8,453	)
Net cash used in financing activities of discontinued operations		—			(28,846	)		—			—
Net cash used in financing activities		(8,453	)		(29,932	)		(16,400	)		(8,453	)

Net increase in cash and cash equivalents		46,699			30,258			19,682			46,699
Cash and cash equivalents at beginning of year		22,547			4,524			26,607			22,547
Cash and cash equivalents at end of the period	$	69,246			34,782		$	46,289			69,246

See accompanying notes.

FRP HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019

(In thousands, except share amounts)


		Nine Months Ended September 30, 2020
													Accumulated			Total
							Capital in						Other Comp-			Share			Non-
	Common Stock						Excess of			Retained			Rehensive			holders’			Controlling			Total
	Shares			Amount			Par Value			Earnings			Income, net			Equity			Interest			Equity
Balance at January 1, 2020		9,817,429		$	982		$	57,705		$	315,278		$	923		$	374,888		$	16,757		$	391,645

Stock option grant compensation								71									71						71
Restricted stock compensation								140									140						140
Shares granted to Employees		11,448			1			529									530						530
Shares granted to Directors		12,050			1			499									500						500
Restricted stock award		20,520			2			(2	)								—						—
Shares purchased and cancelled		(379,809	)		(38	)		(2,252	)		(13,397	)					(15,687	)					(15,687	)
Net income											11,222						11,222			(475	)		10,747
Distributions to partners																				(713	)		(713	)
Minimum pension liability, net														143			143						143
Unrealized loss on investment, net														(70	)		(70	)					(70	)

Balance at September 30, 2020		9,481,638		$	948		$	56,690		$	313,103		$	996		$	371,737		$	15,569		$	387,306


		Three Months Ended September 30, 2020
													Accumulated			Total
							Capital in						Other Comp-			Share			Non-
	Common Stock						Excess of			Retained			Rehensive			holders’			Controlling			Total
	Shares			Amount			Par Value			Earnings			Income, net			Equity			Interest			Equity
Balance at July 1, 2020		9,563,144		$	956		$	57,107		$	310,486		$	1,194		$	369,743		$	16,058		$	385,801

Stock option grant compensation								24									24						24
Restricted stock compensation								46									46						46
Shares purchased and cancelled		(81,506	)		(8	)		(487	)		(2,838	)					(3,333	)					(3,333	)
Net income											5,455						5,455			(184	)		5,271
Distributions to partners																				(305	)		(305	)
Minimum pension liability, net														143			143						143
Unrealized loss on investment, net														(341	)		(341	)					(341	)

Balance at September 30, 2020		9,481,638		$	948		$	56,690		$	313,103		$	996		$	371,737		$	15,569		$	387,306


		Nine Months Ended September 30, 2019
													Accumulated			Total
							Capital in						Other Comp-			Share			Non-
	Common Stock						Excess of			Retained			rehensive			holders’			Controlling			Total
	Shares			Amount			Par Value			Earnings			Income, net			Equity			Interest			Equity
Balance at January 1, 2019		9,969,174		$	997		$	58,004		$	306,307		$	(701	)	$	364,607		$	18,648		$	383,255

Exercise of stock options		11,304			1			346									347						347
Stock option grant compensation								86									86						86
Shares granted to Employees		1,012						50									50						50
Shares granted to Directors		1,460						70									70						70
Shares purchased and cancelled		(159,282	)		(16	)		(929	)		(6,769	)					(7,714	)					(7,714	)
Net income											13,724						13,724			(380	)		13,344
Distributions to partners																				(1,086	)		(1,086	)
Unrealized gain on investment, net														1,862			1,862						1,862

Balance at September 30, 2019		9,823,668		$	982		$	57,627		$	313,262		$	1,161		$	373,032		$	17,182		$	390,214

		Three Months Ended September 30, 2019
													Accumulated			Total
							Capital in						Other Comp-			Share			Non-
	Common Stock						Excess of			Retained			rehensive			holders’			Controlling			Total
	Shares			Amount			Par Value			Earnings			Income, net			Equity			Interest			Equity
Balance at July 1, 2019		9,863,451		$	986		$	57,562		$	313,373		$	1,210		$	373,131		$	17,870		$	391,001

Exercise of stock options		6,500			1			201									202						202
Stock option grant compensation								29									29						29
Shares granted to Employees		1,012						50									50						50
Shares granted to Directors		1,460						70									70						70
Shares purchased and cancelled		(48,755	)		(5	)		(285	)		(2,112	)					(2,402	)					(2,402	)
Net income											2,001						2,001			(112	)		1,889
Distributions to partners																				(576	)		(576	)
Unrealized loss on investment, net														(49	)		(49	)					(49	)

Balance at September 30, 2019		9,823,668		$	982		$	57,627		$	313,262		$	1,161		$	373,032		$	17,182		$	390,214

FRP HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, ~~2019~~2020

(Unaudited)

(1) Description of Business and Basis of Presentation.

FRP Holdings, Inc. is a holding company engaged in the real estate business, 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 a residential apartment building, and (iv) warehouse/office building ownership, leasing and management.

The accompanying consolidated financial statements include the accounts of FRP Holdings, Inc. (the “Company” or “FRP”) inclusive of our operating real estate subsidiaries, FRP Development Corp. (“Development”) and Florida Rock Properties, Inc. (”Properties”) and RiverFront Investment Partners I, LLC. Our investment in the Brooksville joint venture, BC FRP Realty joint venture, RiverFront Holdings II joint venture, ~~and~~ Bryant Street Partnerships, 1800 Half Street and Greenville/Woodfield are accounted for under the equity method of accounting (See Note 11). Our ownership of RiverFront Investment Partners I, LLC includes a non-controlling interest representing the ownership of our partner. The Company uses the cost method to account for its investment in DST Hickory Creek because it does not have significant influence over operating and financial policies.

On May 21, 2018, the Company completed the disposition of 40 industrial warehouse properties and 3three additional land parcels to an affiliate of Blackstone Real Estate Partners VIII, L.P. for $347.2 million. One warehouse property valued at $11.7 million was excluded from the sale due to the tenant exercising its right of first refusal to purchase the property. On June 28, 2019, the Company completed the sale of the excluded property to the same buyer for $11.7 million. This resulted in the disposition of all of the Company’s industrial flex/office warehouse properties prior to the sale date and constituted a major strategic shift and as a result, these properties have been reclassified as discontinued operations for all periods presented. ~~On June 28, 2019, the Company completed the sale of the excluded property to the same buyer for $11.7 million.~~The Asset Management segment currently contains three commercial properties.

These statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the instructions to Form 10-Q and do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (primarily consisting of normal recurring accruals) considered necessary for a fair statement of the results for the interim periods have been included. Operating results for the nine months ended September 30, ~~2019~~2020 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2019.~~2020. 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, ~~2018.~~2019.

(2) Recently Issued Accounting Standards.In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” which replaces existing revenue recognition standards and significantly expand the disclosure requirements for revenue arrangements. It may be adopted either retrospectively or on a modified retrospective basis to new contracts and existing contracts with remaining performance obligations as of the effective date. Lease contracts with customers constitute a materially all of our revenues and are a specific scope exception. The new standard was adopted beginning with the first quarter of 2018 in connection with our revenues not subject to leases and did not have a material impact on our financial statements.

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)”, which requires lessees to recognize a right-to-use asset and a lease obligation for all leases. The Company is not a significant lessee. Lessors will account for leases using an approach that is substantially equivalent to existing accounting standards. The Company's existing leases will continue to be classified as operating leases. Leases entered into after the effective date of the new standard may be classified as operating or sales-type leases, based on specific classification criteria. Operating leases will continue to have a similar pattern of recognition as under current GAAP. Sales-type lease accounting, however, will result in the recognition of selling profit at lease commencement, with interest income recognized over the life of

the lease. The new standard also includes a change to the treatment of internal leasing costs and legal costs, which can no longer be capitalized. Only incremental costs of a lease that would not have been incurred if the lease had not been obtained may be deferred as initial direct costs. The new standard also requires lessors to exclude from variable

payments certain lessor costs, such as real estate taxes, that the lessor contractually requires the lessee to pay directly to a third party on its behalf. The new standard requires our expected credit loss related to the collectability of lease receivables to be reflected as an adjustment to the line item Lease Revenue. For the ~~nine months~~year ended ~~September 30,~~December 31, 2019, the credit loss related to the collectibility of lease receivables was recognized in the line item Operating expenses and was not significant. Additionally, the new standard requires lessors to allocate the consideration in a contract between the lease component (right to use an underlying asset) and non-lease component (transfer of a good or service that is not a lease). However, lessors are provided with a practical expedient, elected by class of underlying asset, to account for lease and non-lease components of a contract as a single lease component if certain criteria are met. The terms of the Company's leases generally provide that the Company is entitled to receive reimbursements from tenants for operating expenses such as real estate taxes, insurance and common area maintenance, in addition to the base rental payments for use of the underlying asset. Under the new standard, common area maintenance is considered a nonlease component of a lease contract, which would be accounted for under Topic 606. However, the Company will apply the practical expedient to account for its lease and non-lease components as a single, combined operating lease component. While the timing of recognition should remain the same, the Company is no longer presenting reimbursement revenue from tenants separately in our Consolidated Statements of Income beginning January 1, 2019. The new standard along with the adoption of ASU No. 2018-11, Leases - Targeted Improvements which the FASB issued in July 2018, was adopted effective January 1, 2019 and we have elected to use January 1, 2019 as our date of initial application. Consequently, financial information will not be updated and disclosures required under the new standard will not be provided for periods presented before January 1, 2019 as these prior periods conform to the Accounting Standards Codification 840. We elected the package of practical expedients permitted under the transition guidance within the new standard. By adopting these practical expedients, we were not required to reassess (1) whether an existing contract meets the definition of a lease; (2) the lease classification for existing leases; or (3) costs previously capitalized as initial direct costs. The adoption of this guidance did not have a material impact on our financial statements.

(3) Business Segments.

The Company is reporting its financial performance based on four reportable segments, Asset Management, Mining Royalty Lands, Development and Stabilized Joint Venture, as described below.

The Asset Management segment owns, leases and manages commercial properties. The flex/office warehouses in the Asset Management Segment were sold and reclassified to discontinued operations leaving only two commercial properties and one recent industrial acquisition, Cranberry Run, which we purchased in 2019. In July 2019 ~~and~~we sold our property located at 1801 62^nd Street, our most recent spec building in Hollander Business Park, which had joined Asset Management April 1, ~~of this year.~~2019.

Through our Development segment, we own and are continuously ~~monitoring~~assessing for their ~~“highest~~highest and best ~~use”~~use for several parcels of land that are in various stages of development. Our overall strategy in this segment is to convert all of our non-income producing lands into income production through (i) an orderly process of constructing new buildings for us to own and operate or (ii) a sale to, or joint venture with, third parties. Additionally, our Development segment will form joint ventures on new developments of land not previously owned by the Company.

The ~~Company operates a residential apartment building~~Stabilized Joint Venture segment includes joint ventures which own, lease and manage buildings that have met our initial lease up criteria. One of our two joint ventures in the segment, Riverfront Investment Partners I, LLC ~~partnership~~ (“Dock 79”). is consolidated. The ownership of Dock 79 attributable to our partner ~~MRP~~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 amounts of consolidated net income attributable to the noncontrolling interest is clearly identified on the accompanying Consolidated Statements of Income.

On May 21, 2018, the Company completed the disposition of 40 industrial warehouse properties and 3 additional land parcels to an affiliate of Blackstone Real Estate Partners VIII, L.P. for $347.2 million. One warehouse property valued at $11.7 million was excluded from the sale due to the tenant exercising its right of first refusal to purchase the property. This sale constituted a major strategic shift and as a result, these properties have been reclassified as discontinued operations for all periods presented. On June 28, 2019, the Company completed the sale of the excluded property to the same buyer for $11.7 million. We plan to develop our remaining owned office/warehouse pad sites in a timely, opportunistic manner and sell the fully leased buildings in groups of two or three.

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

Three Months ended Nine Months ended
September 30, September 30,
2019 2018 2019 2018
Revenues:
Asset management $ 430 568 1,733 1,717
Mining royalty lands 2,302 2,125 7,164 5,952
Development 307 330 892 944
Stabilized Joint Venture 2,844 2,719 8,171 7,757
5,883 5,742 17,960 16,370

Operating profit (loss):
Before corporate expenses:
   Asset management $ 8 276 233 783
   Mining royalty lands 2,103 1,961 6,605 5,497
   Development (629 ) (139 ) (1,747 ) (1,146 )
   Stabilized Joint Venture 608 92 1,657 (915 )
    Operating profit before corporate expenses 2,090 2,190 6,748 4,219
Corporate expenses:
  Allocated to asset management (168 ) (34 ) (470 ) (146 )
  Allocated to mining royalty lands (44 ) (28 ) (123 ) (157 )
  Allocated to development (479 ) (408 ) (1,219 ) (1,110 )
  Allocated to stabilized joint venture (41 ) (52 ) (116 ) (289 )
  Unallocated —   —   —   (1,208 )
    Total corporate expenses (732 ) (522 ) (1,928 ) (2,910 )
$ 1,358 1,668 4,820 1,309

Interest expense $ 129 768 989 2,418

Depreciation, depletion and amortization:
Asset management $ 154 145 527 405
Mining royalty lands 36 55 130 145
Development 54 57 161 171
Stabilized Joint Venture 1,187 1,564 3,572 5,629
$ 1,431 1,821 4,390 6,350
Capital expenditures:
Asset management $ 824 17 8,642 184
Mining royalty lands —   —   —   —
Development 167 4,268 415 5,578
Stabilized Joint Venture 194 25 304 (33 )
$ 1,185 4,310 9,361 5,729

		Three Months ended						Nine Months ended
		September 30,						September 30,
		2020			2019			2020			2019
Revenues:
Asset management		$	721			430			2,089			1,733
Mining royalty lands			2,507			2,302			7,094			7,164
Development			290			307			862			892
Stabilized Joint Venture			2,580			2,844			7,685			8,171
			6,098			5,883			17,730			17,960

Operating profit (loss):
Before corporate expenses:
Asset management		$	200			8			700			233
Mining royalty lands			2,291			2,103			6,486			6,605
Development			(659	)		(629	)		(2,136	)		(1,747	)
Stabilized Joint Venture			386			608			1,379			1,657
Operating profit before corporate expenses			2,218			2,090			6,429			6,748
Corporate expenses:
Allocated to asset management			(165	)		(168	)		(738	)		(470	)
Allocated to mining royalty lands			(53	)		(44	)		(234	)		(123	)
Allocated to development			(381	)		(479	)		(1,710	)		(1,219	)
Allocated to stabilized joint venture			(38	)		(41	)		(168	)		(116	)
Total corporate expenses			(637	)		(732	)		(2,850	)		(1,928	)
		$	1,581			1,358			3,579			4,820

Interest expense		$	46			129			142			989

Depreciation, depletion and amortization:
Asset management		$	137			154			529			527
Mining royalty lands			60			36			160			130
Development			53			54			160			161
Stabilized Joint Venture	��		1,188			1,187			3,557			3,572
		$	1,438			1,431			4,406			4,390
Capital expenditures:
Asset management		$	233			824			787			8,642
Mining royalty lands			—			—			—			—
Development			1,754			167			2,371			415
Stabilized Joint Venture			46			194			42			304
		$	2,033			1,185			3,200			9,361

		September 30,	December 31,
Identifiable net assets		2020	2019

Asset management	$	11,323	18,468
Mining royalty lands		37,617	38,409
Development		182,567	179,357
Stabilized Joint Venture		136,679	133,956
Investments available for sale at fair value		104,624	137,867
Cash items		61,548	26,793
Unallocated corporate assets		1,772	3,298
	$	536,130	538,148

~~September 30,~~

~~December 31,~~

Identifiable net assets 2019 2018

Asset management $ 17,823 10,593
Discontinued operations 32 3,224
Mining royalty lands 38,734 37,991
Development 118,209 119,029
Stabilized Joint Venture 135,232 138,206
Investments available for sale at fair value 115,308 165,212
Cash items 75,980 22,749
Unallocated corporate assets 34,979 8,484
$ 536,297 505,488

(4) Related Party Transactions.

The Company is a party to a Transition Services Agreement which resulted from our January 30, 2015 spin-off of Patriot Transportation Holding, Inc. (Patriot). The Transition Services Agreement sets forth the terms on which Patriot will provide to FRP certain services that were shared prior to the Spin-off, including the services of certain shared executive officers. The boards of the respective companies amended and extended this agreement for one year effective April 1, ~~2019.~~2020.

The consolidated statements of income reflect charges and/or allocation from Patriot for these services of ~~$347,000~~$290,000 and ~~$360,000~~$347,000 for the three months ended September 30, 2020 and 2019 and ~~2018~~$870,000 and $976,000 ~~and $1,089,000~~ for the nine months ended September 30, ~~2019~~2020 and ~~2018,~~2019, respectively. Included in the charges above are amounts recognized for corporate executive stock-based compensation expense. These charges are reflected as part of corporate expenses.

To determine these allocations between FRP and Patriot as set forth in the Transition Services Agreement, we 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.

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

September 30, December 31,
2019 2018
Riverfront permanent loan $ 88,891 88,789
Less portion due within one year — —
$ 88,891 88,789

On May 21, 2018 in conjunction with the sale of the warehouse business the Companies mortgages notes were prepaid and the credit line with First Tennessee Bank, N.A. was terminated. Prepayment penalties of $3,420,000 were paid.

	September 30,		December 31,
	2020		2019
Riverfront permanent loan	$	89,027		88,925
Less portion due within one year		—		—
	$	89,027		88,925

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 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 September 30, ~~2019,~~2020, there was no debt outstanding on this revolver, ~~$958,000~~$411,000 outstanding under letters of credit and ~~$19,042,000~~$19,589,000 available for borrowing. The letters of credit were issued to guarantee certain obligations to state agencies related to real estate development. Most of the letters of credit are irrevocable for a period of one year and typically are automatically extended for additional one-year periods. The letter of credit fee is 1% and applicable interest rate would have been ~~3.0435%~~1.149% on September 30, ~~2019.~~2020. The credit agreement contains certain conditions and financial covenants, including a minimum tangible net worth and

dividend restriction. As of September 30, ~~2019,~~2020, these covenants would have limited our ability to pay dividends to a maximum of ~~$217~~$219 million combined. The Company was in compliance with all covenants as of September 30, ~~2019.~~2020.

year amortization period. The loan is a non-recourse loan. However, all amounts due under the Loan Documents will become immediately due upon an event of default by the Joint Venture, such events including, without limitation, Joint Venture's (i) failure to: pay, permit inspections or observe covenants under the Loan Documents, (ii) breach of representations made under the Loan Documents (iii) voluntary or involuntary bankruptcy, and (iv) dissolution, or the dissolution of the guarantor. ~~MidAtlantic Realty Partners, LLC, an affiliate of~~ MRP has executed a carve-out guaranty in connection with the loan.

Debt cost amortization of $34,000 and $102,000 was recorded during the three and nine months ended September 30, 2020, respectively. During the three months ended September 30, ~~2019~~2020 and September 30, ~~2018~~2019 the Company capitalized interest costs of ~~$870,000~~$948,000 and ~~$243,000,~~$870,000, respectively. During the nine months ended September 30, ~~2019~~2020 and September 30, ~~2018~~2019 the Company capitalized interest costs of ~~$1,960,000~~$2,823,000 and ~~$742,000,~~$1,960,000, respectively.

(6) Earnings per Share.

The following details the computations of the basic and diluted earnings per common share (in thousands, except per share amounts):

	Three Months ended						Nine Months ended				Three Months ended					Nine Months ended
	September 30,						September 30,				September 30,					September 30,
	2019			2018			2019		2018		2020		2019			2020		2019
Weighted average common shares
outstanding during the period
- shares used for basic
earnings per common share		9,843			10,062			9,903		10,037		9,517		9,843			9,646		9,903

Common shares issuable under
share based payment plans
which are potentially dilutive		43			73			42		73		28		43			35		42

Common shares used for diluted
earnings per common share		9,886			10,135			9,945		10,110		9,545		9,886			9,681		9,945

Income from continuing operations	$	1,902			2,030			6,495		458	$	5,271		1,902			10,747		6,495
Discontinued operations	$	(13	)		(78	)		6,849		122,109	$	—		(13	)		—		6,849
Net income attributable to the Company	$	2,001			2,224			13,724		123,766	$	5,455		2,001			11,222		13,724

Basic earnings per common share:
Income from continuing operations	$	0.19			0.20			0.66		0.05	$	0.55		0.19			1.11		0.66
Discontinued operations	$	0.00			(0.01	)		0.69		12.17	$	—		—			—		0.69
Net income attributable to the Company	$	0.20			0.22			1.39		12.33	$	0.57		0.20			1.16		1.39

Diluted earnings per common share:
Income from continuing operations	$	0.19			0.20			0.65		0.05	$	0.55		0.19			1.11		0.65
Discontinued operations	$	0.00			(0.01	)		0.69		12.08	$	—		—			—		0.69
Net income attributable to the Company	$	0.20			0.22			1.38		12.24	$	0.57		0.20			1.16		1.38

For the three and nine months ended September 30, 2020, 74,065 and 53,545 shares attributable to outstanding stock options were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive. For the three and nine months ended September 30, 2019, 19,950 shares attributable to outstanding stock options were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive. For the three and nine months ended September 30, 2018, no shares attributable to outstanding stock operations were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive.

During the first nine months the Company repurchased ~~159,282~~379,809 shares at an average cost of ~~$48.43.~~$41.30.

(7) Stock-Based Compensation Plans.

The Company has two Stock Option Plans (the 2006 Stock Incentive Plan and the 2016 Equity Incentive Option Plan) under which options for shares of common stock were granted to directors, officers and key employees. The 2016 plan permits the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock units, or stock awards. The options awarded under the plans have similar characteristics. All stock options are non-qualified and expire ten years from the date of grant. Stock based compensation awarded to directors, officers and employees are exercisable immediately or become exercisable in cumulative installments of 20% or 25% at the end of each year following the date of grant. When stock options are exercised the Company issues new shares after receipt of exercise proceeds and taxes due, if any, from the grantee. ~~The number of common shares available for future issuance was 487,838 at September 30, 2019.~~

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 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 443,820 at September 30, 2020. In March 2020, 11,448 shares of stock 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				Nine Months ended				Three Months ended				Nine Months ended
	September 30,				September 30,				September 30,				September 30,
	2019		2018		2019		2018		2020		2019		2020		2019
Stock option grants	$	29		17		86		486	$	24		29		71		86
Restricted stock awards granted in 2020										46		—		140		—
Employee stock grant										—		—		530		—
Unrestricted employee stock award		50		—		50		—		—		50		—		50
Annual director stock award		70		—		70		683		—		70		500		70
	$	149		17		206		1,169	$	70		149		1,241		206

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, 2020		132,504	$	33.82	5.8	$	1,631
Granted		—	$	—		$	—
Exercised		—	$	—		$	—
Outstanding at September 30, 2020		132,504	$	33.82	5.0	$	1,631

Exercisable at September 30, 2020		114,189	$	32.11	4.5	$	1,333
Vested during nine months ended
September 30, 2020		—				$	—

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, 2019 147,538 $ 33.48 6.7 $ 1,782
    Granted —   $ —   $ —
    Exercised (11,304 ) $ 30.67 $ (108 )
Outstanding at September 30, 2019 136,234 $ 33.71 6.0 $ 1,674

Exercisable at September 30, 2019 108,410 $ 31.68 5.4 $ 1,239
Vested during nine months ended
  September 30, 2019 —   $ —

1315

The aggregate intrinsic value of exercisable in-the-money options was ~~$1,771,000~~$1,216,000 and the aggregate intrinsic value of outstanding in-the-money options was ~~$1,950,000~~$1,234,000 based on the market closing price of ~~$48.02~~$41.67 on September 30, ~~2019~~2020 less exercise prices.

The unrecognized compensation cost of options granted to FRP employees but not yet vested as of September 30, ~~2019~~2020 was ~~$317,000,~~$219,000, which is expected to be recognized over a weighted-average period of ~~3.8~~3.1 years.

~~Gains~~A summary of ~~$218,000 were realized by option holders during the nine months ended~~changes in restricted stock awards is presented below (in thousands, except share and per share amounts):

Weighted

Number

Average

Exercise

Remaining

Grant Date

Restricted stock

Price

Term (yrs)

Fair Value(000's)

Outstanding at January 1, 2020

Granted

20,520

46.30

950

Outstanding at September 30, 2020

20,520

46.30

3.7

950

Total compensation cost of restricted stock granted but not yet vested as of September 30, ~~2019. Patriot realized the tax benefits~~2020 was $809,000 which is expected to be recognized over a weighted-average period of ~~$130,838 of these gains because these options were exercised by Patriot employees for options granted prior to the spin-off.~~3.7 years.

(8) Contingent Liabilities.

Certain of the Company’s subsidiaries are involved in litigation on a number of matters and are subject to certain claims which arise in the normal course of business. The Company has retained certain self-insurance risks with respect to losses for third party liability and property damage. The liability at any point in time depends upon the relative ages and amounts of the individual open claims. In the opinion of management, none of these matters are expected to have a material adverse effect on the Company’s consolidated financial condition, results of operations or cash flows.

The Company executed a letter of intent with MRP in May 2016 to develop Phase II of the Riverfront on the Anacostia project and recorded an estimated environmental remediation expense of $2.0 million for the Company’s estimated liability under the proposed agreement. The Company substantially completed the remediation and reduced the estimated liability in the quarter ending September 30, 2018 by ~~$465,000.~~$465,000 and further reduced the liability $92,000 to zero in 2020. The Company has no obligation to remediate any known contamination on Phases III and IV of the development until such time as it makes a commitment to commence construction on each phase.

(9) Concentrations.

The mining royalty lands segment has a total of five tenants currently leasing mining locations and one lessee that accounted for ~~31%~~32.1% of the Company’s consolidated revenues during the nine months ended September 30, ~~2019~~2020 and ~~$469,000~~$374,000 of accounts receivable at September 30, ~~2019.~~2020. The termination of these lessees’ underlying leases could have a material adverse effect on the Company. The Company places its cash and cash equivalents with Wells Fargo Bank and First ~~Tennessee~~Horizon Bank. At times, such amounts may exceed FDIC limits.

(10) Fair Value Measurements.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Level 1 means the use of quoted prices in active markets for identical assets or liabilities. Level 2 means the use of values that are derived principally from or corroborated by observable market data. Level 3 means the use of inputs are those that are unobservable and significant to the overall fair value measurement.

At September 30, ~~2019~~2020 the Company was invested in 4046 corporate bonds with individual maturities ranging from 2020 through 2022. The unrealized gain on these bonds of ~~$1,539,000~~$1,117,000 was recorded as part of comprehensive income and was based on the estimated market value by National Financial Services, LLC (“NFS”) obtained from sources that may include pricing vendors, broker/dealers who clear through NFS and/or other sources (Level 2). The Company recorded a realized gain of ~~$591,000~~$297,000 in its net investment income related to bonds that were sold in ~~2019.~~2020. The amortized cost of the investments was ~~$113,769,000~~$103,507,000 and the carrying amount and fair value of such bonds were ~~$115,308,000~~$104,624,000 as of September 30, ~~2019.~~2020.

At September 30, ~~2019~~2020 and ~~2018,~~2019, the carrying amount reported in the consolidated balance sheets for cash and cash equivalents and revolving credit approximate their fair value based upon the short-term nature of these items.

The fair values of the Company’s other mortgage notes payable were estimated based on current rates available to the Company for debt of the same remaining maturities. At September 30, 2020, the carrying amount and fair value of such other long-term debt was $89,027,000 and $95,138,000, respectively. At September 30, 2019, the carrying amount and fair value of such other long-term debt was $88,891,000 and $94,658,000, respectively. ~~At September 30, 2018, the carrying amount and fair value of such other long-term debt was $88,755,000 and $85,642,000, respectively.~~

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

Brooksville.In 2006, the Company entered into a Joint Venture Agreement with Vulcan Materials Company to jointly own and develop approximately 4,300 acres of land near Brooksville, Florida. Under the terms of the joint venture, FRP contributed its fee interest in approximately 3,443 acres formerly leased to Vulcan under a long-term mining lease which had a net book value of $2,548,000. Vulcan is entitled to mine a portion of the property until 2032 and pay royalties to the Company. FRP also contributed $3,018,000 for one-half of the acquisition costs of a 288-acre contiguous parcel. Vulcan contributed 553 acres that it owned as well as its leasehold interest in the 3,443 acres that it leased from FRP and $3,018,000 for one-half of the acquisition costs of the 288-acre contiguous parcel. The joint venture is jointly controlled by Vulcan and FRP. Distributions will be made on a 50-50 basis except for royalties and depletion specifically allocated to the Company. Other income for the nine months ended September 30, ~~2019~~2020 includes a loss of ~~$34,000~~$33,000 representing the Company’s portion of the loss of this joint venture.

BC FRP Realty (Windlass Run). ~~During~~In 2016, the ~~quarter ending March 2016, we~~Company entered into an agreement with a Baltimore development company (St. John Properties, Inc.) to jointly develop the remaining lands of our Windlass Run Business Park. The 50/50 partnership initially calls for FRP to combine its 25 acres (valued at $7,500,000) with St. John Properties’ adjacent 10 acres fronting on a major state highway (valued at $3,239,536) which resulted in an initial cash distribution of $2,130,232 to FRP in May 2016. Thereafter, the venture will jointly develop the combined properties into a multi-building business park to consist of approximately 329,000 square feet of single-story office space. On September 28, 2017 BC FRP Realty, LLC obtained $17,250,000 of construction financing commitments for 4four buildings through September 15, 2022 from ~~BB&T~~TRUIST BANK at 2.5% over Daily 1 Month LIBOR. The balance outstanding on these loans at September 30, ~~2019~~2020 was ~~$11,538,000.~~$12,211,000.

RiverFront Holdings II, LLC. On May 4, 2018, the Company and MRP formed a partnership to develop Phase II of our RiverFront on the Anacostia project and closed on construction financing with Eagle Bank. The Company has contributed its land with an agreed value of $16.3 million (cost basis of $4.6 million) and $6.2 million of cash. MRP contributed capital of $5.6 million to the partnership including development costs paid prior to the formation of the partnership and a $725,000 development fee. The Company further agreed to fund $13.75 million preferred equity financing at 7.5% interest rate all of which was advanced through June 30, 2019. The Company records interest

income for this loan and a loss in equity in ventures for our 80% equity in the partnership. The loan from Eagle Bank allows draws of up to $71 million during construction at an interest rate of 3.25% over Daily 1 Month LIBOR. The loan is interest only and matures in 36 months with a 12-month extension assuming completion of construction and at least one occupancy. There is a provision for an additional 60 months extension with a 30-year amortization of principal at 2.15% over seven-year US Treasury Constant if NOI is sufficient for a 9% yield. The loan balance at September 30, ~~2019~~2020 was ~~$27,671,000.~~$63,466,000. The Company’s equity interest in the joint venture is accounted for under the equity method of accounting through the construction and lease up period as MRP acts as the administrative agent of the joint venture and oversees and controls the day to day operations of the project.

Bryant Street Partnerships.On December 24, 2018 the Company and MRP formed four partnerships to purchase and develop approximately five acres of land at 500 Rhode Island Ave NE, Washington, D.C. This property is the first phase of the Bryant Street Master Plan. The property is located in an Opportunity Zone, which provides tax benefits in the new communities development program as established by Congress in the Tax Cuts and Jobs Act of 2017. The Company contributed cash of $32 million in exchange for a 61.36% common equity in the partnership. The Company also contributed cash of $23 million as preferred equity financing at 8.0% interest rate. The Company records interest income for this loan and a loss in equity in ventures for our 61.36% equity in the partnership. On March 13, 2019 the partnerships closed on a construction loan with a group of lenders for up to $132 million at an interest rate of 2.25% over Daily 1 Month LIBOR. The loan matures March 13, 2023 with up to two ~~extension~~extensions of one year each upon certain conditions including, for the first, a debt service coverage of at least 1.10 and a loan-to-value that does not exceed 65% and for the second, a debt service coverage of 1.25 and a maximum loan-to-value of 65%. Borrower may prepay a portion of the unpaid principal to satisfy such tests. ~~There were no draws on the~~The loan ~~through~~balance at September 30, ~~2019.~~2020 was $60,342,000. The Company and MRP guaranteed $26 million of the loan in exchange for a 1% lower interest rate. The Company and MRP have a side agreement limiting the Company’s guarantee to its proportionate ownership. The value of the guarantee was calculated at $1.9 million based on the present value of the 1% interest savings over the anticipated ~~48 month~~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.~~ The Company’s equity interest in the joint venture is accounted for under the equity method of accounting as all the major decisions are shared equally.

Hyde Park.On January 27, 2018 the Company entered into a loan agreement with a Baltimore developer to be the principal capital source of a residential development venture in Essexshire now known as “Hyde Park.” We have committed up to $3.5 million in exchange for an interest rate of 10% and a preferred return of 20% after which the Company is also entitled to a portion of proceeds from sale. ~~Hyde Park will hold 122 town homes and four single-family lots and received~~Entitlements for the development of the property are complete, a ~~non-appealable Plan Approval during the first quarter of 2019. We are currently pursuing entitlements and have a home builder~~homebuilder is under contract to purchase all of the ~~land upon government approval to begin development.~~126 recorded building lots. The ~~loan balance at September 30, 2019 was $1,047,000.~~first phase of settlement occurred in May 2020, resulting in a $2.67 million principal and interest payment, with subsequent payments of $1.26 million in principal and interest payments in the third quarter.

DST Hickory Creek. In July 2019, the Company invested $6 million in 1031 proceeds from two sales in 2019 into a Delaware Statutory Trust (DST) known as CS1031 Hickory Creek Apartments, DST. The Company is 26.65% beneficial owner and receives monthly distributions. The DST owns a 294-unit garden-style apartment community consisting of 19 three-story apartment buildings containing 273,940 rentable square feet on approximately 20.4 acres of land. The property was constructed in 1984 and substantially renovated in 2016. The DST purchased the property in April, 2019 for $45,600,000 with ~~10 year~~ten-year financing obtained for $29,672,000 at 3.74% with a 30 year amortization period, interest only for 5five years. The ~~property~~Company’s equity interest in the trust is ~~located~~accounted for under the cost method because we do not have significant influence over the operating and financial policies. Monthly distributions are recorded as equity in ~~Henrico County, providing residents convenient access to some~~gain or loss of ~~the largest employment and economic drivers in Metro Richmond, including ten fortune 1,000 companies.~~joint ventures. Distributions of ~~$40,000 have been received.~~$254,000 were received in the first nine months of 2020.

Amber Ridge.On June 26, 2019 the Company entered into a loan agreement with a Baltimore developer to be the principal capital source of a residential development venture in Prince Georges County, Maryland known as “Amber Ridge.” We have committed up to $18.5 million in exchange for an interest rate of 10% and a preferred return of 20% after which the Company is also entitled to a portion of proceeds from sale. This project will hold ~~190~~187 single-family town homes. We are currently pursuing entitlements and have two homebuilders under contract to purchase all of the 187 units upon completion of development infrastructure.

1800 Half Street. On December 20, 2019 the Company and MRP formed a joint venture to acquire and develop a

mixed-use project located at 1800 Half Street, Washington, D.C. This property is located in the Buzzard Point area of Washington, DC, less than half a mile downriver from Dock 79 and the Maren. It lies directly between our two acres on the Anacostia currently under lease to Vulcan and Audi Field, the home stadium of the DC United. The project is located in an Opportunity Zone, which provides tax benefits in the new communities’ development program as established by Congress in the Tax Cuts and Jobs Act of 2017. The Company contributed cash of $37.3 million. MRP will contribute the remainder of its equity in 2020. The land was acquired in two pieces over first half of 2020. On June 26, 2020 the partnership closed on a construction loan with Truist Bank for up to $74 million at an interest rate of 2.25% over Daily 1 Month LIBOR. The loan matures June 26, 2024 with one extension of two years requiring a .25% fee, paying principal monthly under a 30-year amortization schedule, and meeting a 9.9% debt yield after the first year. The ten-story structure will have 344 apartments and 11,246 square feet of ground floor retail. The Company’s equity interest in the joint venture is accounted for under the equity method of accounting because all major decisions are shared equally.

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

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

Investments in Joint Ventures (in thousands):

								The									The
								Company's									Company's
								Share of									Share of Profit
	Common			Total	Total Assets of	Profit (Loss)		Profit (Loss) of		Common			Total	Total Assets of	Profit (Loss)		(Loss) of the
	Ownership			Investment	The Partnership	Of the Partnership		the Partnership		Ownership			Investment	The Partnership	Of the Partnership		Partnership

As of September 30, 2019
As of September 30, 2020
Brooksville Quarry, LLC	50.00	%	$	7,464	14,383	(68	)	(34	)	50.00	%	$	7,463	14,306	(66	)	(33	)
BC FRP Realty, LLC	50.00	%		5,487	22,857	(990	)	(495	)	50.00	%		5,233	22,726	(311	)	(157	)
RiverFront Holdings II, LLC	80.00	%		25,726	78,282	(602	)	(597	)	80.00	%		24,429	106,289	(3,116	)	(2,749	)
Bryant Street Partnerships	61.36	%		57,827	90,441	(130	)	(130	)	61.36	%		60,059	156,638	(126	)	(1,317	)
Hyde Park				1,067	1,067	—		—					591	591	—		—
DST Hickory Creek	26.65	%		5,934	51,642	(98	)	(26	)	26.65	%		6,000	48,303	(255	)	254
Amber Ridge				317	317	—		—
Amber Ridge Loan													9,970	9,970	—		—
1800 Half St. Owner, LLC										61.37	%		37,748	52,933	147		141
Greenville/Woodfield Partnerships										40.00	%		16,093	44,896	176		88
Total			$	103,822	258,989	(1,888	)	(1,282	)			$	167,586	456,652	(3,551	)	(3,773	)

As of December 31, 2018
As of December 31, 2019
Brooksville Quarry, LLC	50.00	%	$	7,449	14,325	(122	)	(61	)	50.00	%	$	7,499	14,316	(84	)	(42	)
BC FRP Realty, LLC	50.00	%		5,976	21,371	—		—		50.00	%		5,391	22,969	(1,114	)	(591	)
RiverFront Holdings II, LLC	80.00	%		19,865	38,869	(66	)	(66	)	80.00	%		25,975	88,235	(95	)	(871	)
Bryant Street Partnerships	61.36	%		55,000	77,541	—		—		61.36	%		58,353	96,477	260		(573	)
Hyde Park				594	594	39		39					3,492	3,492	—		—
DST Hickory Creek										26.65	%		6,000	49,369	(168	)	123
Amber Ridge Loan													509	509	—		—
1800 Half St. Owner, LLC										59.73	%		37,314	40,161	—		—
Greenville/Woodfield Partnerships										40.00	%		15,919	19,214	—		—
Total			$	88,884	152,700	(149	)	(88	)			$	160,452	334,742	(1,201	)	(1,954	)

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

As of September 30, 2019
Brooksville BC FRP Riverfront Bryant Street
Quarry, LLC Realty, LLC Holdings II, LLC Partnerships Others Total

Investments in real estate, net $ 14,294 22,532 77,713 78,176 50,467 $ 243,182
Cash and cash equivalents 89 18 569 5,884 2,559 9,119
Unrealized rents & receivables —   52 —   52 —   104
Deferred costs —   255 —   6,329 —   6,584
   Total Assets $ 14,383 22,857 78,282 90,441 53,026 $ 258,989

Secured notes payable $ —   11,920 27,671 —   29,375 $ 68,966
Other liabilities 141 75 7,903 13,416 —   21,535
Capital – FRP 7,465 5,431 37,077 56,876 7,318 114,167
Capital - Third Parties 6,777 5,431 5,631 20,149 16.333 54,321
   Total Liabilities and Capital $ 14,383 22,857 78,282 90,441 53,026 $ 258,989

	As of September 30, 2020										Total
	RiverFront		Bryant Street		DST Hickory		1800 Half St.		Greenville/		Apartment/
	Holdings II, LLC		Partnership		Creek		Partnership		Woodfield		Mixed Use

Investments in real estate, net	$	104,647		156,022		45,787		32,358		32,768	$	371,582
Cash and cash equivalents		1,330		483		1,397		17,765		11,754		32,729
Unrealized rents & receivables		81		110		697		0		0		888
Deferred costs		231		23		422		2,810		374		3,860
Total Assets	$	106,289		156,638		48,303		52,933		44,896	$	409,059

Secured notes payable	$	63,082		57,792		29,279		0		0	$	150,153
Other liabilities		2,670		20,213		229		2,969		4,996		31,077
Capital – FRP		35,550		58,527		5,009		37,481		15,960		152,527
Capital - Third Parties		4,987		20,106		13,786		12,483		23,940		75,302
Total Liabilities and Capital	$	106,289		156,638		48,303		52,933		44,896	$	409,059

	As of December 31, 2018													As of September 30, 2020
	Brooksville		BC FRP				RiverFront		Bryant Street					Brooksville		BC FRP				Amber Ridge		Apartment/		Grand
	Quarry, LLC		Realty, LLC		Hyde Park		Holdings II, LLC		Partnerships		Total			Quarry, LLC		Realty, LLC		Hyde Park		Loan		Mixed Use		Total

Investments in real estate, net	$	14,299		21,352		594		38,793		41,821		$	116,859
Investments in real estate, net.														$	14,289		22,063		591		9,970		371,582	$	418,495
Cash and cash equivalents		20		11		—		76		35,670			35,777		17		82		0		0		32,729		32,965
Unrealized rents & receivables															0		235		0		0		888		1,123
Deferred costs		6		8		—		—		50			64		0		346		0		0		3,860		4,069
Total Assets	$	14,325		21,371		594		38,869		77,541		$	152,700	$	14,306		22,726		591		9,970		409,059	$	456,652

Secured notes payable	$	—		9,549		—		—		—		$	9,549	$	0		12,268		0		0		150,153	$	162,421
Other liabilities		119		38		—		1,887		2,886			4,930		62		104		0		0		31,077		31,243
Capital – FRP		7,449		5,892		594		31,347		55,000			100,282		7,463		5,177		591		9,970		152,527		175,728
Capital - Third Parties		6,757		5,892		—		5,635		19,655			37,939		6,781		5,177		0		0		75,302		87,260
Total Liabilities and Capital	$	14,325		21,371		594		38,869		77,541		$	152,700	$	14,306		22,726		591		9,970		409,059	$	456,652

	As of December 31, 2019										Total
	RiverFront		Bryant Street		DST Hickory		1800 Half St.		Greenville/		Apartment/
	Holdings II, LLC		Partnership		Creek		Partnership		Woodfield		Mixed Use

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

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

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

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

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

The Company’s capital recorded by the unconsolidated Joint Ventures is ~~$10,345,000~~$8,199,000 more than the Investment in Joint Ventures reported in the Company’s consolidated balance sheet due to the lower basis in property contributed.

The amount of consolidated ~~accumulated deficit~~retained earnings for these joint ventures was ~~$(3,637,000)~~$(6,879,000) and ~~$(2,702,000)~~$(4,127,000) as of September 30, ~~2019~~2020 and December 31, ~~2018~~2019 respectively.

(12) Discontinued Operations.

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

	Three months ended				Nine months ended				Three months ended			Nine months ended
	September 30,				September 30,				September 30,			September 30,
	2019		2018		2019		2018		2019			2019
Lease Revenue		—		219		460		11,876	$	—			460

Cost of operations:
Depreciation, depletion and amortization										(24	)		17
Operating expenses										12			246
Property taxes										—			46
Management company indirect										—			—
Corporate expenses										—			—
Total cost of operations										(12	)		309

Total operating profit										12			151

Interest expense										—			—

1721

     Depreciation, depletion and amortization (24 ) 29 17 3,131
     Operating expenses 12 52 246 1,694
     Property taxes —   19 46 1,266
     Management company indirect —   370 —   1,360
     Corporate expenses   —   56 —   1,458
Total cost of operations (12 ) 526 309 8,909

Total operating profit (loss) 12 (307 ) 151 2,967

Interest expense —   —   —   (587 )
Gain (loss) on sale of buildings (30 ) 200 9,238 165,007

Income (loss) before income taxes (18 ) (107 ) 9,389 167,387
Provision for (benefit from) income taxes (5 ) (29 ) 2,540 45,278

Income (loss) from discontinued operations $ (13 ) (78 ) 6,849 122,109

Earnings per common share:
Income (loss) from discontinued operations-
    Basic 0.00 (0.01 ) 0.69 12.17
    Diluted 0.00 (0.01 ) 0.69 12.08

~~The components of the balance sheet are as follows (in thousands):~~

September 30 December 31
Assets: 2019 2018
Real estate investments at cost:
Land $ —   546
Buildings and improvements —   3,315
     Total investments in properties —   3,861
Less accumulated depreciation and depletion —   2,374
     Net investments in properties —   1,487

Accounts receivable, net 32 910
Unrealized rents —   473
Deferred costs —   354
Assets of discontinued operations $ 32 3,224

Liabilities:
Accounts payable and accrued liabilities $ 18 205
Deferred revenue —   45
Tenant security deposits —   38
Liabilities of discontinued operations $ 18 288

Gain (loss) on sale of buildings		(30	)	9,238

Income (loss) before income taxes		(18	)	9,389
Provision for (benefit from) income taxes		(5	)	2,540

Income (loss) from discontinued operations	$	(13	)	6,849

Earnings per common share:
Income (loss) from discontinued operations-
Basic	$	0.00		0.69
Diluted	$	0.00		0.69

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

The following discussion includes a non-GAAP financial measure within the meaning of Regulation G promulgated by the Securities and Exchange Commission to supplement the financial results as reported in accordance with GAAP. The non-GAAP financial measure discussed is net operating income (NOI). The Company uses this metric to analyze its continuing operations and to monitor, assess, and identify meaningful trends in its operating and financial performance. This measure is not, and should not be viewed as, a substitute for GAAP financial measures. Refer to “Non-GAAP Financial Measure” below in this quarterly report for a more detailed discussion, including reconciliations of this non-GAAP financial measure to its most directly comparable GAAP financial measure.

Overview -FRP Holdings, Inc. is a holding company engaged in the real estate business, 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 a residential apartment building, and (iv) warehouse/office building ownership, leasing and management.

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

On May 21, 2018, the Company completed the disposition of 40 industrial warehouse properties and three additional land parcels to an affiliate of Blackstone Real Estate Partners VIII, L.P. for $347.2 million. One warehouse property valued at $11.7 million was excluded from the sale due to the tenant exercising its right of first refusal to purchase the property. On June 28, 2019, the Company completed the sale of the excluded property to the same buyer for $11.7 million. These properties comprised substantially all the assets of our Asset Management segment and constituted a strategic shift for the Company and have been reclassified as discontinued operations for all periods presented. ~~On June 28, 2019, the Company completed the sale of the excluded property to the same buyer for $11.7 million.~~

Asset Management Segment.

The Asset Management segment owns, leases and manages ~~four~~ commercial properties. These assets create revenue and cash flows through tenant rental payments, lease management fees and reimbursements for building operating costs. The major cash outlays incurred in this segment are for operating expenses, real estate taxes, building repairs, lease commissions and other lease closing costs, construction of tenant improvements, capital to acquire existing operating buildings and closing costs related thereto and personnel costs of our property management team.

As of September 30, ~~2019,~~2020, the Asset Management Segment owned ~~four~~three commercial properties as follows:

1) 34 Loveton Circle in suburban Baltimore County, Maryland consists of one office building totaling 33,708 square feet which is ~~95.2%~~95.1% occupied (16% of the space is occupied by the Company for use as our Baltimore headquarters).

2) 155 E. 21st Street in Duval County, Florida was an office building property that remains under lease through March

2026. We permitted the tenant to demolish all structures on the property during 2018.

3) Cranberry Office Park consists of five office buildings totaling 268,010 square feet which are ~~26.1%~~78.6% occupied at September 30, ~~2019.~~

~~4) 1801 62~~^nd ~~Street consists of 94,350 square feet and was completed in second quarter. The building is 100% leased at September 30, 2019.~~2020.

~~Management~~To take advantage of market cycles and attract a wide range of top tier buyers, management focuses on several factors ~~to measure our success on a comparative basis~~ in this ~~segment.~~segment to facilitate a successful and profitable sale. The major factors we focus on are (1) ~~revenue growth, (2)~~ net operating income ~~(3)~~growth, (2) growth in ~~occupied square feet, (4) actual~~ occupancy, ~~rate, (5) average annual occupied square feet, (6)~~(3) average annual occupancy rate (defined as the occupied 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), ~~and (7)~~(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 (this does not include the 4,280 acres owned in our Brooksville joint venture with Vulcan Materials). Other than one location in Virginia, all of these properties are located in Florida and Georgia. The typical lease in this segment requires the tenant to pay us a royalty based on the number of tons of mined materials sold from our property during a given fiscal year multiplied by a percentage of the average annual sales price per ton sold. As a result of this royalty payment structure, we do not bear the cost risks associated with the mining operations, however, we are subject to the cyclical nature of the construction markets in these states 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. Our mining properties had estimated remaining reserves of ~~528~~516 million tons as of December 31, ~~2018~~2019 after a total of ~~8.0~~8.1 million tons were consumed in ~~2018.~~2019.

The major expenses in this segment are comprised of collection and accounting for royalties, management’s oversight of the mining leases, land entitlement for post-mining uses and property taxes at our non-leased locations and at our Grandin location which, unlike our other leased mining locations, are not paid by the tenant. As such, our costs in this business are very low as a percentage of revenue, are relatively stable and are not affected by increases in production at our locations. Our current mining tenants are Vulcan Materials, Martin Marietta, Cemex, Argos and The Concrete Company.

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

Significant “2^nd life” Mining Lands:

Location	Acreage	Status
Brooksville, 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	~~1,993~~1,907 +/-	Approval in place for 105, 1 acre, waterfront residential lots after mining completed.
~~Gulf Hammock, Fl~~	~~1,600 +/-~~	~~Currently on the market~~
Total	~~7,873~~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.

Since 1990, one of our primary strategies in this segment has been to acquire, entitle and ultimately develop commercial/industrial business parks providing 5–15 building pads which we typically convert into warehouse/office buildings. To date, our management team has converted 30 of these pads into developed buildings. Our typical practice has been to transfer these assets to the Asset Management segment on the earlier to occur of (i) commencement of rental revenue or (ii) issuance of the certificate of occupancy. We have also occasionally sold several of these pad sites over time to third parties.

Development Segment – Warehouse/Office Land.

At September 30, ~~2019~~2020 this segment owned the following future development ~~parcels:~~parcel:

~~15 acres of horizontally developed land available for future construction of an additional 187,550 square feet of warehouse/office product at Lakeside Business Park in Harford County, Maryland.~~

25 acres of horizontally developed land capable of supporting ~~227,940~~226,750 square feet of warehouse, office, and flex buildings at Hollander 95 Business Park in Baltimore City, Maryland.

We will continue to actively monitor these submarkets where we have lots ready for construction and take advantage of the opportunities presented to us. We will also look for new parcels to place into development.

We 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.

Significant Investment Lands Inventory:

Location	Approx. Acreage	Status	NBV	Approx. Acreage	Status	NBV
RiverFront on the Anacostia Phases III-IV	2.5	Phase II contributed to JV and under construction.	$6,099,000	2.5	Conceptual design program ongoing.	$6,068,000
Hampstead Trade Center, MD	73	Residential conceptual design program ongoing	$8,146,000	73	Residential conceptual design program ongoing	$8,969,000
Square 664E,on the Anacostia River in DC	2	Under lease to Vulcan Materials as a concrete batch plant through 2021 with one 5 year renewal option.	$8,052,000	2	Under lease to Vulcan Materials as a concrete batch plant through 2021 with one 5-year renewal option.	$7,885,000
Total	77.5		$22,297,000	77.5		$22,922,000

RIVERFRONT ON THE ANACOSTIA PHASES III-IV: This property consists of 2.5 acres on the Anacostia River and is immediately adjacent to the Washington ~~Nationals’~~National’s baseball park in the SE Central Business District of Washington, DC. Once zoned for industrial use and under a ground lease, this property is no longer under lease and has been rezoned for the construction of approximately 600,000 square feet of “mixed-use” development in two phases. See “Stabilized Joint Venture Segment” below for discussion on Phase I and Development Joint Ventures below for discussion of Phase II. Phases III and IV are slated for office, and hotel/residential buildings, respectively,

all with permitted first floor retail uses.

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

HAMPSTEAD TRADE CENTER: We purchased this 118-acre tract in 2005 for $4.3 million in a Section 1031

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

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

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

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

	As of September 30, 2019													As of September 30, 2020										Total
	Brooksville		BC FRP		Riverfront		Bryant Street							RiverFront		Bryant Street		DST Hickory		1800 Half St.		Greenville/		Apartment/
	Quarry, LLC		Realty, LLC		Holdings II, LLC		Partnerships		Others		Total			Holdings II, LLC		Partnership		Creek		Partnership		Woodfield		Mixed Use

Investments in real estate, net	$	14,294		22,532		77,713		78,176		50,467		$	243,182	$	104,647		156,022		45,787		32,358		32,768	$	371,582
Cash and cash equivalents		89		18		569		5,884		2,559			9,119		1,330		483		1,397		17,765		11,754		32,729
Unrealized rents & receivables		—		52		—		52		—			104		81		110		697		0		0		888
Deferred costs		—		255		—		6,329		—			6,584		231		23		422		2,810		374		3,860
Total Assets	$	14,383		22,857		78,282		90,441		53,026		$	258,989	$	106,289		156,638		48,303		52,933		44,896	$	409,059

Secured notes payable	$	—		11,920		27,671		—		29,375		$	68,966	$	63,082		57,792		29,279		0		0	$	150,153
Other liabilities		141		75		7,903		13,416		—			21,535		2,670		20,213		229		2,969		4,996		31,077
Capital – FRP		7,465		5,431		37,077		56,876		7,318			114,167		35,550		58,527		5,009		37,481		15,960		152,527
Capital - Third Parties		6,777		5,431		5,631		20,149		16.333			54,321		4,987		20,106		13,786		12,483		23,940		75,302
Total Liabilities and Capital	$	14,383		22,857		78,282		90,441		53,026		$	258,989	$	106,289		156,638		48,303		52,933		44,896	$	409,059

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

Investments in real estate, net.	$	14,289		22,063		591		9,970		371,582	$	418,495
Cash and cash equivalents		17		82		0		0		32,729		32,965
Unrealized rents & receivables		0		235		0		0		888		1,123
Deferred costs		0		346		0		0		3,860		4,069
Total Assets	$	14,306		22,726		591		9,970		409,059	$	456,652

Secured notes payable	$	0		12,268		0		0		150,153	$	162,421
Other liabilities		62		104		0		0		31,077		31,243
Capital – FRP		7,463		5,177		591		9,970		152,527		175,728
Capital - Third Parties		6,781		5,177		0		0		75,302		87,260
Total Liabilities and Capital	$	14,306		22,726		591		9,970		409,059	$	456,652

Brooksville Quarry, LLC..In 2006, the Company entered into a Joint Venture Agreement with Vulcan Materials Company to jointly own and develop approximately 4,300 acres of land near Brooksville, Florida. Under the terms of the joint venture, FRP contributed its fee interest in approximately 3,443 acres formerly leased to Vulcan under a long-term mining lease which had a net book value of $2,548,000. Vulcan is entitled to mine a portion of the property until 2032 and pay royalties to the Company. FRP also contributed $3,018,000 for one-half of the acquisition costs of a 288-acre contiguous parcel. Vulcan contributed 553 acres that it owned as well as its leasehold interest in the 3,443 acres that it leased from FRP and $3,018,000 for one-half of the acquisition costs of the 288-acre contiguous parcel. The joint venture is jointly controlled by Vulcan and FRP. Distributions will be made on a 50-50 basis except for royalties and depletion specifically allocated to the Company. Other income for the year ended September 30, ~~2019~~2020 includes a loss of ~~$34,000~~$33,000 representing the Company’s portion of the loss of this joint venture (not including FRP’s royalty revenues).

BC Realty, LLC (Windlass Run). In March 2016, we entered into an agreement with a Baltimore development company (St. John Properties, Inc.) to jointly develop the remaining lands of our Windlass Run Business Park. The 50/50 partnership initially calls for FRP to combine its 25 acres (valued at $7,500,000) with St. John Properties’ adjacent 10 acres fronting on a major state highway (valued at $3,239,536) which resulted in an initial cash distribution of $2,130,232 to FRP in May 2016. Thereafter, the venture will jointly develop the combined properties into a multi-building business park to consist of approximately 329,000 square feet of single-story office space. The project will take place in several phases, with construction of the first phase, which includes two office buildings and

two retail buildings totaling 100,030-square-feet (inclusive of 27,950 retail), commenced in the fourth quarter of 2017 and ~~projected to stabilize~~was completed in ~~the fourth quarter of 2020. The start of subsequent phases will follow with the final phase commencing in the 4th quarter of 2024.~~December 2018. On September 28, 2017 BC FRP Realty, LLC obtained $17,250,000 of construction financing commitments for 4 buildings through September 15, 2022 from ~~BB&T~~TRUIST BANK at 2.5% over Daily 1 Month LIBOR. The balance outstanding on these loans at September 30, ~~2019~~2020 was ~~$11,538,000. The joint venture finished shell construction on its two office buildings in November 2018, while shell construction on the two retail buildings wrapped up in January 2019.~~$12,211,000.

RiverFront Holdings II, LLC. On May 4, 2018, the Company and MRP formed a Joint Venture to develop Phase II and closed on construction financing with Eagle Bank. Phase II on the Anacostia known as The Maren is a 250,000-square-foot mixed-use development which supports 264 residential units and ~~6,900~~6,937 SF of retail. The Company has contributed its land with an agreed value of $16.3 million (cost basis of $4.6 million) and $6.2 million of cash. MRP contributed capital of $5.6 million to the joint venture including development costs paid prior to the formation of the joint venture and a $725,000 development fee. The Company further agreed to fund $13.75 million preferred equity financing at 7.5% interest rate all of which was advanced through ~~September 30,~~December 31, 2019. The loan from Eagle Bank allows draws of up to $71 million during construction at an interest rate of 3.25% over Daily 1 Month LIBOR. The loan is interest only and matures in 36 months with a 12-month extension assuming completion of construction and at least one occupancy. There is a provision for an additional 60 months extension with a 30-year amortization of principal at 2.15% over seven-year US Treasury Constant if NOI is sufficient for a 9% yield. The Company’s equity interest in the joint venture is accounted for under the equity method of accounting as MRP acts as the administrative agent of the

joint venture and oversees and controls the day to day operations of the project. Construction began in April 2018,

with substantial completion ~~estimated~~ in ~~June~~March 2020, and stabilization (meaning 90% of the individual apartments are leased and occupied by third party tenants) in ~~late~~early 2021.

Bryant Street Partnerships:On December 24, 2018 the Company and MRP formed four partnerships to purchase and develop approximately five acres of land at 500 Rhode Island Ave NE, Washington, D.C. This property is the first phase of the Bryant Street Master Plan. The property is located in an Opportunity Zone, which provides tax benefits in the new communities development program as established by Congress in the Tax Cuts and Jobs Act of 2017. This first phase is a mixed-use development which supports 487 residential units and ~~86,042~~85,681 SF of first floor and stand-alone retail on approximately five acres of the roughly 12-acre site. The Company contributed cash of $32 million in exchange for a 61.36% common equity in the partnership. The Company also contributed cash of $23 million as preferred equity financing at 8.0% interest rate. The Company records interest income for this loan and a loss in equity in joint ventures for our 61.36% equity in the partnership. On March 13, 2019 the partnerships closed on a construction loan with a group of lenders for up to $132 million at an interest rate of 2.25% over Daily 1 Month LIBOR. The loan matures March 13, 2023 with up to two ~~extension~~extensions of one year each upon certain conditions including, for the first, a debt service coverage of at least ~~1.10~~1.1 and a loan-to-value that does not exceed 65% and for the second, a debt service coverage of 1.25 and a maximum loan-to-value of 65%. The Company and MRP guaranteed $26 million of the loan in exchange for a 1% lower interest rate. The Company and MRP have a side agreement limiting the Company’s guarantee to its proportionate ownership. The value of the guarantee was calculated at $1.9 million based on the present value of the 1% interest savings over the anticipated 48-month term. This amount is included as part of the Company’s investment basis and is amortized to expense over the 48 months. The Company will evaluate the guarantee liability based upon the success of the project and assuming no payments are made under the guarantee the Company will have a gain for $1.9 million when the loan is paid in full. Borrower may prepay a portion of the unpaid principal to satisfy such tests. ~~There were no draws on the loan through September 30, 2019.~~ The Company’s equity interest in the joint venture is accounted for under the equity method of accounting as all the major decisions are shared equally. Construction ~~is to begin~~began in February 2019, with substantial completion estimated in ~~2nd~~3rd quarter 2021, and stabilization (meaning ~~90%~~88% of the individual apartments and retail are leased and occupied by third party tenants) in late 2022.

Hyde Park. On January 27, 2018 the Company entered into a loan agreement with a Baltimore developer to be the principal capital source of a residential development venture in Essexshire now known as “Hyde Park.” We have committed up to $3.5 million in exchange for an interest rate of 10% and a preferred return of 20% after which a “waterfall” determines the split of proceeds from sale. ~~Hyde Park will hold 122 town homes~~Entitlements for the development of the property are complete and ~~four single-family lots and received~~ a ~~non-appealable Plan Approval during the first quarter of 2019. We are currently pursuing entitlements and have a home builder~~homebuilder is under contract to purchase all of the ~~land upon government approval to begin development.~~126 recorded building lots. The ~~loan balance at September 30, 2019 was $1,047,000.~~

first phase of settlement occurred in May 2020, resulting in a $2.67 million principal and interest payment, with subsequent payments of $1.26 million in principal and interest payments in the third quarter.

Amber Ridge.On June 26, 2019 the Company entered into a loan agreement with a Baltimore developer to be the principal capital source of a residential development venture in Prince Georges County, Maryland known as “Amber Ridge.” We have committed up to $18.5 million in exchange for an interest rate of 10% and a preferred return of 20% after which the Company is also entitled to a portion of proceeds from sale. This project will hold ~~190~~187 single-family town homes. We are currently pursuing entitlements and have two homebuilders under contract to purchase all of the 187 units upon completion of infrastructure development.

1800 Half Street. On December 20, 2019 the Company and MRP formed a joint venture to acquire and develop a mixed-use project located at 1800 Half Street, Washington, D.C. This property is located in the Buzzard Point area of Washington, DC, less than half a mile downriver from Dock 79 and the Maren. It lies directly between our two acres on the Anacostia currently under lease by Vulcan and Audi Field, the home stadium of the DC United. The project is located in an Opportunity Zone, which provides tax benefits in the new communities’ development program as established by Congress in the Tax Cuts and Jobs Act of 2017. The Company contributed cash of $37.3 million. The land was acquired in two pieces over first half of 2020. On June 26, 2020 the partnership closed on a construction loan with Truist Bank for up to $74 million at an interest rate of 2.25% over Daily 1 Month LIBOR. The loan matures June 26, 2024 with one extension of two years requiring a .25% fee, paying principal monthly under a 30 year amortization schedule, and meeting a 9.9% debt yield after the first year. The ten-story structure will have 344 apartments and 11,246 square feet of ground floor retail. The Company’s equity interest in the joint venture is accounted for under the equity method of accounting as all major decisions are shared equally.

2327

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

Stabilized Joint Venture Segment.

Currently the segment includes two stabilized joint ventures which own, ~~leases~~lease and manage buildings. These assets create revenue and cash flows through tenant rental payments, and reimbursements for building operating costs. The major cash outlays incurred in this segment are for property taxes, full service maintenance, property management, utilities, marketing and our management.

Dock 79.IsThis first phase of our RiverFront on The Anacostia project is a joint venture owned by the Company (66%) and our partner, MRP Realty (34%) and is a 305-unit residential apartment building with approximately 18,000 sq. ft. of first floor retail space. For financial reporting purposes the Company consolidates this venture as it is considered the primary beneficiary of the Variable Interest Entity. As of September 30, ~~2019,~~2020, the residential units were ~~96.72%~~94.43% occupied and ~~93.44%~~90.49% leased, while retail units are 76% leased with just one space remaining.

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

Comparative Results of Operations for the Three months ended September 30, ~~2019~~2020 and ~~2018~~2019

Consolidated Results

(dollars in thousands) Three Months Ended September 30,
2019 2018 Change %
Revenues:
  Lease Revenue $ 3,581 $ 3,617 $ (36 ) -1.0 %
  Mining lands lease revenue 2,302 2,125 177 8.3 %
Total Revenues 5,883 5,742 141 2.5 %

Cost of operations:
  Depreciation/Depletion/Amortization 1,431 1,821 (390 ) -21.4 %
  Operating Expenses 952 983 (31 ) -3.2 %
  Environmental remediation —   (465 ) 465 100.0 %
  Property Taxes 740 663 77 11.6 %
  Management company indirect 670 550 120 21.8 %
  Corporate Expense 732 522 210 40.2 %
Total cost of operations 4,525 4,074 451 11.1 %

Total operating profit 1,358 1,668 (310 ) -18.6 %

Net investment income, including realized gains
of $144 and $0 2,019 1,654 365 22.1 %
Interest Expense (129 ) (768 ) 639 -83.2 %
Equity in loss of joint ventures (746 ) (13 ) (733 ) 5638.5 %
Gain (loss) on real estate investments 126 (3 ) 129 -4300.0 %

Income before income taxes 2,628 2,538 90 3.5 %

(dollars in thousands)		Three Months Ended September 30,
	2020			2019		Change		%
Revenues:
Lease Revenue	$		3,591	$	3,581	$	10		0.3	%
Mining lands lease revenue			2,507		2,302		205		8.9	%
Total Revenues			6,098		5,883		215		3.7	%

2428

Cost of operations:
Depreciation/Depletion/Amortization													1,438			1,431			7		0.5	%
Operating Expenses													892			952			(60	)	-6.3	%
Property Taxes													706			740			(34	)	-4.6	%
Management company indirect													844			670			174		26.0	%
Corporate Expense													637			732			(95	)	-13.0	%
Total cost of operations													4,517			4,525			(8	)	-0.2	%

Total operating profit													1,581			1,358			223		16.4	%

Net investment income, including realized gains
of $55 and $144													1,814			2,019			(205	)	-10.2	%
Interest Expense													(46	)		(129	)		83		-64.3	%
Equity in loss of joint ventures													(1,788	)		(746	)		(1,042	)	139.7	%
Gain on sale of real estate													5,732			126			5,606		4449.2	%

Income before income taxes													7,293			2,628			4,665		177.5	%
Provision for income taxes		726			508			218		42.9	%		2,022			726			1,296		178.5	%
Income from continuing operations		1,902			2,030			(128	)	-6.3	%		5,271			1,902			3,369		177.1	%

Loss from discontinued operations, net		(13	)		(78	)		65		-83.3	%		—			(13	)		13		-100.0	%

Net income		1,889			1,952			(63	)	-3.2	%		5,271			1,889			3,382		179.0	%
Loss attributable to noncontrolling interest		(112	)		(272	)		160		-58.8	%		(184	)		(112	)		(72	)	64.3	%
Net income attributable to the Company	$	2,001		$	2,224		$	(223	)	-10.0	%	$	5,455		$	2,001		$	3,454		172.6	%

Net income for the third quarter of ~~2019~~2020 was $5,455,000 or $.57 per share versus $2,001,000 or $.20 ~~per share versus $2,224,000 or $.22~~ per share in the same period last year. The third quarter of 2020 was impacted by the following items:

Interest expense decreased $83,000 as we capitalized more interest on our joint venture construction projects.
Loss on joint ventures increased $1,042,000 primarily due to operating loss at the Maren due to leasing efforts.
Gain on sale of $5,732,000 from the sale of our building at 1801 62^nd Street and the sale of 87 acres of our Ft. Myers property compared to $126,000 in the same period last year

Loss from discontinued operations for the third quarter of 2019 was ($13,000) or $.00 per ~~share versus a loss from discontinued operations of ($78,000) or ($.01) per share in the same period last year. Interest earned for the~~share. The third quarter ~~includes $560,000 for Bryant Street and Maren preferred interest and~~of 2019 included a $144,000 realized gain on bonds called early. Loss on Joint Venture includes $393,000 for the Company’s ownership share of the Bryant Street and Maren preferred interest and $255,000 amortization of the guarantee liability related to the Bryant Street loan. In July 2019 land located in Yatesville, Georgia was sold for $213,500 resulting in a gain of $124,000.

Asset Management Segment Results

	Three months ended September 30																		Three months ended September 30
(dollars in thousands)	2019			%			2018			%			Change			%			2020		%			2019			%			Change			%

Lease revenue	$	430			100.0	%		568			100.0	%		(138	)		-24.3	%	$	721		100.0	%		430			100.0	%		291			67.7	%

Depreciation, depletion and amortization		154			35.8	%		145			25.5	%		9			6.2	%		137		19.0	%		154			35.8	%		(17	)		-11.0	%
Operating expenses		108			25.1	%		106			18.7	%		2			1.9	%		139		19.3	%		108			25.1	%		31			28.7	%
Property taxes		70			16.3	%		43			7.6	%		27			62.8	%		43		5.9	%		70			16.3	%		(27	)		-38.6	%
Management company indirect		90			20.9	%		(2	)		-.4	%		92			-4600.0	%		202		28.0	%		90			20.9	%		112			124.4	%
Corporate expense		168			39.1	%		34			6.0	%		134			394.1	%		165		22.9	%		168			39.1	%		(3	)		-1.8	%

Cost of operations		590			137.2	%		326			57.4	%		264			81.0	%		686		95.1	%		590			137.2	%		96			16.3	%

Operating profit	$	(160	)		-37.2	%		242			42.6	%		(402	)		-166.1	%	$	35		4.9	%		(160	)		-37.2	%		195			-121.9	%

Most of the Asset Management Segment was reclassified to discontinued operations leaving two commercial properties as well as Cranberry Run, which we purchased in the first quarter of 2019, and 1801 ~~62nd~~62^nd Street which joined ~~Asset Management~~this segment on April 1.1 of 2019 and sold this quarter. Cranberry Run is a five-building industrial park in Harford County, MD totaling 268,010 square feet of industrial/ flex space and at quarter end was ~~26.1%~~78.6% leased and occupied. 1801 62nd Street is our most recent spec building in Hollander Business Park and is our first warehouse with a 32-foot clear. We completed construction on this building earlier this year and it is now 100% leased. We expect it to be fully occupied in the first quarter of 2020. Total revenues in this segment were ~~$430,000, down ($138,000)~~$721,000, up $291,000 or ~~(24.3%)~~67.7%, over the same period last year. Operating ~~loss~~profit was ~~($160,000), down ($402,000)~~$35,000, up $195,000 from an operating ~~profit~~loss of ~~$242,000~~($160,000) in the same quarter last year due to ~~higher allocation~~1801 62^nd St being fully leased and occupied, improved leasing at Cranberry offset by the sale of ~~corporate expenses and increased operating expenses associated with the Cranberry Run acquisition~~7030 Dorsey Road in ~~the first quarter and the addition of 1901 62nd Street to Asset Management in the second quarter.~~June 2019.

Mining Royalty Lands Segment Results

~~Highlights of the Three Months ended September 30, 2019:~~

~~Mining lands lease revenue was up $177,000, or 8.3%.~~

~~Three months ended September 30~~

																	Three months ended September 30
(dollars in thousands)	2019		%			2018		%			Change			%			2020		%			2019		%			Change			%

Mining lands lease revenue	$	2,302		100.0	%		2,125		100.0	%		177			8.3	%	$	2,507		100.0	%		2,302		100.0	%		205			8.9	%

Depreciation, depletion and amortization		36		1.6	%		55		2.6	%		(19	)		-34.5	%		60		2.4	%		36		1.6	%		24			66.7	%
Operating expenses		44		1.9	%		48		2.2	%		(4	)		-8.3	%		16		0.6	%		44		1.9	%		(28	)		-63.6	%
Property taxes		66		2.9	%		61		2.9	%		5			8.2	%		59		2.4	%		66		2.9	%		(7	)		-10.6	%
Management company indirect		53		2.3	%		—		0.0	%		53			0.0	%		81		3.2	%		53		2.3	%		28			52.8	%
Corporate expense		44		1.9	%		28		1.3	%		16			57.1	%		53		2.1	%		44		1.9	%		9			20.5	%

Cost of operations		243		10.6	%		192		9.0	%		51			26.6	%		269		10.7	%		243		10.6	%		26			10.7	%

Operating profit	$	2,059		89.4	%		1,933		91.0	%		126			6.5	%	$	2,238		89.3	%		2,059		89.4	%		179			8.7	%

Total revenues in this segment were ~~$2,302,000~~$2,507,000 versus ~~$2,125,000~~$2,302,000 in the same period last year. Total operating profit in this segment was ~~$2,059,000,~~$2,238,000, an increase of ~~$126,000~~$179,000 versus ~~$1,933,000~~$2,059,000 in the same period last year. Among the reasons for this increase in revenue and operating profit is the contribution from our Ft. Myers quarry, the revenue from which, now that mining has begun in earnest, was nearly double the minimum royalty we have been receiving until recently. Royalties were reduced by $115,000 due to a volumetric adjustment from the Manassas quarry.

Development Segment Results

	Three months ended September 30									Three months ended September 30
(dollars in thousands)	2019			2018			Change			2020			2019			Change

Lease revenue	$	307			330			(23	)	$	290			307			(17	)

Depreciation, depletion and amortization		54			57			(3	)		53			54			(1	)
Operating expenses		105			143			(38	)		62			105			(43	)
Environmental remediation		—			(465	)		465
Property taxes		300			269			31			330			300			30
Management company indirect		477			465			12			504			477			27
Corporate expense		479			408			71			381			479			(98	)

Cost of operations		1,415			877			538			1,330			1,415			(85	)

Operating loss	$	(1,108	)		(547	)		(561	)	$	(1,040	)		(1,108	)		68

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

With respect to ongoing projects:

We are ~~fully engaged~~ in the ~~formal~~PUD entitlement process ~~of seeking PUD entitlements~~ for our 118-acre tract in Hampstead, Maryland, now known as “Hampstead Overlook.” Hampstead Overlook received ~~non-appealable rezoning~~Concept Plan approval from the Town of Hampstead

for 164 single and 91 town home residential units in February 2020, and the project is currently under Preliminary Plan review with the governing agencies.
This quarter we received permit entitlements for two industrial ~~to residential during~~buildings at Hollander Business Park totaling 145,750 square feet. We have started construction and anticipate shell completion in the ~~first~~third quarter ~~this year.~~ of 2021.
We finished shell building construction in December 2018 on the two office buildings in the first phase of our joint venture with St. John Properties. Shell building construction of the two retail buildings was completed in ~~January.~~January 2019. We are now in the process of leasing these four single-story buildings totaling 100,030 square feet of office and retail space. At quarter end, Phase I was ~~44%~~47% leased and 8%44% occupied.
We are the principal capital source of a residential development venture in Baltimore County, Maryland known as “Hyde Park.” We have committed up to $3.5 million in exchange for an interest rate of 10%. Additional proceeds and interest payments above a

20% preferred return ~~of 20% after which~~on capital determine a ~~“waterfall” determines the~~ split of ~~proceeds from sale. Hyde Park will hold 122 town homes~~profits. Entitlements for the development of the property are complete, and ~~four single-family lots and received~~ a ~~non-appealable Plan Approval during the first quarter. We are currently pursuing entitlements and have a home builder~~homebuilder is under contract to purchase all the ~~land upon government approval to begin development.~~126 recorded building lots. The first phase of settlement occurred in May 2020, resulting in a $2.67 million principal and interest payment, with subsequent payments of $1.26M in principal and interest payments in the third quarter. Currently all principal and $322,605 in accrued interest has been repaid.
We are the principal capital source of a residential development venture in Prince George’s County, Maryland known as “Amber Ridge.” We have committed up to $18.5 million in exchange for an interest rate of 10%. Additional proceeds and interest payments above a 20% preferred return ~~of 20% after which~~on capital determine a ~~“waterfall” determines the~~ split of ~~proceeds from sale.~~profits. Amber Ridge will hold ~~approximately 200~~187 town homes. We are currently pursuing entitlements, mass grading the site, and have ~~a home builder~~two homebuilders under contract to purchase ~~136 of the 200~~all 187 units upon completion of ~~development.~~development infrastructure.
In April 2018, we began construction on Phase II of our RiverFront on the Anacostia project, now known as “The Maren.” ~~We expect to deliver~~The 14-story project has 264 units and 6,937 net leasable square feet of ground floor retail and received its certificate of occupancy at the ~~building~~end of September. Lease-up commenced in earnest in the ~~first half~~second week of ~~2020.~~March. At the end of the quarter, the Maren’s residential units were 76.14% leased, and 68.94% occupied.
In December 2018, the Company entered into a joint venture agreement with ~~MidAtlantic Realty Partners (MRP)~~MRP for the development of the first phase of a multifamily, mixed-use development in northeast Washington, DC known as “Bryant Street.” The project is comprised of four buildings, with 487 units and 85,681 net leasable square feet of retail. FRP contributed $32 million ~~for~~in common equity and another $23 million ~~for~~in preferred equity to the joint venture. Construction began in February 2019 and ~~should~~as of the end of the quarter was 78% complete. Bryant Street is currently on time, within budget, and expected to be ~~finished~~complete in ~~2021.~~the fourth quarter of 2021, with the first of the four buildings delivering in the fourth quarter of 2020. This project is located in an opportunity zone and ~~could~~has allowed us to defer $14.9 million in taxes associated with the sale of our industrial assets.
In December 2019, the Company entered into a joint venture agreement with MRP for the development of a mixed-use project known as “1800 Half Street.” The development is located in the Buzzard Point area of Washington, DC, less than half a mile downriver from Dock 79 and the Maren. It lies directly between our two acres on the Anacostia, currently under lease by Vulcan, and Audi Field, the home stadium of the DC United. The 10-story structure will have 344 apartments and 11,246 square feet of ground floor retail. FRP contributed $37.3 million in common equity. The project is a qualified opportunity zone investment and will defer just over $10 million in taxes associated with the sale of our industrial assets. In June 2020, we closed on a $74 million construction loan, and we began construction at the end of August.
In December 2019, the company entered into two joint ventures in Greenville, SC with a new partner, Woodfield Development. Woodfield specializes in Class-A multi-family, mixed use developments primarily in the Carolinas and DC. Our first joint venture with them is a 200-unit multifamily project known as “Riverside.” FRP contributed $6.2 million in common equity for a 40% ownership interest. Construction began in February 2020 and should be complete in the third quarter of 2021. The second joint venture in Greenville with Woodfield is a 227-unit multifamily development known as “.408 Jackson.” It will have 4,700 square feet of retail and is located across the street from Greenville’s minor league baseball stadium. FRP contributed $9.7 million in common equity for a 40% ownership interest. Construction began in May 2020 and should be complete in the second quarter of 2022. Both projects are qualified opportunity investments and will defer a ~~significant tax liability associated with last year’s asset sale.~~combined $4.3 million in taxes.

Stabilized Joint Venture Segment Results

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

Lease revenue	$	2,580		100.0	%		2,844		100.0	%		(264	)		-9.3	%

Depreciation, depletion and amortization		1,188		46.0	%		1,187		41.7	%		1			0.1	%
Operating expenses		675		26.2	%		695		24.4	%		(20	)		-2.9	%
Property taxes		274		10.6	%		304		10.7	%		(30	)		-9.9	%
Management company indirect		57		2.2	%		50		1.8	%		7			14.0	%
Corporate expense		38		1.5	%		41		1.5	%		(3	)		-7.3	%

Cost of operations		2,232		86.5	%		2,277		80.1	%		(45	)		-2.0	%

Operating profit	$	348		13.5	%		567		19.9	%		(219	)		-38.6	%

Three months ended September 30
(dollars in thousands) 2019 % 2018 % Change %

Lease revenue $ 2,844 100.0 % 2,719 100.0 % 125 4.6 %

Depreciation, depletion and amortization 1,187 41.7 % 1,564 57.5 % (377 ) -24.1 %
Operating expenses 695 24.4 % 686 25.2 % 9 1.3 %
Property taxes 304 10.7 % 290 10.7 % 14 4.8 %
Management company indirect 50 1.8 % 87 3.2 % (37 ) -42.5 %
Corporate expense 41 1.5 % 52 1.9 % (11 ) -21.2 %

Cost of operations 2,277 80.1 % 2,679 98.5 % (402 ) -15.0 %

Operating profit $ 567 19.9 % 40 1.5 % 527 1317.5 %

Dock 79’s average residential occupancy for the quarter was ~~97.02%~~93.29%, and at the end of the quarter, Dock ~~79 was 93.44%~~79’s residential units were 90.49% leased and ~~96.72%~~94.43% occupied. This quarter, ~~63.51%~~52.31% of expiring leases renewed with ~~an average~~no increase in rent due to the mandated rent freeze on ~~those~~ renewals ~~of 3.19%.~~in DC. Net Operating Income this quarter for this segment was ~~$1,849,000, up $153,000~~$1,634,000, down $215,000 or ~~9.02%~~11.63% compared to the same quarter last year. Dock 79 is a joint venture between the Company and MRP, in which FRP Holdings, Inc. is the majority partner with 66% ownership.

In July 2019, the Company completed a like-kind exchange by reinvesting $6,000,000 into a Delaware Statutory Trust (DST) known as CS1031 Hickory Creek DST. The DST owns a 294-unit garden-style apartment community known as Hickory Creek consisting of 19 three-story apartment buildings containing 273,940 rentable square feet. Hickory Creek was constructed in 1984 and substantially renovated in 2016 and is located in ~~Henrico County,~~suburban Richmond, Virginia. The Company is 26.649% beneficial owner and receives monthly distributions.

Third quarter distributions were $86,000. The project is a qualified 1031 like-kind exchange investment and will defer $790,000 in taxes associated with the sales of 7030 Dorsey Road and 1502 Quarry Drive.

Comparative Results of Operations for the Nine months ended September 30, ~~2019~~2020 and ~~2018~~2019

Consolidated Results

(dollars in thousands)		Nine Months Ended September 30,
	2020				2019			Change			%
Revenues:
Lease Revenue	$		10,636		$	10,796		$	(160	)		-1.5	%
Mining lands lease revenue			7,094			7,164			(70	)		-1.0	%
Total Revenues			17,730			17,960			(230	)		-1.3	%

Cost of operations:
Depreciation/Depletion/Amortization			4,406			4,390			16			0.4	%
Operating Expenses			2,598			2,744			(146	)		-5.3	%
Property Taxes			2,089			2,206			(117	)		-5.3	%
Management company indirect			2,208			1,872			336			17.9	%
Corporate Expense			2,850			1,928			922			47.8	%
Total cost of operations			14,151			13,140			1,011			7.7	%

Total operating profit			3,579			4,820			(1,241	)		-25.7	%

Net investment income, including realized gains
of $297 and $591			5,915			5,813			102			1.8	%
Interest Expense			(142	)		(989	)		847			-85.6	%

2732

(dollars in thousands) Nine Months Ended September 30,
2019 2018 Change %
Revenues:
  Lease Revenue $ 10,796 $ 10,418 $ 378 3.6 %
  Mining lands lease revenue 7,164 5,952 1,212 20.4 %
Total Revenues 17,960 16,370 1,590 9.7 %

Cost of operations:
  Depreciation/Depletion/Amortization 4,390 6,350 (1,960 ) -30.9 %
  Operating Expenses 2,744 2,951 (207 ) -7.0 %
  Environmental remediation —   (465 ) 465 100.0 %
  Property Taxes 2,206 1,949 257 13.2 %
  Management company indirect 1,872 1,366 506 37.0 %
  Corporate Expense 1,928 2,910 (982 ) -33.7 %
Total cost of operations 13,140 15,061 (1,921 ) -12.8 %

Total operating profit 4,820 1,309 3,511 268.2 %

Net investment income, including realized gains
of $519 and $0 5,813 1,875 3,938 210.0 %
Interest Expense (989 ) (2,418 ) 1,429 -59.1 %
Equity in loss of joint ventures (1,282 ) (36 ) (1,246 ) 3461.1 %
Gain on real estate investments 662 (3 ) 665 -22166.7 %

Income before income taxes 9,024 727 8,297 1141.3 %
Provision for income taxes 2,529 269 2,260 840.1 %
Income from continuing operations 6,495 458 6,037 1318.1 %

Income from discontinued operations, net 6,849 122,109 (115,260 ) -94.4 %

Net income 13,344 122,567 (109,223 ) -89.1 %
Loss attributable to noncontrolling interest (380 ) (1,199 ) 819 -68.3 %
Net income attributable to the Company $ 13,724 $ 123,766 $ (110,042 ) -88.9 %

Equity in loss of joint ventures		(3,773	)		(1,282	)		(2,491	)	194.3	%
Gain on real estate investments		9,329			662			8,667		1309.2	%

Income before income taxes		14,908			9,024			5,884		65.2	%
Provision for income taxes		4,161			2,529			1,632		64.5	%
Income from continuing operations		10,747			6,495			4,252		65.5	%

Income from discontinued operations, net		—			6,849			(6,849	)	-100.0	%

Net income		10,747			13,344			(2,597	)	-19.5	%
Loss attributable to noncontrolling interest		(475	)		(380	)		(95	)	25.0	%
Net income attributable to the Company	$	11,222		$	13,724		$	(2,502	)	-18.2	%`

Net income for first nine months of ~~2019~~2020 was $11,222,000 or $1.16 per share versus $13,724,000 or $1.38 ~~per share versus $123,766,000 or $12.24~~ per share in the same period last year. Income from discontinued operations for the first nine months of 2019 was $6,849,000 or $.69 per ~~share versus $122,109,000~~share. Income from continuing operations increased $4,252,000 or ~~$12.08 per share~~66% and was impacted by the following items:

Corporate expense stock compensation of $1,241,000 compared to $206,000 in the same period last ~~year.~~ year due the timing of stock grants.
Interest ~~earned for the first nine months of 2019 includes $1,017,000 for Bryant Street and Maren preferred~~expense decreased $847,000 as we capitalized more interest ~~and $591,000 realized gain~~ on ~~bonds.~~ our joint venture construction projects.
Loss on ~~Joint Venture includes $759,000 for the Company’s ownership~~joint ventures increased $2,491,000 primarily due to our share of the Bryant Street ~~and Maren~~ preferred interest, ~~and $255,000~~$354,000 amortization of ~~the~~ guarantee liability related to the Bryant Street ~~loan. In July 2019,~~loan, $2,121,000 operating loss at the Company sold a parcel of vacant land in Yatesville, GA for $213,500 resulting in a gain of $124,000. The first nine months of 2018 income from continuing operations of $1,309,000 included $1,085,000 in stock compensation expense ($682,800 for the 2018 director stock grant and $402,000 for vesting of option grants from 2016 and 2017Maren due to pre-leasing efforts, partially offset by interest income generated in our opportunity zone investments prior to the ~~asset disposition).~~
funds being deployed.
Gain on sale of $9,329,000 compared to $662,000 in the same period last year from the sale of the three remaining lots at our Lakeside Business Park, 1801 62^nd Street, Gulf Hammock, and 87 acres from our Ft. Myers property.

Asset Management Segment Results

	Nine months ended September 30
(dollars in thousands)	2020			%			2019			%			Change			%

Lease revenue	$	2,089			100.0	%		1,733			100.0	%		356			20.5	%

Depreciation, depletion and amortization		529			25.3	%		527			30.4	%		2			0.4	%
Operating expenses		332			15.9	%		492			28.4	%		(160	)		-32.5	%
Property taxes		91			4.4	%		216			12.5	%		(125	)		-57.9	%
Management company indirect		437			20.9	%		265			15.3	%		172			64.9	%
Corporate expense		738			35.3	%		470			27.1	%		268			57.0	%

Cost of operations		2,127			101.8	%		1,970			113.7	%		157			8.0	%

Operating profit	$	(38	)		-1.8	%		(237	)		-13.7	%		199			-84.0	%

Nine months ended September 30
(dollars in thousands) 2019 % 2018 % Change %

Lease revenue $ 1,733 100.0 % 1,717 100.0 % 16 0.9 %

Depreciation, depletion and amortization 527 30.4 % 405 23.6 % 122 30.1 %
Operating expenses 492 28.4 % 335 19.5 % 157 46.9 %
Property taxes 216 12.5 % 122 7.1 % 94 77.0 %
Management company indirect 265 15.3 % 72 4.2 % 193 268.1 %
Corporate expense 470 27.1 % 146 8.5 % 324 221.9 %

Cost of operations 1,970 113.7 % 1,080 62.9 % 890 82.4 %

Operating profit (loss) $ (237 ) -13.7 % 637 37.1 % (874 ) -137.2 %

Most of the Asset Management Segment was reclassified to discontinued operations leaving ~~one recent industrial acquisition,~~two commercial properties as well as Cranberry Run, which we purchased in the first quarter of 2019, and 1801 62^nd Street which joined ~~Asset Management~~this segment on April 1 ~~and two commercial properties after the sale this past quarter~~ of ~~our office property at 7030 Dorsey Road.~~2019, but was sold in July 2020. Cranberry Run is a five-building industrial park in Harford County, MD totaling 268,010 square feet of industrial/ flex ~~space. It is our plan to make $1,455,000 in improvements in order to re-lease the property for a total investment of $29.35 per square foot. 1801 62~~^nd ~~Street is our most recent spec building in Hollander Business Park~~space and ~~is our first warehouse with a 32-foot clear. We completed construction on this building earlier this year~~at quarter end was 78.6% leased and ~~it is 100% leased as of September 30, 2019.~~occupied. Total revenues in this segment were ~~$1,733,000,~~$2,089,000, up ~~$16,000~~$356,000 or ~~.9%~~20.5%, over the same period last year. Operating loss was ($~~237,000)~~38,000), down ~~$874,000~~$199,000 from an operating ~~profit~~loss of ~~$637,000~~($237,000) in the same period last year due to

higher allocation of corporate ~~expenses and increased operating expenses associated with the Cranberry Run acquisition in the first quarter and the addition of 1801 62~~^nd ~~Street to Asset Management second quarter.~~

expenses.

Mining Royalty Lands Segment Results

	Nine months ended September 30
(dollars in thousands)	2020		%			2019		%			Change			%

Mining lands lease revenue	$	7,094		100.0	%		7,164		100.0	%		(70	)		-1.0	%

Depreciation, depletion and amortization		160		2.3	%		130		1.8	%		30			23.1	%
Operating expenses		43		0.6	%		75		1.1	%		(32	)		-42.7	%
Property taxes		191		2.7	%		203		2.8	%		(12	)		-5.9	%
Management company indirect		214		3.0	%		151		2.1	%		63			41.7	%
Corporate expense		234		3.3	%		123		1.7	%		111			90.2	%
					��
Cost of operations		842		11.9	%		682		9.5	%		160			23.5	%

Operating profit	$	6,252		88.1	%		6,482		90.5	%		(230	)		-3.5	%

~~Highlights of the Nine Months ended September 30, 2019:~~

~~Mining lands lease revenue were up $1,212,000, or 20.4%.~~

Nine months ended September 30
(dollars in thousands) 2019 % 2018 % Change %

Mining lands lease revenue $ 7,164 100.0 % 5,952 100.0 % 1,212 20.4 %

Depreciation, depletion and amortization 130 1.8 % 145 2.4 % (15 ) -10.3 %
Operating expenses 75 1.1 % 128 2.2 % (53 ) -41.4 %
Property taxes 203 2.8 % 182 3.1 % 21 11.5 %
Management company indirect 151 2.1 % — 0.0 % 151 0.0 %
Corporate expense 123 1.7 % 157 2.6 % (34 ) -21.7 %

Cost of operations 682 9.5 % 612 10.3 % 70 11.4 %

Operating profit $ 6,482 90.5 % 5,340 89.7 % 1,142 21.4 %

Total revenues in this segment were ~~$7,164,000~~$7,094,000 versus ~~$5,952,000~~$7,164,000 in the same period last year. Total operating profit in this segment was ~~$6,482,000, an increase~~$6,252,000, a decrease of ~~$1,142,000~~$230,000 versus ~~$5,340,000~~$6,482,000 in the same period last year. ~~Among the reasons~~The primary reason for this ~~increase~~decrease is that we are no longer receiving double minimums at our Lake Louisa property, because our tenant, Cemex, received its final permit to begin mining the property in revenue and operating profit is the contribution from our Ft. Myers quarry, the revenue from which, now that mining has begun in earnest, was more than double the minimum royalty we have been receiving until recently. Royalties were reduced by $115,000 due to a volumetric adjustment from the Manassas quarry.July 2019.

Development Segment Results

	Nine months ended September 30
(dollars in thousands)	2020			2019			Change

Lease revenue	$	862			892			(30	)

Depreciation, depletion and amortization		160			161			(1)
Operating expenses		415			246			169
Property taxes		1,019			918			101
Management company indirect		1,404			1,314			90
Corporate expense		1,710			1,219			491

Cost of operations		4,708			3,858			850

Operating loss	$	(3,846	)		(2,966	)		(880	)

Nine months ended September 30
(dollars in thousands) 2019 2018 Change

Lease revenue $ 892 944 (52 )

Depreciation, depletion and amortization 161 171 (10 )
Operating expenses 246 618 (372 )
Environmental remediation — (465 ) 465
Property taxes 918 768 150
Management company indirect 1,314 998 316
Corporate expense 1,219 1,110 109

Cost of operations 3,858 3,200 658

Operating loss $ (2,966 ) (2,256 ) (710 )

~~With respect to ongoing projects:~~

We are fully engaged in the formal process of seeking PUD entitlements for our 118-acre tract in Hampstead, Maryland, now known as “Hampstead Overlook.” Hampstead Overlook received non-appealable rezoning from industrial to residential during the first quarter this year.
We finished shell construction in December 2018 on the two office buildings in the first phase of our joint venture with St. John Properties. Shell construction of the two retail buildings was completed in January. We are now in the process of leasing these four single-story buildings totaling 100,030 square feet of office and retail space. At quarter end, Phase I was 44% leased and 8% occupied.
We are the principal capital source of a residential development venture in Baltimore County, Maryland known as “Hyde Park.” We have committed up to $3.5 million in exchange for an interest rate of 10% and a preferred return of 20% after which a “waterfall” determines the split of proceeds from sale. Hyde Park will hold 122 town homes and four single-family lots and received a non-appealable Plan Approval during the first quarter. We are currently pursuing entitlements and have a home builder under contract to purchase the land upon government approval to begin development.
We are the principal capital source of a residential development venture in Prince George’s County, Maryland known as “Amber Ridge.” We have committed up to $18.5 million in exchange for an interest rate of 10% and a preferred return of 20% after which a “waterfall” determines the split of proceeds from sale. Amber Ridge will hold approximately 200 town homes. We are currently pursuing entitlements and have a home builder under contract to purchase 136 of the 200 units upon completion of development.
~~In April 2018, we began construction on Phase II of our RiverFront on the Anacostia project, now known as “The Maren.” We expect to deliver the building in the first half of 2020.~~
In December 2018, the Company entered into a joint venture agreement with MidAtlantic Realty Partners (MRP) for the development of the first phase of a multifamily, mixed-use development in northeast Washington, DC known as “Bryant Street.” FRP contributed $32 million for common equity and another $23 million for preferred equity to the joint venture. Construction began in February 2019 and should be finished in 2021. This project is located in an opportunity zone and could defer a significant tax liability associated with last year’s asset sale.

Stabilized Joint Venture Segment Results

	Nine months ended September 30
(dollars in thousands)	2020		%			2019		%			Change			%

Lease revenue	$	7,685		100.0	%		8,171		100.0	%		(486	)		-5.9	%

Depreciation, depletion and amortization		3,557		46.3	%		3,572		43.7	%		(15	)		-0.4	%
Operating expenses		1,808		23.5	%		1,931		23.6	%		(123	)		-6.4	%
Property taxes		788		10.2	%		869		10.6	%		(81	)		-9.3	%
Management company indirect		153		2.0	%		142		1.8	%		11			7.7	%
Corporate expense		168		2.2	%		116		1.4	%		52			44.8	%

Cost of operations		6,474		84.2	%		6,630		81.1	%		(156	)		-2.4	%

Operating profit	$	1,211		15.8	%		1,541		18.9	%		(330	)		-21.4	%

3034

Nine months ended September 30
(dollars in thousands) 2019 % 2018 % Change %

Lease revenue $ 8,171 100.0 % 7,757 100.0 % 414 5.3 %

Depreciation, depletion and amortization 3,572 43.7 % 5,629 72.6 % (2,057 ) -36.5 %
Operating expenses 1,931 23.6 % 1,870 24.1 % 61 3.3 %
Property taxes 869 10.6 % 877 11.3 % (8 ) -0.9 %
Management company indirect 142 1.8 % 296 3.8 % (154 ) -52.0 %
Corporate expense 116 1.4 % 289 3.7 % (173 ) -59.9 %

Cost of operations 6,630 81.1 % 8,961 115.5 % (2,331 ) -26.0 %

Operating profit $ 1,541 18.9 % (1,204 ) -15.5 % 2,745 -228.00 %

~~Average~~Dock 79’s average residential occupancy for the first nine months ~~at Dock 79~~ was ~~95.57%~~92.80%, and at the end of the third quarter, Dock ~~79 was 93.44%~~79’s residential units were 90.49% leased and ~~96.72%~~94.43% occupied. ~~Through~~For the first nine months, ~~of the year, 59.76%~~56.22% of expiring leases ~~have~~ renewed with an average increase in rent on those renewals of ~~2.80%.~~0.41% due to the mandated rent freeze on renewals that went into effect in March. Net Operating Income for this segment was ~~$5,346,000, up $499,000~~$5,100,000, down $246,000 or ~~10.30%~~4.6% compared to the same ~~period last year, primarily due to substantial increases in NOI from our retail tenants compared to this~~ period last year. Dock 79 is a joint venture between the Company and MRP, in which FRP Holdings, Inc. is the majority partner with 66% ownership.

~~In July 2019,~~Distributions for Hickory Creek were $254,000 for the ~~Company completed~~first nine months. The project is a qualified 1031 like-kind exchange ~~by reinvesting $6,000,000 into~~investment in a Delaware Statutory Trust ~~(DST) known as CS1031 Hickory Creek DST. The DST owns a 294-unit apartment community known as Hickory Creek consisting~~ of 19 three-story apartment buildings containing 273,940 rentable square feet. Hickory Creek was constructed in 1984 and substantially renovated in 2016. The property is eleven miles from downtown Richmond in Henrico County, Virginia. Thewhich the Company is ~~26.649%~~a 26.659% beneficial ~~owner and receives monthly distributions.~~

owner.

Liquidity and Capital Resources. The growth of the Company’s businesses requires significant cash needs to acquire and develop land or operating buildings and to construct new buildings and tenant improvements. As of September 30, ~~2019,~~2020, we had ~~$69,246,000~~$61,548,000 of cash and cash equivalents along with ~~$115,308,000~~$104,624,000 of investments available for sale. As of September 30, ~~2019,~~2020, we had no debt borrowed under our $20 million Wells Fargo revolver, ~~$958,000~~$411,000 outstanding under letters of credit and ~~$19,042,000~~$19,589,000 available to borrow under the revolver. In November 2017, we secured $90 million in permanent financing for Dock 79 from EagleBank, the proceeds of which were used to pay off $79 million of construction and mezzanine debt. The remainder was distributed pari passu between the Company and our partners.

Cash Flows- The following table summarizes our cash flows from operating, investing and financing activities for each of the periods presented (in thousands of dollars):

		Nine months						Nine months
		Ended September 30,						Ended September 30,
		2019		2018				2020		2019
Total cash provided by (used for):
Operating activities	$	15,021			(41,660	)	$	13,353			15,021
Investing activities		40,131			101,850			22,729			40,131
Financing activities		(8,453	)		(29,932	)		(16,400	)		(8,453	)
Increase in cash and cash equivalents	$	46,699			30,258
Increase (decrease) in cash and cash equivalents							$	19,682			46,699

Outstanding debt at the beginning of the period	$	88,789			118,317		$	88,925			88,789
Outstanding debt at the end of the period	$	88,891			88,755		$	89,027			88,891

Operating Activities -Net cash provided by operating activities for the nine months ended September 30, ~~2019~~2020 was ~~$15,021,000~~$13,353,000 versus ~~net cash used for operating activities of $41,660,000~~$15,021,000 in the same period last year. Net cash used in ~~discontinued operations was $1,756,000. Net cash provided by~~ operating activities of ~~continuing~~discontinued operations for the nine months ended September 30, 2019 was ~~higher primarily due to the deferral of income taxes related to a 1031 exchange on the sales of 1502 Quarry Drive and~~

$1,756,000.

~~7030 Dorsey Road and the placement of $50 million in two opportunity zone funds.~~

Investing Activities - Net cash provided by investing activities for the nine months ended September 30, ~~2019~~2020 was ~~$40,131,000~~$22,729,000 versus ~~$101,850,000~~$40,131,000 in the same period last year. The decrease was due primarily to the proceeds on the sale of investments available for sale offset by the purchase of investments available for sale, while the prior year included the acquisition of Cranberry Business Park, and the preferred equity contribution to the RiverFront Holdings II joint ~~venture and the investment in DST Hickory Creek while the prior year included the proceeds on the sale of the buildings offset by the cash held in escrow related to the sale.~~venture.

recorded a realized gain of ~~$591,000~~$297,000 in its net investment income related to bonds that were sold in ~~2019.~~2020.

Financing Activities – Net cash used in investing activities was ~~$8,453,000~~$16,400,000 versus ~~$29,932,000~~$8,453,000 in the same period last year due primarily due to the increased purchase of company stock in the nine months ended September 30, ~~2019 and the payoff of mortgage loans related to the buildings sold in the prior year.~~2020.

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”), effective February 6, 2019. The Credit Agreement modifies the Company’s prior Credit Agreement with Wells Fargo, dated January 30, 2015. The Credit Agreement establishes a five-year revolving credit facility (“Revolver”) with a maximum facility amount of $20 million. The 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 September 30, ~~2019,~~2020, these covenants would have limited our ability to pay dividends to a maximum of ~~$217~~$219 million combined.

On November 17, 2017, Riverfront Holdings I, LLC (the "Joint Venture") refinanced the Dock 79 project pursuant to a Loan Agreement and Deed of Trust Note entered into with EagleBank ("Loan Documents"). The Joint Venture, which was formed between the Company and MRP in 2014 in connection with the development of the Riverfront on the Anacostia property, borrowed a principal sum of $90,000,000 in connection with the refinancing. The loan is secured by the Dock 79 real property and improvements, bears a fixed interest rate of 4.125% per annum and has a term of 120 months. During the first 48 months of the loan term, the Joint Venture will make monthly payments of interest only, and thereafter, make monthly payments of principal and interest in equal installments based upon a 30-year amortization period. The loan is a non-recourse loan. However, all amounts due under the Loan Documents will become immediately due upon an event of default by the Joint Venture, such events including, without limitation, Joint Venture's (i) failure to: pay, permit inspections or observe covenants under the Loan Documents, (ii) breach of representations made under the Loan Documents (iii) voluntary or involuntary bankruptcy, and (iv) dissolution, or the dissolution of the guarantor. ~~MidAtlantic Realty Partners, LLC, an affiliate of~~ MRP has executed a carve-out guaranty in connection with the loan.

Cash Requirements – The Board of Directors has authorized Management to repurchase shares of the Company’s common stock from time to time as opportunities arise. 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. As of September 30, ~~2019, $11,436,000~~2020, $15,252,000 was authorized for future repurchases of common stock. The Company does not currently pay any cash dividends on common stock.

The Company currently expects its capital expenditures for the remainder of ~~2019~~2020 to include approximately ~~$10.5~~$19.7 million for real estate ~~development~~ 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. ~~In June~~

Impact of the ~~Company formed two opportunity zone funds for a total~~COVID-19 Pandemic. The COVID-19 pandemic is having an extraordinary impact on the world economy and the markets in which we operate. As an essential business, we have continued to operate throughout the pandemic in accordance with White House guidance and orders issued by state and local authorities. We have implemented social distancing and other measures to protect the health of ~~$50 million which is included~~our employees and customers. While we recognize the importance of social distancing, stay at home and telework measures to protect human health, these measures will adversely affect our retail tenants as long as they remain in ~~cash~~place. We are negotiating with our retail tenants on rent abatements and cash ~~equivalents at September 30, 2019. If suitable investments can be found~~flow adjustments that will adversely affect our NOI. We anticipate that the pandemic will continue to have negative impacts on the overall economy that is likely to have a negative impact on many of our tenants. During this period, we will continue to fulfill our duty to operate while managing our business in a prudent fashion.

Summary and Outlook. As we have settled into a post-COVID world, we remain fortunate and pleasantly surprised with how well our assets have responded. Aggregates royalties this quarter were well ahead of the same period last year, and we are now only 1% off of last year’s record numbers through the first nine months. And like last year, the ~~funds will need to be deployed into qualified opportunity zones within 31 months.~~

3236

~~Summary and Outlook~~. With the second quarter dispositions of our assets at 1502 Quarry Drive and 7030 Dorsey Road for $11.7 million and $8.85 million respectively, the Company continued and has nearly completed the liquidation of its “heritage” properties. Of the 43 buildings owned and operated by the Company at the start of 2018, all that remains is the Company’s home office building in Sparks, MD and the vacant lot in Jacksonville still under lease to Vulcan that used to house Florida Rock Industries’ home office. In the past yearroyalties we have added Cranberry Run and 1801 62nd Street to the Asset Management Segment. These additions, the former a value-add, opportunistic acquisition and the latter, an in-house development of one of the parcels remaining at Hollander Business Park, are indicative of the types of assets we intend to add periodically to this segment. But they should not be mistaken as the first steps on the road to rebuilding the kind of Asset Management Segment we operated prior to last year’s sale. We are no longer in the develop and hold business when it comes to industrial assets. Rather, we will develop buildings from our existing land bank or rehabilitate an existing industrial park acquired at a discount with the aim of selling the rehabilitated parks and/or groups of two or three new, fully leased warehouses into a market that puts a premium on a portfolio of assets.

This quarter marked the sixth consecutive quarter of increases in mining royalty revenue compared to the same period the year before and represents the segment’s best ever nine-month start to a fiscal year. The royalties collected through the first nine months ~~are more than what~~exceed the royalties we collected in any entire year prior to 2017. Unrelated to any mining activity, Lee County exercised their option to buy 87 acres from our quarry in Ft. Myers for $2.2 million in order to extend Alico Road and ease traffic in the area. This road extension will benefit any second life developments on our property once the reserves are depleted.

~~Construction remains on schedule for~~ The lease up of the Maren ~~and Bryant Street, with delivery expected~~continues to exceed our expectations. The building received its final certificate of occupancy at ~~The Maren in the first half of 2020. While construction should be complete at Bryant St in 2021, the first residential unit should be delivered by~~ the end of ~~2020. These assets represent an investment~~September and is now officially “complete.” We signed 91 leases this past quarter and moved in 125 tenants. At quarter end, the building was 76% leased and 69% occupied, putting us within shouting distance of ~~over $80 million and will more than triple the number of residential units and square feet of mixed use we have in our existing portfolio.~~stabilization.

~~As mentioned previously, we renewed 63.51%~~Unfortunately for Dock 79, the rent freeze on renewals was extended through the end of the ~~leases at~~year. Because our apartments come up for renewal two months prior to the end of the lease, we will not have the ability to increase rent on renewals for the rest of the year. In all likelihood the first quarter of 2021 will be affected as well. The current environment is less than ideal for our three retail tenants, but they are all currently open and serving customers. Occupancy remains above 90% and renewals are still in line with where they were in a pre-COVID world. We believe that the rapid lease-up of the Maren and the continued success of Dock 79 ~~that were set~~speak to expire this quarter. That number was helped by the fact that 20 of the 26 leases expiring in September renewed. Given the growing supply of multi-family in that submarket, the fact that we continue to renew more than half our tenants during the construction of The Maren next door, while also growing rents is a testament to both the quality of these assets and the ~~asset~~desirability of their location. Despite major construction and no baseball, waterfront real estate still demands a premium, and as working from home becomes more and more common, it is possible that the environment afforded by these assets has only served to increase their appeal.

Industrial has responded well to the pandemic, as evidenced by the ~~premium this market places on a waterfront location.~~sale in July of 1801 62^nd Street at Hollander Business Park for $12.3 million. We had no issues with tenants paying rent and do not expect to. We had some concerns regarding our office tenants, but every tenant is currently paying rent and the only issue we had with back rent is one tenant who owes $6,500 for the month of April.

We are half a year into this pandemic, and we have been very fortunate. Our assets have performed nearly as well and sometimes better than they did a year ago. But while the people of this country have gotten used to life during a pandemic, COVID-19 as an economic factor may just be ramping up. Government intervention has shielded people and businesses from some of the financial realities of this disease, and as that well of assistance starts to dry up, it is possible that the second wave of the disease may be the first wave of real economic distress. We have yet to see any reason why our assets will not continue to ~~explore different projects~~perform well during this unusual time, but we have the safety net of a conservative balance sheet and substantial cash reserves to tide us over if they do. Regardless of what is happening right now or in ~~which to reinvest~~ the ~~proceeds~~near future, we believe strongly in the long run viability of our ~~recent asset sales. Though~~business and its assets. The money we are aggressive in terms of the scope of our exploration, we remain cautious and perhaps conservative regarding the quality of any project we consider. We do not expect that our investors will have unlimited patience as to when this money is put ~~to work, and no one is more anxious than our management team to return the money to our shareholders~~back into it in the form of ~~new investments. However, though we hear the clock ticking, we are not going to let that factor unduly into any investment decision we make. The redeployment~~share buybacks is representative of ~~our cash will be based on the amount of return we can generate rather than the amount of time that has passed since the asset sale.~~

that. To that end, ~~we have been buying back shares~~during the first nine months of 2020, the Company ~~when we believe it is underpriced. As of September 30, the Company had~~ repurchased ~~159,282~~379,809 shares ~~in 2019~~ at an average cost of ~~$48.43~~$41.30 per ~~share and had authorization to repurchase another $11,436,000 in stock.~~share.

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 financial measure to analyze its continuing operations and to monitor, assess, and identify meaningful trends in its operating and financial performance. This measure is not, and should not be viewed as, a substitute for GAAP financial measures.

Net Operating Income Reconciliation
Nine months ended 09/30/19 (in thousands)
Nine months ended 09/30/20 (in thousands)
						Stabilized													Stabilized
	Asset					Joint		Mining		Unallocated		FRP		Asset					Joint		Mining		Unallocated		FRP
	Management		Development			Venture		Royalties		Corporate		Holdings		Management		Development			Venture		Royalties		Corporate		Holdings
	Segment		Segment			Segment		Segment		Expenses		Totals		Segment		Segment			Segment		Segment		Expenses		Totals
Income (loss) from continuing operations		218		(2,236	)		304		4,796		3,413		6,495		2,745		(2,055	)		864		7,200		1,993		10,747
Income Tax Allocation		81		(829	)		253		1,778		1,246		2,529		1,018		(762	)		496		2,670		739		4,161
Income (loss) from continuing operations before income taxes		299		(3,065	)		557		6,574		4,659		9,024		3,763		(2,817	)		1,360		9,870		2,732		14,908

Less:
Equity in profit of Joint Ventures															—		—			254		—		—		254
Gains on sale of buildings		536		—			—		126		—		662		3,801		1,877			—		3,651		—		9,329
Unrealized rents		—		—			25		—		—		25		147		—			—		178		—		325
Interest income		—		1,123			—		—		4,690		5,813		—		3,146			—		—		2,769		5,915
Plus:
Unrealized rents		5		—			—		184		—		189		—		—			11		—		—		11
Equity in loss of Joint Venture		—		1,222			26		34		—		1,282		—		3,994			—		33		—		4,027
Interest Expense		—		—			958		—		31		989		—		—			105		—		37		142
Depreciation/Amortization		527		161			3,572		130		—		4,390		529		160			3,557		160		—		4,406
Management Co. Indirect		265		1,314			142		151		—		1,872		437		1,404			153		214		—		2,208
Allocated Corporate Expenses		470		1,219			116		123		—		1,928		738		1,710			168		234		—		2,850

Net Operating Income (loss)		1,030		(272	)		5,346		7,070		—		13,174		1,519		(572	)		5,100		6,682		—		12,729

Net Operating Income Reconciliation
Nine months ended 09/30/18 (in thousands)
Nine months ended 09/30/19 (in thousands)
						Stabilized															Stabilized
	Asset					Joint			Mining		Unallocated			FRP		Asset					Joint		Mining		Unallocated		FRP
	Management		Development			Venture			Royalties		Corporate			Holdings		Management		Development			Venture		Royalties		Corporate		Holdings
	Segment		Segment			Segment			Segment		Expenses			Totals		Segment		Segment			Segment		Segment		Expenses		Totals
Income (loss) from continuing operations		1,648		(1,625	)		(2,967	)		3,870		(468	)		458		218		(2,236	)		304		4,796		3,413		6,495
Income Tax Allocation		611		(603	)		(655	)		1,435		(519	)		269		81		(829	)		253		1,778		1,246		2,529
Income (loss) from continuing operations before income taxes		2,259		(2,228	)		(3,622	)		5,305		(987	)		727		299		(3,065	)		557		6,574		4,659		9,024

Less:
Gains on sale of buildings																	536		—			—		126		—		662
Unrealized rents		—		—			163			—		—			163		—		—			25		—		—		25
Interest income		1,622		32			—			—		221			1,875		—		1,123			—		—		4,690		5,813
Plus:
Unrealized rents		27		—			—			369		—			396		5		—			—		184		—		189
Loss on investment land sold		—		3			—			—		—			3
Equity in loss of Joint Venture		—		1			—			35		—			36		—		1,222			26		34		—		1,282
Interest Expense		—		—			2,418			—		—			2,418		—		—			958		—		31		989
Depreciation/Amortization		405		171			5,629			145		—			6,350		527		161			3,572		130		—		4,390
Management Co. Indirect		72		998			296			—		—			1,366		265		1,314			142		151		—		1,872
Allocated Corporate Expenses		146		1,110			289			157		1,208			2,910		470		1,219			116		123		—		1,928

Net Operating Income		1,287		23			4,847			6,011		—			12,168
Net Operating Income (loss)																	1,030		(272	)		5,346		7,070		—		13,174

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 September 30, ~~2019~~2020 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 September 30, ~~2019,~~2020, 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 September 30, ~~2019,~~2020, the Company, under the supervision and with the participation of the Company's management, including the CEO, CFO and CAO, carried out an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on this evaluation, the Company’s CEO, CFO and CAO concluded that the Company's disclosure controls and procedures are effective in alerting them in a timely manner to material information required to be included in periodic SEC filings.

There have been no changes in the Company’s internal controls over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

3539

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, ~~2018,~~2019, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

The following risk factor set forth below is in addition to the risk factors discussed under Part I, Item 1A (Risk Factors) of the Company’s most recent annual report on Form 10-K.

The current pandemic of the novel coronavirus COVID-19 could materially and adversely impact or disrupt our financial condition, results of operations, cash flows and performance.

Since being reported in December 2019, the novel coronavirus (COVID-19) pandemic has had repercussions across regional and global economies and financial markets. The outbreak of COVID-19 has significantly adversely impacted global economic activity, contributed to significant volatility and negative pressure in financial markets and increased economic uncertainty. In response to the pandemic, many states and cities in which we own properties have instituted quarantines, restrictions on travel, “shelter in place” rules, restrictions on types of business that may continue to operate, and/or restrictions on the types of construction projects that may continue. In response to these restrictions and to protect employee safety, many of our employees are working remotely.

As a result, the COVID-19 pandemic is negatively impacting many industries, especially the commercial real estate business which has mixed use tenants including apartment dwellers, small businesses and restaurants. The significance, extent and duration of the impacts of the COVID-19 pandemic remains largely uncertain and dependent on future developments that cannot be accurately predicted at this time, such as the continued severity and spread of the virus, the period of time during which mandated social distancing or other mitigation measures remain in place, the timetable for developing effective treatments and a vaccine and the trajectory of the economic recovery.

At this time, the Company anticipates that the pandemic could have material and adverse effects on our ability to successfully operate and on our financial condition, results of operations and cash flows due to, among other factors:

●

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

●

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

●

A decline in royalties collected by our Mining Royalties section in the event that the pandemic results in a decline in construction activity;

●

Our ability to complete pending and planned construction projects in a timely manner due to restrictions imposed on construction activities, delays in the permitting process or delays in the supply of materials or labor necessary for construction.

●

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

●

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

●

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

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

Item 2. PURCHASES OF EQUITY SECURITIES BY THE ISSUER

(c)
Total
Number of
Shares (d)
Purchased Approximate
(a) As Part of Dollar Value of
Total (b) Publicly Shares that May
Number of Average Announced Yet Be Purchased
Shares Price Paid Plans or Under the Plans
Period Purchased per Share Programs or Programs (1)
July 1
Through
July 31 13,620 $ 49.65 13,620 $ 3,162,000

August 1
Through
August 31 21,073 $ 49.04 21,073 $ 12,129,000

September 1
Through
September 30 14,062 $ 49.25 14,062 $ 11,436,000

Total 48,755 $ 49.27 48,755

(c)

Total

Number of

(d)

Purchased

Approximate

(a)

As Part of

Dollar Value of

Total

(b)

Publicly

Shares that May

Number of

Average

Announced

Yet Be Purchased

Price Paid

Plans or

Under the Plans

Period

Purchased

per Share

Programs

or Programs (1)

July 1

Through

July 31

18,547

39.71

18,547

7,849,000

August 1

Through

August 31

7,158

40.59

7,158

17,558,000

September 1

Through

September 30

55,801

41.32

55,801

15,252,000

Total

81,506

40.89

81,506

(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 ~~38.~~43.

3641

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

		FRP Holdings, Inc.


Date: November ~~8, 2019~~12, 2020	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)

3742

FRP HOLDINGS, INC.

FORM 10-Q FOR THE NINE MONTHS ENDED SEPTEMBER 30, ~~2019~~2020

EXHIBIT INDEX

(14)	Financial Code of Ethical Conduct between the Company, Chief Executive Officers and Financial Managers, adopted December 3, 2014, incorporated by reference to Exhibit 14 to the Company’s Form 10-Q filed on November 9, 2017.
(31)(a)	Certification of John D. Baker IIII..
(31)(b)	Certification of John D. Baker ~~III~~III..
(31)(c)	Certification of John D. ~~Klopfenstein~~Klopfenstein..
(32)	Certification of Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer under Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS	XBRL Instance Document
101.XSD	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

3843

Depreciation, depletion and amortization		(24	)	29		17	3,131
Operating expenses		12		52		246	1,694
Property taxes		—		19		46	1,266
Management company indirect		—		370		—	1,360
Corporate expenses		—		56		—	1,458
Total cost of operations		(12	)	526		309	8,909

Total operating profit (loss)		12		(307	)	151	2,967

Interest expense		—		—		—	(587	)
Gain (loss) on sale of buildings		(30	)	200		9,238	165,007

Income (loss) before income taxes		(18	)	(107	)	9,389	167,387
Provision for (benefit from) income taxes		(5	)	(29	)	2,540	45,278

Income (loss) from discontinued operations	$	(13	)	(78	)	6,849	122,109

Earnings per common share:
Income (loss) from discontinued operations-
Basic		0.00		(0.01	)	0.69	12.17
Diluted		0.00		(0.01	)	0.69	12.08