Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION.
Information required in response to Item 7
is included under the caption "Management’s Discussion and Analysis of Financial Condition and Results of Operation"
on pages 10 through 21 of the Company’s 2020 Annual Report to Shareholders, and such information is incorporated herein by
reference.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK.
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 December 31, 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 outstanding at December 31, 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.
For our debt instruments with variable interest
rates, changes in interest rates affect the amount of interest expense incurred. The following table provides information about
the Company’s long-term debt and variable rate debt outstanding at December 31, 2020 (dollars in thousands):
There Fair
Scheduled
maturities of
long-term debt:
Item 8. FINANCIAL STATEMENTS
AND SUPPLEMENTARY DATA.
Information required in response to this Item
8 is included under the caption "Quarterly Results" on page 9 and on pages 22 through 41 of the Company's 2020 Annual
Report to Shareholders. Such information is incorporated herein by reference.
Item 9. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
Item 9A. CONTROLS AND PROCEDURES.
CONCLUSION REGARDING THE EFFECTIVENESS OF
DISCLOSURE CONTROLS AND PROCEDURES
Under the supervision and with the participation
of our management, including our principal executive officer, principal financial officer and chief accounting officer, we conducted
an evaluation of our disclosure controls and procedures, as such terms is defined under Rule 13a-15(e) promulgated under the Exchange
Act. Based on this evaluation, our principal executive officer, our principal financial officer and our chief
accounting officer concluded that our disclosure
controls and procedures were effective as of the end of the period covered by this Annual Report.
MANAGEMENT’S REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING
Our management is responsible for establishing
and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under
the supervision and with the participation of our management, including our principal executive officer, principal financial officer
and principal accounting officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting
based on the framework in the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations
of the Treadway Commission (COSO). Based on our evaluation under the framework in the Internal Control-Integrated Framework
(2013), our management concluded that our internal control over financial reporting was effective as of December 31, 2020.
This Annual Report does not include an attestation
report of our Independent Registered Certified Public Accounting Firm, Hancock Askew & Co., LLP, regarding internal control
over financial reporting. Management’s report was not subject to attestation by our Independent Registered Certified Public
Accounting Firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s
report in this Annual Report.
CHANGE IN INTERNAL CONTROL OVER FINANCIAL
REPORTING
During the fourth quarter of 2020, there were
no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.
INHERENT LIMITATIONS OVER INTERNAL CONTROLS
Our internal control over financial reporting
is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated
financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over
financial reporting includes those policies and procedures that:
Internal control over financial reporting cannot
provide absolute assurance of achieving financial reporting objectives because of its inherent limitations, including the possibility
of human error and circumvention by collusion or overriding of controls. Accordingly, even an effective internal control system
may not prevent or detect material misstatements on a timely basis. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance
with the policies or procedures may deteriorate.
ITEM 9B. OTHER INFORMATION.
None.
PART III
Item 10. DIRECTORS, EXECUTIVE OFFICERS AND
CORPORATE GOVERNANCE.
The Company has adopted a Financial Code of
Ethical Conduct applicable to its principal executive officers, principal financial officers and principal accounting officers.
A copy of this Financial Code of Ethical Conduct is filed as Exhibit 14 to this Form 10-K. The Financial Code of Ethical Conduct
is also available on our web site at www.frpdev.com/investor-relations/corporate-governance/.
The rest of the information required in response
to this Item 10 is included under the captions “Board of Directors & Corporate Governance”, “Our Executive
Officers”, “Securities Ownership” in the Company's Proxy Statement, and such information is incorporated herein
by reference. The Proxy Statement will be filed with the Securities and Exchange Commission not later than March 31, 2021.
Item 11. EXECUTIVE COMPENSATION.
Information required in response to this Item
11 is included under the caption “Executive Compensation” in the Company's Proxy Statement, and such information is
incorporated herein by reference. The Proxy Statement will be filed with the Securities and Exchange Commission not later than
March 31, 2021.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
Equity Compensation Plan Information
Number of Securities
remaining available
Number of Securities for future issuance
to be issued upon Weighted average under equity
exercise of exercise price of compensation plans
outstanding options, outstanding options, (excluding securities
warrants and rights warrants and rights reflected in column (a))
Plan Category (a) (b) (c)
Equity compensation plans
Equity compensation plans
not approved by security holders 0 0 0
subject
to the satisfaction of certain performance criteria and the recipient’s continued service to the Company, a number of shares
of restricted stock, which number will be calculated after the applicable performance period by dividing the pre-determined value
of each award by the closing price of our common stock on the date the restricted stock is issued. The aggregate value of the
performance share awards shown in table is $237,500. For illustrative purposes, the maximum payout of the performance share awards
has been assumed, and the number of performance share awards has been calculated using our closing stock price on March 8, 2021
($51.95). The performance share awards are subject to partial or complete forfeiture if the vesting criteria are not met. Because
some or all of the performance share awards may not vest, and because the number of shares of restricted stock to be issued thereunder
is dependent on future stock prices, columns (a) and (c) may overstate or understate expected dilution.
The remainder of the information
required in response to this Item 12 is included under the captions “Securities Ownership” in the Company's Proxy Statement,
and such information is incorporated herein by reference. The Proxy Statement will be filed with the Securities and Exchange Commission
not later than March 31, 2021.
Item 13. CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
Information required in response to this Item
13 is included under the captions “Related Party Transactions” and “Board of Directors & Corporate Governance”
in the Company's Proxy Statement, and such information is incorporated herein by reference. The Proxy Statement will be filed with
the Securities and Exchange Commission not later than March 31, 2021.
Item 14. PRINCIPAL ACCOUNTING
FEES AND SERVICES.
Information required in response to this Item
14 is included under the captions “Proposal 2: The Auditor Proposal” in the Company’s Proxy Statement, and such
information is incorporated herein by reference. The Proxy Statement will be filed with the Securities and Exchange Commission
not later than March 31, 2021.
PART IV
Item 15. EXHIBITS, FINANCIAL
STATEMENT SCHEDULE.
(a) (1) and (2) Financial Statements
and Financial Statement Schedule.
The response to this item is
submitted as a separate section. See Index to Financial Statements and Financial Statement Schedule on page 24 of this Form 10-K.
(3) Exhibits.
The response to this item is
submitted as a separate section. See Exhibit Index on pages 24 through 25 of this Form 10-K.
SIGNATURES
Pursuant to the requirements of Section 13
or 15(d) 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: March 19, 2021 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)
Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities
indicated on March 19, 2021.
(Principal Executive Officer)
FRP HOLDINGS, INC.
FORM 10-K FOR THE FISCAL
YEAR ENDED DECEMBER 31, 2020
EXHIBIT INDEX
Item 15(a)(3)
4.3 Description of Registrant’s Common Stock.
31.1 Certification of John D. Baker II.
31.2 Certification of John D. Baker III.
31.3 Certification of John D. Klopfenstein.
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
FRP HOLDINGS, INC.
INDEX TO FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULE
(Item 15(a) (1) and 2))
Page
Consolidated Financial Statements:
Consolidated balance sheets at December 31, 2020 and 2019 25 (a)
Consolidated statements of income 23 (a)
Consolidated statements of comprehensive income 24 (a)
Consolidated statements of cash flows 26 (a)
Consolidated statements of shareholders' equity 27 (a)
Notes to consolidated financial statements 28-40 (a)
Reports of Independent Registered Certified Public Accounting Firm 42-43 (a)
Selected quarterly financial data (unaudited) 6-10 (a)
Consent of Independent Registered Certified Public Accounting Firm 25 (b)
Report of Independent Registered Certified Public Accounting Firm
on Financial Statement Schedule 25 (b)
Consolidated Financial Statement Schedule:
III – Real estate and accumulated depreciation and depletion 26-27 (b)
(b) Refers to the page number in this Form 10-K
Exhibit 23
CONSENT OF INDEPENDENT REGISTERED
CERTIFIED PUBLIC ACCOUNTING FIRM
FRP Holdings, Inc.
Jacksonville, Florida
We hereby consent to the incorporation
by reference in the Registration Statements on Form S-8 (No. 333- 125099, 333-131475 and 333-216025) of FRP Holdings, Inc. of our
reports dated March 19, 2021, relating to the consolidated financial statements which appear in the Annual Report to Shareholders
incorporated by reference herein. We also consent to the incorporation by reference of our report dated March 19, 2021 relating
to the financial statement schedule, which appears in this Form 10-K.
/s/ Hancock Askew & Co.,
LLP
Savannah, Georgia
March 19, 2021
REPORT OF INDEPENDENT REGISTERED
CERTIFIED PUBLIC ACCOUNTING FIRM ON FINANCIAL STATEMENT SCHEDULE
The Shareholders and Board of Directors
FRP Holdings, Inc.:
Our audit of the consolidated financial
statements referred to in our report dated March 19, 2021 appearing in the 2020 Annual Report to Shareholders of FRP Holdings,
Inc. (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also
included an audit of the financial statement schedule listed in Item 15(a)(2) of this Form 10-K. The financial statement schedule
is the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statement
schedule based on our audit. In our opinion, the financial statement schedule presents fairly, in all material respects, the information
set forth therein when read in conjunction with the related consolidated financial statements.
/s/ Hancock Askew & Co.,
LLP
Savannah, Georgia
March 19, 2021
FRP HOLDINGS, INC.
SCHEDULE III (CONSOLIDATED)-REAL
ESTATE & ACCUMULATED DEPRECIATION AND
DEPLETION (dollars in thousands)
DECEMBER 31, 2020
Mining Royalty Lands
Asset Management Properties
Development Properties
Residential Rental Properties
(a) The
aggregate cost for Federal income tax purposes is $87,596.
FRP HOLDINGS, INC.
SCHEDULE III (CONSOLIDATED) -
REAL ESTATE AND
ACCUMULATED DEPRECIATION AND DEPLETION
(In thousands)
Years ended December 31,
Gross Carrying Cost of Real Estate:
Additions during period:
Deductions during period:
Accumulated Depreciation & Depletion:
Additions during period:
Deductions during period: