cto-10q_20160630.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

x

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

For the quarterly period ended June 30, 2016

¨

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 01-11350

 

CONSOLIDATED-TOMOKA LAND CO.

(Exact name of registrant as specified in its charter)

 

 

Florida

 

59-0483700

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

1530 Cornerstone Blvd., Suite 100

Daytona Beach, Florida

 

32117

(Address of principal executive offices)

 

(Zip Code)

(386) 274-2202

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

 

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 website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or 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 “accelerated filer,” “smaller reporting company,” and “large accelerated filer” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

o

 

Accelerated filer

 

x

 

 

 

 

 

 

 

Non-accelerated filer

 

o

(Do not check if a smaller reporting company)

Smaller reporting company

 

o

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 of Common Stock Outstanding

July 22, 2016

$1.00 par value 5,796,325

 

 

 

 


 

INDEX

 

 

 

 

 

Page

No.

PART I—FINANCIAL INFORMATION

 

 

 

 

 

 

 

Item 1.

 

Financial Statements

 

 

 

 

 

Consolidated Balance Sheets – June 30, 2016 (Unaudited) and December 31, 2015

 

3

 

 

 

Consolidated Statements of Operations – Three and Six Months ended June 30, 2016 and 2015 (Unaudited)

 

4

 

 

 

Consolidated Statements of Comprehensive Income – Three and Six Months ended June 30, 2016 and 2015 (Unaudited)

 

5

 

 

 

Consolidated Statements of Shareholders’ Equity – Six Months ended June 30, 2016 (Unaudited)

 

6

 

 

 

Consolidated Statements of Cash Flows – Six Months ended June 30, 2016 and 2015 (Unaudited)

 

7

 

 

 

Notes to Consolidated Financial Statements (Unaudited)

 

9

 

 

 

 

 

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

41

 

 

 

 

 

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risks

 

56

 

 

 

 

 

Item 4.

 

Controls and Procedures

 

56

 

 

 

PART II—OTHER INFORMATION

 

 

 

 

 

 

 

Item 1.

 

Legal Proceedings

 

56

 

 

 

 

 

Item 1A.

 

Risk Factors

 

57

 

 

 

 

 

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

57

 

 

 

 

 

Item 3.

 

Defaults Upon Senior Securities

 

57

 

 

 

 

 

Item 4.

 

Mine Safety Disclosures

 

57

 

 

 

 

 

Item 5.

 

Other Information

 

57

 

 

 

 

 

Item 6.

 

Exhibits

 

58

 

 

 

SIGNATURES

 

59

 

2


 

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED-TOMOKA LAND CO.

CONSOLIDATED BALANCE SHEETS 

 

 

 

(Unaudited)

June 30,

2016

 

 

December 31,

2015

 

ASSETS

 

 

 

 

 

 

 

 

Property, Plant, and Equipment:

 

 

 

 

 

 

 

 

Income Properties, Land, Buildings, and Improvements

 

$

211,698,872

 

 

$

268,970,875

 

Golf Buildings, Improvements, and Equipment

 

 

3,445,842

 

 

 

3,432,681

 

Other Furnishings and Equipment

 

 

1,060,007

 

 

 

1,044,139

 

Construction in Progress

 

 

234,677

 

 

 

50,610

 

Total Property, Plant, and Equipment

 

 

216,439,398

 

 

 

273,498,305

 

Less, Accumulated Depreciation and Amortization

 

 

(13,814,002

)

 

 

(16,242,277

)

Property, Plant, and Equipment—Net

 

 

202,625,396

 

 

 

257,256,028

 

Land and Development Costs ($11,484,560 and $11,329,574 Related to Consolidated VIE     as of June 30, 2016 and December 31, 2015, respectively)

 

 

56,962,202

 

 

 

53,406,020

 

Intangible Lease Assets—Net

 

 

16,646,400

 

 

 

20,087,151

 

Assets Held for Sale

 

 

38,685,310

 

 

 

-

 

Impact Fee and Mitigation Credits

 

 

4,277,767

 

 

 

4,554,227

 

Commercial Loan Investments

 

 

23,960,467

 

 

 

38,331,956

 

Cash and Cash Equivalents

 

 

24,742,236

 

 

 

4,060,677

 

Restricted Cash

 

 

10,568,618

 

 

 

14,060,523

 

Investment Securities

 

 

-

 

 

 

5,703,767

 

Refundable Income Taxes

 

 

117,079

 

 

 

858,471

 

Other Assets

 

 

8,544,663

 

 

 

6,034,824

 

Total Assets

 

$

387,130,138

 

 

$

404,353,644

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

Accounts Payable

 

$

2,225,130

 

 

$

1,934,417

 

Accrued and Other Liabilities

 

 

9,382,443

 

 

 

8,867,919

 

Deferred Revenue

 

 

5,393,195

 

 

 

14,724,610

 

Intangible Lease Liabilities - Net

 

 

30,870,405

 

 

 

31,979,559

 

Accrued Stock-Based Compensation

 

 

48,000

 

 

 

135,554

 

Deferred Income Taxes—Net

 

 

42,405,361

 

 

 

39,526,406

 

Long-Term Debt

 

 

153,887,378

 

 

 

166,796,853

 

Total Liabilities

 

 

244,211,912

 

 

 

263,965,318

 

Commitments and Contingencies - See Note 18

 

 

 

 

 

 

 

 

Shareholders’ Equity:

 

 

 

 

 

 

 

 

Consolidated-Tomoka Land Co. Shareholders' Equity:

 

 

 

 

 

 

 

 

Common Stock – 25,000,000 shares authorized; $1 par value, 6,018,739

   shares issued and 5,796,115 shares outstanding at June 30, 2016;

   6,068,310 shares issued and 5,908,437 shares outstanding at December 31, 2015

 

 

5,911,602

 

 

 

5,901,510

 

Treasury Stock – 222,624 shares at June 30, 2016; 159,873 shares at December 31, 2015

 

 

(10,864,945

)

 

 

(7,866,410

)

Additional Paid-In Capital

 

 

19,411,293

 

 

 

16,991,257

 

Retained Earnings

 

 

123,210,563

 

 

 

120,444,002

 

Accumulated Other Comprehensive Loss

 

 

(335,271

)

 

 

(688,971

)

Total Consolidated-Tomoka Land Co. Shareholders' Equity

 

 

137,333,242

 

 

 

134,781,388

 

Noncontrolling Interest in Consolidated VIE

 

 

5,584,984

 

 

 

5,606,938

 

Total Shareholders’ Equity

 

 

142,918,226

 

 

 

140,388,326

 

Total Liabilities and Shareholders’ Equity

 

$

387,130,138

 

 

$

404,353,644

 

 

See Accompanying Notes to Consolidated Financial Statements

3


 

CONSOLIDATED-TOMOKA LAND CO.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

June 30,

 

 

June 30,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Properties

 

$

6,033,082

 

 

$

4,132,052

 

 

$

12,462,323

 

 

$

8,392,727

 

Interest Income from Commercial Loan Investments

 

 

635,050

 

 

 

638,710

 

 

 

1,516,295

 

 

 

1,270,194

 

Real Estate Operations

 

 

4,774,620

 

 

 

1,368,141

 

 

 

14,335,518

 

 

 

2,227,942

 

Golf Operations

 

 

1,412,196

 

 

 

1,448,567

 

 

 

2,876,555

 

 

 

2,985,993

 

Agriculture and Other Income

 

 

18,990

 

 

 

20,738

 

 

 

37,682

 

 

 

39,677

 

Total Revenues

 

 

12,873,938

 

 

 

7,608,208

 

 

 

31,228,373

 

 

 

14,916,533

 

Direct Cost of Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Properties

 

 

(1,204,040

)

 

 

(682,887

)

 

 

(2,380,747

)

 

 

(1,323,733

)

Real Estate Operations

 

 

(1,124,641

)

 

 

(305,853

)

 

 

(3,381,682

)

 

 

(904,576

)

Golf Operations

 

 

(1,447,176

)

 

 

(1,456,232

)

 

 

(2,851,764

)

 

 

(2,845,844

)

Agriculture and Other Income

 

 

(52,654

)

 

 

(43,195

)

 

 

(100,705

)

 

 

(98,346

)

Total Direct Cost of Revenues

 

 

(3,828,511

)

 

 

(2,488,167

)

 

 

(8,714,898

)

 

 

(5,172,499

)

General and Administrative Expenses

 

 

(1,899,126

)

 

 

(1,874,877

)

 

 

(6,696,583

)

 

 

(3,344,643

)

Impairment Charges

 

 

(1,970,822

)

 

 

 

 

 

(2,180,730

)

 

 

(510,041

)

Depreciation and Amortization

 

 

(1,805,559

)

 

 

(1,071,752

)

 

 

(3,872,926

)

 

 

(2,227,491

)

Gain on Disposition of Assets

 

 

1,362,948

 

 

 

12,749

 

 

 

1,362,948

 

 

 

18,189

 

Total Operating Expenses

 

 

(8,141,070

)

 

 

(5,422,047

)

 

 

(20,102,189

)

 

 

(11,236,485

)

Operating Income

 

 

4,732,868

 

 

 

2,186,161

 

 

 

11,126,184

 

 

 

3,680,048

 

Investment Income (Loss)

 

 

2,691

 

 

 

74,818

 

 

 

(563,693

)

 

 

225,277

 

Interest Expense

 

 

(2,154,437

)

 

 

(1,888,434

)

 

 

(4,246,203

)

 

 

(2,954,936

)

Income Before Income Tax Expense

 

 

2,581,122

 

 

 

372,545

 

 

 

6,316,288

 

 

 

950,389

 

Income Tax Expense

 

 

(1,000,480

)

 

 

(147,928

)

 

 

(3,343,081

)

 

 

(372,416

)

Net Income

 

 

1,580,642

 

 

 

224,617

 

 

 

2,973,207

 

 

 

577,973

 

Less: Net Loss (Income) Attributable to Noncontrolling Interest in Consolidated VIE

 

 

(10,199

)

 

 

 

 

 

21,954

 

 

 

 

 

Net Income Attributable to Consolidated-Tomoka Land Co.

 

$

1,570,443

 

 

$

224,617

 

 

$

2,995,161

 

 

$

577,973

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Share Information- See Note 10:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income Attributable to Consolidated-Tomoka Land Co.

 

$

0.28

 

 

$

0.04

 

 

$

0.52

 

 

$

0.10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends Declared and Paid

 

$

0.04

 

 

$

0.04

 

 

$

0.04

 

 

$

0.04

 

 

See Accompanying Notes to Consolidated Financial Statements

4


 

CONSOLIDATED-TOMOKA LAND CO.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

2016

 

 

June 30,

2015

 

 

June 30,

2016

 

 

June 30,

2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income Attributable to Consolidated-Tomoka Land Co.

 

$

1,570,443

 

 

$

224,617

 

 

$

2,995,161

 

 

$

577,973

 

Other Comprehensive Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Realized Loss (Gain) on Investment Securities Sold (Net of Tax of $222,025 and $(49,240) for the six months ended June 30, 2016 and 2015, respectively)

 

 

-

 

 

 

-

 

 

 

353,542

 

 

 

(81,551

)

Unrealized Gain (Loss) on Investment Securities (Net of Tax of $-0- and $(185,294) for the three months ended June 30, 2016 and 2015, respectively and Net of Tax of $210,652 and $(41,094) for the six months ended June 30, 2016 and 2015, respectively)

 

 

-

 

 

 

(295,050

)

 

 

335,429

 

 

 

(65,431

)

Cash Flow Hedging Derivative - Interest Rate Swap (Net of Tax of $(210,550) and $-0- for the three and six months ended June 30, 2016 and 2015, respectively)

 

 

(335,271

)

 

 

-

 

 

 

(335,271

)

 

 

-

 

Total Other Comprehensive Income (Loss), Net of Tax

 

 

(335,271

)

 

 

(295,050

)

 

 

353,700

 

 

 

(146,982

)

Total Comprehensive Income (Loss)

 

$

1,235,172

 

 

$

(70,433

)

 

$

3,348,861

 

 

$

430,991

 

 

See Accompanying Notes to Consolidated Financial Statements

 

5


 

CONSOLIDATED-TOMOKA LAND CO.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)

 

 

 

Consolidated-Tomoka Land Co. Shareholders

 

 

 

 

 

 

 

 

 

 

 

Common

Stock

 

 

Treasury

Stock

 

 

Additional

Paid-In

Capital

 

 

Retained

Earnings

 

 

Accumulated

Other

Comprehensive

Income (Loss)

 

 

Total Consolidated-Tomoka Land Co.

Shareholders’

Equity

 

 

Noncontrolling

Interest in

Consolidated

VIE

 

 

Total

Shareholders'

Equity

 

Balance January 1, 2016

 

 

5,901,510

 

 

 

(7,866,410

)

 

 

16,991,257

 

 

 

120,444,002

 

 

 

(688,971

)

 

 

134,781,388

 

 

 

5,606,938

 

 

 

140,388,326

 

Net Income

 

 

 

 

 

 

 

 

 

 

 

2,995,161

 

 

 

 

 

 

2,995,161

 

 

 

(21,954

)

 

 

2,973,207

 

Stock Repurchase

 

 

 

 

 

(2,998,535

)

 

 

 

 

 

 

 

 

 

 

 

(2,998,535

)

 

 

 

 

 

(2,998,535

)

Exercise of Stock Options

 

 

850

 

 

 

 

 

 

28,858

 

 

 

 

 

 

 

 

 

29,708

 

 

 

 

 

 

29,708

 

Vested Restricted Stock

 

 

8,884

 

 

 

 

 

 

(205,090

)

 

 

 

 

 

 

 

 

(196,206

)

 

 

 

 

 

(196,206

)

Stock Issuance

 

 

358

 

 

 

 

 

 

17,093

 

 

 

 

 

 

 

 

 

17,451

 

 

 

 

 

 

17,451

 

Stock Compensation Expense from Restricted Stock Grants and Equity Classified Stock Options

 

 

 

 

 

 

 

 

2,579,175

 

 

 

 

 

 

 

 

 

2,579,175

 

 

 

 

 

 

2,579,175

 

Cash Dividends ($0.04 per share)

 

 

 

 

 

 

 

 

 

 

 

(228,600

)

 

 

 

 

 

(228,600

)

 

 

 

 

 

(228,600

)

Other Comprehensive Income, Net of Tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

353,700

 

 

 

353,700

 

 

 

 

 

 

353,700

 

Balance June 30, 2016

 

$

5,911,602

 

 

$

(10,864,945

)

 

$

19,411,293

 

 

$

123,210,563

 

 

$

(335,271

)

 

$

137,333,242

 

 

$

5,584,984

 

 

$

142,918,226

 

 

See Accompanying Notes to Consolidated Financial Statements

 

6


 

CONSOLIDATED-TOMOKA LAND CO.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

Six Months Ended

 

 

 

June 30

 

 

June 30

 

 

 

2016

 

 

2015

 

Cash Flow from Operating Activities:

 

 

 

 

 

 

 

 

Net Income

 

$

2,973,207

 

 

$

577,973

 

Adjustments to Reconcile Net Income to Net Cash Provided by (Used In) Operating

   Activities:

 

 

 

 

 

 

 

 

Depreciation and Amortization

 

 

3,872,926

 

 

 

2,227,491

 

Amortization of Intangible Liabilities to Income Property Revenue

 

 

(1,162,780

)

 

 

 

Loan Cost Amortization

 

 

227,293

 

 

 

167,036

 

Amortization of Discount on Convertible Debt

 

 

551,489

 

 

 

318,197

 

Amortization of Discount on Debt Securities within Investment Securities

 

 

 

 

 

(4,228

)

Gain on Disposition of Property, Plant, and Equipment and Intangible Assets

 

 

(1,362,948

)

 

 

(18,189

)

Impairment Charges

 

 

2,180,730

 

 

 

510,041

 

Accretion of Commercial Loan Origination Fees

 

 

(164,893

)

 

 

(58,424

)

Amortization of Fees on Acquisition of Commercial Loan Investments

 

 

36,382

 

 

 

 

Discount on Commercial Loan Investment Payoff

 

 

217,500

 

 

 

 

Realized Loss (Gain) on Investment Securities

 

 

575,567

 

 

 

(130,791

)

Realized Gain on Put Option Derivative

 

 

 

 

 

(24,915

)

Deferred Income Taxes

 

 

2,108,493

 

 

 

229,744

 

Non-Cash Compensation

 

 

2,491,621

 

 

 

621,724

 

Decrease (Increase) in Assets:

 

 

 

 

 

 

 

 

Refundable Income Taxes

 

 

741,392

 

 

 

(440,488

)

Land and Development Costs

 

 

(4,584,904

)

 

 

(440,607

)

Impact Fees and Mitigation Credits

 

 

276,460

 

 

 

422,731

 

Other Assets

 

 

(2,678,702

)

 

 

(1,167,489

)

Increase (Decrease) in Liabilities:

 

 

 

 

 

 

 

 

Accounts Payable

 

 

290,713

 

 

 

532,273

 

Accrued and Other Liabilities

 

 

514,524

 

 

 

613,782

 

Deferred Revenue

 

 

(9,331,415

)

 

 

(1,571,266

)

Net Cash Provided By (Used In) Operating Activities

 

 

(2,227,345

)

 

 

2,364,595

 

Cash Flow from Investing Activities:

 

 

 

 

 

 

 

 

Acquisition of Property, Plant, and Equipment

 

 

(422,002

)

 

 

(1,499,328

)

Acquisition of Property, Plant, and Equipment and Intangible Lease Assets and Liabilities through Business Combinations

 

 

(2,460,000

)

 

 

(8,634,452

)

Acquisition of Commercial Loan Investments

 

 

 

 

 

(894,878

)

Decrease in Restricted Cash

 

 

3,491,905

 

 

 

2,946,703

 

Proceeds from Sale of Investment Securities

 

 

6,252,362

 

 

 

834,964

 

Proceeds from Sale of Put Options

 

 

 

 

 

78,995

 

Acquisition of Investment Securities

 

 

 

 

 

(6,927,254

)

Proceeds from Disposition of Property, Plant, and Equipment

 

 

18,828,578

 

 

 

6,185,947

 

Principal Payments Received on Commercial Loan Investments

 

 

14,282,500

 

 

 

7,200,909

 

Net Cash Provided By (Used In) Investing Activities

 

 

39,973,343

 

 

 

(708,394

)

Cash Flow from Financing Activities:

 

 

 

 

 

 

 

 

Proceeds from Long-Term Debt

 

 

28,750,000

 

 

 

76,375,000

 

Payments on Long-Term Debt

 

 

(42,050,000

)

 

 

(47,540,011

)

Cash Paid for Loan Fees

 

 

(388,257

)

 

 

 

Cash Proceeds from Exercise of Stock Options

 

 

47,159

 

 

 

423,480

 

Cash Used to Purchase Common Stock

 

 

(2,998,535

)

 

 

(858,695

)

Cash From (Used for) Excess Tax Benefit (Expense) from Vesting of Restricted Stock

 

 

2,507

 

 

 

(29,563

)

Cash Paid for Vesting of Restricted Stock

 

 

(198,713

)

 

 

 

Dividends Paid

 

 

(228,600

)

 

 

(233,187

)

Net Cash Provided By (Used In) Financing Activities

 

 

(17,064,439

)

 

 

28,137,024

 

Net Increase in Cash

 

 

20,681,559

 

 

 

29,793,225

 

Cash, Beginning of Year

 

 

4,060,677

 

 

 

1,881,195

 

Cash, End of Period

 

$

24,742,236

 

 

$

31,674,420

 

 

See Accompanying Notes to Consolidated Financial Statements

 

7


 

CONSOLIDATED-TOMOKA LAND CO.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Unaudited)

Supplemental Disclosure of Cash Flows:

Income taxes refunded, net of payments made, totaled approximately $58,000 during the six months ended June 30, 2016, while income taxes paid totaled approximately $577,000 during the six months ended June 30, 2015.

Interest totaling approximately $3.5 million and $1.5 million was paid during the six months ended June 30, 2016 and 2015, respectively. No interest was capitalized during the six months ended June 30, 2016 or 2015, respectively.

During the six months ended June 30, 2015, in connection with the issuance of the Company’s $75.0 million convertible senior notes due 2020, approximately $2.1 million of the issuance was allocated to the equity component for the conversion option. This non-cash allocation was reflected on the balance sheet as a decrease in long-term debt of approximately $3.4 million and an increase in deferred income taxes of approximately $1.3 million.

During the six months ended June 30, 2016, non-cash compensation includes a reduction in the value of accrued stock-based compensation of approximately $88,000. This portion of non-cash compensation was reflected on the consolidated balance sheet as a decrease in accrued stock-based compensation and on the consolidated income statement as a decrease in general and administrative expenses.

See Accompanying Notes to Consolidated Financial Statements

 

 

8


 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 1. DESCRIPTION OF BUSINESS AND PRINCIPLES OF INTERIM STATEMENTS

Description of Business

The terms “us,” “we,” “our,” and “the Company” as used in this report refer to Consolidated-Tomoka Land Co. together with our consolidated subsidiaries.      

We are a diversified real estate operating company. We own and manage thirty-seven commercial real estate properties in ten states in the U.S. As of June 30, 2016, we owned twenty-nine single-tenant and eight multi-tenant income-producing properties with over 1,500,000 square feet of gross leasable space. We also own and manage a land portfolio of approximately 10,500 acres. As of June 30, 2016, we had three commercial loan investments including one fixed-rate and one variable–rate mezzanine loan and a variable-rate B-Note representing a secondary tranche in a commercial mortgage loan. Our golf operations consist of the LPGA International golf club, which is managed by a third party. We also lease property for twenty billboards, have agricultural operations that are managed by a third party, which consists of leasing land for hay and sod production, timber harvesting, and hunting leases, and own and manage subsurface interests. The results of our agricultural and subsurface leasing operations are included in Agriculture and Other Income and Real Estate Operations, respectively, in our consolidated statements of operations.

Interim Financial Information

The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. These unaudited consolidated financial statements do not include all of the information and notes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements and should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, which provides a more complete understanding of the Company’s accounting policies, financial position, operating results, business properties, and other matters. The unaudited consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to present fairly the financial position of the Company and the results of operations for the interim periods.

The results of operations for the six months ended June 30, 2016 are not necessarily indicative of results to be expected for the year ending December 31, 2016.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, and other entities in which we have a controlling interest. Any real estate entities or properties included in the consolidated financial statements have been consolidated only for the periods that such entities or properties were owned or under control by us. All significant inter-company balances and transactions have been eliminated in the consolidated financial statements. Noncontrolling interests in consolidated pass-through entities are recognized before income taxes.

Use of Estimates in Preparation of Financial Statements

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, bank demand accounts, and money market accounts having maturities at acquisition date of 90 days or less. The Company’s bank balances as of June 30, 2016 include certain amounts over the Federal Deposit Insurance Corporation limits.

9


 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 1. DESCRIPTION OF BUSINESS AND PRINCIPLES OF INTERIM STATEMENTS (continued)

Restricted Cash

Restricted cash totaled approximately $10.6 million at June 30, 2016 of which approximately $9.1 million of cash is being held in escrow, from the sale of an income property and a surface entry right release, to be reinvested through the like-kind exchange structure into one or more other income properties. Approximately $306,000 is being held in a reserve primarily for property taxes and insurance escrows in connection with our financing of two properties acquired in January 2013; approximately $504,000 is being held in three separate escrow accounts related to three separate land transactions of which one closed in December 2013 and two closed in December 2015; approximately $17,000 is being held by the consolidated variable interest entity in which the Company is the primary beneficiary; and approximately $634,000 is being held in a reserve primarily for certain required tenant improvements for the Lowes in Katy, Texas.

Investment Securities

In accordance with ASC Topic 320, Investments – Debt and Equity Securities, the Company’s debt and equity securities investments have been determined to be equity securities classified as available-for-sale. Available-for-sale securities are carried at fair value in the consolidated balance sheets, with the unrealized gains and losses, net of tax, reported in other comprehensive income.

Realized gains and losses, and declines in value judged to be other-than-temporary related to equity securities, are included in investment income in the consolidated statements of operations. With respect to debt securities, when the fair value of a debt security classified as available-for-sale is less than its cost, management assesses whether or not: (i) it has the intent to sell the security or (ii) it is more likely than not that the Company will be required to sell the security before its anticipated recovery. If either of these conditions are met, the Company must recognize an other-than-temporary impairment through earnings for the differences between the debt security’s cost basis and its fair value, and such amount is included in investment income in the consolidated statements of operations. There were no other-than-temporary impairments during the six months ended June 30, 2016 or 2015. During the fourth quarter of 2015, an other-than-temporary impairment was deemed to exist on a portion of the equity securities held by the Company, resulting in an impairment charge of approximately $60,000. The Company completed the disposition of its remaining position in investment securities during the six months ended June 30, 2016 resulting in a loss of approximately $576,000.

The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified as available-for-sale are included in investment income in the consolidated statements of operations.

The fair value of the Company’s available-for-sale equity securities were measured quarterly, on a recurring basis, using Level 1 inputs, or quoted prices for identical, actively traded assets. The fair value of the Company’s available-for-sale debt securities were measured quarterly, on a recurring basis, using Level 2 inputs.

Derivative Instrument and Hedging Activity

In conjunction with the variable-rate mortgage loan secured by our property located in Raleigh, NC leased to Wells Fargo Bank, NA (“Wells Fargo”), the Company entered into an interest rate swap to fix the interest rate (the “Interest Rate Swap”). The Company accounts for its cash flow hedging derivative in accordance with ASC 815-20 “Derivatives and Hedging”. The derivative is included in Accrued and Other Liabilities on the consolidated balance sheet at its fair value. On the date the Interest Rate Swap was entered into, the Company designated the derivative as a hedge of the variability of cash flows to be paid related to the recognized long-term debt liability.

The Company formally documented the relationship between the hedging instrument and the hedged item, as well as its risk-management objective and strategy for undertaking the hedge transaction. At the hedge’s inception, the Company formally assessed whether the derivative that is used in hedging the transaction is highly effective in offsetting changes in cash flows of the hedged item, and we will continue to do so on an ongoing basis.

Changes in fair value of the Interest Rate Swap that are highly effective and designated and qualified as a cash-flow hedge are recorded in other comprehensive income and loss, until earnings are affected by the variability in cash flows of the designated hedged item.

10


 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 1. DESCRIPTION OF BUSINESS AND PRINCIPLES OF INTERIM STATEMENTS (continued)

Fair Value of Financial Instruments

The carrying amounts of the Company’s financial assets and liabilities including cash and cash equivalents, restricted cash, accounts receivable, and accounts payable at June 30, 2016 and December 31, 2015, approximate fair value because of the short maturity of these instruments. The carrying amount of the Company’s investments in commercial loans approximates fair value at June 30, 2016 and December 31, 2015, since the floating and fixed rates of the loans reasonably approximate current market rates for notes with similar risks and maturities. The carrying value of the Company’s credit facility approximates fair value at June 30, 2016 and December 31, 2015, since the floating rate reasonably approximates current market rates for revolving credit arrangements with similar risks and maturities. The face value of the Company’s fixed rate mortgage notes and convertible debt is measured at fair value based on current market rates for debt instruments with similar risks and maturities, see Note 6, “Fair Value of Financial Instruments.”

Fair Value Measurements

The Company’s estimates of fair value of financial and non-financial assets and liabilities is based on the framework established in the fair value accounting guidance. The framework specifies a hierarchy of valuation inputs which was established to increase consistency, clarity and comparability in fair value measurements and related disclosures. The guidance describes a fair value hierarchy based upon three levels of inputs that may be used to measure fair value, two of which are considered observable and one that is considered unobservable. The following describes the three levels:

 

·

Level 1 – Valuation is based upon quoted prices in active markets for identical assets or liabilities.

 

·

Level 2 – Valuation is based upon inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

 

·

Level 3 – Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include option pricing models, discounted cash flow models and similar techniques.

Classification of Commercial Loan Investments

Loans held for investment are stated at the principal amount outstanding and include the unamortized deferred loan fees offset by any applicable unaccreted purchase discounts and origination fees, if applicable, in accordance with GAAP.

Commercial Loan Investment Impairment

The Company’s commercial loans are held for investment. For each loan, the Company evaluates the performance of the collateral property and the financial and operating capabilities of the borrower/guarantor, in part, to assess whether any deterioration in the credit has occurred and for possible impairment of the loan. Impairment would reflect the Company’s determination that it is probable that all amounts due according to the contractual terms of the loan would not be collected. Impairment is measured based on the present value of the expected future cash flows from the loan discounted at the effective rate of the loan or the fair value of the collateral. Upon determination of an impairment, the Company would record an allowance to reduce the carrying value of the loan with a corresponding recognition of loss in the results of operations. Significant exercise of judgment is required in determining impairment, including assumptions regarding the estimate of expected future cash flows, collectability of the loan, the value of the underlying collateral and other factors including the existence of guarantees. The Company has determined that, as of June 30, 2016 and December 31, 2015, no allowance for impairment was required.

Recognition of Interest Income from Commercial Loan Investments

Interest income on commercial loan investments includes interest payments made by the borrower and the accretion of purchase discounts and loan origination fees, offset by the amortization of loan costs. Interest payments are accrued based on the actual coupon rate and the outstanding principal balance, and purchase discounts and loan origination fees are accreted into income using the effective yield method, adjusted for prepayments.

11


 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 1. DESCRIPTION OF BUSINESS AND PRINCIPLES OF INTERIM STATEMENTS (continued)

Impact Fees and Mitigation Credits

Impact fees and mitigation credits are stated at historical cost. As these assets are sold, the related revenues and cost basis are reported as revenues from, and direct costs of, real estate operations, respectively, in the consolidated statements of operations.

Accounts Receivable

Accounts receivable related to income properties, which are classified in other assets on the consolidated balance sheets, primarily consist of tenant reimbursable expenses. Receivables related to tenant reimbursable expenses totaled approximately $494,000 and $831,000 as of June 30, 2016 and December 31, 2015, respectively.

Accounts receivable related to real estate operations, which are classified in other assets on the consolidated balance sheets, totaled approximately $3.4 million and $1.3 million as of as of June 30, 2016 and December 31, 2015, respectively. These accounts receivable are related to the reimbursement of certain infrastructure costs completed by the Company in conjunction with three land sale transactions that closed during the fourth quarter of 2015 and one land sale transaction that closed during the first quarter of 2016.

Trade accounts receivable primarily consist of receivables related to golf operations, which are classified in other assets on the consolidated balance sheets. Trade accounts receivable related to golf operations, which primarily consist of membership and event receivables, totaled approximately $294,000 and $253,000 as of June 30, 2016 and December 31, 2015, respectively.

The collectability of the aforementioned receivables is determined based on a review of specifically identified accounts using judgments. As of as of June 30, 2016 and December 31, 2015, no allowance for doubtful accounts was required.

Purchase Accounting for Acquisitions of Real Estate Subject to a Lease

In accordance with the Financial Accounting Standards Board (“FASB”) guidance on business combinations, the fair value of the real estate acquired with in-place leases is allocated to the acquired tangible assets, consisting of land, building and tenant improvements, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, the value of in-place leases, and the value of leasing costs, based in each case on their relative fair values. The Company has determined that income property purchases with a pre-existing lease at the time of acquisition qualify as a business combination, in which case acquisition costs are expensed in the period the transaction closes. For income property purchases in which a new lease is originated at the time of acquisition, the Company has determined that these asset purchases are outside the scope of the business combination standards and accordingly, the acquisition costs are capitalized with the purchase.

The fair value of the tangible assets of an acquired leased property is determined by valuing the property as if it were vacant, and the “as-if-vacant” value is then allocated to land, building and tenant improvements based on the determination of the fair values of these assets.

In allocating the fair value of the identified intangible assets and liabilities of an acquired property, above-market and below-market in-place lease values are recorded as other assets or liabilities based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases, and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining term of the lease, including the probability of renewal periods. The capitalized above-market lease values are amortized as a reduction of rental income over the remaining terms of the respective leases. The capitalized below-market lease values are amortized as an increase to rental income over the initial term unless the Company believes that it is likely that the tenant will renew the option whereby the Company amortizes the value attributable to the renewal over the renewal period.

The aggregate value of other acquired intangible assets, consisting of in-place leases, is measured by the excess of (i) the purchase price paid for a property after adjusting existing in-place leases to market rental rates over (ii) the estimated fair value of the property as-if-vacant, determined as set forth above. The value of in-place leases exclusive of the value of above-market and below-market in-place leases is amortized to expense over the remaining non-cancelable periods of the respective leases. If a lease were to be terminated prior to its stated expiration, all unamortized amounts relating to that lease would be written off. The value of tenant relationships is reviewed on individual transactions to determine if future value was derived from the acquisition.

12


 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 1. DESCRIPTION OF BUSINESS AND PRINCIPLES OF INTERIM STATEMENTS (continued)

Sales of Real Estate

Gains and losses on sales of real estate are accounted for as required by the “Accounting for Sales of Real Estate” Topic of FASB Accounting Standards Codification (“FASB ASC”) FASB ASC 976-605-25. The Company recognizes revenue from the sale of real estate at the time the sale is consummated, unless the property is sold on a deferred payment plan and the initial payment does not meet established criteria, or the Company retains some form of continuing involvement in the property. As market information becomes available, real estate cost basis is analyzed and recorded at the lower of cost or market.

Adoption of New Accounting Standard

A certain item in the prior period’s consolidated balance sheet has been reclassified to conform to the presentation as of and for the six months ended June 30, 2016. Specifically, upon the adoption of ASU 2015-03, related to simplifying the presentation of debt issuance costs effective January 1, 2016, debt issuance costs, net of accumulated amortization, are required to be presented as a direct deduction from the carrying amount of the related long-term debt liability. The amount reclassified from other assets to long-term debt was approximately $1.7 million as of December 31, 2015.

NOTE 2. INCOME PROPERTIES

 

During the six months ended June 30, 2016, the Company acquired one multi-tenant income property, for an acquisition cost of approximately $2.5 million. Of the total acquisition cost, approximately $1.0 million was allocated to land, approximately $1.6 million was allocated to buildings and improvements, approximately $100,000 was allocated to intangible assets pertaining to the in-place lease value and leasing fees, and approximately $200,000 was allocated to intangible liabilities for the below market lease value. The amortization period for the intangible assets and liabilities is approximately 8.3 years. The property acquired during the six months ended June 30, 2016 is described below:

 

·

On February 18, 2016, the Company acquired a 4,685 square-foot building situated on approximately 0.37 acres in Dallas, TX which was 100% occupied and leased to two tenants, anchored by 7-Eleven, Inc. The purchase price was approximately $2.5 million, and as of the acquisition date, the weighted average remaining term of the leases was approximately 8.2 years.  

Four income properties were disposed of during the six months ended June 30, 2016 as described below:

 

·

On April 5, 2016, the Company sold its income property leased to American Signature Furniture located in Daytona Beach, Florida, which had 3.8 years remaining on the lease, for a sales price of approximately $5.2 million. The Company’s gain on the sale was approximately $197,000, or $0.02 per share after tax.

 

·

On April 6, 2016, the Company sold its income property leased to an affiliate of CVS, located in Sebring, Florida, which was sub-leased to Advanced Auto Parts and had approximately 3.1 years remaining on the lease, for a sales price of approximately $2.4 million. The Company’s loss on the sale was approximately $210,000, or $0.02 per share after tax, which was charged to earnings as an impairment during the three months ended March 31, 2016.

 

·

On April 22, 2016, the Company sold its 15,360 square foot self-developed property leased to Teledyne ODI, located in Daytona Beach, Florida, which had approximately 9.3 years remaining on the lease, for a sales price of approximately $3.0 million. The Company’s gain on the sale was approximately $822,000, or $0.09 per share after tax.

 

·

On June 22, 2016, the Company sold its income property leased to Lowe’s located in Lexington, North Carolina, which had 9.6 years remaining on the lease, for a sales price of approximately $9.1 million. The Company’s gain on the sale was approximately $344,000, or $0.04 per share after tax.

An impairment charge of approximately $942,000 was recognized during the three months ended June 30, 2016 on the single-tenant income property in Altamonte Springs, Florida leased to PNC Bank as described in Note 8, “Impairment of Long-Lived Assets.”

 

13


 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 2. INCOME PROPERTIES (continued)

Fourteen single-tenant properties were classified as held for sale as of March 31, 2016 which continue to be held for sale as of June 30, 2016 as the sale has not yet closed. Those fourteen properties classified as held for sale are described below:

 

·

On March 28, 2016, the Company entered into a purchase and sale agreement for the sale of a portfolio of fourteen single-tenant income properties (the “Portfolio Sale”). The properties include nine properties leased to Bank of America, located primarily in Orange County and also in Los Angeles County, California; two properties leased to Walgreens, located in Boulder, Colorado and Palm Bay, Florida; a property leased to a subsidiary of CVS located in Tallahassee, Florida; a ground lease for a property leased to Chase Bank located in Chicago, Illinois; and a ground lease for a property leased to Buffalo Wild Wings in Phoenix, Arizona. The sales price for the Portfolio Sale is approximately $51.6 million. The Portfolio Sale contemplates that the sales price includes the buyer’s assumption of the existing $23.1 million mortgage loan secured by the aforementioned properties. The Portfolio Sale, if completed, would result in an estimated gain of approximately $11.4 million, or approximately $1.22 per share, after tax. The Portfolio Sale is anticipated to close in the third quarter of 2016. The closing of the Portfolio Sale is subject to customary closing conditions.

On April 5, 2016, the Company entered into a 15 year lease with a national fitness center for the anchor space at The Grove at Winter Park located in Winter Park, Florida. The lease is for approximately 40,000 square feet, or 36%, of the 112,000 square foot multi-tenant retail center. On July 6, 2016, the Company funded approximately $4.0 million into an escrow account for customary tenant improvements for the fitness center, which could open as early as the fourth quarter of 2016. The tenant will draw funding from escrow as construction progresses.

One single-tenant income property and one vacant pad site were acquired during the six months ended June 30, 2015 at an aggregate acquisition cost of approximately $9.1 million. Two single-tenant income properties were classified as held for sale as of March 31, 2015, for which the sale closed in April 2015. An impairment of approximately $510,000 was charged to earnings during the three months ended March 31, 2015, related to the April 2015 sale as described in Note 8, “Impairment of Long-Lived Assets.”

NOTE 3. COMMERCIAL LOAN INVESTMENTS

On May 26, 2016, the Company’s $14.5 million first mortgage loan secured by the Sheraton Old San Juan Hotel located in San Juan, Puerto Rico was paid off at a discount of approximately $218,000. On payoff, the remaining loan origination fee net of loan costs was accreted into income.

During the three months ended June 30, 2016, the approximately $9.0 million B-Note secured by property in Sarasota, Florida and the $10.0 million mezzanine loan secured by property in Dallas, Texas were extended by the borrowers, each borrower having exercised one-year extension options thereby extending the maturity dates to June 2017 and September 2017, respectively.

As of June 30, 2016, the Company owned three performing commercial loan investments which have an aggregate outstanding principal balance of approximately $24.0 million. These loans are secured by real estate, or the borrower’s equity interest in real estate, located in Dallas, Texas, Sarasota, Florida, and Atlanta, Georgia and have an average remaining maturity of approximately 1.4 years and a weighted average interest rate of 8.7%.

The Company’s commercial loan investment portfolio was comprised of the following at June 30, 2016:

 

Description

 

Date of

Investment

 

Maturity

Date

 

Original Face

Amount

 

 

Current Face

Amount

 

 

Carrying

Value

 

 

Coupon Rate

 

Mezz – Hotel – Atlanta, GA

 

January 2014

 

February 2019

 

$

5,000,000

 

 

$

5,000,000

 

 

$

5,000,000

 

 

 

12.00%

 

B-Note – Retail Shopping Center,

   Sarasota, FL

 

May 2014

 

June 2017

 

 

8,960,467

 

 

 

8,960,467

 

 

 

8,960,467

 

 

30-day LIBOR

plus 7.50%

 

Mezz – Hotel, Dallas, TX

 

September 2014

 

September 2017

 

 

10,000,000

 

 

 

10,000,000

 

 

 

10,000,000

 

 

30-day LIBOR

plus 7.25%

 

Total

 

 

 

 

 

$

23,960,467

 

 

$

23,960,467

 

 

$

23,960,467

 

 

 

 

 

 

14


 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 3. COMMERCIAL LOAN INVESTMENTS (continued)

The carrying value of the commercial loan investment portfolio as of June 30, 2016 consisted of the following:

 

 

 

Total

 

Current Face Amount

 

$

23,960,467

 

Unamortized Fees

 

 

-

 

Unaccreted Origination Fees

 

 

-

 

Total Commercial Loan Investments

 

$

23,960,467

 

 

The Company’s commercial loan investment portfolio was comprised of the following at December 31, 2015:

 

Description

 

Date of

Investment

 

Maturity

Date

 

Original Face

Amount

 

 

Current Face

Amount

 

 

Carrying

Value

 

 

Coupon Rate

 

Mezz – Hotel – Atlanta, GA

 

January 2014

 

February 2019

 

$

5,000,000

 

 

$

5,000,000

 

 

$

5,000,000

 

 

 

12.00%

 

B-Note – Retail Shopping Center,

   Sarasota, FL

 

May 2014

 

June 2016

 

 

8,960,467

 

 

 

8,960,467

 

 

 

8,960,467

 

 

30-day LIBOR

plus 7.50%

 

Mezz – Hotel, Dallas, TX

 

September 2014

 

September 2016

 

 

10,000,000

 

 

 

10,000,000

 

 

 

10,000,000

 

 

30-day LIBOR

plus 7.25%

 

First Mortgage – Hotel, San Juan,

   Puerto Rico

 

September 2015

 

September 2018

 

 

14,500,000

 

 

 

14,500,000

 

 

 

14,371,489

 

 

30-day LIBOR

plus 9.00%

 

Total

 

 

 

 

 

$

38,460,467

 

 

$

38,460,467

 

 

$

38,331,956

 

 

 

 

 

 

The carrying value of the commercial loan investment portfolio as of December 31, 2015 consisted of the following:

 

 

 

Total

 

Current Face Amount

 

$

38,460,467

 

Unamortized Fees

 

 

36,382

 

Unaccreted Origination Fees

 

 

(164,893

)

Total Commercial Loan Investments

 

$

38,331,956

 

 

 

NOTE 4. LAND AND SUBSURFACE INTERESTS

During the six months ended June 30, 2016, a total of approximately 7.46 acres of land was sold for approximately $2.2 million as described below:

 

·

On February 12, 2016, the Company sold approximately 3.06 acres of land located in Daytona Beach, Florida at a sales price of $190,000, or approximately $62,000 per acre, for a gain of approximately $145,000.

 

 

·

On March 30, 2016, the Company sold approximately 4.40 acres of land located within the 235-acre Tomoka Town Center located in Daytona Beach, Florida east of Interstate 95 and south of LPGA Boulevard (the “Town Center”) at a sales price of approximately $2.0 million, or approximately $455,000 per acre, for a gain of approximately $1.25 million recognized at closing, with the remaining estimated gain of approximately $683,000 to be recognized as related infrastructure work is completed.

15


 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 4. LAND AND SUBSURFACE INTERESTS (continued)

In addition, the gain recognized on the percentage-of-completion basis for the sales within the Town Center, of which approximately 180 of the total 235 acres are developable, is described below. The Town Center infrastructure work was approximately 81% complete as of June 30, 2016. The gain consists of revenue from a portion of the sales price and revenue from expected reimbursement of infrastructure costs, less the allocated cost basis of the infrastructure costs incurred, as the infrastructure work is completed:

 

Land Tract

 

Date Closed

 

No. of Acres

 

 

Sales Price

 

 

Avg. Sales Price per Acre

 

 

Revenue (1) Recognized in

Q2 2016

 

 

Revenue (1) Recognized in YTD Q2 2016

 

 

Gain (2) Recognized in Q2 2016