CTO Realty Growth Reports Fourth Quarter and Full Year 2020 Operating Results
CTO Realty Growth reported robust operating results for Q4 and FY 2020 following its successful REIT conversion. Highlights include a Q4 net income per diluted share of $16.60 and a 25.5% year-over-year revenue increase to $56.4 million. The company paid a record $13.88 in dividends per share, up 3,054.5% from the previous year. A total of $336 million in real estate transactions were completed in 2020, positioning the company strongly despite pandemic challenges, achieving 99% rent collection rates for Q4.
- Successful REIT conversion enhancing tax efficiency.
- Reported 25.5% revenue growth year-over-year to $56.4 million.
- Paid record $13.88 dividends per share, up 3,054.5% from 2019.
- Completed a record $336 million in real estate transactions in 2020.
- Maintained 99% rent collection rates in Q4 2020.
- Net income decreased 31.7% to $78.5 million for the year.
- Q4 net income per share dropped 17.2% compared to 2019.
- General and administrative expenses rose 17.8% year-over-year.
DAYTONA BEACH, Fla., Feb. 18, 2021 (GLOBE NEWSWIRE) -- CTO Realty Growth, Inc. (NYSE: CTO) (the “Company” or “CTO”) today announced its operating results and earnings for the quarter and year ended December 31, 2020.
Select Highlights
- Announced successful completion of the Company’s real estate investment trust (“REIT”) conversion and payment of the previously declared special distribution on the Company’s shares of common stock through an aggregate of
$5.6 million in cash and the issuance of 1,198,963 shares of the Company’s common stock. - Reported Net Income per diluted share of
$16.60 and$16.69 for the quarter and year ended December 31, 2020, respectively. - Reported FFO per diluted share of
$2.11 and$5.84 for the quarter and year ended December 31, 2020, respectively. - Reported AFFO per diluted share of
$2.20 and$5.57 for the quarter and year ended December 31, 2020, respectively. - Paid a regular cash dividend for the fourth quarter of 2020 of
$1.00 per share on November 30, 2020 to shareholders of record as of November 16, 2020. - Collected
99% of the Contractual Base Rent (“CBR”) (as defined below) due for the three months ended December 31, 2020. - During the fourth quarter of 2020, sold three income properties and one vacant land parcel for
$34.9 million , representing a weighted average exit cap rate of6.1% . - During the fourth quarter of 2020, the Land JV (as defined below) sold 86 acres for
$11.5 million . - Sold eight billboard sites during the fourth quarter of 2020 for a sales price of
$1.5 million , resulting in a gain equal to the sales price. - Total real estate transaction activity for 2020, which includes income property acquisitions and dispositions, as well as vacant land sales of the Land JV (as defined below), totaled a Company record
$336.0 million . - Book value per share outstanding as of December 31, 2020 was
$59.32 . - Collected
99% of CBR (as defined below) due in January 2021. - On January 28, 2021, the Company sold approximately 25,000 acres of subsurface oil, gas and mineral rights for
$1.9 million , resulting in a gain on the sale of$1.8 million . - Declared a regular cash dividend for the first quarter of 2021 of
$1.00 per share, representing an annualized yield of8.1% based on the closing price of CTO common stock on February 17, 2021.
CEO Comments
“We are pleased with the progress we made during 2020 as we accomplished a record number of company-specific operational and transactional initiatives, with our fourth quarter REIT conversion representing the culmination of our multi-year process to reposition CTO Realty Growth into a high-quality, publicly traded diversified REIT,” said John P. Albright, President and Chief Executive Officer of CTO Realty Growth. “This was a terrific year of execution for our team as we managed
Quarterly Financial Results Highlights
The tables below provide a summary of the Company’s operating results for the three months ended December 31, 2020:
| (in thousands) | For the Three Months Ended December 31, 2020 | For the Three Months Ended December 31, 2019 | Variance to Comparable Period in the Prior Year | |||||||||||
| Income Properties | $ | 14,544 | $ | 10,595 | $ | 3,949 | 37.3 | % | ||||||
| Management Fee Income | $ | 664 | $ | 304 | $ | 360 | 118.4 | % | ||||||
| Commercial Loan and Master Lease Investments | $ | 734 | $ | 921 | $ | (187 | ) | (20.3 | %) | |||||
| Real Estate Operations | $ | 19 | $ | 143 | $ | (124 | ) | (86.7 | %) | |||||
| Total Revenues | $ | 15,961 | $ | 11,963 | $ | 3,998 | 33.4 | % | ||||||
The increase in total revenue was primarily attributable to income produced by the Company’s recent income property acquisitions versus that of properties disposed of by the Company during the comparative period and revenue from management fee income, the majority of which was from the external management of PINE that did not commence until late in the fourth quarter of 2019.
| (in thousands) | For the Three Months Ended December 31, 2020 | For the Three Months Ended December 31, 2019 | Variance to Comparable Period in the Prior Year | |||||||||||
| Recurring General and Administrative Expenses | $ | 1,941 | $ | 2,083 | $ | (142 | ) | (6.8 | %) | |||||
| Non-Cash Stock Compensation | $ | 651 | $ | 629 | $ | 22 | 3.5 | % | ||||||
| REIT Conversion and Other Non-Recurring Items | $ | 371 | $ | 225 | $ | 146 | 64.9 | % | ||||||
| Total General and Administrative Expenses | $ | 2,963 | $ | 2,937 | $ | 26 | 0.9 | % | ||||||
The operating results for the quarter ended December 31, 2020 were impacted by
| (in thousands, except per share data) | For the Three Months Ended December 31, 2020 | For the Three Months Ended December 31, 2019 | Variance to Comparable Period in the Prior Year | ||||||||||
| Net Income | $ | 79,682 | $ | 96,422 | $ | (16,740 | ) | (17.4 | %) | ||||
| Net Income per diluted share | $ | 16.60 | $ | 20.04 | $ | (3.44 | ) | (17.2 | %) | ||||
| FFO (1) | $ | 10,129 | $ | 3,718 | $ | 6,411 | 172.4 | % | |||||
| FFO per diluted share (1) | $ | 2.11 | $ | 0.77 | $ | 1.34 | 174.0 | % | |||||
| AFFO (1) | $ | 10,557 | $ | 3,433 | $ | 7,124 | 207.5 | % | |||||
| AFFO per diluted share (1) | $ | 2.20 | $ | 0.71 | $ | 1.49 | 209.9 | % | |||||
| Dividends Declared and Paid, per share | $ | 12.98 (2) | $ | 0.13 | $ | 12.85 | 9,884.6 | % | |||||
(1) See the “Non-GAAP Financial Measures” section and tables at the end of this press release for a discussion and reconciliation of Net Income to non-GAAP financial measures, including FFO, FFO per diluted share, AFFO and AFFO per diluted share.
(2) Includes the payment of the Company’s previously announced special distribution in an aggregate amount of approximately
Net income for the quarter ended December 31, 2020 includes an increase in deferred income tax benefit of
Annual Financial Results Highlights
The tables below provide a summary of the Company’s operating results for the year ended December 31, 2020:
| (in thousands) | For the Year Ended December 31, 2020 | For the Year Ended December 31, 2019 | Variance to Comparable Period in the Prior Year | |||||||||||
| Income Properties | $ | 49,953 | $ | 41,956 | $ | 7,997 | 19.1 | % | ||||||
| Management Fee Income | $ | 2,744 | $ | 304 | $ | 2,440 | 802.6 | % | ||||||
| Commercial Loan and Master Lease Investments | $ | 3,034 | $ | 1,829 | $ | 1,205 | 65.9 | % | ||||||
| Real Estate Operations | $ | 650 | $ | 852 | $ | (202 | ) | (23.7 | %) | |||||
| Total Revenues | $ | 56,381 | $ | 44,941 | $ | 11,440 | 25.5 | % | ||||||
The increase in total revenue year-over-year was primarily attributable to income produced by the Company’s recent income property acquisitions versus that of properties disposed of by the Company during the comparative period, income from commercial loan and master lease investments that were originated during and subsequent to the second quarter of 2019, and revenue from management fee income, the majority of which was from the external management of PINE, which did not commence until late in the fourth quarter of 2019.
| (in thousands) | For the Year Ended December 31, 2020 | For the Year Ended December 31, 2019 | Variance to Comparable Period in the Prior Year | ||||||||||
| Recurring General and Administrative Expenses | $ | 7,355 | $ | 6,668 | $ | 687 | 10.3 | % | |||||
| Non-Cash Stock Compensation | $ | 2,786 | $ | 2,688 | $ | 98 | 3.6 | % | |||||
| REIT Conversion and Other Non-Recurring Items | $ | 1,426 | $ | 462 | $ | 964 | 208.7 | % | |||||
| Total General and Administrative Expenses | $ | 11,567 | $ | 9,818 | $ | 1,749 | 17.8 | % | |||||
The operating results for the year ended December 31, 2020 were impacted by a
| (in thousands, except for per share data) | For the Year Ended December 31, 2020 | For the Year Ended December 31, 2019 | Variance to Comparable Period in the Prior Year | ||||||||
| Net Income | $ | 78,509 | $ | 114,973 | $ | (36,464 | ) | (31.7 | %) | ||
| Net Income per diluted share | $ | 16.69 | $ | 23.00 | $ | (6.31 | ) | (27.4 | %) | ||
| FFO (1) | $ | 27,468 | $ | 14,224 | $ | 13,244 | 93.1 | % | |||
| FFO per diluted share (1) | $ | 5.84 | $ | 2.85 | $ | 2.99 | 104.9 | % | |||
| AFFO (1) | $ | 26,215 | $ | 14,819 | $ | 11,396 | 76.9 | % | |||
| AFFO per diluted share (1) | $ | 5.57 | $ | 2.97 | $ | 2.60 | 87.5 | % | |||
| Dividends Declared and Paid, per share | $ | 13.88 (2) | $ | 0.44 | $ | 13.44 | 3,054.5 | % | |||
(1) See the “Non-GAAP Financial Measures” section and tables at the end of this press release for a discussion and reconciliation of Net Income to non-GAAP financial measures, including FFO, FFO per diluted share, AFFO and AFFO per diluted share.
(2) Includes the payment of the Special Distribution in an aggregate amount of approximately
Net income for the year ended December 31, 2020 includes an increase in deferred income tax benefit of
Acquisitions
During the year ended December 31, 2020, the Company acquired three retail properties and one office property for total acquisition volume of
Dispositions
During the three months ended December 31, 2020, the Company sold three income properties and one vacant land parcel for total disposition volume of
During the fourth quarter and full year of 2020, the Company sold eight billboard sites for a sales price of
During the year ended December 31, 2020, the Company sold 11 income properties and one vacant land parcel for total disposition volume of
On January 20, 2021, the Company completed the sale of the property located in Brandon, Florida leased to two tenants operating as World of Beer and Fuzzy’s Taco Shop for a sale price of
Income Property Portfolio
As of December 31, 2020, the Company’s portfolio had economic occupancy of
The Company’s income property portfolio consisted of the following as of December 31, 2020:
Property Type | # of Properties | Square Feet | Weighted Average Remaining on Lease Term | ||||
| Single-Tenant (1) | 21 | 1,478 | 18.6 years | ||||
| Multi-Tenant | 6 | 1,016 | 5.9 years | ||||
| Total / Weighted Average Lease Term | 27 | 2,494 | 12.7 years | ||||
| % of Rent attributable to Retail Tenants | |||||||
| % of Rent attributable to Office Tenants | |||||||
| % of Rent attributable to Hotel Ground Lease | |||||||
Square feet in thousands.
(1) The 21 single-tenant properties include (i) a property leased to The Carpenter Hotel which is under a long-term ground lease and includes two tenant-repurchase options and (ii) a property in Hialeah leased to a master tenant which includes three tenant-repurchase options. Pursuant to FASB ASC Topic 842, Leases, the
Operational Highlights
During the fourth quarter of 2020, CTO signed leases totaling approximately 155,300 square feet. A summary of the Company’s leasing activity is as follows:
Retail | Square Feet | Weighted Average Lease Term | Weighted Average Cash Rent Per Square Foot | Tenant Improvements | Leasing Commissions | ||||||||
| New Leases | 22.4 | 9.8 | $ | 2,850 | $ | 305 | |||||||
| Renewals & Extensions | 132.9 | 5.7 | 0 | 54 | |||||||||
| Total | 155.3 | 6.6 | $ | 2,850 | $ | 359 | |||||||
In thousands except for per square foot and lease term data.
COVID-19 Pandemic and Rent Collection Update
In March 2020, the World Health Organization declared the outbreak of the novel coronavirus as a pandemic (the “COVID-19 Pandemic”), which has spread throughout the United States. The spread of the COVID-19 Pandemic has continued to cause significant volatility in the U.S. and international markets, and in many industries, business activity has experienced periods of almost complete shutdown. There continues to be uncertainty around the duration and severity of business disruptions related to the COVID-19 Pandemic, as well as its impact on the U.S. economy and international economies.
Q4 2020 Rent Status: The Company collected
2021 Rent Status: As of February 17, 2021, the Company has received payments for CBR due in January 2021 from tenants representing
- The total borrowing capacity on the Company’s revolving credit facility is based on the assets currently in the borrowing base, as defined by the Company’s revolving credit facility agreement. Pursuant to the terms of the revolving credit facility agreement, any property in the borrowing base with a tenant that is more than 60 days past due on its contractual rent obligations would be automatically removed from the borrowing base and the Company’s borrowing capacity would be reduced. For the tenants requesting rent relief with which the Company has reached an agreement, such deferral and/or abatement agreements for current rent, under the terms of the credit facility, would not be past due if the tenants adhere to such modifications, and thus those properties would not be required to be removed from the borrowing base. The Company’s available borrowing capacity has not been limited as a result of the referenced terms of the revolving credit facility.
- As a result of the outbreak of the COVID-19 Pandemic, the federal government and the state of Florida issued orders encouraging everyone to remain in their residence and not go into work. In response to these orders and in the best interest of our employees and directors, we have implemented significant preventative measures to ensure the health and safety of our employees and Board of Directors (the “Board”), including: (i) conducting all meetings of the Board and Committees of the Board telephonically or via a visual conferencing service, (ii) permitting the Company’s employees to work from home at their election, (iii) enforcing appropriate social distancing practices in the Company’s office, (iv) encouraging the Company’s employees to wash their hands often and use face masks, (v) providing hand sanitizer and other disinfectant products throughout the Company’s office, (vi) requiring employees who do not feel well in any capacity to stay at home, and (vii) requiring all third-party delivery services (e.g. mail, food delivery, etc.) to complete their service outside the front door of the Company’s office. The Company also offered COVID-19 testing to its employees to ensure a safe working environment. These preventative measures have not had any material adverse impact on the Company’s financial reporting systems, internal controls over financial reporting or disclosure controls and procedures. At this time, we have not laid off, furloughed, or terminated any employee in response to the COVID-19 Pandemic.
Land Joint Venture
During the three months ended December 31, 2020, the venture formed when the Company sold its controlling interest in the entity that owned the Company’s remaining land portfolio, of which the Company has a retained interest (the “Land JV”) sold 86 acres for
Following these transactions, the Land JV has approximately 1,600 acres of undeveloped land, or an estimated
The Land JV’s current transaction pipeline related to the remaining 1,600 acres includes 55 acres of potential land sales that total
Commercial Loan Investments
During the three months ended December 31, 2020, the Company completed the following commercial loan transactions:
- Invested approximately
$0.4 million in one commercial loan provided to the buyer of a vacant land parcel located in Dallas, Texas. The loan has an initial term of 2.5 years and an interest rate of7.5% . - Generated proceeds of
$2.0 million in connection with the borrower’s repayment of the Company’s loan made to the buyer of the Company’s former golf operations.
During the year ended December 31, 2020, the Company sold four of its commercial loan investments generating aggregate proceeds of approximately
The following is a summary of the Company’s commercial loan investment as of December 31, 2020:
($ in thousands) | Date of Investment | Maturity Date | Original Loan Amount | Carrying Value | Interest Rate | ||||||||||||||
| Mortgage Note – 4311 Maple Avenue, Dallas, TX | October 2020 | April 2023 | $ | 400 | $ | 392 | 7.50 | % | |||||||||||
Subsurface Interests
During the year ended December 31, 2020, the Company sold 345 acres of subsurface interests totaling
On January 28, 2021, the Company sold approximately 25,000 acres of subsurface oil, gas and mineral rights for
REIT Conversion and NYSE Uplisting
During the third quarter of 2020, the Company’s Board unanimously approved a plan for the Company to elect to be subject to tax as a REIT for U.S. federal income tax purposes, commencing with its taxable year ended December 31, 2020. In connection with the REIT conversion, the Company’s Board declared a special distribution on its shares of common stock in an aggregate amount of
On February 1, 2020, the Company announced the completion of a merger that was undertaken in connection with the Company’s previously announced plan for the Company to elect to be subject to tax as a REIT for U.S. federal income tax purposes (the “Merger”).
As a result of the Merger, the Company is a corporation organized in the state of Maryland and the Company’s charter includes certain standard REIT provisions, including ownership limitations and transfer restrictions applicable to the Company’s capital stock.
Following the completion of the Merger, the Company’s common stock began trading on the New York Stock Exchange on February 1, 2021 under the ticker symbol “CTO.”
Capital Markets and Balance Sheet
During the year ended December 31, 2020, the Company completed the following notable capital markets transactions:
- Exchanged or refinanced the
$75.0 million of convertible notes due in March 2020 that carried a coupon rate of4.50% with a new issuance of$75.0 million in convertible notes that mature in April 2025 and have a coupon rate of3.875% (the “2025 Notes”). - Repurchased
$12.5 million aggregate principal amount of the Company’s 2025 Notes at a$2.6 million cash discount, resulting in a gain on the extinguishment of debt of$1.1 million . - Under the Company’s
$10.0 million buyback program, the Company repurchased 88,565 shares for approximately$4.1 million with an average purchase price of$46.29 per share. The per share purchase price is unadjusted for the Company’s Special Distribution in connection with its REIT Conversion.
The following table provides a summary of the Company’s long-term debt, at face value, as of December 31, 2020:
| Component of Long-Term Debt | Principal | Interest Rate | Maturity Date | ||||
| Revolving Credit Facility (1) | May 2023 | ||||||
| Revolving Credit Facility (2) | May 2023 | ||||||
| Revolving Credit Facility | 30-day LIBOR + [ | May 2023 | |||||
| Mortgage Note Payable (3) | April 2021 | ||||||
| Mortgage Note Payable | October 2034 | ||||||
| 2025 Convertible Senior Notes | April 2025 | ||||||
| Total Debt / Weighted Average Interest Rate | |||||||
(1) Effective March 31, 2020, the Company utilized an interest rate swap to achieve a fixed LIBOR rate of
(2) Effective August 31, 2020, the Company utilized an interest rate swap to achieve a fixed LIBOR rate of
(3) The mortgage note payable is subject to an interest rate swap to achieve a fixed interest rate of
Dividends
On October 28, 2020, the Company announced a regular cash dividend for the fourth quarter of 2020 of
On December 21, 2020, the Company announced the completion of the Special Distribution of
During year ended December 31, 2020, the Company paid regular cash dividends of
On February 16, 2021, the Company announced a regular cash dividend for the first quarter of 2021 of
2021 Outlook
The Company's outlook and guidance for 2021 assumes improvement in economic activity, stable or positive business trends related to each of our tenants and other significant assumptions. The Company’s outlook for 2021 is as follows:
| 2021 Outlook | ||||||||
| Low | High | |||||||
| Acquisition of Income-Producing Assets | ||||||||
| Target Investment Initial Cash Yield | | | ||||||
| Disposition of Assets (1) | ||||||||
| Target Disposition Cash Yield (1) | | | ||||||
| FFO Per Diluted Share | ||||||||
| AFFO Per Diluted Share | ||||||||
| Weighted Average Diluted Shares Outstanding | 5.9 million | 1.9 million | ||||||
(1) Includes the disposition of one property subsequent to December 31, 2020, as described above under “Dispositions.”
The Company's outlook and guidance for 2021 is based on current plans and assumptions, and subject to risks and uncertainties more fully described in this press release and the Company’s reports filed with the Securities and Exchange Commission (the “SEC”).
CEO Comments
“With our focus now on 2021, we are encouraged with our leasing activity and the opportunity to continue to monetize non-core and non-income producing properties to drive additional cash flow for our stockholders,” said John P. Albright, President and Chief Executive Officer of CTO Realty Growth. “As we look at our growth strategy for 2021 and beyond, we believe we can drive organic growth by selling some of our existing single tenant, net leased assets and reinvesting the proceeds in multi-tenant properties that we think have the potential to provide more attractive risk-adjusted returns.”
4th Quarter Earnings Conference Call & Webcast
The Company will host a conference call to present its operating results for the quarter and year ended December 31, 2020, on Friday, February 19, 2021, at 9:00 AM ET. Stockholders and interested parties may access the earnings call via teleconference or webcast:
| Teleconference: USA (Toll Free) | 1-888-317-6003 |
| International: | 1-412-317-6061 |
| Canada (Toll Free): | 1-866-284-3684 |
Please dial in at least fifteen minutes prior to the scheduled start time and use the code 0116865 when prompted.
A webcast of the call can be accessed at: https://services.choruscall.com/links/cto210219.html.
To access the webcast, log on to the web address noted above or go to http://www.ctorealtygrowth.com and log in at the investor relations section. Please log in to the webcast at least ten minutes prior to the scheduled time of the Earnings Call.
About CTO Realty Growth, Inc.
CTO Realty Growth, Inc. is a publicly traded diversified REIT that owns and operates a diversified portfolio of income properties comprising approximately 2.5 million square feet in the United States. CTO also owns an approximate
We encourage you to review our most recent investor presentation, which is available on our website at www.ctorealtygrowth.com.
Safe Harbor
Certain statements contained in this press release (other than statements of historical fact) are 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. Forward-looking statements can typically be identified by words such as “believe,” “estimate,” “expect,” “intend,” “anticipate,” “will,” “could,” “may,” “should,” “plan,” “potential,” “predict,” “forecast,” “project,” and similar expressions, as well as variations or negatives of these words.
Although forward-looking statements are made based upon management’s present expectations and reasonable beliefs concerning future developments and their potential effect upon the Company, a number of factors could cause the Company’s actual results to differ materially from those set forth in the forward-looking statements. Such factors may include, but are not limited to: the Company’s ability to remain qualified as a REIT; the Company’s exposure to U.S. federal and state income tax law changes, including changes to the REIT requirements; general adverse economic and real estate conditions; the ultimate geographic spread, severity and duration of pandemics such as the recent outbreak of the novel coronavirus, actions that may be taken by governmental authorities to contain or address the impact of such pandemics, and the potential negative impacts of such pandemics on the global economy and the Company’s financial condition and results of operations; the inability of major tenants to continue paying their rent or obligations due to bankruptcy, insolvency or a general downturn in their business; the loss or failure, or decline in the business or assets of PINE or the venture formed when the Company sold its controlling interest in the entity that owned the Company’s remaining land portfolio, of which the Company has a retained interest; the completion of 1031 exchange transactions; the availability of investment properties that meet the Company’s investment goals and criteria; the uncertainties associated with obtaining required governmental permits and satisfying other closing conditions for planned acquisitions and sales; and the uncertainties and risk factors discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, each as filed with the SEC.
There can be no assurance that future developments will be in accordance with management’s expectations or that the effect of future developments on the Company will be those anticipated by management. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company undertakes no obligation to update the information contained in this press release to reflect subsequently occurring events or circumstances.
Non-GAAP Financial Measures
Our reported results are presented in accordance with GAAP. We also disclose Funds From Operations (“FFO”) and Adjusted Funds From Operations (“AFFO”), both of which are non-GAAP financial measures. We believe these two non-GAAP financial measures are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the operating performance of REITs.
FFO and AFFO do not represent cash generated from operating activities and are not necessarily indicative of cash available to fund cash requirements; accordingly, they should not be considered alternatives to net income as a performance measure or cash flows from operating activities as reported on our statement of cash flows as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures.
We compute FFO in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT. NAREIT defines FFO as GAAP net income or loss adjusted to exclude extraordinary items (as defined by GAAP), net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets and real estate related depreciation and amortization, including the pro rata share of such adjustments of unconsolidated subsidiaries. The Company also excludes the gains or losses from sales of assets incidental to the primary business of the REIT which specifically include the sales of mitigation credits, impact fee credits, subsurface sales, and the land sales gains included in discontinued operations. To derive AFFO, we modify the NAREIT computation of FFO to include other adjustments to GAAP net income related to non-cash revenues and expenses such as straight-line rental revenue, amortization of deferred financing costs, amortization of capitalized lease incentives and above- and below-market lease related intangibles, and non-cash compensation. Such items may cause short-term fluctuations in net income but have no impact on operating cash flows or long-term operating performance. We use AFFO as one measure of our performance when we formulate corporate goals.
FFO is used by management, investors and analysts to facilitate meaningful comparisons of operating performance between periods and among our peers primarily because it excludes the effect of real estate depreciation and amortization and net gains on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions. We believe that AFFO is an additional useful supplemental measure for investors to consider because it will help them to better assess our operating performance without the distortions created by other non-cash revenues or expenses. FFO and AFFO may not be comparable to similarly titled measures employed by other companies.
CTO Realty Growth, Inc.
Consolidated Balance Sheets
(In thousands, except share and per share data)
| As of | ||||||||
| (Unaudited) December 31, 2020 | December 31, 2019 | |||||||
| ASSETS | ||||||||
| Real Estate: | ||||||||
| Land, at cost | $ | 166,512 | $ | 160,090 | ||||
| Building and Improvements, at cost | 305,614 | 232,752 | ||||||
| Other Furnishings and Equipment, at cost | 672 | 733 | ||||||
| Construction in Process, at cost | 323 | 24 | ||||||
| Total Real Estate, at cost | 473,121 | 393,599 | ||||||
| Less, Accumulated Depreciation | (30,737 | ) | (23,008 | ) | ||||
| Real Estate—Net | 442,384 | 370,591 | ||||||
| Land and Development Costs | 7,083 | 6,732 | ||||||
| Intangible Lease Assets—Net | 50,176 | 49,022 | ||||||
| Assets Held for Sale | 833 | 833 | ||||||
| Investment in Joint Ventures | 48,677 | 55,737 | ||||||
| Investment in Alpine Income Property Trust, Inc. | 30,574 | 38,814 | ||||||
| Mitigation Credits | 2,622 | 2,323 | ||||||
| Commercial Loan and Master Lease Investments | 38,320 | 34,625 | ||||||
| Cash and Cash Equivalents | 4,289 | 6,475 | ||||||
| Restricted Cash | 29,536 | 128,430 | ||||||
| Refundable Income Taxes | 26 | — | ||||||
| Other Assets | 11,411 | 9,704 | ||||||
| Total Assets | $ | 665,931 | $ | 703,286 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Liabilities: | ||||||||
| Accounts Payable | $ | 1,047 | $ | 1,386 | ||||
| Accrued and Other Liabilities | 9,090 | 5,687 | ||||||
| Deferred Revenue | 3,319 | 5,831 | ||||||
| Intangible Lease Liabilities—Net | 24,163 | 26,198 | ||||||
| Liabilities Held for Sale | 831 | 832 | ||||||
| Income Taxes Payable | — | 439 | ||||||
| Deferred Income Taxes—Net | 3,521 | 90,282 | ||||||
| Long-Term Debt | 273,061 | 287,218 | ||||||
| Total Liabilities | 315,032 | 417,873 | ||||||
| Commitments and Contingencies | ||||||||
| Shareholders’ Equity: | ||||||||
| Common Stock – 25,000,000 shares authorized; | 7,250 | 6,017 | ||||||
| Treasury Stock – 1,394,924 shares at December 31, 2020 and 1,306,359 shares at December 31, 2019 | (77,541 | ) | (73,441 | ) | ||||
| Additional Paid-In Capital | 83,183 | 26,690 | ||||||
| Retained Earnings | 339,917 | 326,073 | ||||||
| Accumulated Other Comprehensive Income (Loss) | (1,910 | ) | 74 | |||||
| Total Shareholders’ Equity | 350,899 | 285,413 | ||||||
| Total Liabilities and Shareholders’ Equity | $ | 665,931 | $ | 703,286 | ||||
CTO Realty Growth, Inc.
Consolidated Statements of Operations
(In thousands, except share, per share and dividend data)
| Three Months Ended | Year Ended | ||||||||||||||
| (Unaudited) | (Unaudited) | ||||||||||||||
| December 31, | December 31, | December 31, | December 31, | ||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||
| Revenues | |||||||||||||||
| Income Properties | $ | 14,544 | $ | 10,595 | $ | 49,953 | $ | 41,956 | |||||||
| Management Fee Income | 664 | 304 | 2,744 | 304 | |||||||||||
| Interest Income from Commercial Loan and Master Lease Investments | 734 | 921 | 3,034 | 1,829 | |||||||||||
| Real Estate Operations | 19 | 143 | 650 | 852 | |||||||||||
| Total Revenues | 15,961 | 11,963 | 56,381 | 44,941 | |||||||||||
| Direct Cost of Revenues | |||||||||||||||
| Income Properties | (3,715 | ) | (1,956 | ) | (11,988 | ) | (7,000 | ) | |||||||
| Real Estate Operations | 40 | (10 | ) | (3,223 | ) | (105 | ) | ||||||||
| Total Direct Cost of Revenues | (3,675 | ) | (1,966 | ) | (15,211 | ) | (7,105 | ) | |||||||
| General and Administrative Expenses | (2,963 | ) | (2,937 | ) | (11,567 | ) | (9,818 | ) | |||||||
| Impairment Charges | (7,242 | ) | — | (9,147 | ) | — | |||||||||
| Depreciation and Amortization | (4,729 | ) | (4,090 | ) | (19,063 | ) | (15,797 | ) | |||||||
| Total Operating Expenses | (18,609 | ) | (8,993 | ) | (54,988 | ) | (32,720 | ) | |||||||
| Gain on Disposition of Assets | 2,381 | 1,109 | 9,746 | 21,978 | |||||||||||
| Gain on Extinguishment of Debt | — | — | 1,141 | — | |||||||||||
| Other Gains and Income | 2,381 | 1,109 | 10,887 | 21,978 | |||||||||||
| Total Operating Income | (267 | ) | 4,079 | 12,280 | 34,199 | ||||||||||
| Investment and Other Income (Loss) | (686 | ) | 258 | (6,432 | ) | 344 | |||||||||
| Interest Expense | (2,454 | ) | (3,247 | ) | (10,838 | ) | (12,466 | ) | |||||||
| Income from Continuing Operations Before Income Tax Expense | (3,407 | ) | 1,090 | (4,990 | ) | 22,077 | |||||||||
| Income Tax Benefit (Expense) from Continuing Operations | 83,089 | (182 | ) | 83,499 | (5,472 | ) | |||||||||
| Income from Continuing Operations | 79,682 | 908 | 78,509 | 16,605 | |||||||||||
| Income from Discontinued Operations (Net of Income Tax) | — | 95,514 | — | 98,368 | |||||||||||
| Net Income | $ | 79,682 | $ | 96,422 | $ | 78,509 | $ | 114,973 | |||||||
| Per Share Information: | |||||||||||||||
| Basic | |||||||||||||||
| Net Income from Continuing Operations | $ | 16.60 | $ | 0.19 | $ | 16.69 | $ | 3.32 | |||||||
| Net Income from Discontinued Operations (Net of Income Tax) | — | 19.86 | — | 19.71 | |||||||||||
| Basic Net Income per Share | $ | 16.60 | $ | 20.05 | $ | 16.69 | $ | 23.03 | |||||||
| Diluted | |||||||||||||||
| Net Income from Continuing Operations | $ | 16.60 | $ | 0.19 | $ | 16.69 | $ | 3.32 | |||||||
| Net Income from Discontinued Operations (Net of Income Tax) | — | 19.85 | — | 19.68 | |||||||||||
| Diluted Net Income per Share | $ | 16.60 | $ | 20.04 | $ | 16.69 | $ | 23.00 | |||||||
| Weighted Average Number of Common Shares: | |||||||||||||||
| Basic | 4,799,668 | 4,808,417 | 4,704,877 | 4,991,656 | |||||||||||
| Diluted | 4,799,668 | 4,811,765 | 4,704,877 | 4,998,043 | |||||||||||
| Dividends Declared and Paid | $ | 12.98 | $ | 0.13 | $ | 13.88 | $ | 0.44 | |||||||
CTO Realty Growth, Inc.
Non-GAAP Financial Measures
(Unaudited)
(In thousands, except per share data)
| Three Months Ended | Year Ended | |||||||||||||||
| December 31, 2020 | December 31, 2019 | December 31, 2020 | December 31, 2019 | |||||||||||||
| Net Income | $ | 79,682 | $ | 96,422 | $ | 78,509 | $ | 114,973 | ||||||||
| Depreciation and Amortization | 4,729 | 4,090 | 19,063 | 15,797 | ||||||||||||
| Gains on Disposition of Assets | (2,381 | ) | (833 | ) | (9,746 | ) | (16,507 | ) | ||||||||
| Losses (Gains) on Other Assets (Including Discontinued Operations) | (60 | ) | (95,900 | ) | 2,480 | (99,978 | ) | |||||||||
| Impairment Charges | 7,242 | — | 9,147 | — | ||||||||||||
| Unrealized (Gain) Loss on Investment Securities | 1,142 | (61 | ) | 8,240 | (61 | ) | ||||||||||
| Income Tax Benefit from De-Recognition of REIT Deferred Tax Assets and Liabilities | (80,225 | ) | — | (80,225 | ) | — | ||||||||||
| Funds from Operations | $ | 10,129 | $ | 3,718 | $ | 27,468 | $ | 14,224 | ||||||||
| Adjustments: | ||||||||||||||||
| Straight-Line Rent Adjustment | $ | (754 | ) | $ | (873 | ) | $ | (2,564 | ) | $ | (1,680 | ) | ||||
| COVID-19 Rent Repayments (Deferrals), Net | 363 | — | (1,005 | ) | — | |||||||||||
| Amortization of Intangibles to Lease Income | (402 | ) | (572 | ) | (1,754 | ) | (2,383 | ) | ||||||||
| Lease Incentive Amortization | — | 50 | — | 277 | ||||||||||||
| Contributed Leased Assets Accretion | (115 | ) | (43 | ) | (245 | ) | (217 | ) | ||||||||
| Gain on Extinguishment of Debt | — | — | (1,141 | ) | — | |||||||||||
| Amortization of Discount on Convertible Debt | 312 | 348 | 1,379 | 1,357 | ||||||||||||
| Non-Cash Compensation | 651 | 629 | 2,786 | 2,688 | ||||||||||||
| Non-Recurring G&A | 371 | 225 | 1,426 | 462 | ||||||||||||
| Loan Cost Amortization | 116 | 120 | 454 | 444 | ||||||||||||
| Accretion of Loan Origination Fees | 3 | (67 | ) | (161 | ) | (135 | ) | |||||||||
| Non-Cash Imputed Interest | (117 | ) | (102 | ) | (428 | ) | (218 | ) | ||||||||
| Adjusted Funds from Operations | $ | 10,557 | $ | 3,433 | $ | 26,215 | $ | 14,819 | ||||||||
| FFO per diluted share | $ | 2.11 | $ | 0.77 | $ | 5.84 | $ | 2.85 | ||||||||
| AFFO per diluted share | $ | 2.20 | $ | 0.71 | $ | 5.57 | $ | 2.97 | ||||||||
Contact:
Matthew M. Partridge
Senior Vice President and Chief Financial Officer
(386) 944-5643
mpartridge@ctorealtygrowth.com
FAQ
What were CTO Realty Growth's earnings per share for Q4 2020?
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What is the dividend declared by CTO Realty Growth for Q1 2021?
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