Business Segments

12 Months Ended

Dec. 31, 2017

Segment Reporting [Abstract]

Business Segments

12. Business Segments.

The Company is reporting its financial performance based on four reportable segments, Asset Management, Mining Royalty Lands, Land Development and Construction and RiverFront on the Anacostia, as described below.

The Asset Management segment owns, leases and manages warehouse/office buildings located predominately in the Baltimore/Northern Virginia/Washington, DC market area.

Our Mining Royalty Lands segment owns several properties comprising approximately 15,000 acres currently under lease for mining rents or royalties (this does not include the 4,280 acres owned in our Brooksville joint venture with Vulcan Materials).  Other than one location in Virginia, all of these properties are located in Florida and Georgia.

Through our Land Development and Construction segment, we own and are continuously monitoring for their “highest and best use” several parcels of land that are in various stages of development.  Our overall strategy in this segment is to convert all of our non-income producing lands into income production through (i) an orderly process of constructing new buildings for us to own and operate or (ii) a sale to, or joint venture with, third parties.

In July 2017, Phase I (Dock 79) of the development known as RiverFront on the Anacostia in Washington, D.C., a 300,000 square foot residential apartment building developed by a joint venture between the Company and MRP SE Waterfront Residential, LLC (“MRP”), reached stabilization, meaning 90% of the individual apartments have been leased and are occupied by third party tenants. Upon reaching stabilization, the Company has, for a period of one year, the exclusive right to (i) cause the joint venture to sell the property or (ii) cause the Company’s and MRP’s percentage interests in the joint venture to be adjusted so as to take into account the value of the development at the time of stabilization. The attainment of stabilization also resulted in a change of control for accounting purposes as the veto rights of the minority shareholder lapsed and the Company became the primary beneficiary. As such, beginning July 1, 2017, the Company consolidated the assets (at current fair value), liabilities and operating results of the joint venture as a new segment called RiverFront on the Anacostia.

Subsequent to the Spin-off, the Company is receiving certain services from Patriot (e.g. executive oversight, accounting, information technology and human resource services) which are billed to the Company on a monthly basis in accordance with the Transition Services Agreement entered into and made effective as of the date of the Spin-off. As was the case prior to the Spin-off, these costs (excluding stock compensation) are included in the Company’s corporate expense and are fully allocated to the business segments. Certain other corporate expenses (primarily stock compensation, corporate aircraft and one-time Spin-off related expenses) are reported as “unallocated” on the Company’s consolidated income statement and are not allocated to any business segment. As a result of the Spin-off the former transportation segment of the Company is reported as a discontinued operation and thus is not allowed any corporate overhead allocation. Hence, all corporate overhead of the transportation group through the date of the Spin-off is included in “corporate expense” on the Company’s consolidated income statements herein. Reclassifications to the appropriate prior period line items and amounts have been made to be comparable to the current presentation.

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

	Year ended			Three months ended			Year ended			Year ended
	December 31,			December 31,			September 30,			September 30,
	2017			2016			2016			2015
Revenues:
Asset management	$	29,873			7,321			28,739			27,570
Mining royalty lands		7,241			1,880			7,533			6,094
Land development and construction		1,230			311			1,185			982
RiverFront on the Anacostia		4,847			—			—			—
	$	43,191			9,512			37,457			34,646
Operating profit:
Before corporate expenses:
Asset management	$	13,799			3,509			13,374			13,288
Mining royalty lands		6,732			1,750			7,029			5,478
Land development and construction		(1,528	)		(400	)		(940	)		(2,197	)
RiverFront on the Anacostia		(2,018	)		—			—			—
Corporate expenses:
Allocated to asset management		(1,917	)		(485	)		(1,591	)		(1,248	)
Allocated to mining royalty		(167	)		(42	)		(231	)		(1,322	)
Allocated to land development and construction		(1,231	)		(328	)		(1,258	)		(737	)
Allocated to RiverFront on the Anacostia		(65	)		—			—			—
Unallocated to discontinued operations		—			—			—			(1,081	)
		(3,380	)		(855	)		(3,080	)		(4,388	)
	$	13,605			4,004			16,383			12,181
Interest expense:
Asset management	$	1,340			306			1,561			2,014
RiverFront on the Anacostia		2,983			—			—			—
	$	4,323			306			1,561			2,014
Depreciation, depletion and amortization:
Asset management	$	8,110			2,005			7,689			6,963
Mining royalty lands		110			35			104			133
Land development and construction		337			55			258			282
RiverFront on the Anacostia		4,975			—			—			—
	$	13,532			2,095			8,051			7,378
Capital expenditures:
Asset management	$	6,913			1,199			20,747			2,408
Mining royalty lands		—			2			205			—
Land development and construction		8,840			4,206			6,602			4,085
RiverFront on the Anacostia		857			—			—			—
	$	16,610			5,407			27,554			6,493
Identifiable net assets at end of period:
Asset management	$	179,654			169,736			170,562			151,023
Mining royalty lands		38,656			39,259			39,570			39,300
Land development and construction		46,684			57,126			54,157			60,682
RiverFront on the Anacostia		144,386			—			—			—
Cash items		4,524			—			—			419
Unallocated corporate assets		4,830			439			500			1,054
	$	418,734			266,560			264,789			252,478