Agree Realty Earnings 2020-06-30

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

Mark One


☒	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2020, or


☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number 1-12928

AGREE REALTY CORPORATION

(Exact name of registrant as specified in its charter)


Maryland		38-3148187
State or other jurisdiction of incorporation or		(I.R.S. Employer Identification No.)
organization
70 E. Long Lake Road, Bloomfield Hills, Michigan		48304
(Address of principal executive offices)		(Zip Code)

(248) 737-4190

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, $0.0001 par value	ADC	New York Stock Exchange

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	☒	No	◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).


Yes	☒	No	◻

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


Large Accelerated Filer	☒	Accelerated Filer	◻	Non-accelerated Filer	◻	Smaller reporting company	☐	Emerging growth company	☐

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


Yes	☐	No	☒

As of July 17, 2020, the Registrant had 53,851,032 shares of common stock issued and outstanding.

Table of Contents

AGREE REALTY CORPORATION

Index to Form 10-Q


		Page

PART I	Financial Information

Item 1:	Interim Condensed Consolidated Financial Statements (Unaudited)

	Condensed Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019	1

	Condensed Consolidated Statements of Operations and Comprehensive Income for the three and six months ended June 30, 2020 and 2019	3

	Condensed Consolidated Statements of Equity for the three and six months ended June 30, 2020 and 2019	4

	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2020 and 2019	6

	Notes to Condensed Consolidated Financial Statements	7

Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33

Item 3:	Quantitative and Qualitative Disclosures about Market Risk	46

Item 4:	Controls and Procedures	48

PART II

Item 1:	Legal Proceedings	49

Item 1A:	Risk Factors	49

Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	50

Item 3:	Defaults Upon Senior Securities	50

Item 4:	Mine Safety Disclosures	50

Item 5:	Other Information	50

Item 6:	Exhibits	51

SIGNATURES		52

Table of Contents

AGREE REALTY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per-share data)

(Unaudited)

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements


	June 30,		December 31,
	2020		2019
ASSETS
Real Estate Investments
Land	$	856,113	$	735,991
Buildings		1,927,114		1,600,293
Less accumulated depreciation		(146,267)		(127,748)
		2,636,960		2,208,536
Property under development		6,171		10,056
Net Real Estate Investments		2,643,131		2,218,592

Real Estate Held for Sale, net		—		3,750

Cash and Cash Equivalents		29,341		15,603

Cash Held in Escrows		7,043		26,554

Accounts Receivable - Tenants		33,996		26,808

Lease intangibles, net of accumulated amortization of
$105,296 and $89,118 at June 30, 2020 and December 31, 2019, respectively		368,812		343,514

Other Assets, net		29,319		29,709

Total Assets	$	3,111,642	$	2,664,530

See accompanying notes to condensed consolidated financial statements.

Table of Contents

AGREE REALTY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per-share data)

(Unaudited)


	June 30,		December 31,
	2020		2019
LIABILITIES
Mortgage Notes Payable, net	$	33,513	$	36,698

Unsecured Term Loans, net		237,274		237,403

Senior Unsecured Notes, net		509,253		509,198

Unsecured Revolving Credit Facility		—		89,000

Dividends and Distributions Payable		32,519		25,014

Accounts Payable, Accrued Expenses, and Other Liabilities		80,088		48,987

Lease intangibles, net of accumulated amortization of
$21,758 and $19,307 at June 30, 2020 and December 31, 2019, respectively		33,019		26,668

Total Liabilities		925,666		972,968

EQUITY
Common stock, $.0001 par value, 90,000,000 shares
authorized, 53,851,092 and 45,573,623 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively		5		5
Preferred Stock, $.0001 par value per share, 4,000,000 shares authorized		—		—
Additional paid-in-capital		2,295,235		1,752,912
Dividends in excess of net income		(69,595)		(57,094)
Accumulated other comprehensive income (loss)		(41,544)		(6,492)

Total Equity - Agree Realty Corporation		2,184,101		1,689,331
Non-controlling interest		1,875		2,231
Total Equity		2,185,976		1,691,562

Total Liabilities and Equity	$	3,111,642	$	2,664,530

See accompanying notes to condensed consolidated financial statements.

Table of Contents

AGREE REALTY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(In thousands, except share and per-share data)

(Unaudited)


	Three Months Ended				Six Months Ended
	June 30, 2020		June 30, 2019		June 30, 2020		June 30, 2019
Revenues
Rental Income	$	57,476	$	44,875	$	113,259	$	87,219
Other		59		45		85		49
Total Revenues		57,535		44,920		113,344		87,268

Operating Expenses
Real estate taxes		4,840		3,720		9,542		7,342
Property operating expenses		1,860		1,496		4,195		3,235
Land lease expense		325		372		652		568
General and administrative		4,587		3,880		9,244		7,914
Depreciation and amortization		15,607		10,836		29,740		20,700
Provision for impairment		1,128		1,193		1,128		1,609
Total Operating Expenses		28,347		21,497		54,501		41,368

Income from Operations		29,188		23,423		58,843		45,900

Other (Expense) Income
Interest expense, net		(8,479)		(7,455)		(18,149)		(15,012)
Gain (loss) on sale of assets, net		4,952		2,949		6,597		6,376
Income tax (expense) benefit		(260)		(195)		(520)		(26)
Other (expense) income		23		—		23		—
Net Income		25,424		18,722		46,794		37,238

Less Net Income Attributable to Non-Controlling Interest		166		158		308		327

Net Income Attributable to Agree Realty Corporation	$	25,258	$	18,564	$	46,486	$	36,911

Net Income Per Share Attributable to Agree Realty Corporation
Basic	$	0.47	$	0.45	$	0.94	$	0.94
Diluted	$	0.47	$	0.45	$	0.93	$	0.92

Other Comprehensive Income
Net income	$	25,424	$	18,722	$	46,794	$	37,238
Changes in fair value of interest rate swaps		(2,244)		(3,794)		(35,269)		(7,199)
Realized gain (loss) on settlement of interest rate swaps		(17)		—		(33)		—
Total Comprehensive Income (Loss)		23,163		14,928		11,492		30,039
Less Comprehensive Income (Loss) Attributable to Non-Controlling Interest		151		125		42		264

Comprehensive Income (Loss) Attributable to Agree Realty Corporation	$	23,012	$	14,803	$	11,450	$	29,775

Weighted Average Number of Common Shares Outstanding - Basic		52,726,230		40,612,372		49,082,616		39,058,743

Weighted Average Number of Common Shares Outstanding - Diluted		53,266,740		41,141,659		49,423,546		39,745,337

See accompanying notes to condensed consolidated financial statements.

Table of Contents

AGREE REALTY CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF EQUITY

(In thousands, except share and per-share data)

(Unaudited)


								Accumulated
						Dividends in		Other
	Common Stock			Additional		excess of net		Comprehensive		Non-Controlling		Total
	Shares	Amount		Paid-In Capital		income		Income (Loss)		Interest		Equity
Balance, December 31, 2019	45,573,623	$	5	$	1,752,912	$	(57,094)	$	(6,492)	$	2,231	$	1,691,562
Issuance of common stock, net of issuance costs	1,400,251		—		104,615		—		—		—		104,615
Repurchase of common shares	(20,707)		—		(1,627)		—		—		—		(1,627)
Issuance of restricted stock under the Omnibus Incentive Plan	48,942		—		—		—		—		—		—
Stock-based compensation	—		—		1,014		—		—		—		1,014
Dividends and distributions declared for the period	—		—		—		(26,677)		—		(203)		(26,880)
Other comprehensive income (loss) - change in fair value and realized gain (loss) on settlement of interest rate swaps	—		—		—		—		(32,799)		(243)		(33,042)
Net income	—		—		—		21,229		—		141		21,370
Balance, March 31, 2020	47,002,109	$	5	$	1,856,914	$	(62,542)	$	(39,291)	$	1,926	$	1,757,012
Issuance of common stock, net of issuance costs	6,851,695		—		437,100		—		—		—		437,100
Repurchase of common shares	(51)		—		(3)		—		—		—		(3)
Forfeiture of restricted stock	(2,661)		—		—		—		—		—		—
Stock-based compensation	—		—		1,224		—		—		—		1,224
Dividends and distributions declared for the period	—		—		—		(32,311)		—		(209)		(32,520)
Other comprehensive income (loss) - change in fair value and realized gain (loss) on settlement of interest rate swaps	—		—		—		—		(2,253)		(8)		(2,261)
Net income	—		—		—		25,258		—		166		25,424
Balance, June 30, 2020	53,851,092	$	5	$	2,295,235	$	(69,595)	$	(41,544)	$	1,875	$	2,185,976

Cash dividends declared per common share:
For the three months ended March 31, 2020		$	0.585
For the three months ended June 30, 2020		$	0.600

See accompanying notes to condensed consolidated financial statements.

Table of Contents

AGREE REALTY CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF EQUITY

(In thousands, except share and per-share data)

(Unaudited)


								Accumulated
						Dividends in		Other
	Common Stock			Additional		excess of net		Comprehensive		Non-Controlling		Total
	Shares	Amount		Paid-In Capital		income		Income (Loss)		Interest		Equity
Balance, December 31, 2018	37,545,790	$	4	$	1,277,592	$	(42,945)	$	1,424	$	2,411	$	1,238,486
Issuance of common stock, net of issuance costs	874,268		—		57,845		—		—		—		57,845
Repurchase of common shares	(21,868)		—		(1,398)		—		—		—		(1,398)
Issuance of restricted stock under the Omnibus Incentive Plan	56,592		—		—		—		—		—		—
Stock-based compensation	—		—		913		—		—		—		913
Dividends and distributions declared for the period	—		—		—		(21,342)		—		(193)		(21,535)
Other comprehensive income (loss) - change in fair value and realized gain (loss) on settlement of interest rate swaps	—		—		—		—		(3,374)		(31)		(3,405)
Net income	—		—		—		18,347		—		169		18,516
Balance, March 31, 2019	38,454,782	$	4	$	1,334,952	$	(45,940)	$	(1,950)	$	2,356	$	1,289,422
Issuance of common stock, net of issuance costs	3,512,500		—		186,667		—		—		—		186,667
Stock-based compensation	—		—		1,025		—		—		—		1,025
Dividends and distributions declared for the period	—		—		—		(23,922)		—		(197)		(24,119)
Other comprehensive income (loss) - change in fair value and realized gain (loss) on settlement of interest rate swaps	—		—		—		—		(3,761)		(33)		(3,794)
Net income	—		—		—		18,564		—		158		18,722
Balance, June 30, 2019	41,967,282	$	4	$	1,522,644	$	(51,298)	$	(5,711)	$	2,284	$	1,467,923

Cash dividends declared per common share:
For the three months ended March 31, 2019		$	0.555
For the three months ended June 30, 2019		$	0.570

Price	72.72	EPS	2
Shares	42	P/E	43
MCap	3,084	P/FCF	35
Net Debt	921	EBIT	96
TEV	4,005	TEV/EBIT	42
TTM 2019-09-30, in MM, except price, ratios

10-Q	2020-06-30	Filed 2020-07-20
10-Q	2020-03-31	Filed 2020-04-20
10-K	2019-12-31	Filed 2020-02-20
10-Q	2019-09-30	Filed 2019-10-21
10-Q	2019-06-30	Filed 2019-07-22
10-Q	2019-03-31	Filed 2019-04-22
10-K	2018-12-31	Filed 2019-02-21
10-Q	2018-09-30	Filed 2018-10-22
10-Q	2018-06-30	Filed 2018-07-23
10-Q	2018-03-31	Filed 2018-04-23
10-K	2017-12-31	Filed 2018-02-22
10-Q	2017-09-30	Filed 2017-10-23
10-Q	2017-06-30	Filed 2017-07-24
10-Q	2017-03-31	Filed 2017-04-24
10-K	2016-12-31	Filed 2017-02-23
10-Q	2016-09-30	Filed 2016-10-24
10-Q	2016-06-30	Filed 2016-07-27
10-Q	2016-03-31	Filed 2016-04-27
10-K	2015-12-31	Filed 2016-03-11
10-Q	2015-09-30	Filed 2015-10-30
10-Q	2015-06-30	Filed 2015-07-31
10-Q	2015-03-31	Filed 2015-05-01
10-K	2014-12-31	Filed 2015-03-06
10-Q	2014-09-30	Filed 2014-10-31
10-Q	2014-06-30	Filed 2014-08-01
10-Q	2014-03-31	Filed 2014-05-02
10-K	2013-12-31	Filed 2014-03-07
10-Q	2013-09-30	Filed 2013-11-01
10-Q	2013-06-30	Filed 2013-08-02
10-Q	2013-03-31	Filed 2013-05-03
10-K	2012-12-31	Filed 2013-03-11
10-Q	2012-09-30	Filed 2012-11-02
10-Q	2012-06-30	Filed 2012-08-03
10-Q	2012-03-31	Filed 2012-05-04
10-K	2011-12-31	Filed 2012-03-12
10-Q	2011-09-30	Filed 2011-11-04
10-Q	2011-06-30	Filed 2011-08-05
10-Q	2011-03-31	Filed 2011-05-10
10-K	2010-12-31	Filed 2011-03-15
10-Q	2010-09-30	Filed 2010-11-05
10-Q	2010-06-30	Filed 2010-08-09
10-Q	2010-03-31	Filed 2010-05-10
10-K	2009-12-31	Filed 2010-03-12

8-K	2020-09-03	Regulation FD, Exhibits
8-K	2020-08-14	Officers, Exhibits
8-K	2020-08-12	Other Events, Exhibits
8-K	2020-08-12	Enter Agreement, Off-BS Arrangement, Other Events, Exhibits
8-K	2020-07-20	Earnings, Exhibits
8-K	2020-07-01	Other Events
8-K	2020-06-22
8-K	2020-06-01
8-K	2020-05-27
8-K	2020-05-05
8-K	2020-04-20
8-K	2020-04-20
8-K	2020-04-01
8-K	2020-03-31
8-K	2020-03-30
8-K	2020-03-23
8-K	2020-03-19
8-K	2020-02-20
8-K	2020-01-06
8-K	2019-12-05
8-K	2019-10-21
8-K	2019-10-01
8-K	2019-09-25
8-K	2019-07-26
8-K	2019-07-19
8-K	2019-07-01
8-K	2019-06-14
8-K	2019-04-29
8-K	2019-04-25
8-K	2019-04-22
8-K	2019-04-01
8-K	2019-02-26
8-K	2019-02-21
8-K	2018-12-27
8-K	2018-12-17
8-K	2018-12-11
8-K	2018-12-10
8-K	2018-12-04
8-K	2018-11-02
8-K	2018-10-22
8-K	2018-10-01
8-K	2018-09-26
8-K	2018-09-04
8-K	2018-07-18
8-K	2018-07-02
8-K	2018-05-31
8-K	2018-05-18
8-K	2018-05-15
8-K	2018-05-03
8-K	2018-04-23
8-K	2018-03-19
8-K	2018-03-13
8-K	2018-02-22
8-K	2018-01-03

EX-10.2	adc-20200630xex10d2.htm
EX-10.3	adc-20200630xex10d3.htm
EX-31.1	adc-20200630xex31d1.htm
EX-31.2	adc-20200630xex31d2.htm
EX-32.1	adc-20200630xex32d1.htm
EX-32.2	adc-20200630xex32d2.htm

ADC 10Q Quarterly Report

Agree Realty Earnings 2020-06-30