AGREE REALTY CORP [ADC] Filings

10-Q 1 adc-20220630x10q.htm 10-Q

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, 2022, or


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

For the transition period fromto

Commission File Number 001-12928

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
Depositary Shares, each representing one-thousandth of a share of 4.25% Series A Cumulative Redeemable Preferred Stock, $0.0001 par value	ADCPrA	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, a 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 August 1, 2022, the Registrant had 79,832,706 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:	Financial Statements (Unaudited)

	Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021	1

	Condensed Consolidated Statements of Operations and Comprehensive Income for the three and six months ended June 30, 2022 and 2021	3

	Condensed Consolidated Statements of Equity for the three and six months ended June 30, 2022 and 2021	4

	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021	6

	Notes to Condensed Consolidated Financial Statements	7

Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34

Item 3:	Quantitative and Qualitative Disclosures about Market Risk	48

Item 4:	Controls and Procedures	49

PART II	Other Information

Item 1:	Legal Proceedings	49

Item 1A:	Risk Factors	49

Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	49

Item 3:	Defaults Upon Senior Securities	49

Item 4:	Mine Safety Disclosures	49

Item 5:	Other Information	49

Item 6:	Exhibits	50

SIGNATURES		51

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,
	2022		2021
ASSETS
Real Estate Investments
Land	$	1,762,244	$	1,559,434
Buildings		3,560,694		3,034,391
Less accumulated depreciation		(274,323)		(233,862)
		5,048,615		4,359,963
Property under development		43,051		7,148
Net Real Estate Investments		5,091,666		4,367,111

Real Estate Held for Sale, net		—		5,676

Cash and Cash Equivalents		26,267		43,252

Cash Held in Escrows		840		1,998

Accounts Receivable - Tenants, net		61,406		53,442

Lease Intangibles, net of accumulated amortization of
$218,540 and $180,532 at June 30, 2022 and December 31, 2021, respectively		739,319		672,020

Other Assets, net		118,734		83,407

Total Assets	$	6,038,232	$	5,226,906

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,
	2022		2021
LIABILITIES
Mortgage Notes Payable, net	$	71,824	$	32,429

Senior Unsecured Notes, net		1,496,101		1,495,200

Unsecured Revolving Credit Facility		370,000		160,000

Dividends and Distributions Payable		19,385		16,881

Accounts Payable, Accrued Expenses, and Other Liabilities		70,338		70,005

Lease Intangibles, net of accumulated amortization of
$32,720 and $29,726 at June 30, 2022 and December 31, 2021, respectively		36,344		33,075

Total Liabilities		2,063,992		1,807,590

EQUITY
Preferred stock, $.0001 par value per share, 4,000,000 shares authorized, 7,000 shares Series A outstanding, at stated liquidation value of $25,000 per share, at June 30, 2022 and December 31, 2021		175,000		175,000
Common stock, $.0001 par value, 180,000,000 shares authorized, 79,842,743 and 71,285,311 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively		8		7
Additional paid-in-capital		3,948,547		3,395,549
Dividends in excess of net income		(182,518)		(147,366)
Accumulated other comprehensive income (loss)		31,547		(5,503)

Total Equity - Agree Realty Corporation		3,972,584		3,417,687
Non-controlling interest		1,656		1,629
Total Equity		3,974,240		3,419,316

Total Liabilities and Equity	$	6,038,232	$	5,226,906

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, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Revenues
Rental income	$	104,793	$	82,494	$	203,105	$	160,253
Other		83		52		113		121
Total Revenues		104,876		82,546		203,218		160,374

Operating Expenses
Real estate taxes		7,979		6,158		15,591		11,855
Property operating expenses		4,541		3,214		9,018		6,755
Land lease expense		407		389		809		736
General and administrative		7,651		6,241		15,272		13,118
Depreciation and amortization		31,950		23,188		60,510		44,676
Provision for impairment		—		—		1,015		—
Total Operating Expenses		52,528		39,190		102,215		77,140

Gain (loss) on sale of assets, net		17		6,767		2,326		9,712
Gain (loss) on involuntary conversion, net		(25)		(14)		(50)		103
Income from Operations		52,340		50,109		103,279		93,049

Other (Expense) Income
Interest expense, net		(15,512)		(12,549)		(29,442)		(24,202)
Income tax (expense) benefit		(698)		(485)		(1,418)		(1,494)
Loss on early extinguishment of term loans and settlement of related interest rate swaps		—		(14,614)		—		(14,614)
Net Income		36,130		22,461		72,419		52,739

Less net income attributable to non-controlling interest		157		114		333		280
Net income attributable to Agree Realty Corporation		35,973		22,347		72,086		52,459
Less Series A preferred stock dividends		1,859		—		3,718		—
Net Income Attributable to Common Stockholders	$	34,114	$	22,347	$	68,368	$	52,459

Net Income Per Share Attributable to Common Stockholders
Basic	$	0.45	$	0.34	$	0.93	$	0.82
Diluted	$	0.45	$	0.34	$	0.93	$	0.82

Other Comprehensive Income
Net income	$	36,130	$	22,461	$	72,419	$	52,739
Amortization of interest rate swaps		82		287		164		787
Change in fair value and settlement of interest rate swaps		16,481		2,230		37,062		27,376
Total comprehensive income (loss)		52,693		24,978		109,645		80,902
Less comprehensive income (loss) attributable to non-controlling interest		233		128		509		294

Comprehensive Income (Loss) Attributable to Agree Realty Corporation	$	52,460	$	24,850	$	109,136	$	80,608

Weighted Average Number of Common Shares Outstanding - Basic		75,037,920		64,835,984		73,145,097		63,838,070

Weighted Average Number of Common Shares Outstanding - Diluted		75,570,089		65,185,604		73,474,930		64,079,697

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
	Preferred Stock			Common Stock			Additional		excess of net		Comprehensive		Non-Controlling		Total
	Shares	Amount		Shares	Amount		Paid-In Capital		income		Income (Loss)		Interest		Equity
Balance, December 31, 2021	7,000	$	175,000	71,285,311	$	7	$	3,395,549	$	(147,366)	$	(5,503)	$	1,629	$	3,419,316
Issuance of common stock, net of issuance costs	—		—	3,791,964		1		250,683		—		—		—		250,684
Repurchase of common shares	—		—	(28,117)		—		(1,745)		—		—		—		(1,745)
Issuance of stock under the 2020 Omnibus Incentive Plan	—		—	125,422		—		648		—		—		—		648
Stock-based compensation	—		—	—		—		1,635		—		—		—		1,635
Series A preferred dividends declared for the period	—		(1,859)	—		—		—		—		—		—		(1,859)
Dividends and distributions declared for the period	—		—	—		—		—		(49,653)		—		(237)		(49,890)
Amortization, changes in fair value, and settlement of interest rate swaps	—		—	—		—		—		—		20,563		100		20,663
Net income	—		1,859	—		—		—		34,254		—		176		36,289
Balance, March 31, 2022	7,000	$	175,000	75,174,580	$	8	$	3,646,770	$	(162,765)	$	15,060	$	1,668	$	3,675,741
Issuance of common stock, net of issuance costs	—		—	4,667,850		—		300,110		—		—		—		300,110
Repurchase of common shares	—		—	(1,052)		—		(76)		—		—		—		(76)
Issuance of stock under the 2020 Omnibus Incentive Plan	—		—	1,493		—		—		—		—		—		—
Forfeiture of restricted stock	—		—	(128)		—		—		—		—		—		—
Stock-based compensation	—		—	—		—		1,743		—		—		—		1,743
Series A preferred dividends declared for the period	—		(1,859)	—		—		—		—		—		—		(1,859)
Dividends and distributions declared for the period	—		—	—		—		—		(53,867)		—		(245)		(54,112)
Amortization, changes in fair value, and settlement of interest rate swaps	—		—	—		—		—		—		16,487		76		16,563
Net income	—		1,859	—		—		—		34,114		—		157		36,130
Balance, June 30, 2022	7,000	$	175,000	79,842,743	$	8	$	3,948,547	$	(182,518)	$	31,547	$	1,656	$	3,974,240

Cash dividends declared per depositary share of Series A preferred stock:
For the three months ended March 31, 2022		$	0.266
For the three months ended June 30, 2022		$	0.266

Cash dividends declared per common share:
For the three months ended March 31, 2022					$	0.681
For the three months ended June 30, 2022					$	0.702

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, 2020	60,021,483	$	6	$	2,652,090	$	(91,343)	$	(36,266)	$	1,762	$	2,526,249
Issuance of common stock, net of issuance costs	4,028,410		—		258,105		—		—		—		258,105
Repurchase of common shares	(27,594)		—		(1,780)		—		—		—		(1,780)
Issuance of restricted stock under the 2020 Omnibus Incentive Plan	128,066		—		298		—		—		—		298
Forfeiture of restricted stock	(4,587)		—		(92)		—		—		—		(92)
Stock-based compensation	—		—		1,293		—		—		—		1,293
Dividends and distributions declared for the period	—		—		—		(39,906)		—		(215)		(40,121)
Amortization, changes in fair value, and settlement of interest rate swaps	—		—		—		—		25,506		140		25,646
Net income	—		—		—		30,112		—		166		30,278
Balance, March 31, 2021	64,145,778	$	6	$	2,909,914	$	(101,137)	$	(10,760)	$	1,853	$	2,799,876
Issuance of common stock, net of issuance costs	4,764,450		1		336,875		—		—		—		336,876
Repurchase of common shares	—		—		—		—		—		—		—
Issuance of restricted stock under the 2020 Omnibus Incentive Plan	496		—		22		—		—		—		22
Forfeiture of restricted stock	(351)		—		—		—		—		—		—
Stock-based compensation	—		—		1,453		—		—		—		1,453
Dividends and distributions declared for the period	—		—		—		(42,829)		—		(225)		(43,054)
Amortization, changes in fair value, and settlement of interest rate swaps	—		—		—		—		2,503		14		2,517
Net income	—		—		—		22,347		—		114		22,461
Balance, June 30, 2021	68,910,373	$	7	$	3,248,264	$	(121,619)	$	(8,257)	$	1,756	$	3,120,151

Cash dividends declared per common share:
For the three months ended March 31, 2021		$	0.621
For the three months ended June 30, 2021		$	0.651

See accompanying notes to Condensed Consolidated Financial Statements.

AGREE REALTY CORP [ADC] Filings
AGREE REALTY CORP [ADC-PA] Filings
10-Q	[2022-08-02]
10-Q	[2022-05-03]
10-K	[2022-02-22]
10-Q	[2021-11-01]
10-Q	[2021-07-26]
10-Q	[2021-05-03]
10-K	[2021-02-18]
10-Q	[2020-10-19]
10-Q	[2020-07-20]
10-Q	[2020-04-20]
10-K	[2020-02-20]
10-Q	[2019-10-21]
10-Q	[2019-07-22]
10-Q	[2019-04-22]
10-K	[2019-02-21]
10-Q	[2018-10-22]
10-Q	[2018-07-23]
10-Q	[2018-04-23]
10-K	[2018-02-22]
10-Q	[2017-10-23]
10-Q	[2017-07-24]
10-Q	[2017-04-24]
10-K	[2017-02-23]
10-Q	[2016-10-24]
10-Q	[2016-07-27]
10-Q	[2016-04-27]
10-K	[2016-03-11]
10-Q	[2015-10-30]
10-Q	[2015-07-31]
10-Q	[2015-05-01]
10-K	[2015-03-06]
10-Q	[2014-10-31]
10-Q	[2014-08-01]
10-Q	[2014-05-02]
10-K	[2014-03-07]
10-Q	[2013-11-01]
10-Q	[2013-08-02]
10-Q	[2013-05-03]
10-K	[2013-03-11]
10-Q	[2012-11-02]
10-Q	[2012-08-03]
10-Q	[2012-05-04]
10-K	[2012-03-12]

AGREE REALTY CORP [ADC] Filings

AGREE REALTY CORP [ADC-PA] Filings