DENVER, Oct. 27, 2021 /PRNewswire/ -- Farmland Partners
Inc. (NYSE: FPI) ("FPI" or the "Company") today reported financial
results for the three and nine months ended September 30,
2021.
Selected 2021 Highlights
During the nine months ended September 30, 2021, the
Company:
- recorded net income of $(3.1)
million, $3.8 million
excluding litigation-related items1, compared to
$1.2 million, $1.9 million excluding litigation related
items2, for the same period in 2020;
- recorded AFFO of $(8.5) million,
$(1.6) million excluding
litigation-related items1, compared to $(3.2) million, $(2.4)
million excluding litigation related items2, for
the same period in 2020;
- completed five acquisitions, for total consideration of
$31.0 million;
- completed seventeen property dispositions, for total
consideration of $31.1 million and
total gain on sale of $3.4
million;
- retained property management for ten out of seventeen disposed
properties and closed an additional acquisition in the third
quarter, growing the asset management business's assets under
management to over $50 million;
and
- sold 1,959,512 shares of common stock at an average price of
$13.12 for aggregate net proceeds of
$25.4 million under the ATM
Program.
__________________________
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1
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For the nine months
ended September 30, 2021, legal and accounting expense included
$7.4 million related to litigation and revenue included $0.6
million of litigation settlement proceeds related to Rota Fortunae,
resulting in a net impact of $6.9 million.
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2
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For the nine months
ended September 30, 2020, legal and accounting expense included
$0.8 million related to litigation.
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The Company also:
- announced the conversion of its 6.00% Series B Preferred Stock
into shares of common stock effective October 4, 2021 (FPI press release);
- reopened its loan program to enhance farmers' access to
liquidity;
- experienced strong farmland values with accelerating
appreciation, especially in row crop regions;
- showed substantial increases in lease renewal rates, reflecting
increased farmer profitability; and
- reached a settlement with Quinton
Mathews regarding the falsity of claims that were used to
launch the "short and distort" scheme targeting FPI, its
management, and its stockholders (FPI press release).
CEO Comments
Paul A. Pittman, Chairman and CEO
said: "This was another solid quarter for FPI, but for the
litigation expense. We converted the Series B Preferred Stock
to common stock after quarter-end, a transaction that creates value
for shareholders by improving cash flow, reducing leverage, and
increasing equity market capitalization. Strong farmer profits are
driving our 2021 lease renewals to an increase of over 10% through
approximately 70% of the year's renewals. We are actively
pursuing investment opportunities and building a strong pipeline of
potential transactions."
Macro Comments
Farmers, particularly in the row crop sector, are experiencing
strong profitability driven by increased exports to China and production problems in other parts
of the world.
- Farm Sector Income: According to a USDA report published
in September, net cash farm income is forecast to increase by 21.5%
to $134.7 billion in 2021.
- Farmland Appreciation: According to the Chicago Fed's
August 2021 AgLetter, the value of
good farmland in Illinois
increased by 12% from July 2020 to
July 2021. Farmland values for the
Seventh Federal Reserve District had their largest gain in eight
years.
Financial and Operating Results
- The table below shows financial and operating results for the
three months ended September 30, 2021
and 2020. The values are shown as reported and after adjusting for
litigation items.
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As
reported
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Adjusted for
litigation (1)
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For the three months
ended
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For the three months
ended
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September 30,
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September 30,
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Financial
Results:
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2021
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2020
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2021
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2020
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Net Income
(Loss)
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$
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(2,669)
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$
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561
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$
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(439)
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$
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550
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Net income (loss) per
share available to common stockholders
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$
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(0.17)
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$
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(0.09)
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$
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(0.11)
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$
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(0.09)
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AFFO
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$
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(3,236)
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$
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(1,410)
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$
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(1,006)
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$
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(1,421)
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AFFO per diluted
weighted average share
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$
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(0.09)
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$
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(0.04)
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$
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(0.03)
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$
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(0.05)
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Adjusted
EBITDAre
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$
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3,707
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$
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5,874
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$
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5,937
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$
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5,863
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Operating
Results:
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Total Operating
Revenues
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$
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10,105
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$
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10,604
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$
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10,105
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$
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10,604
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Operating
Income
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$
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1,434
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$
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3,649
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$
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3,664
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$
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3,638
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Net Operating Income
(NOI)
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$
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8,112
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$
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8,643
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$
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8,112
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$
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8,643
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(1)
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Litigation related
expense for the three months ended September 30, 2021 and 2020 of
$2.2 million and $0.0 million, respectively. There was no revenue
from litigation settlement proceeds for the three months ended
September 20, 2021 or 2020.
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- The table below shows financial and operating results for the
nine months ended September 30, 2021
and 2020. The values are shown as reported and after adjusting for
litigation items.
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As
reported
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Adjusted for
litigation (1)
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For the nine months ended
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For the nine months ended
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September 30,
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September 30,
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Financial
Results:
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2021
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2020
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2021
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2020
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Net Income
(Loss)
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$
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(3,055)
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$
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1,153
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$
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3,813
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$
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1,912
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Net income (loss) per
share available to common stockholders
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$
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(0.39)
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$
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(0.28)
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$
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(0.18)
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$
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(0.26)
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AFFO
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$
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(8,493)
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$
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(3,185)
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$
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(1,625)
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$
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(2,426)
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AFFO per diluted
weighted average share
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$
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(0.26)
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$
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(0.10)
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$
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(0.05)
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$
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(0.08)
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Adjusted
EBITDAre
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$
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12,219
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$
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19,296
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$
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19,087
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$
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20,055
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Operating
Results:
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Total Operating
Revenues
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$
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31,693
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$
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32,771
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$
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32,243
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$
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32,771
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Operating
Income
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$
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5,490
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$
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12,628
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$
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12,358
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$
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13,387
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Net Operating Income
(NOI)
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$
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26,061
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$
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27,131
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$
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26,611
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$
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27,131
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(1)
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Litigation related
expense for the nine months ended September 30, 2021 and 2020 of
$7.4 million and $0.8 million, respectively. Revenue for the nine
months ended September 30, 2021 and 2020 included $0.6 million and
$0.0 million, respectively, of litigation settlement proceeds
related to Rota Fortunae resulting in a net impact of $6.9 million
and $0.8 million, respectively.
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- See "Non-GAAP Financial Measures" for complete definitions of
AFFO, Adjusted EBITDAre, and NOI and the financial tables
accompanying this press release for reconciliations of net income
to AFFO, Adjusted EBITDAre and NOI.
CEO Comments on Litigation
Mr. Pittman stated further: "The continued legal spend on the
pending litigation is very frustrating, especially the defense of
the meritless class action and derivative claims. We were hopeful
that the class action lawyers and plaintiffs would drop their
baseless claims once Quinton Mathews
(a.k.a. Rota Fortunae) made it clear that his false and defamatory
statements drove down FPI's stock price, allowing Mr. Mathews and
his clients, including the hedge fund who focused his attention on
FPI, to profit as a result of a 'short and distort' scheme.
Unfortunately, that did not occur, and the Company has no choice
but to continue to vigorously defend itself against these frivolous
and unsubstantiated claims and restore its reputation. We have
already absorbed the discovery cost in the class action, which is a
substantial cost in all litigation, and remain very optimistic that
we will dispose of the class action and derivative litigation on
motion without trials. Based on our assessment of the case
and its status now, while we may have a couple of more quarters
before the class action legal battle is completed, we believe the
bulk of the spend on the class action is behind us."
Acquisition and Disposition Activity
- During the nine months ended September
30, 2021, the Company completed five acquisitions for total
consideration of $31.0 million.
- During the nine months ended September
30, 2021, the Company completed the disposal of seventeen
properties for total consideration of $31.1
million and total gain on sale of $3.4 million. The Company retained property
management for ten of the disposed assets.
Balance Sheet
- During the nine months ended September
30, 2021, the Company repurchased 25,073 shares of Series B
preferred stock at a weighted average price of $25.92 for an aggregate purchase price of
$0.7 million.
- During the nine months ended September
30, 2021, the Company sold 1,959,512 shares of common stock
at an average price of $13.12 for
aggregate net proceeds of $25.4
million under the ATM Program.
- On September 28, 2021, the
Company announced the conversion of its 6.00% Series B Preferred
Stock into shares of the Company's common stock, which was
effective on October 4, 2021.
- As the date of this press release, the Company had 46,419,864
shares of common stock outstanding on a fully diluted basis, after
the conversion of its 6.00% Series B Preferred Stock into share of
the Company's common stock.
- The Company had total debt outstanding of $501.0 million at September 30, 2021, compared to total debt
outstanding of $508.2 million at
December 31, 2020.
Dividend Declarations
- The Company's Board of Directors declared a quarterly cash
dividend of $0.05 per share of common
stock and per Class A Common OP unit. The dividends are payable on
January 18, 2022, to stockholders and
common unit holders of record on January 3,
2022.
Conference Call Information
The Company has scheduled a conference call on October 28, 2021 at 11:00
a.m. (Eastern Time) to discuss the financial results and
provide a company update.
The call can be accessed by dialing 1-844-200-6205 (USA), 1-833-950-0062 (Canada), or 1-929-526-1599 (other locations)
and referencing the Farmland Partners Inc. Third Quarter 2021
Earnings Conference Call or using the access code 070780. The
conference call will also be available via a live listen-only
webcast and can be accessed through the Investor Relations section
of the Company's website, www.farmlandpartners.com.
A replay of the conference call will be available beginning
shortly after the end of the event until November 9, 2021, by dialing 1-866-813-9403
(USA), 1-226-828-7578
(Canada), or 1-929-458-6194 (other
locations) and using the access code 118846. A replay of the
webcast will also be accessible on the Investor Relations section
of the Company's website for a limited time following the
event.
About Farmland Partners Inc.
Farmland Partners Inc. is an internally managed real estate
company that owns and seeks to acquire high-quality North American
farmland and makes loans to farmers secured by farm real estate. As
of the date of this release, the Company owns and/or manages
approximately 167,000 acres in 17 states, including Alabama, Arkansas, California, Colorado, Florida, Georgia, Illinois, Kansas, Louisiana, Michigan, Mississippi, Missouri, Nebraska, North
Carolina, South Carolina,
South Dakota and Virginia. We have approximately 26 crop types
and over 100 tenants. The Company elected to be taxed as a real
estate investment trust, or REIT, for U.S. federal income tax
purposes, commencing with the taxable year ended December 31, 2014. Additional information:
www.farmlandpartners.com or (720) 452-3100.
Forward-Looking Statements
This press release includes "forward-looking statements" within
the meaning of the federal securities laws, including, without
limitation, statements with respect to our outlook, proposed and
pending acquisitions and dispositions, the benefits of the
conversion of the Company's Series B Preferred Stock to common
stock, the potential impact of trade disputes and recent extreme
weather events on the Company's results, financing activities, crop
yields and prices and anticipated rental rates. Forward-looking
statements generally can be identified by the use of
forward-looking terminology such as "may," "should," "could,"
"would," "predicts," "potential," "continue," "expects,"
"anticipates," "future," "intends," "plans," "believes,"
"estimates" or similar expressions or their negatives, as well as
statements in future tense. Although the Company believes that the
expectations reflected in such forward-looking statements are based
upon reasonable assumptions, beliefs and expectations, such
forward-looking statements are not predictions of future events or
guarantees of future performance and our actual results could
differ materially from those set forth in the forward-looking
statements. Some factors that might cause such a difference include
the following: general volatility of the capital markets and the
market price of the Company's common stock, changes in the
Company's business strategy, availability, terms and deployment of
capital, the Company's ability to refinance existing indebtedness
at or prior to maturity on favorable terms, or at all, availability
of qualified personnel, changes in the Company's industry, interest
rates or the general economy, adverse developments related to crop
yields or crop prices, the degree and nature of the Company's
competition, the timing, price or amount of repurchases, if any,
under the Company's share repurchase program, the ability to
consummate acquisitions or dispositions under contract and the
other factors described in the section entitled "Risk Factors" in
the Company's Annual Report on Form 10-K for the year ended
December 31, 2020, and the Company's other filings with the
Securities and Exchange Commission. Any forward-looking
information presented herein is made only as of the date of this
press release, and the Company does not undertake any obligation to
update or revise any forward-looking information to reflect changes
in assumptions, the occurrence of unanticipated events, or
otherwise.
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Farmland Partners
Inc.
Consolidated Balance
Sheets
As of
September 30, 2021 (unaudited) and December 31, 2020
(audited)
(in thousands except
per share amounts)
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September 30,
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December 31,
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2021
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2020
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ASSETS
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Land, at
cost
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$
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931,803
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$
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924,952
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Grain
facilities
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11,282
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12,091
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Groundwater
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10,214
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10,214
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Irrigation
improvements
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52,703
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53,887
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Drainage
improvements
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12,606
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12,805
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Permanent
plantings
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53,741
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54,374
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Other
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6,783
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8,167
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Construction in
progress
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10,153
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9,284
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Real estate, at
cost
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1,089,285
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1,085,774
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Less accumulated
depreciation
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(37,082)
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(32,654)
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Total real estate,
net
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1,052,203
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1,053,120
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Deposits
|
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2,155
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—
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Cash
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21,373
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27,217
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Assets held for
sale
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518
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—
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Notes and interest
receivable, net
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6,128
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|
2,348
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Right of use
asset
|
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142
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93
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Deferred offering
costs
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76
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—
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Deferred financing
fees, net
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22
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87
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Accounts receivable,
net
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7,221
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4,120
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Inventory
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1,705
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1,117
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Equity method
investments
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3,424
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—
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Prepaid and other
assets
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1,919
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|
2,889
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TOTAL
ASSETS
|
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$
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1,096,886
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$
|
1,090,991
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LIABILITIES AND
EQUITY
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LIABILITIES
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Mortgage notes and
bonds payable, net
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$
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499,533
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$
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506,625
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Lease
liability
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142
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93
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Dividends
payable
|
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1,715
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1,612
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Derivative
liability
|
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1,239
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|
|
2,899
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Accrued
interest
|
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3,103
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|
3,446
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Accrued property
taxes
|
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2,588
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|
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1,817
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Deferred
revenue
|
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|
31
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37
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Accrued
expenses
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12,767
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|
|
8,272
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Total
liabilities
|
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521,118
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524,801
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Commitments and
contingencies (See Note 8)
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Series B Participating
Preferred Stock, $0.01 par value, 6,037,500 shares authorized;
5,806,797
shares issued and outstanding at September 30, 2021, and
5,831,870 at December 31, 2020
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139,116
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|
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139,766
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Redeemable
non-controlling interest in operating partnership, Series A
preferred units
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119,633
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120,510
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EQUITY
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Common stock, $0.01
par value, 500,000,000 shares authorized; 32,942,696 shares issued
and
outstanding at September 30, 2021, and 30,571,271 shares
issued and outstanding at December 31,
2020
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319
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|
297
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Additional paid in
capital
|
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374,966
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345,870
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Retained earnings
(deficit)
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(11,066)
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|
1,037
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Cumulative
dividends
|
|
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(59,579)
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|
|
(54,751)
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Other comprehensive
income
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(284)
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|
(2,380)
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Non-controlling
interests in operating partnership
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12,663
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|
15,841
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Total
equity
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317,019
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|
305,914
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TOTAL LIABILITIES,
REDEEMABLE NON-CONTROLLING INTERESTS IN OPERATING
PARTNERSHIP AND EQUITY
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$
|
1,096,886
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$
|
1,090,991
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|
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|
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|
|
|
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Farmland Partners
Inc.
Consolidated
Statements of Operations
For the three and
nine months ended September 30, 2021 and 2020
(unaudited, in
thousands except per share amounts)
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|
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|
|
|
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For the Three
Months
Ended
|
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For the Nine
Months Ended
|
|
|
September 30,
|
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September 30,
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|
2021
|
|
2020
|
|
2021
|
|
2020
|
OPERATING
REVENUES:
|
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|
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|
|
|
|
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Rental
income
|
|
$
|
8,850
|
|
$
|
8,701
|
|
$
|
27,400
|
|
$
|
27,916
|
Tenant
reimbursements
|
|
|
861
|
|
|
911
|
|
|
2,638
|
|
|
2,655
|
Crop sales
|
|
|
262
|
|
|
748
|
|
|
715
|
|
|
1,445
|
Other
revenue
|
|
|
132
|
|
|
244
|
|
|
940
|
|
|
755
|
Total operating
revenues
|
|
|
10,105
|
|
|
10,604
|
|
|
31,693
|
|
|
32,771
|
|
|
|
|
|
|
|
|
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OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation,
depletion and amortization
|
|
|
1,911
|
|
|
1,979
|
|
|
5,731
|
|
|
5,982
|
Property operating
expenses
|
|
|
1,993
|
|
|
1,961
|
|
|
5,632
|
|
|
5,640
|
Cost of goods
sold
|
|
|
417
|
|
|
1,332
|
|
|
1,334
|
|
|
2,643
|
Acquisition and due
diligence costs
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|
11
|
General and
administrative expenses
|
|
|
1,746
|
|
|
1,395
|
|
|
5,258
|
|
|
4,248
|
Legal and
accounting
|
|
|
2,599
|
|
|
287
|
|
|
8,241
|
|
|
1,617
|
Other operating
expenses
|
|
|
—
|
|
|
1
|
|
|
2
|
|
|
2
|
Total operating
expenses
|
|
|
8,671
|
|
|
6,955
|
|
|
26,203
|
|
|
20,143
|
OPERATING
INCOME
|
|
|
1,434
|
|
|
3,649
|
|
|
5,490
|
|
|
12,628
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER (INCOME)
EXPENSE:
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (income)
expense
|
|
|
(8)
|
|
|
25
|
|
|
(59)
|
|
|
113
|
(Income) loss from
equity method investment
|
|
|
(15)
|
|
|
—
|
|
|
(15)
|
|
|
—
|
(Gain) loss on
disposition of assets
|
|
|
112
|
|
|
(1,348)
|
|
|
(3,355)
|
|
|
(2,179)
|
Interest
expense
|
|
|
4,014
|
|
|
4,411
|
|
|
11,974
|
|
|
13,541
|
Total other
expense
|
|
|
4,103
|
|
|
3,088
|
|
|
8,545
|
|
|
11,475
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
before income tax expense
|
|
|
(2,669)
|
|
|
561
|
|
|
(3,055)
|
|
|
1,153
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
(LOSS)
|
|
|
(2,669)
|
|
|
561
|
|
|
(3,055)
|
|
|
1,153
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (income) loss
attributable to non-controlling interests in operating
partnership
|
|
|
115
|
|
|
(34)
|
|
|
127
|
|
|
(70)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to the Company
|
|
|
(2,554)
|
|
|
527
|
|
|
(2,928)
|
|
|
1,083
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonforfeitable
distributions allocated to unvested restricted
shares
|
|
|
(14)
|
|
|
(16)
|
|
|
(42)
|
|
|
(48)
|
Distributions on
Series A Preferred Units and Series B Preferred Stock
|
|
|
(3,055)
|
|
|
(3,064)
|
|
|
(9,175)
|
|
|
(9,269)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) available
to common stockholders of Farmland Partners Inc.
|
|
$
|
(5,623)
|
|
$
|
(2,553)
|
|
$
|
(12,145)
|
|
$
|
(8,234)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted per
common share data:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net (loss)
available to common stockholders
|
|
$
|
(0.17)
|
|
$
|
(0.09)
|
|
$
|
(0.39)
|
|
$
|
(0.28)
|
Diluted net (loss)
available to common stockholders
|
|
$
|
(0.17)
|
|
$
|
(0.09)
|
|
$
|
(0.39)
|
|
$
|
(0.28)
|
Basic weighted average
common shares outstanding
|
|
|
32,551
|
|
|
29,206
|
|
|
31,355
|
|
|
29,392
|
Diluted weighted
average common shares outstanding
|
|
|
32,551
|
|
|
29,206
|
|
|
31,355
|
|
|
29,392
|
Dividends declared per
common share
|
|
$
|
0.05
|
|
$
|
0.05
|
|
$
|
0.15
|
|
$
|
0.15
|
Farmland Partners
Inc.
Reconciliation of
Non-GAAP Measures
For the three and
nine months ended September 30, 2021 and 2020
(unaudited, in
thousands except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended
September 30,
|
|
For the nine months ended
September 30,
|
(in thousands
except per share amounts)
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net income
(loss)
|
|
$
|
(2,669)
|
|
$
|
561
|
|
$
|
(3,055)
|
|
$
|
1,153
|
(Gain) loss on
disposition of assets
|
|
|
112
|
|
|
(1,348)
|
|
|
(3,355)
|
|
|
(2,179)
|
Depreciation,
depletion and amortization
|
|
|
1,911
|
|
|
1,979
|
|
|
5,731
|
|
|
5,982
|
FFO
|
|
|
(646)
|
|
|
1,192
|
|
|
(679)
|
|
|
4,956
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
|
334
|
|
|
271
|
|
|
919
|
|
|
788
|
Deferred impact of
interest rate swap terminations
|
|
|
126
|
|
|
191
|
|
|
437
|
|
|
329
|
Real estate related
acquisition and due diligence costs
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|
11
|
Distributions on
Preferred units
|
|
|
(3,055)
|
|
|
(3,064)
|
|
|
(9,175)
|
|
|
(9,269)
|
AFFO
|
|
$
|
(3,236)
|
|
$
|
(1,410)
|
|
$
|
(8,493)
|
|
$
|
(3,185)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO per diluted
weighted average share data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO weighted average
common shares
|
|
|
34,298
|
|
|
31,428
|
|
|
33,124
|
|
|
31,614
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share
available to common stockholders
|
|
$
|
(0.17)
|
|
$
|
(0.09)
|
|
$
|
(0.39)
|
|
$
|
(0.28)
|
Income available to
redeemable non-controlling interest and non-
controlling interest in operating partnership
|
|
|
0.10
|
|
|
0.11
|
|
|
0.31
|
|
|
0.33
|
Depreciation and
depletion
|
|
|
0.06
|
|
|
0.06
|
|
|
0.17
|
|
|
0.19
|
Stock-based
compensation
|
|
|
0.01
|
|
|
0.01
|
|
|
0.03
|
|
|
0.02
|
(Gain) loss on
disposition of assets
|
|
|
—
|
|
|
(0.04)
|
|
|
(0.10)
|
|
|
(0.07)
|
Distributions on
Preferred units
|
|
|
(0.09)
|
|
|
(0.10)
|
|
|
(0.28)
|
|
|
(0.29)
|
AFFO per diluted
weighted average share
|
|
$
|
(0.09)
|
|
$
|
(0.04)
|
|
$
|
(0.26)
|
|
$
|
(0.10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended
|
|
For the nine months ended
|
|
|
September 30,
|
|
September 30,
|
(in
thousands)
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net income
(loss)
|
|
$
|
(2,669)
|
|
$
|
561
|
|
$
|
(3,055)
|
|
$
|
1,153
|
Interest
expense
|
|
|
4,014
|
|
|
4,411
|
|
|
11,974
|
|
|
13,541
|
Income tax
expense
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Depreciation,
depletion and amortization
|
|
|
1,911
|
|
|
1,979
|
|
|
5,731
|
|
|
5,982
|
(Gain) loss on
disposition of assets
|
|
|
112
|
|
|
(1,348)
|
|
|
(3,355)
|
|
|
(2,179)
|
EBITDAre
|
|
$
|
3,368
|
|
$
|
5,603
|
|
$
|
11,295
|
|
$
|
18,497
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
|
334
|
|
|
271
|
|
|
919
|
|
|
788
|
Real estate related
acquisition and due diligence costs
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|
11
|
Adjusted
EBITDAre
|
|
$
|
3,707
|
|
$
|
5,874
|
|
$
|
12,219
|
|
$
|
19,296
|
|
|
|
|
|
|
|
|
|
|
|
|
Farmland Partners
Inc.
Reconciliation of
Non-GAAP Measures
For the three and
nine months ended September 30, 2021 and 2020
(unaudited, in
thousands except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended
September 30,
|
|
For the Nine Months Ended
September 30
|
($ in
thousands)
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
OPERATING
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
|
Rental
income
|
|
$
|
8,850
|
|
$
|
8,701
|
|
$
|
27,400
|
|
27,916
|
Tenant
reimbursements
|
|
|
861
|
|
|
911
|
|
|
2,638
|
|
2,655
|
Crop sales
|
|
|
262
|
|
|
748
|
|
|
715
|
|
1,445
|
Other
revenue
|
|
|
132
|
|
|
244
|
|
|
940
|
|
755
|
Total operating
revenues
|
|
|
10,105
|
|
|
10,604
|
|
|
31,693
|
|
32,771
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses
|
|
|
1,993
|
|
|
1,961
|
|
|
5,632
|
|
5,640
|
NOI
|
|
|
8,112
|
|
|
8,643
|
|
|
26,061
|
|
27,131
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation,
depletion and amortization
|
|
|
1,911
|
|
|
1,979
|
|
|
5,731
|
|
5,982
|
Cost of goods
sold
|
|
|
417
|
|
|
1,332
|
|
|
1,334
|
|
2,643
|
Acquisition and due
diligence costs
|
|
|
5
|
|
|
—
|
|
|
5
|
|
11
|
General and
administrative expenses
|
|
|
1,746
|
|
|
1,395
|
|
|
5,258
|
|
4,248
|
Legal and
accounting
|
|
|
2,599
|
|
|
287
|
|
|
8,241
|
|
1,617
|
Other operating
expenses
|
|
|
—
|
|
|
1
|
|
|
2
|
|
2
|
Other (income)
expense
|
|
|
(8)
|
|
|
25
|
|
|
(59)
|
|
113
|
(Income) loss from
equity method investment
|
|
|
(15)
|
|
|
—
|
|
|
(15)
|
|
—
|
(Gain) loss on
disposition of assets
|
|
|
112
|
|
|
(1,348)
|
|
|
(3,355)
|
|
(2,179)
|
Interest
expense
|
|
|
4,014
|
|
|
4,411
|
|
|
11,974
|
|
13,541
|
NET INCOME
(LOSS)
|
|
$
|
(2,669)
|
|
$
|
561
|
|
$
|
(3,055)
|
|
1,153
|
Non-GAAP Financial Measures
The Company considers the following non-GAAP measures as useful
to investors as key supplemental measures of its performance: FFO,
NOI, AFFO, EBITDAre and Adjusted EBITDAre. These non-GAAP financial
measures should be considered along with, but not as alternatives
to, net income or loss as a measure of the Company's operating
performance. FFO, NOI, AFFO, EBITDAre and Adjusted EBITDAre, as
calculated by the Company, may not be comparable to other companies
that do not define such terms exactly as the Company.
FFO
The Company calculates FFO in accordance with the standards
established by the National Association of Real Estate Investment
Trusts, or NAREIT. NAREIT defines FFO as net income (loss)
(calculated in accordance with GAAP), excluding gains (or losses)
from sales of depreciable operating property, plus real estate
related depreciation, depletion and amortization (excluding
amortization of deferred financing costs), and after adjustments
for unconsolidated partnerships and joint ventures. Management
presents FFO as a supplemental performance measure because it
believes that FFO is beneficial to investors as a starting point in
measuring the Company's operational performance. Specifically, in
excluding real estate related depreciation and amortization and
gains and losses from sales of depreciable operating properties,
which do not relate to or are not indicative of operating
performance, FFO provides a performance measure that, when compared
year over year, captures trends in occupancy rates, rental rates
and operating costs. The Company also believes that, as a widely
recognized measure of the performance of REITs, FFO will be used by
investors as a basis to compare the Company's operating performance
with that of other REITs. However, other equity REITs may not
calculate FFO in accordance with the NAREIT definition as the
Company does, and, accordingly, the Company's FFO may not be
comparable to such other REITs' FFO.
AFFO
The Company calculates AFFO by adjusting FFO to exclude the
income and expenses that the Company believes are not reflective of
the sustainability of the Company's ongoing operating performance,
including, but not limited to, real estate related acquisition and
due diligence costs, stock-based compensation, deferred impact of
interest rate swap terminations, and distributions on the Company's
Series A preferred units.
Changes in GAAP accounting and reporting rules that were put in
effect after the establishment of NAREIT's definition of FFO in
1999 result in the inclusion of a number of items in FFO that do
not correlate with the sustainability of the Company's operating
performance. Therefore, in addition to FFO, the Company
presents AFFO and AFFO per share, fully diluted, both of which are
non-GAAP measures. Management considers AFFO a useful
supplemental performance metric for investors as it is more
indicative of the Company's operational performance than FFO. AFFO
is not intended to represent cash flow or liquidity for the period
and is only intended to provide an additional measure of the
Company's operating performance. Even AFFO, however, does not
properly capture the timing of cash receipts, especially in
connection with full-year rent payments under lease agreements
entered into in connection with newly acquired farms. Management
considers AFFO per share, fully diluted to be a supplemental metric
to GAAP earnings per share. AFFO per share, fully diluted provides
additional insight into how the Company's operating performance
could be allocated to potential shares outstanding at a specific
point in time. Management believes that AFFO is a widely recognized
measure of the operations of REITs and presenting AFFO will enable
investors to assess the Company's performance in comparison to
other REITs. However, other REITs may use different methodologies
for calculating AFFO and AFFO per share, fully diluted and,
accordingly, the Company's AFFO and AFFO per share, fully diluted
may not always be comparable to AFFO and AFFO per share amounts
calculated by other REITs. AFFO and AFFO per share, fully diluted
should not be considered as an alternative to net income (loss) or
earnings per share (determined in accordance with GAAP) as an
indication of financial performance, or as an alternative to net
income (loss) earnings per share (determined in accordance with
GAAP) as a measure of the Company's liquidity, nor are they
indicative of funds available to fund the Company's cash needs,
including its ability to make distributions.
EBITDAre and Adjusted EBITDAre
The Company calculates Earnings Before Interest Taxes
Depreciation and Amortization for real estate ("EBITDAre") in
accordance with the standards established by NAREIT in its
September 2017 White Paper. NAREIT
defines EBITDAre as net income (calculated in accordance with GAAP)
excluding interest expense, income tax, depreciation and
amortization, gains or losses on disposition of depreciated
property (including gains or losses on change of control),
impairment write-downs of depreciated property and of investments
in unconsolidated affiliates caused by a decrease in value of
depreciated property in the affiliate, and adjustments to reflect
the entity's pro rata share of EBITDAre of unconsolidated
affiliates. EBITDAre is a key financial measure used to
evaluate the Company's operating performance but should not be
construed as an alternative to operating income, cash flows from
operating activities or net income, in each case as determined in
accordance with GAAP. The Company believes that EBITDAre is a
useful performance measure commonly reported and will be widely
used by analysts and investors in the Company's industry. However,
while EBITDAre is a performance measure widely used across the
Company's industry, the Company does not believe that it correctly
captures the Company's business operating performance because it
includes non-cash expenses and recurring adjustments that are
necessary to better understand the Company's business operating
performance. Therefore, in addition to EBITDAre, management
uses Adjusted EBITDAre, a non-GAAP measure.
The Company calculates Adjusted EBITDAre by adjusting EBITDAre
for certain items such as stock-based compensation and real estate
related acquisition and due diligence costs that the Company
considers necessary to understand its operating performance. The
Company believes that Adjusted EBITDAre provides useful
supplemental information to investors regarding the Company's
ongoing operating performance that, when considered with net income
and EBITDAre, is beneficial to an investor's understanding of the
Company's operating performance. However, EBITDAre and Adjusted
EBITDAre have limitations as analytical tools and should not be
considered in isolation or as a substitute for analysis of the
Company's results as reported under GAAP.
In prior periods, the Company has presented EBITDA and Adjusted
EBITDA. In accordance with NAREIT's recommendation, beginning with
the Company's reported results for the three months ended
March 31, 2018, the Company is
reporting EBITDAre and Adjusted EBITDAre in place of EBITDA and
Adjusted EBITDA.
Net Operating Income (NOI)
The Company calculates net operating income (NOI) as total
operating revenues (rental income, tenant reimbursements, crop
sales and other revenue) less property operating expenses (direct
property expenses and real estate taxes). Since net operating
income excludes general and administrative expenses, interest
expense, depreciation and amortization, acquisition-related
expenses, other income and losses and extraordinary items, it
provides a performance measure that, when compared year over year,
reflects the revenues and expenses directly associated with owning
and leasing farmland real estate, providing a perspective not
immediately apparent from net income. However, net operating income
should not be viewed as an alternative measure of the Company's
financial performance since it does not reflect general and
administrative expenses, interest expense, depreciation and
amortization costs, other income and losses.
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content:https://www.prnewswire.com/news-releases/farmland-partners-inc-reports-third-quarter-2021-results-301410391.html
SOURCE Farmland Partners Inc.