DENVER, March 13, 2019 /PRNewswire/ -- Farmland Partners
Inc. (NYSE: FPI) (the "Company") today reported financial results
for the quarter and fiscal year ended December 31, 2018.
Fourth Quarter 2018 Highlights
- Reported total operating revenues of $20.9 million, a 34.2% increase over the same
period in 2017
- Reported operating income of $13.5
million, a 33.2% increase over the same period in 2017
- Reported basic net income to common stockholders of
$0.13 per share
- Reported Adjusted EBITDAre of $16.2
million, a 25.9% increase over the same period in 2017
- Reported AFFO per share of $0.22
- Repurchased $6.3 million in
shares of common stock at a weighted average price of $5.74 and $0.4
million of Series B Participating Preferred Stock at a
weighted average price of $18.40
Full Year 2018 Highlights
- Reported total operating revenues of $56.1 million, a 21.3% increase over 2017
- Reported operating income of $29.7
million, a 31.8% increase over 2017
- Reported basic net loss available to common stockholders of
$0.01 per share
- Reported Adjusted EBITDAre of $40.3
million, an 18.9% increase over 2017
- Reported AFFO per share of $0.24
- Repurchased $20.6 million in
shares of common stock at a weighted average price of $6.76 and $0.5
million of Series B Participating Preferred Stock at a
weighted average price of $19.32
- Completed farm dispositions totaling $31.9 million at an 11.4% gain relative to gross
book value and net book value
Additional Highlights
- Subsequent to quarter and fiscal year end, repurchased
$5.0 million in shares of common
stock at a weighted average price of $5.39 and $0.3
million in shares of Series B Participating Preferred stock
at a weighted average price of $18.51
- Subsequent to quarter and fiscal year end, completed farm
dispositions totaling $4.7 million
for a gain of 10.2% relative to gross book value and net book
value
"This has been a difficult year for our stockholders due to the
anonymous short-and-distort attack perpetrated on Seeking Alpha. We
continue to pursue the responsible parties and are optimistic that
we will eventually hold the perpetrators of this stock manipulation
scheme accountable" said Paul A.
Pittman the Company's Chairman and CEO. "We will continue to
opportunistically buy back our stock as long as we believe that it
will continue to provide stockholder value. The business faced
headwinds from weather events and the trade war in 2018, but asset
values remain stable to modestly increasing."
Financial Results
For the three months ended December 31,
2018, the Company recorded net income of $8.4 million and basic net income to common
stockholders of $0.13 per share, as
compared to net income of $6.5
million and basic net income to common stockholders of
$0.08 per share for the same period
during 2017. For the twelve months ended December 31, 2018, the Company recorded net
income of $14.0 million and basic net
loss to common stockholders of $0.01
per share, as compared to net income of $9.2
million and basic net income to common stockholders of
$0.03 per share for the same period
during 2017.
For the three months ended December 31,
2018, the Company recorded Adjusted Funds from Operations
("AFFO") of $8.1 million and AFFO per
fully diluted share of $0.22, as
compared to AFFO of $5.4 million and
AFFO per fully diluted share of $0.16
for the same period during 2017. For the twelve months ended
December 31, 2018, the Company
recorded AFFO of $9.0 million and
AFFO per fully diluted share of $0.24, as compared to AFFO of $13.5 million and AFFO per fully diluted share of
$0.36 for the same period during
2017.
In 2018 the Company incurred extra expenses, including legal and
employee retention expenses related to the Rota Fortunae
short-and-distort attack and related litigation, that amounted to
approximately $1.6 million, gross of
insurance reimbursements.
See "Non-GAAP Financial Measures" for complete definitions of
AFFO and Adjusted EBITDAre and the financial tables accompanying
this press release for reconciliations of net income to AFFO and
Adjusted EBITDAre.
Operating
Results
For the three months ended December 31,
2018, the Company recorded total operating revenues of
$20.9 million, as compared to
$15.6 million for the same period
during 2017. For the twelve months ended December 31, 2018, the Company recorded total
operating revenues of $56.1 million,
as compared to $46.2 million for the
same period during 2017.
For the three months ended December 31,
2018, the Company recorded total operating income of
$13.5 million and net operating
income ("NOI") of $18.4 million, as
compared to total operating income of $10.2
million and NOI of $14.1
million for the same period in 2017. For the twelve months
ended December 31, 2018, the Company
recorded total operating income of $29.7
million and NOI of $48.2
million, as compared to total operating income of
$22.5 million and NOI of $40.3 million for the same period in 2017.
Our 2018 operating results were also impacted by extreme weather
events. Our tenant's profitability and, to some degree, our
variable rent revenues were negatively impacted by these weather
events. Specifically, Hurricane Michael affected our pecan farms in
Alabama and Georgia, and excess rainfall affected the
performance of many row crop farms, particularly in the
Southeastern United States.
Our 2018 operating results were also impacted by ongoing trade
disputes between the United States
and its primary agricultural trade partners. These trade disputes
have placed downward pressure on the prices of agricultural
products which has negatively impacted some of our tenant's
profitability. In some cases, our variable rent revenues were
negatively impacted by these ongoing trade disputes.
Management estimates that trade tensions and extreme weather
events had a negative impact on 2018 rental income of approximately
$1.0 million.
See "Non-GAAP Financial Measures" for a complete definition of
NOI and the financial table included in this press release for
reconciliations of net income to NOI.
Acquisition and Disposition Activity
In the twelve months ended December 31,
2018, the Company completed $31.9
million in farm dispositions for a gain of 11.4% relative to
gross book value and net book value. Subsequent to year end,
the company has completed $4.7
million in farm dispositions for a gain of 10.2% relative to
gross book value and net book value.
Capital Markets Activity and Balance Sheet
During the quarter, the Company repurchased 1.1 million shares
of common stock at a weighted average price of $5.74 per share for an aggregate purchase price
of $6.3 million, and 23,913 shares of
Series B Participating Preferred stock at a weighted average price
of $18.40 per share for an aggregate
purchase price of $0.4 million.
Subsequent to quarter and fiscal year end and as of the date of
this press release, the Company had repurchased an additional 0.9
million shares of common stock at a weighted average price of
$5.39 per share for an aggregate
purchase price of $5.0 million, and
16,800 shares of Series B Participating Preferred stock at a
weighted average price of $18.51 per
share for an aggregate purchase price of $0.3 million.
As of December 31, 2018, the
Company had 35,176,571 shares of common stock outstanding on a
fully diluted basis. As of the date of this press release, the
Company had 34,295,802 shares of common stock outstanding on
fully diluted basis.
The Company had total debt outstanding of $525.3 million at December
31, 2018, compared to total debt outstanding of $515.8 million at December
31, 2017.
Dividend Declarations
The Company announced that its Board of Directors has declared a
quarterly cash dividend of $0.05 per
common share and per Class A Common OP unit. The dividends are
payable on April 15, 2019, to
stockholders and unit holders of record on April 1, 2019.
The Company also announced that its Board of Directors has
declared a quarterly cash dividend of $0.375 per share of Series B Participating
Preferred Stock. The dividends are payable on April 1, 2019, to holders of Series B
Participating Preferred Stock of record on March 15, 2019.
Conference Call Information
The Company has scheduled a conference call on March 14, 2019 at 11:30
a.m. (Eastern Time) to discuss its financial results for the
quarter and year ended December 31,
2018. The conference call can be accessed live over the
phone toll-free by dialing 1-866-262-6804, or for international
callers by dialing 1-412-902-4107. Participants can reference
the Farmland Partners Inc. Fourth Quarter 2018 Earnings Call. 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 March 14, 2019 at 1:30
p.m. (Eastern Time) until March 28,
2019 at 11:59 p.m. (Eastern
Time), by dialing 1-877-344-7529 (U.S.) or 1-412-317-0088
(International); passcode: 10129397. 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 approximately 162,000
acres in 17 states, including Alabama, Arkansas, California, Colorado, Florida, Georgia, Illinois, Kansas, Louisiana, Michigan, Mississippi, Nebraska, North
Carolina, South Carolina,
South Dakota, Texas 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.
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 proposed and pending
acquisitions, financing activities, crop yields and prices,
anticipated rental rates, asset values and the outcomes of ongoing
litigation. 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 or Series B
participating preferred 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 under contract and the other factors described in the
section entitled "Risk Factors" in our most recent Annual Report on
Form 10-K, and our 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 we do not
undertake any obligation to update or revise any forward-looking
information to reflect changes in assumptions, the occurrence of
unanticipated events, or otherwise.
Farmland Partners
Inc.
Consolidated Balance
Sheets
As of December 31,
2018 (Audited) and December 31, 2017
(in thousands except
par value and share data)
|
|
|
|
December 31,
|
|
December 31,
|
|
|
2018
|
|
2017
|
ASSETS
|
|
|
|
|
|
|
Land, at
cost
|
|
$
|
957,516
|
|
$
|
947,899
|
Grain
facilities
|
|
|
12,184
|
|
|
11,463
|
Groundwater
|
|
|
11,473
|
|
|
12,107
|
Irrigation
improvements
|
|
|
53,458
|
|
|
51,678
|
Drainage
improvements
|
|
|
12,271
|
|
|
9,964
|
Permanent
plantings
|
|
|
52,989
|
|
|
52,870
|
Other
|
|
|
8,196
|
|
|
8,245
|
Construction in
progress
|
|
|
10,262
|
|
|
8,137
|
Real estate, at
cost
|
|
|
1,118,349
|
|
|
1,102,363
|
Less accumulated
depreciation
|
|
|
(18,202)
|
|
|
(10,285)
|
Total real estate,
net
|
|
|
1,100,147
|
|
|
1,092,078
|
Deposits
|
|
|
-
|
|
|
239
|
Cash
|
|
|
16,891
|
|
|
53,536
|
Notes and interest
receivable, net
|
|
|
11,877
|
|
|
9,760
|
Deferred offering
costs
|
|
|
218
|
|
|
292
|
Deferred financing
fees, net
|
|
|
261
|
|
|
348
|
Accounts receivable,
net
|
|
|
6,136
|
|
|
6,650
|
Inventory
|
|
|
341
|
|
|
126
|
Prepaid and other
assets
|
|
|
3,638
|
|
|
3,057
|
TOTAL
ASSETS
|
|
$
|
1,139,509
|
|
$
|
1,166,086
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
Mortgage notes and
bonds payable, net
|
|
$
|
523,641
|
|
$
|
514,071
|
Dividends
payable
|
|
|
1,681
|
|
|
4,847
|
Derivative
liability
|
|
|
865
|
|
|
-
|
Accrued
interest
|
|
|
4,296
|
|
|
3,193
|
Accrued property
taxes
|
|
|
1,666
|
|
|
1,584
|
Deferred
revenue
|
|
|
238
|
|
|
3,907
|
Accrued
expenses
|
|
|
3,581
|
|
|
2,800
|
Total
liabilities
|
|
|
535,968
|
|
|
530,402
|
|
|
|
|
|
|
|
Series B
Participating Preferred Stock, $0.01 par value, 100,000,000 shares
authorized; 6,013,587 shares issued and outstanding at December 31,
2018, and 6,037,500 outstanding at December 31, 2017
|
|
|
143,758
|
|
|
144,223
|
Redeemable
non-controlling interest in operating partnership, Series A
preferred units
|
|
|
120,510
|
|
|
120,510
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
Common stock, $0.01
par value, 500,000,000 shares authorized; 30,594,592 shares issued
and outstanding at December 31, 2018, and 33,334,849 shares
issued and outstanding at December 31, 2017
|
|
|
300
|
|
|
329
|
Additional paid in
capital
|
|
|
332,996
|
|
|
350,147
|
Retained
earnings
|
|
|
4,852
|
|
|
5,161
|
Cumulative
dividends
|
|
|
(42,695)
|
|
|
(31,199)
|
Other comprehensive
income
|
|
|
(865)
|
|
|
-
|
Non-controlling
interests in operating partnership
|
|
|
44,685
|
|
|
46,513
|
Total
equity
|
|
|
339,273
|
|
|
370,951
|
|
|
|
|
|
|
|
TOTAL LIABILITIES,
REDEEMABLE NON-CONTROLLING INTERESTS IN OPERATING PARTNERSHIP AND
EQUITY
|
|
$
|
1,139,509
|
|
$
|
1,166,086
|
Farmland Partners
Inc.
Consolidated
Statements of Operations
For the three months
and year ended December 31, 2018 and 2017
(In thousands
except per share amounts)
|
|
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
|
For the Three
Months Ended
|
|
For the Twelve
Months Ended
|
|
|
December
31,
|
|
December 31,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
OPERATING
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
income
|
|
$
|
19,971
|
|
$
|
14,575
|
|
$
|
51,185
|
|
$
|
42,956
|
Tenant
reimbursements
|
|
|
632
|
|
|
678
|
|
|
3,158
|
|
|
1,909
|
Crop sales
|
|
|
-
|
|
|
270
|
|
|
410
|
|
|
799
|
Other
revenue
|
|
|
290
|
|
|
41
|
|
|
1,316
|
|
|
555
|
Total operating
revenues
|
|
|
20,893
|
|
|
15,564
|
|
|
56,069
|
|
|
46,219
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
depletion
|
|
|
2,134
|
|
|
2,142
|
|
|
8,544
|
|
|
7,792
|
Property operating
expenses
|
|
|
2,534
|
|
|
1,497
|
|
|
7,834
|
|
|
5,897
|
Acquisition and due
diligence costs
|
|
|
6
|
|
|
51
|
|
|
180
|
|
|
930
|
General and
administrative expenses
|
|
|
2,124
|
|
|
1,419
|
|
|
7,477
|
|
|
7,258
|
Legal and
accounting
|
|
|
566
|
|
|
303
|
|
|
2,330
|
|
|
1,453
|
Other operating
expenses
|
|
|
-
|
|
|
(2)
|
|
|
11
|
|
|
361
|
Total operating
expenses
|
|
|
7,364
|
|
|
5,410
|
|
|
26,376
|
|
|
23,691
|
OPERATING
INCOME
|
|
|
13,529
|
|
|
10,154
|
|
|
29,693
|
|
|
22,528
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER (INCOME)
EXPENSE:
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
income
|
|
|
(40)
|
|
|
(235)
|
|
|
(264)
|
|
|
(391)
|
(Gain) loss on
disposition of assets
|
|
|
204
|
|
|
152
|
|
|
(2,882)
|
|
|
200
|
Interest
expense
|
|
|
4,966
|
|
|
3,709
|
|
|
18,799
|
|
|
13,561
|
Total other
expense
|
|
|
5,130
|
|
|
3,626
|
|
|
15,653
|
|
|
13,370
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
|
|
|
8,399
|
|
|
6,528
|
|
|
14,040
|
|
|
9,158
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (income) loss
attributable to non-controlling interests in operating
partnership
|
|
|
(1,085)
|
|
|
(891)
|
|
|
(1,786)
|
|
|
(1,244)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to the Company
|
|
|
7,314
|
|
|
5,637
|
|
|
12,254
|
|
|
7,914
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonforfeitable
distributions allocated to unvested restricted
shares
|
|
|
(13)
|
|
|
(35)
|
|
|
(111)
|
|
|
(151)
|
Distributions on
redeemable non-controlling interests in operating partnership,
Series A preferred units and dividends on Series B Participating
Preferred Stock
|
|
|
(3,140)
|
|
|
(3,142)
|
|
|
(12,563)
|
|
|
(6,856)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
income available to common stockholders of Farmland Partners
Inc.
|
|
$
|
4,161
|
|
$
|
2,460
|
|
$
|
(420)
|
|
$
|
907
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted per
common share data:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income
(loss) available to common stockholders
|
|
$
|
0.13
|
|
$
|
0.08
|
|
$
|
(0.01)
|
|
$
|
0.03
|
Diluted net income
(loss) available to common stockholders
|
|
$
|
0.09
|
|
$
|
0.07
|
|
$
|
(0.01)
|
|
$
|
0.03
|
Basic weighted
average common shares outstanding
|
|
|
30,889
|
|
|
32,085
|
|
|
32,162
|
|
|
31,210
|
Diluted weighted
average common shares outstanding
|
|
|
86,025
|
|
|
44,938
|
|
|
32,162
|
|
|
31,210
|
Dividends declared
per common share
|
|
$
|
0.0500
|
|
$
|
0.1275
|
|
$
|
0.3550
|
|
$
|
0.5100
|
Farmland Partners
Inc.
Reconciliation of
Non-GAAP Measures
For the three months
ended December 31, 2018 and 2017
(In thousands except
per share amounts)
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
|
For the Three
Months Ended
December 31,
|
|
For the Twelve
Months
Ended December 31,
|
(in thousands
except per share amounts)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net income
|
|
$
|
8,399
|
|
$
|
6,528
|
|
$
|
14,040
|
|
$
|
9,158
|
(Gain) loss on
disposition of assets
|
|
|
204
|
|
|
152
|
|
|
(2,882)
|
|
|
200
|
Depreciation and
depletion
|
|
|
2,134
|
|
|
1,497
|
|
|
8,544
|
|
|
7,792
|
FFO
|
|
|
10,737
|
|
|
8,177
|
|
|
19,702
|
|
|
17,150
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock based
compensation
|
|
|
518
|
|
|
309
|
|
|
1,653
|
|
|
1,409
|
Real estate related
acquisition and due diligence costs
|
|
|
6
|
|
|
51
|
|
|
181
|
|
|
1,811
|
Distributions on
Series A preferred units and dividends on Series B participating
preferred stock
|
|
|
(3,140)
|
|
|
(3,142)
|
|
|
(12,563)
|
|
|
(6,856)
|
AFFO
|
|
$
|
8,121
|
|
$
|
5,395
|
|
$
|
8,973
|
|
$
|
13,514
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO per diluted
weighted average share data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO weighted average
common shares
|
|
|
35,781
|
|
|
37,442
|
|
|
37,083
|
|
|
37,358
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per
share available to common stockholders
|
|
$
|
0.13
|
|
$
|
0.08
|
|
$
|
(0.01)
|
|
$
|
0.03
|
Income available to
redeemable non-controlling interest and non-controlling interest in
operating partnership
|
|
|
0.10
|
|
|
0.09
|
|
|
0.39
|
|
|
0.21
|
Depreciation and
depletion
|
|
|
0.06
|
|
|
0.06
|
|
|
0.23
|
|
|
0.21
|
Stock based
compensation
|
|
|
0.01
|
|
|
0.01
|
|
|
0.04
|
|
|
0.04
|
Real estate related
acquisition and due diligence costs
|
|
|
—
|
|
|
—
|
|
|
0.01
|
|
|
0.05
|
(Gain) loss on
disposition of assets
|
|
|
0.01
|
|
|
—
|
|
|
(0.08)
|
|
|
—
|
Distributions on
Series A preferred units and dividends on Series B participating
preferred stock
|
|
|
(0.09)
|
|
|
(0.08)
|
|
|
(0.34)
|
|
|
(0.18)
|
AFFO per diluted
weighted average share
|
|
$
|
0.22
|
|
$
|
0.16
|
|
$
|
0.24
|
|
$
|
0.36
|
|
|
(Unaudited)
|
|
(Audited)
|
|
|
For the Three
Months Ended
December 31,
|
|
For the Twelve
Months Ended
December 31,
|
(in
thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net income
|
|
$
|
8,399
|
|
$
|
6,528
|
|
$
|
14,040
|
|
$
|
9,158
|
Interest
expense
|
|
|
4,966
|
|
|
3,709
|
|
|
18,799
|
|
|
13,561
|
Depreciation and
depletion
|
|
|
2,134
|
|
|
2,142
|
|
|
8,544
|
|
|
7,792
|
(Gain) Loss on
disposal of assets
|
|
|
204
|
|
|
152
|
|
|
(2,882)
|
|
|
200
|
EBITDAre
|
|
$
|
15,703
|
|
$
|
12,531
|
|
$
|
38,501
|
|
$
|
30,711
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
|
518
|
|
|
309
|
|
|
1,653
|
|
|
1,409
|
Real estate related
acquisition and due diligence costs
|
|
|
6
|
|
|
51
|
|
|
181
|
|
|
1,811
|
Adjusted
EBITDAre
|
|
$
|
16,227
|
|
$
|
12,891
|
|
$
|
40,335
|
|
$
|
33,931
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
For the Three
Months Ended
|
|
For the Twelve
Months Ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
OPERATING
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
income
|
|
$
|
19,971
|
|
$
|
14,575
|
|
$
|
51,185
|
|
$
|
42,956
|
Tenant
reimbursements
|
|
|
632
|
|
|
678
|
|
|
3,158
|
|
|
1,909
|
Crop sales
|
|
|
—
|
|
|
270
|
|
|
410
|
|
|
799
|
Other
revenue
|
|
|
290
|
|
|
41
|
|
|
1,316
|
|
|
555
|
Total operating
revenues
|
|
$
|
20,893
|
|
$
|
15,564
|
|
$
|
56,069
|
|
$
|
46,219
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses
|
|
|
2,534
|
|
|
1,497
|
|
|
7,834
|
|
|
5,897
|
NOI
|
|
$
|
18,359
|
|
$
|
14,067
|
|
$
|
48,235
|
|
$
|
40,322
|
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 and stock-based compensation.
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 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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SOURCE Farmland Partners Inc.