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

☒~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934~~

For the quarterly period ended September 30, ~~2017~~2023

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934~~

For the transition period from to

Commission ~~file number: 001- 36405~~File Number: 001-36405

FARMLAND PARTNERS INC.

(Exact Name of Registrant as Specified in its Charter)


Maryland		46-3769850
(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification No.)

4600 South Syracuse Street, Suite 1450 Denver, Colorado		80237-2766
(Address of Principal Executive Offices)		(Zip Code)

~~(720)~~ (720) 452-3100

(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	FPI	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 ~~and posted on its corporate Website, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ 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 ~~and post~~ such files). ☒ Yes ☐ No

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


Large ~~Accelerated Filer~~accelerated filer	☐	Accelerated ~~Filer~~filer	☒☐

~~Non-Accelerated Filer~~Non-accelerated filer	~~☐ (Do not check if a smaller reporting company)~~☒	Smaller reporting company	☒

		Emerging growth company	☐

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

~~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 ~~November 3, 2017, 32,337,305~~October 20, 2023, 48,185,949 shares of the Registrant’s common stock (49,389,288 on a fully diluted basis, including 1,203,339 Common Units of limited partnership interests in the registrant’s operating partnership) were outstanding.

Table of Contents

Farmland Partners Inc.

FORM 10-Q FOR THE QUARTER ENDED

September 30, ~~2017~~2023

TABLE OF CONTENTS

9



PART I. FINANCIAL INFORMATION		Page

Item 1.	Financial Statements
	Consolidated Financial Statements
	Balance Sheets as of September 30, ~~2017~~2023 (unaudited) and December 31, ~~2016 (unaudited)~~2022	3
	Statements of Operations for the three and nine months ended September 30, ~~2017~~2023 and ~~2016~~2022 (unaudited)	4
	Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2023 and 2022 (unaudited)	5
	Statements of Changes in Equity for the three and nine months ended September 30, ~~2017~~2023 and ~~2016~~2022 (unaudited)	5 6
	Statements of Cash Flows for the nine months ended September 30, ~~2017~~2023 and ~~2016~~2022 (unaudited)	6 8
	Notes to Consolidated Financial Statements (unaudited)	7 10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33 32
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	56
~~Item 4.~~	~~Controls and Procedures~~	56
		49
Item 4.	Controls and Procedures	49

PART II. OTHER INFORMATION		56 50

Item 1.	Legal Proceedings	56 50
Item 1A.	Risk Factors	56 50
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	57 50
Item 3.	Defaults Upon Senior Securities	57 51
Item 4.	Mine Safety Disclosures	57 51
Item 5.	Other Information	57 51
Item 6.	Exhibits	57 51

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Farmland Partners Inc.

Consolidated Balance Sheets

As of September 30, ~~2017~~2023 (Unaudited) and December 31, ~~2016~~2022

~~(Unaudited)~~

(in thousands, except par value and share data)

September 30,

December 31,

2017

2016
ASSETS

Land, at cost

$
835,986

$
551,392
Grain facilities

10,732

6,856
Groundwater

12,072

11,933
Irrigation improvements

50,660

15,988
Drainage improvements

8,146

4,757
Permanent plantings

51,868

1,845
Other

6,615

2,901
Construction in progress

7,843

1,615
Real estate, at cost

983,922

597,287
Less accumulated depreciation

(8,309)

(3,224)
Total real estate, net

975,613

594,063
Deposits

1,161

5,721
Cash

129,298

47,166
Notes and interest receivable, net

6,951

2,843
Deferred offering costs

280

216
Deferred financing fees, net

370

—
Accounts receivable, net

3,205

4,181
Inventory

92

283
Prepaid and other assets

2,746

1,056
TOTAL ASSETS

$
1,119,716

$
655,529

LIABILITIES AND EQUITY

LIABILITIES

Mortgage notes, line of credit and bonds payable, net

$
464,494

$
308,779
Dividends and distributions payable

4,882

2,938
Accrued interest

2,886

1,538
Accrued property taxes

1,523

1,225
Deferred revenue (See Note 2)

3,876

982
Accrued expenses

3,525

4,558
Total liabilities

481,186

320,020

Series B Participating Preferred Stock

144,223

—
Redeemable non-controlling interests in operating partnership, Series A preferred units

119,633

119,915

EQUITY

Common stock, $0.01 par value, 500,000,000 shares authorized; 32,632,150 shares issued and outstanding at September 30, 2017, and 17,351,446 shares issued and outstanding at December 31, 2016

322

172
Additional paid in capital

342,313

172,100
Retained earnings

2,665

4,103
Cumulative dividends

(26,948)

(14,473)
Non-controlling interests in operating partnership

56,322

53,692
Total equity

374,674

215,594

TOTAL LIABILITIES, SERIES B PARTICIPATING PREFERRED STOCK, REDEEMABLE NON-CONTROLLING INTERESTS IN OPERATING PARTNERSHIP AND EQUITY

$
1,119,716

$
655,529


	September 30,		December 31,
	2023		2022
ASSETS
Land, at cost	$	913,056	$	980,521
Grain facilities		11,150		11,349
Groundwater		13,044		17,682
Irrigation improvements		44,368		50,097
Drainage improvements		10,590		12,543
Permanent plantings		46,612		50,394
Other		6,781		6,967
Construction in progress		6,234		14,810
Real estate, at cost		1,051,835		1,144,363
Less accumulated depreciation		(36,299)		(38,447)
Total real estate, net		1,015,536		1,105,916
Deposits		26		148
Cash and cash equivalents		6,057		7,654
Assets held for sale		6,295		33
Loans and financing receivables, net		19,881		21,921
Right of use asset		454		325
Deferred offering costs		—		63
Accounts receivable, net		5,615		7,055
Derivative asset		2,133		2,084
Inventory		3,257		2,808
Equity method investments		4,118		4,185
Intangible assets, net		2,040		2,055
Goodwill		2,706		2,706
Prepaid and other assets		579		3,196
TOTAL ASSETS	$	1,068,697	$	1,160,149

LIABILITIES AND EQUITY
LIABILITIES
Mortgage notes and bonds payable, net	$	420,464	$	436,875
Lease liability		454		325
Dividends payable		2,972		3,333
Accrued interest		4,805		4,135
Accrued property taxes		2,639		2,008
Deferred revenue		70		44
Accrued expenses		7,203		9,215
Total liabilities		438,607		455,935

Commitments and contingencies (See Note 8)

Redeemable non-controlling interest in operating partnership, Series A preferred units		101,228		110,210

EQUITY
Common stock, $0.01 par value, 500,000,000 shares authorized; 48,338,160 shares issued and outstanding at September 30, 2023, and 54,318,312 shares issued and outstanding at December 31, 2022		469		531
Additional paid in capital		580,453		647,346
Retained earnings		14,834		3,567
Cumulative dividends		(82,978)		(73,964)
Other comprehensive income		3,225		3,306
Non-controlling interests in operating partnership		12,859		13,218
Total equity		528,862		594,004

TOTAL LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS IN OPERATING PARTNERSHIP AND EQUITY	$	1,068,697	$	1,160,149

See accompanying notes.

Table of Contents

Farmland Partners Inc.

Consolidated Statements of Operations

For the three and nine months ended September 30, ~~2017~~2023 and ~~2016~~2022

(Unaudited)

(in thousands, except per share amounts)

For the Three Months Ended

For the Nine Months Ended

September 30,

September 30,


2017

2016

2017

2016
OPERATING REVENUES:

Rental income (See Note 2)

$
11,107

$
6,164

$
28,381

$
16,462
Tenant reimbursements

474

112

1,230

276
Other revenue

465

670

1,044

931
Total operating revenues

12,046

6,946

30,655

17,669

OPERATING EXPENSES

Depreciation, depletion and amortization

2,107

419

5,651

1,102
Property operating expenses

1,400

548

4,399

1,529
Acquisition and due diligence costs

180

1,712

878

1,818
General and administrative expenses

1,707

1,587

5,840

4,770
Legal and accounting

450

330

1,151

882
Other operating expenses

88

160

363

248
Total operating expenses

5,932

4,756

18,282

10,349
OPERATING INCOME

6,114

2,190

12,373

7,320

OTHER (INCOME) EXPENSE:

Other income

(135)

(72)

(157)

(133)
(Gain) loss on disposition of assets

(44)

—

48

—
Interest expense

3,683

2,065

9,852

7,869
Total other expense

3,504

1,993

9,743

7,736

Net income (loss) before income tax expense

2,610

197

2,630

(416)

Income tax expense

—

97

—

97

NET INCOME (LOSS)

2,610

100

2,630

(513)

Net (income) loss attributable to non-controlling interests in operating partnership

(394)

(30)

(353)

37
Net (income) loss attributable to redeemable non-controlling interests in operating partnership

—

—

—

64

Net income (loss) attributable to the Company

2,216

70

2,277

(412)

Nonforfeitable distributions allocated to unvested restricted shares

(36)

(24)

(116)

(72)
Distributions on redeemable non-controlling interests in operating partnership, Common units

—

—

—

(113)
Distributions on redeemable non-controlling interests in operating partnership, Series A preferred units and dividends on Series B Participating Preferred Stock

(1,959)

(887)

(3,714)

(2,057)

Net income (loss) available to common stockholders of Farmland Partners Inc.

$
221

$
(841)

$
(1,553)

$
(2,654)

Basic and diluted per common share data:

Basic net income (loss) available to common stockholders

$
0.01

$
(0.06)

$
(0.05)

$
(0.21)
Diluted net income (loss) available to common stockholders

$
0.01

$
(0.06)

$
(0.05)

$
(0.21)
Basic weighted average common shares outstanding

32,862

13,683

30,695

12,663
Diluted weighted average common shares outstanding

32,862

13,683

30,695

12,663
Dividends declared per common share

$
0.1275

$
0.1275

$
0.3825

$
0.3825


	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
OPERATING REVENUES:
Rental income	$	9,432	$	9,081	$	28,510	$	27,823
Tenant reimbursements		705		883		2,574		2,470
Crop sales		814		2,471		1,689		4,316
Other revenue		666		705		3,101		4,778
Total operating revenues		11,617		13,140		35,874		39,387

OPERATING EXPENSES
Depreciation, depletion and amortization		1,904		1,665		5,905		5,076
Property operating expenses		2,099		2,115		6,709		6,128
Cost of goods sold		703		1,673		2,629		4,444
Acquisition and due diligence costs		3		24		17		86
General and administrative expenses		2,651		2,505		8,161		8,613
Legal and accounting		398		407		924		2,479
Impairment of assets		3,840		—		3,840		—
Other operating expenses		4		26		81		65
Total operating expenses		11,602		8,415		28,266		26,891
OPERATING INCOME		15		4,725		7,608		12,496

OTHER (INCOME) EXPENSE:
Other (income) expense		(41)		(366)		23		(380)
(Income) loss from equity method investment		(5)		—		17		(16)
(Gain) loss on disposition of assets		(10,293)		48		(23,179)		(3,948)
Interest expense		6,230		3,891		16,998		11,461
Total other expense		(4,109)		3,573		(6,141)		7,117

Net income before income tax (benefit) expense		4,124		1,152		13,749		5,379

Income tax (benefit) expense		(191)		33		(178)		129

NET INCOME		4,315		1,119		13,927		5,250

Net (income) attributable to non-controlling interests in operating partnership		(105)		(25)		(331)		(135)

Net income attributable to the Company		4,210		1,094		13,596		5,115

Nonforfeitable distributions allocated to unvested restricted shares		(21)		(16)		(64)		(47)
Distributions on Series A Preferred Units		(743)		(728)		(2,228)		(2,408)

Net income available to common stockholders of Farmland Partners Inc.	$	3,446	$	350	$	11,304	$	2,660

Basic and diluted per common share data:
Basic net income available to common stockholders	$	0.07	$	0.01	$	0.22	$	0.05
Diluted net income available to common stockholders	$	0.07	$	0.01	$	0.22	$	0.05
Basic weighted average common shares outstanding		48,432		53,495		51,079		49,908
Diluted weighted average common shares outstanding		48,432		53,495		51,079		49,908
Dividends declared per common share	$	0.06	$	0.06	$	0.18	$	0.17

See accompanying notes.

Table of Contents

Farmland Partners Inc.

Consolidated Statements of Comprehensive Income (Loss)

For the three and nine months ended September 30, 2023 and 2022

(Unaudited)

(in thousands)


	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Net income	$	4,315	$	1,119	$	13,927	$	5,250
Amortization of other comprehensive income		—		141		198		453
Net change associated with current period hedging activities		(287)		1,207		(279)		2,473
Comprehensive income		4,028		2,467		13,846		8,176
Comprehensive (loss) attributable to non-controlling interests		(105)		(25)		(331)		(135)
Net income attributable to Farmland Partners Inc.	$	3,923	$	2,442	$	13,515	$	8,041

See accompanying notes.

Table of Contents

Farmland Partners Inc.

Consolidated Statements of Changes in Equity and Other Comprehensive Income

For the three and nine months ended September 30, 2023 (Unaudited)

(in thousands)


	Stockholders’ Equity
	Common Stock											Non-controlling
				Additional						Other		Interests in
				Paid in		Retained		Cumulative		Comprehensive		Operating		Total
	Shares	Par Value		Capital		Earnings		Dividends		Income		Partnership		Equity
Balance at December 31, 2022	54,318	$	531	$	647,346	$	3,567	$	(73,964)	$	3,306	$	13,218	$	594,004
Net income	—		—		—		1,676		—		—		38		1,714
Issuance of stock	5		—		54		—		—		—		—		54
Grant of unvested restricted stock	223		—		—		—		—		—		—		—
Shares withheld for income taxes on vesting of equity-based compensation	(3)		—		(36)		—		—		—		—		(36)
Stock-based compensation	—		—		405		—		—		—		—		405
Dividends accrued and paid	—		—		—		(803)		(3,185)		—		(74)		(4,062)
Net change associated with current period hedging transactions and amortization of other comprehensive income	—		—		—		—		—		(383)		—		(383)
Repurchase and cancellation of shares	(1,458)		(15)		(14,577)		—		—		—		—		(14,592)
Adjustments to non-controlling interests resulting from changes in ownership of operating partnership	—		—		17		—		—		—		(17)		—
Balance at March 31, 2023	53,085	$	516	$	633,209	$	4,440	$	(77,149)	$	2,923	$	13,165	$	577,104
Net income	—		—		—		7,710		—		—		188		7,898
Issuance of stock	3		—		33		—		—		—		—		33
Stock-based compensation	—		—		473		—		—		—		—		473
Dividends accrued and paid	—		—		—		(782)		(2,929)		—		(75)		(3,786)
Net change associated with current period hedging transactions and amortization of other comprehensive income	—		—		—		—		—		589		—		589
Repurchase and cancellation of shares	(4,137)		(41)		(47,056)		—		—		—		—		(47,097)
Adjustments to non-controlling interests resulting from changes in ownership of operating partnership	—		—		77		—		—		—		(77)		—
Balance at June 30, 2023	48,951	$	475	$	586,736	$	11,368	$	(80,078)	$	3,512	$	13,201	$	535,214
Net income	—		—		—		4,210		—		—		105		4,315
Issuance of stock	3		—		34		—		—		—		—		34
Grant of unvested restricted stock	3		—		—		—		—		—		—		—
Forfeiture of unvested restricted stock	(1)		—		—		—		—		—		—		—
Shares withheld for income taxes on vesting of equity-based compensation	—		—		(2)		—		—		—		—		(2)
Stock-based compensation	—		—		475		—		—		—		—		475
Dividends accrued and paid	—		—		—		(744)		(2,900)		—		(71)		(3,715)
Net change associated with current period hedging transactions and amortization of other comprehensive income	—		—		—		—		—		(287)		—		(287)
Repurchase and cancellation of shares	(618)		(6)		(6,733)		—		—		—		(433)		(7,172)
Adjustments to non-controlling interests resulting from changes in ownership of operating partnership	—		—		(57)		—		—		—		57		—
Balance at September 30, 2023	48,338	$	469	$	580,453	$	14,834	$	(82,978)	$	3,225	$	12,859	$	528,862

See accompanying notes.

Table of Contents

Farmland Partners Inc.

Consolidated Statements of Changes in Equity and Other Comprehensive Income

For the three and nine months ended September 30, 2022 (Unaudited)

(in thousands)


	Stockholders’ Equity
	Common Stock											Non-controlling
				Additional						Other		Interests in
				Paid in		Retained		Cumulative		Comprehensive		Operating		Total
	Shares	Par Value		Capital		Earnings (Deficit)		Dividends		Income		Partnership		Equity
Balance at December 31, 2021	45,474	$	444	$	524,183	$	(4,739)	$	(61,853)	$	279	$	13,762	$	472,076
Net income	—		—		—		1,106		—		—		33		1,139
Issuance of stock	2,913		29		38,264		—		—		—		—		38,293
Grant of unvested restricted stock	147		—		—		—		—		—		—		—
Forfeiture of unvested restricted stock	(1)		—		—		—		—		—		—		—
Shares withheld for income taxes on vesting of equity-based compensation	(14)		—		(185)		—		—		—		—		(185)
Stock-based compensation	—		—		642		—		—		—		—		642
Dividends accrued and paid	—		—		—		(878)		(2,428)		—		(68)		(3,374)
Net change associated with current period hedging transactions and amortization of other comprehensive income	—		—		—		—		—		1,107		—		1,107
Adjustments to non-controlling interests resulting from changes in ownership of operating partnership	—		—		(187)		—		—		—		187		—
Balance at March 31, 2022	48,519	$	473	$	562,717	$	(4,511)	$	(64,281)	$	1,386	$	13,914	$	509,698
Net income	—		—		—		2,915		—		—		77		2,992
Issuance of stock	4,121		41		60,108		—		—		—		—		60,149
Forfeiture of unvested restricted stock	(7)		—		—		—		—		—		—		—
Shares withheld for income taxes on vesting of equity-based compensation	(1)		—		(1)		—		—		—		—		(1)
Stock-based compensation	—		—		185		—		—		—		—		185
Dividends accrued and paid	—		—		—		(859)		(3,165)		—		(75)		(4,099)
Conversion of common units to shares of common stock	110		1		1,213		—		—		—		(1,214)		—
Net change associated with current period hedging transactions and amortization of other comprehensive income	—		—		—		—		—		471		—		471
Adjustments to non-controlling interests resulting from changes in ownership of operating partnership	—		—		(474)		—		—		—		474		—
Balance at June 30, 2022	52,742	$	515	$	623,748	$	(2,455)	$	(67,446)	$	1,857	$	13,176	$	569,395
Net income	—		—		—		1,094		—		—		25		1,119
Issuance of stock	1,565		16		22,927		—		—		—		—		22,943
Grant of unvested restricted stock	2		—		—		—		—		—		—		—
Stock-based compensation	—		—		351		—		—		—		—		351
Dividends accrued and paid	—		—		—		(828)		(3,259)		—		(74)		(4,161)
Conversion of common units to shares of common stock	10		—		106		—		—		—		(106)		—
Net change associated with current period hedging transactions and amortization of other comprehensive income	—		—		—		—		—		1,348		—		1,348
Adjustments to non-controlling interests resulting from changes in ownership of operating partnership	—		—		(133)		—		—		—		133		—
Balance at September 30, 2022	54,319	$	531	$	646,999	$	(2,189)	$	(70,705)	$	3,205	$	13,154	$	590,995

See accompanying notes.

Table of Contents

Farmland Partners Inc.

Consolidated Statements of Cash Flows

For the nine months ended September 30, ~~2017~~2023 and ~~2016~~2022

(Unaudited)

(in thousands)


	For the Nine Months Ended
	September 30,
	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	13,927	$	5,250
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities:
Depreciation, depletion and amortization		5,905		5,076
Amortization of deferred financing fees and discounts/premiums on debt		509		272
Amortization of net origination fees related to notes receivable		(16)		(28)
Stock-based compensation		1,353		1,178
Stock-based incentive		—		417
(Gain) on disposition of assets		(23,179)		(3,948)
(Income) loss from equity method investment		17		(16)
Bad debt expense		15		24
Impairment of assets		3,840		—
Amortization of dedesignated interest rate swap		162		417
Loss on early extinguishment of debt		—		162
Changes in operating assets and liabilities:
(Increase) Decrease in accounts receivable		1,425		(1,913)
(Increase) Decrease in interest receivable		(51)		(43)
(Increase) Decrease in other assets		2,384		1,903
(Increase) Decrease in inventory		(450)		(64)
Increase (Decrease) in accrued interest		670		935
Increase (Decrease) in accrued expenses		(2,162)		(2,091)
Increase (Decrease) in deferred revenue		603		124
Increase (Decrease) in accrued property taxes		780		1,101
Net cash and cash equivalents provided by operating activities		5,732		8,756

CASH FLOWS FROM INVESTING ACTIVITIES
Real estate acquisitions		(20,010)		(36,943)
Real estate and other improvements		(4,322)		(3,040)
Acquisition of non-real estate assets		—		(75)
Investment in equity method investees		—		(705)
Distributions from equity method investees		50		—
Collections of principal on loans and financing receivables		2,107		1,577
Origination fees on notes receivable		—		60
Issuance of loans and financing receivables		—		(3,500)
Proceeds from sale of property		121,741		16,901
Net cash and cash equivalents provided by (used in) investing activities		99,566		(25,725)

CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings from mortgage notes payable		77,501		114,000
Repayments on mortgage notes payable		(94,199)		(216,941)
Proceeds from ATM offering		—		121,326
Issuance of stock		121		59
Common stock repurchased		(68,429)		—
Payment of debt issuance costs		(222)		(444)
Payment of swap fees		(291)		(401)
Redemption of Series A preferred units		(8,100)		(10,158)
Redemption of common units		(432)		—
Dividends on common stock		(9,373)		(7,867)
Shares withheld for income taxes on vesting of equity-based compensation		(38)		(186)
Distributions on Series A preferred units		(3,210)		(3,510)
Distributions to non-controlling interests in operating partnership, common		(223)		(211)
Net cash and cash equivalents (used in) financing activities		(106,895)		(4,333)

Net (decrease) in cash and cash equivalents		(1,597)		(21,302)
Cash and cash equivalents, beginning of period		7,654		30,171
Cash and cash equivalents, end of period	$	6,057	$	8,869

Cash paid during period for interest	$	16,631	$	10,217
Cash paid during period for taxes	$	—	$	—

Stockholders’ Equity

Common Stock

Non‑controlling






Additional





Interests in


Paid-in

Retained

Cumulative

Operating

Total


Shares

Par Value

Capital

Earnings

Dividends

Partnership

Equity
Balance at December 31, 2015

11,979

$
118

$
114,783

$
659

$
(7,188)

$
30,162

$
138,534

Net loss

—

—

—

(412)

—

(37)

(449)
Grant of unvested restricted stock

119

—

—

—

—

—

—
Issuance of stock under the at-the-market offering, net of costs of $81

844

10

9,224

—

—

—

9,234
Conversion of Common units to shares of common stock

1,109

11

10,450

—

—

(10,461)

—
Stock based compensation

—

—

892

—

—

—

892
Dividends and distributions accrued or paid

—

—

(2,057)

—

(5,073)

(2,232)

(9,362)
Issuance of Common units as partial consideration for asset acquisition

—

—

—

—

—

28,825

28,825
Reclassification of Common units from mezzanine equity

—

—

—

—

—

9,519

9,519
Forfeiture of unvested restricted stock

(5)

—

(3)

—

—

—

(3)
Adjustments to non-controlling interests resulting from changes in ownership of operating partnership

—

—

4,282

—

—

(4,282)

—
Balance at September 30, 2016

14,046

$
139

$
137,571

$
247

$
(12,261)

$
51,494

$
177,190

Balance at December 31, 2016

17,351

172

172,100

4,103

(14,473)

53,692

215,594

Net income

—

—

—

2,277

—

353

2,630
Grant of unvested restricted stock

205

—

—

—

—

—

—
Costs incurred related to the at-the-market offering

—

—

(119)

—

—

—

(119)
Conversion of Common units to shares of common stock

1,108

11

10,944

—

—

(10,955)

—
Stock based compensation

—

—

1,100

—

—

—

1,100
Dividends and distributions accrued or paid

—

—

—

(3,715)

(12,475)

(2,398)

(18,588)
Issuance of common stock as partial consideration for asset acquisition and business combination

14,815

148

168,835

—

—

—

168,983
Issuance of Common units as partial consideration for business combination

—

—

—

—

—

2,494

2,494
Issuance of Common units as partial consideration for asset acquisitions

—

—

—

—

—

10,035

10,035
Repurchase and cancellation of shares

(841)

(9)

(7,437)

—

—

—

(7,446)
Forfeiture of unvested restricted stock

(6)

—

(9)

—

—

—

(9)
Adjustments to non-controlling interests resulting from changes in ownership of operating partnership

—

—

(3,101)

—

—

3,101

—
Balance at September 30, 2017

32,632

$
322

$
342,313

$
2,665

$
(26,948)

$
56,322

$
374,674

See accompanying notes.

Table of Contents

Farmland Partners Inc.

Consolidated Statements of Cash Flows (continued)

For the nine months ended September 30, ~~2017~~2023 and ~~2016~~2022

(Unaudited)

(in thousands)

For the Nine Months Ended

September 30,

2017

2016
CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss)

$
2,630

$
(513)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:

Depreciation, depletion and amortization

5,651

1,102
Amortization of deferred financing fees and discounts/premiums on debt

162

219
Amortization of net origination fees related to notes receivable

(11)

(3)
Amortization of below market leases

—

(63)
Stock based compensation

1,091

889
Loss on disposition of assets

48

—
Changes in operating assets and liabilities:

Decrease (increase) in accounts receivable

2,739

(1,427)
(Increase) in interest receivable

(227)

(106)
(Increase) in other assets

(433)

(303)
Decrease (increase) in inventory

289

(129)
Increase in accrued interest

1,348

945
(Decrease) increase in accrued expenses

(14,358)

1,984
(Decrease) increase in deferred revenue

(2,028)

900
(Decrease) increase in accrued property taxes

(302)

119
Net cash (used in) provided by operating activities

(3,401)

3,614
CASH FLOWS FROM INVESTING ACTIVITIES

Real estate acquisitions, net of cash acquired

(92,680)

(122,388)
Real estate and other improvements

(17,650)

(5,011)
Principal receipts on notes receivable

—

50
Issuance of notes receivable

(3,870)

—
Net cash used in investing activities

(114,200)

(127,349)
CASH FLOWS FROM FINANCING ACTIVITIES

Borrowings from mortgage notes payable and lines of credit

101,790

200,787
Repayments on mortgage notes payable

(20,819)

(84,750)
Proceeds from ATM offering

—

9,338
Proceeds from issuance of Series B Participating Preferred Stock

144,523

—
Common stock repurchased

(7,446)

—
Payment of offering costs

(572)

(64)
Payment of debt issuance costs

(817)

(937)
Dividends on common stock

(10,535)

(4,809)
Distributions on Series A preferred units

(2,915)

—
Dividends on Series B Participating Preferred Stock

(1,082)

—
Distributions to non-controlling interests in operating partnership

(2,394)

(2,155)
Net cash provided by financing activities

199,733

117,410

NET INCREASE (DECREASE) IN CASH

82,132

(6,325)
CASH, BEGINNING OF PERIOD

47,166

23,514

CASH, END OF PERIOD

$
129,298

$
17,189
Cash paid during period for interest

$
8,491

$
6,706
Cash paid during period for taxes

$
—

$
—

SUPPLEMENTAL NON-CASH INVESTING AND FINANCING TRANSACTIONS:

Transfer of deferred offering costs to equity

$
419

$
104
Dividend payable, common stock

$
4,152

$
1,791
Distributions payable, Common units

$
730

$
724
Distributions payable, preferred units

$
2,633

$
2,057
Additions to real estate improvements included in accrued expenses

$
1,155

$
134
Financing fees included in accrued expenses

$
25

$
—
Issuance of common stock and equity from non-controlling interests in operating partnership in conjunction with acquisitions

$
181,510

$
145,826
Below market lease acquisitions

$
—

$
29
Property tax liability assumed in acquisitions

$
—

$
79
Deferred offering costs included in accrued expenses

$
—

$
24


	For the Nine Months Ended
	September 30,
	2023		2022
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING TRANSACTIONS:
Dividend payable, common stock	$	2,900	$	3,259
Dividend payable, common units	$	72	$	74
Distributions payable, Series A preferred units	$	2,228	$	2,408
Additions to real estate improvements included in accrued expenses	$	314	$	1,053
Swap fees payable included in accrued interest	$	36	$	36
Prepaid property tax liability acquired in acquisitions	$	3	$	55
Deferred offering costs amortized through equity in the period	$	—	$	107
Right-of-use assets obtained in exchange for new operating lease liabilities	$	386	$	368
Non-cash conversion of notes receivable to real estate	$	—	$	2,135

See accompanying notes.

Table of Contents

Farmland Partners Inc.

Notes to the Unaudited Financial Statements as of September 30, 2023

Note 1—Organization and Significant Accounting ~~Policies~~Policies

Organization

Farmland Partners Inc. (“FPI”), collectively with its subsidiaries, ~~(the “Company”),~~ is an internally managed real estate company that owns and seeks to acquire high-quality farmland located in agricultural markets throughout North America. ~~The Company~~FPI was incorporated in Maryland on September 27, 2013. ~~The Company~~FPI elected to be taxed as a real estate investment trust (“REIT”) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with its short taxable year ended December 31, 2014.

FPI is the sole member of the sole general partner of Farmland Partners Operating Partnership, LP (the “Operating Partnership”), which was formed in Delaware on September 27, 2013. ~~As of September 30, 2017, the Company owned a portfolio of approximately 154,164 acres which are consolidated in these financial statements.~~ All of ~~the Company’s~~FPI’s assets are held by, and its operations are primarily conducted through, the Operating Partnership and the wholly owned subsidiaries of the Operating Partnership. As of September 30, ~~2017, the Company~~2023, FPI owned ~~an 85.1%~~a 97.6% interest in the Operating ~~Partnership (see~~Partnership. See “Note 9—Stockholders’ Equity and Non-controlling Interests” for additional discussion regarding Class A Common units of limited partnership interest in the Operating Partnership (“Common units”), and Series A preferred units of limited partnership interest in the Operating Partnership (“Series A preferred units”)~~) and Series B participating preferred units of limited partnership interest in the Operating Partnership (“Series B participating preferred units”))~~. Unlike holders of ~~the Company’s~~FPI’s common stock, par value $0.01 per share (“Common stock”), holders of the Operating Partnership’s Common units and Series A preferred units generally do not have voting rights or the power to direct ~~our affairs. On August 17, 2017,~~ the ~~Company issued 6,037,500 shares~~affairs of ~~its newly designated 6.00% Series B Participating Preferred Stock, $0.01 par value per share (the “Series B Participating Preferred Stock”)~~FPI. As of September 30, 2023, the Operating Partnership owned a 9.97% equity interest in an ~~underwritten public offering. Shares of Series B Participating Preferred Stock, which represent~~unconsolidated equity ~~interests in the Company, generally have no voting rights and rank senior to the Company’s common stock with respect to dividend rights and rights upon liquidation (See~~method investment that holds 12 properties (see “Note ~~9—Stockholders’ Equity—Series B Participating Preferred Stock” for more information on the Series B Participating Preferred Stock)~~4—Related Party Transactions”).

~~The~~References to the “Company,” “we,” “us,” or “our” mean collectively FPI and its consolidated subsidiaries, including the Operating Partnership.

As of September 30, 2023, the Company ~~elected~~owned a portfolio of approximately 147,200 acres of farmland, which is consolidated in these financial statements. In addition, as of September 30, 2023, we owned land and buildings for four agriculture equipment dealerships in Ohio leased to ~~be taxed~~Ag-Pro Ohio, LLC (“Ag Pro”) under the John Deere brand and served as ~~a real estate investment trust (“REIT”), under Sections 856 through 860~~property manager for approximately 31,000 acres of ~~the Internal Revenue Code of 1986, as amended (the “Code”~~farmland (see “Note 6—Loans and Financing Receivables”)~~, commencing with its short taxable year ended December 31, 2014.~~.

On March 16, 2015, the Company formed FPI Agribusiness Inc., a wholly owned subsidiary (the “TRS” or “FPI Agribusiness”), as a taxable REIT subsidiary. ~~The TRS was formed to~~We engage directly in farming, provide property management, auction, and brokerage services and volume purchasing services to our tenants through the ~~Company’s tenants and also to operate a small scale custom farming business.~~TRS. As of September 30, ~~2017,~~2023, the TRS ~~performs these custom~~performed direct farming operations on ~~716~~2,108 acres of farmland owned by the Company ~~and~~ located in ~~Florida~~California.

All references to numbers and ~~California.~~ percent of acres within this report are unaudited.

~~AFCO Mergers~~

On February 2, 2017, the Company completed the previously announced merger with American Farmland Company (“AFCO”) at which time one of the Company’s wholly owned subsidiaries was merged with and into American Farmland Company L.P. (“AFCO OP”) with AFCO OP surviving as a wholly owned subsidiary of the Operating Partnership (the “Partnership Merger”), and AFCO merged with and into another one of our wholly owned subsidiaries with such wholly owned subsidiary surviving (the “Company Merger” and together with the Partnership Merger, the “AFCO Mergers”).

At the effective time of the Company Merger, each share of common stock of AFCO, par value $0.01 per share (“AFCO Common Stock”), issued and outstanding immediately prior to the effective time of the Company Merger (other than any shares of AFCO Common Stock owned by any wholly owned subsidiary of AFCO or by the Company or the Operating Partnership or any wholly owned subsidiary of the Company or the Operating Partnership), was automatically converted into the right to receive, subject to certain adjustments, 0.7417 shares of the Company’s common stock (the “Company Merger Consideration”). In addition, in connection with the Company Merger, each outstanding AFCO restricted stock unit that had become fully earned and vested in accordance with its terms was, at the effective time of the Company Merger, converted into the right to receive the Company Merger Consideration. The Company issued 14,763,604 shares of its common stock as consideration in the Company Merger, 17,373 shares of its common stock in respect of fully earned and vested AFCO restricted stock units, and 218,525 Common units in connection with the Partnership Merger at a share price of $11.41 per share on the date of the merger for a total consideration of $171.1 million, net of $75.0 million in assumed debt.

~~Table of Contents~~

Principles of Combination and Consolidation

The accompanying consolidated financial statements ~~for the periods ended September 30, 2017 and 2016~~ are presented on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of ~~the Company~~FPI and the Operating Partnership. All significant intercompany balances and transactions have been eliminated in consolidation.

Interim Financial Information

The information in the ~~Company’s~~accompanying consolidated financial statements of the Company as of December 31, 2022 and September 30, 2023 and for the three and nine months ended September 30, ~~2017~~2023 and ~~2016~~2022 is unaudited. The accompanying financial statements ~~for the three and nine months ended September 30, 2017 and 2016~~ include adjustments based on management’s estimates (consisting of normal and recurring accruals), which the Company considers necessary for a fair ~~statement~~presentation of the results for the periods. The financial information should be read in conjunction with the consolidated financial statements for the year ended

Table of Contents

December 31, ~~2016,~~2022, included in the Company’s Annual Report on Form 10-K, which the Company filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 23, ~~2017.~~2023. Operating results for the three and nine months ended September 30, ~~2017~~2023 are not necessarily indicative of actual operating results for the entire year ending December 31, ~~2017.~~2023.

The consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the SEC for interim financial statements. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations.

During the second quarter of 2017, the Company identified and recorded an out-of-period adjustment related to tenant reimbursement revenue that should have been recorded in the first quarter of 2017. The Company concluded that this adjustment was not material to the Company’s consolidated financial statements for the periods impacted. The adjustment was reflected as a $0.2 million increase in tenant reimbursement revenue in the consolidated statements of operations for the three and six months ended June 30, 2017 with a corresponding increase to accounts receivable in the consolidated balance sheet as of June 30, 2017.

During the third quarter of 2017, the Company identified and recorded an out-of-period adjustment related to rental revenue that should have been recorded in the first and second quarters of 2017. The Company concluded that this adjustment was not material to the consolidated financial statements for the periods impacted. The adjustment is reflected as a $0.2 million increase in rental revenue in the consolidated statements of operations for the three months ended September 30, 2017 with a $0.2 million decrease in deferred revenue in the consolidated balance sheet as of September 30, 2017.

Use of Estimates

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results ~~may~~could materially differ from ~~previously estimated amounts,~~those estimates for a variety of reasons, including, without limitation, the impacts of public health crises, the war in Ukraine, substantially higher prices for oil and ~~such differences may be material~~gas and substantially increased interest rates, and their effects on the domestic and global economies. We are unable to quantify the ultimate impact of these factors on our ~~consolidated financial statements.~~business.

~~Real Estate Acquisitions~~Significant Accounting Policies

~~When~~There have been no changes to the ~~Company acquires farmland where substantially all of~~Company’s significant accounting policies disclosed in our Annual Report on Form 10-K for the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets it is not considered a business. As such, the Company accounts for these types of acquisitions as asset acquisitions. When substantially all of the fair value of the gross assets acquired is not concentrated in a single identifiable asset or a group or similar assets and contains acquired inputs, processes and outputs, these acquisitions are accounted for as a business combination.year ended December 31, 2022.

Liquidity Policy

~~Table of Contents~~

The Company ~~considers single identifiable assets~~manages its liquidity position and expected liquidity needs taking into consideration current cash balances, undrawn availability under its lines of credit ($157.0 million as ~~tangible assets that are attached to~~of September 30, 2023), and ~~cannot be physically removed and used separately from another tangible asset without incurring significant cost or significant diminution in utility or fair value.~~reasonably expected cash receipts. The ~~Company considers similar assets as assets that have a similar nature and risk characteristics.~~

~~Whether our acquisitions are treated as an asset acquisition under ASC 360 or a~~ business ~~combination under ASC 805, the fair value~~model of the ~~purchase price is allocated among the assets acquired~~Company, and any liabilities assumed by valuing the property as if it was vacant. The “as-if-vacant” value is allocated to land, buildings, improvements, permanent plantings and any liabilities, based on management’s determination of the relative fair values of such assets and liabilities as of the date of acquisition.

~~Upon acquisition~~ of real estate investment companies in general, utilizes debt as a structural source of financing. When debt becomes due, it is generally refinanced rather than repaid using the Company’s cash flow from operations. The Company has a history of being able to refinance its debt obligations prior to maturity. Furthermore, the Company ~~allocates the purchase price~~also has a substantial portfolio of ~~the~~ real estate ~~based upon~~assets that management believes could be readily liquidated if necessary to fund any immediate liquidity needs. As of September 30, 2023, we had $420.5 million of mortgage and other debt against a portfolio of real estate assets with a net book value of $1.0 billion. As of September 30, 2023, we had capacity to issue up to $50.5 million of our common stock under our At-the-Market Equity Offering Program (the “ATM Program”). We also have an effective shelf registration statement with approximately $100 million of capacity, in addition to availability on the ATM Program, pursuant to which we could issue additional equity or debt securities. For more information on the ATM Program please see “Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”

Assets Held for Sale

The Company has determined that certain assets meet the criteria of assets held for sale in accordance with ASC Topic 360, “Property, Plant, and Equipment”. These assets are measured at the lower of (i) the carrying value and (ii) the fair value of the assets, and liabilities acquired, which historically have consisted of land, drainage improvements, irrigation improvements, groundwater, permanent plantings (bushes, shrubs, vines, and perennial crops), and grain facilities, and may also consist of intangible assets including in-place leases, above market and below market leases, and tenant relationships.less costs to sell. The Company ~~allocates the purchase price to the~~determines fair value of the tangible assets by valuing the land as if it were unimproved. The Company values improvements, including permanent plantings and grain facilities, at replacement cost, adjusted for depreciation.

Management’s estimates of land value are made using a comparable sales analysis. Factors considered by management in its analysis of land value include soil types and water availability and the sales prices of comparable farms. Management’s estimates of groundwater value are made using historical information obtained regarding the applicable aquifer. Factors considered by management in its analysis of groundwater value are related to the location of the aquifer and whether or not the aquifer is a depletable resource or a replenishing resource. If the aquifer is a replenishing resource, no value is allocated to the groundwater. The Company includes an estimate of property taxes in the purchase price allocation of acquisitions to account for the expected liability that was assumed.

~~When above or below market leases are acquired, the Company values the intangible assets~~ based on the ~~present~~three-level valuation hierarchy for fair value measurement. Effective with the designation of the ~~difference between prevailing market rates and~~assets as held for sale, the ~~in-place rates measured over a period equal to the remaining term~~Company suspended recording depreciation of the ~~lease for above market leases~~assets which resulted in an immaterial decrease in depreciation during the three and the initial term plus the term of any below market fixed rate renewal options for below market leases that are considered bargain renewal options. The above market lease values are amortized as a reduction of rental income over the remaining term of the respective leases. The fair value of acquired below market leases, included in deferred revenue on the accompanying consolidated balance sheets, is amortized as an increase to rental income on a straight-line basis over the remaining non-cancelable terms of the respective leases, plus the terms of any below market fixed rate renewal options that are considered bargain renewal options of the respective leases. As of September 30, 2016, all below market leases had been fully amortized, with amortization totaling $0.1 million recorded in the nine months ended September 30, ~~2016. There~~2023.

As of September 30, 2023, the Company had $6.3 million classified as held for sale within the accompanying consolidated balance sheets. The balance includes the value of three properties that were ~~no above market leases~~actively marketed for sale. The sale of two of the properties had closed as of the date of this report (see “Note 12—Subsequent Events”) and one is expected to close later in ~~place~~the fourth quarter of 2023. The balance of these properties consists entirely of real estate assets. For the property that is expected to close later in the fourth quarter of 2023, the Company measured the property at its fair

Table of Contents

value less expected costs to sell, resulting in an impairment of $3.8 million during the three and nine months ended September 30, ~~2017 or~~2023. The impairment charge is included in “Impairment of assets” in the ~~year ended December 31, 2016.~~

AsConsolidated Statements of ~~September 30, 2017 and 2016, the Company had $0.9 million and $0 million respectively, recorded for tenant relationship intangibles, net~~Operations. Our estimate of ~~accumulated amortization of $0.5 million and $0 million, respectively. The purchase price is allocated to in-place lease values and tenant relationships, if they are acquired,~~fair value was determined based on the Company’s evaluation of the specific characteristics of each tenant’s lease, availability of replacement tenants, probability of lease renewal, estimated down time, and its overall relationship with the tenant. The value of in-place lease intangibles and tenant relationships will be included as an intangible asset and will be amortized over the remaining lease term (including expected renewal periods of the respective leases for tenant relationships) as amortization expense. If a tenant terminates its lease prior to its stated expiration, any unamortized amounts relating to that lease, including (i) above and below market leases, (ii) in-place lease values, and (iii) tenant relationships, would be recorded to revenue or expense as appropriate.

The Company capitalizes acquisition costs and due diligence costs if the asset is expected to qualify as an asset acquisition. If the asset acquisition is abandoned, the capitalized asset acquisition costs will be expensed to acquisition and due diligence costs in the period of abandonment. Costs associated with a business combination are expensed to acquisition and due diligence costs as incurred.

~~Table of Contents~~

Total consideration for acquisitions may include a combination of cash and equity securities. When equity securities are issued, we determine the fair value of the equity securities issued based on the number of shares of common stock and Common units issued multiplied by the stock price on the date of closing in the case of common stock and Common units and by liquidation preference in the case of preferred units.

Using information available at the time of business combination, the Company allocates the total consideration to tangible assets and liabilities and identified intangible assets and liabilities. During the measurement period, which may be up to one yearproceeds from the ~~acquisition date,~~sale. For the ~~Company may adjust the preliminary purchase price allocations after obtaining more information about assets acquired~~three and ~~liabilities assumed at the date of acquisition.~~

~~Inventory~~

The costs of growing crops are accumulated until the time of harvest at the lower of cost or market value and are included in inventory in the consolidated balance sheets. Costs are allocated to growing crops based on a percentage of the total costs of production and total operating costs that are attributable to the portion of the crops that remain in inventory at the end of the period. The costs of growing crops incurred by FPI Agribusiness consist primarily of costs related to land preparation, cultivation, irrigation and fertilization. Growing crop inventory is charged to cost of products sold when the related crop is harvested and sold. The cost of harvested crop was $0.4 million and $0.2 million, respectively, for the nine months ended September 30, ~~2017 and 2016 and~~2023, these properties resulted in an aggregate operating loss of less than $0.1 million and $0.2 million, respectively, prior to impairment. The Company does not expect further losses as a result of the valuation or sale of these properties.

Accounts Receivable

Accounts receivable are presented at face value, net of the allowance for ~~the three months ended~~doubtful accounts. The allowance for doubtful accounts was less than $0.1 million as of September 30, ~~2017~~2023 and ~~2016.~~December 31, 2022. An allowance for doubtful accounts is recorded on the Consolidated Statements of Operations as a reduction to rental revenue if in relation to revenues recognized in the year, or as property operating expenses if in relation to revenue recognized in the prior years.

~~Harvested~~Inventory

Inventory consists of costs related to crops grown on farms directly operated by the TRS and is separated into growing crop inventory, ~~includes costs accumulated during both the growing and harvesting phases. Growing~~harvested crop inventory ~~includes costs accumulated during the current crop year for crops which have not been harvested. Both harvested and growing crop are stated at the lower of cost~~ or the estimated net realizable value, which is the market price, based upon the nearest market in the geographic region, less any cost of disposition. Cost of disposition includes brokers’ commissions, freight and other marketing costs. general inventory, as appropriate.

~~Other inventory, such as fertilizer and pesticides, is valued at the lower of cost or market.~~

As of September 30, ~~2017~~2023 and December 31, ~~2016, respectively,~~2022, inventory consisted of the following:



(in thousands)	September 30, 2017		December 31, 2016		September 30, 2023		December 31, 2022
Harvested crop	$	—	$	283	$	975	$	—
Growing crop		92		—		2,282		2,808
	$	92	$	283
					$	3,257	$	2,808

~~New or Revised~~Goodwill and Intangible Assets

During the three and nine months ended September 30, 2023, the Company did not incur any impairment charges related to goodwill.

The Company recorded amortization of customer relationships of less than $0.1 million for each period during the three and nine months ended September 30, 2023 and 2022.

Recently Adopted Accounting Standards

~~Adopted~~

In ~~July 2015,~~March 2020, the FASB issued ASU ~~No. 2015-11,~~ ~~Inventory~~2020-04, Reference Rate Reform (Topic ~~330)~~848), that provided practical expedients to address existing guidance on contract modifications and hedge accounting due to the expected market transition from the London Inter-bank Offered Rate (“LIBOR”) and other interbank offered rates (together, “IBORs”) to alternative reference rates, such as the Secured Overnight Financing Rate (“SOFR”). In July 2017, the Financial Conduct Authority announced it intended to stop compelling banks to submit rates for the calculation of LIBOR after 2021. We refer to this transition as “reference rate reform.”

The ~~amendments require~~first practical expedient allows companies to elect to not apply certain modification accounting requirements to debt, derivative and lease contracts affected by reference rate reform if certain criteria are met. These criteria include the following: (i) the contract referenced an IBOR rate that ~~an entity should measure inventory~~is expected to be discontinued; (ii) the modified terms directly replace or have the potential to replace the IBOR rate that is expected to be discontinued; and (iii) any contemporaneous changes to other terms that change or have the potential to change the amount and timing of contractual cash flows must be related to the replacement of the IBOR rate. If the contract meets all three criteria, there is no requirement for remeasurement of the contract at the ~~lower of cost~~modification date or net realizable value. Net realizable value is the estimated sales price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The amendments are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The amendments should be applied prospectively with earlier application permitted asreassessment of the ~~beginning~~previous hedging relationship accounting determination.

The second practical expedient allows companies to change the reference rate and other critical terms related to the reference rate reform in derivative hedge documentation without having to de-designate the hedging relationship. This allows for companies to continue applying hedge accounting to existing cash flow and net investment hedges.

Table of ~~an interim or annual reporting period. The Company has adopted this guidance as of January 1, 2017 and there has been no impact on the financial results of the Company.~~Contents

~~Not Yet Adopted~~

In ~~May 2014,~~December 2022, the FASB issued ASU ~~No. 2014-09,~~ ~~Revenue from Contracts with Customers:~~2022-06, Reference Rate Reform (Topic ~~606)(“ASU 2014-09”). ASU 2014-09 amends~~848): Deferral of the Sunset Date of Topic 848, which extends the period of time preparers can utilize the reference rate reform relief guidance in Topic 848. The objective of the guidance ~~for revenue recognition~~in Topic 848 is to ~~replace numerous, industry-specific requirements and converges areas under this topic with those~~provide relief during the temporary transition period, so the FASB included a sunset provision within Topic 848 based on expectations of when the ~~International~~London Interbank Offered Rate (LIBOR) would cease being published. In 2021, the UK Financial Reporting Standards. ASU 2014-09 implements a five-step process for customer contract revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards. The amendment also requires enhanced disclosures regardingConduct Authority (FCA) delayed the ~~nature, amount, timing and uncertainty~~

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~~of revenues and cash flows from contracts with customers. Other major provisions include the capitalization and amortization~~intended cessation date of certain ~~contract costs, ensuring~~tenors of USD LIBOR to June 30, 2023. To ensure the relief in Topic 848 covers the period of time ~~value~~during which a significant number of ~~money is considered~~modifications may take place, the ASU defers the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in ~~the transaction price,~~Topic 848.

The Company will continue to evaluate its debt, derivative and ~~allowing estimates of variable consideration~~lease contracts that are eligible for modification relief and expects to be recognized before contingencies are resolved in certain circumstances. While the Company is still completing its assessment of the impact of this guidance, it does not believe that it will have a material impact on the financial statementsapply those elections as ~~the~~needed.

Note 2—Revenue Recognition

Fixed Rent: The majority of the Company’s ~~contracts with customers relate to~~ leases that fall within the scope of ASU 2016-02 (see below). Other contract types undergoing evaluation are considered ancillary to the Company’s operations and financial statements. The amendments in this ASU are effectiveprovide for annual and interim reporting periods beginning after December 15, 2017. We are currently assessing the impact of ASU 2014-09, as amended; however, the majority of our revenue is from net-lease agreements which will be in the scope of the leasing standard as described below.

~~In February 2016, the FASB issued ASU 2016-02,~~ ~~Leases: (Topic 842) (“ASU 2016-02”),~~ which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized basedrent payments on an ~~effective interest method~~entirely or on a straight line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. While the Company is still completing its assessment of the impact of this guidance, the following is anticipated to reflect the primary effects of this guidance on the Company’s reporting:

~~(i)~~

For leases in which the Company is the lessee, the Company does not expect the guidance to have a material impact as there are only three operating leases for office space and for subleased property in Nebraska. Two of these leases have terms less than 12 months and the Company will elect not to apply the recognition requirements of ASU 2016-02. The Company will record a right-of-use asset and a lease liability for the third lease that has a term greater than 12 months, but the Company does not expect it to have a significant impact on the consolidated financial statements;

~~(ii)~~

For leases in which the Company is the lessor, the Company does not expect there to be a material impact as the majority of the Company’s leases do not contain a non-lease component. While the Company is expecting there to be other ancillary impacts for leases in which the Company is the lessor, they are not expected to be material to the consolidated financial statements. Under the new guidance lease procurement costs which were previously capitalized will be expensed as incurred. Lastly, under the new guidance, there are certain circumstances in which buyer-lessors in sale and leaseback transactions could potentially result in recording the transaction as a financial receivable if such transaction fails sale and leaseback criteria, which the Company is still evaluating.

The standard is effective for annual and interim reporting periods beginning after December 15, 2018, with modified retrospective restatement for each reporting period presented at the time of adoption. Early adoption is permitted. The Company has not yet determined whether this guidance will be early adopted.

~~In August 2016, the FASB issued ASU No. 2016-15,~~ ~~Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments~~ (“ASU 2016-15”). ASU 2016-15 is intended to reduce diversity in practice across all industries. The amendments in this update provide guidance on the following eight specific cash flow issues: 1) Debt Prepayment or Debt Extinguishment Costs; 2) Settlement of Zero-Coupon Debt Instruments or Other Debt Instruments with Coupon Interest Rates That Are Insignificant in Relation to the Effective Interest Rate of the Borrowing; 3) Contingent Consideration Payments Made after a Business Combination; 4) Proceeds from the Settlement of Insurance Claims; 5) Proceeds from the Settlement of Corporate-Owned Life Insurance Policies, including Bank-Owned Life Insurance Policies; 6) Distributions Received from Equity Method Investees; 7) Beneficial Interests in Securitization Transactions; and 8) Separately Identifiable Cash Flows and Application of the Predominance Principle. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years and retrospective

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restatement is required. Early adoption is permitted. The Company is currently evaluating the requirements of ASU 2016-15 and does not anticipate a material impact on our statement of cash flows.

~~In January 2017, the FASB issued ASU No. 2017-01,~~ ~~Business Combination (Topic 805): Clarifying the definition of a business~~ (“ASU 2017-01”). ASU 2017-01 is intended to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of businesses. The Company has determined that with the adoption of this guidance some acquisitions that were deemed business combinations will be deemed asset acquisitions and costs associated with these asset acquisitions will be capitalized to the acquisition rather than being expensed. ASU 2017-01 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. The Company has adopted this guidance as of January 1, 2017. The Company expects the vast majority of its acquisitions to be deemed asset acquisitions under this new guidance.

~~Note 2—Revenue Recognition~~

partially fixed basis. For the majority of its fixed farm rent leases, the Company receives at least 50% of the annual lease payment from tenants ~~either~~before crops are planted, generally during the first quarter of the year, ~~or at the time of acquisition of the related farm,~~ with the ~~remainder~~remaining 50% of the lease payment ~~generally secured by growing or harvested crops,~~ due in the second half of the ~~year. The rental~~year generally after the crops are harvested. Rental income ~~received~~ is recorded on a straight-line basis over the lease term. This means that rental income is equal in all periods of the lease, calculated by adding all expected lease payments (including increases within the lease) and dividing by the number of periods, despite the cash rents being received in lump sums at the specific times as described above. The lease term generally ~~includes~~considers periods when a tenant: (1) may not terminate its lease obligation early; (2) may terminate its lease obligation early in exchange for a fee or penalty that the Company considers material enough such that termination would not be probable; (3) possesses renewal rights and the tenant’s failure to exercise such rights imposes a penalty on the tenant material enough such that renewal appears reasonably assured; or (4) possesses bargain renewal options for such periods. Payments received in advance are included in deferred revenue until they are earned.

Variable Rent:Certain of the Company’s leases provide for a rent payment determined as a percentage of the gross farm ~~proceeds.~~proceeds in their entirety or above a certain threshold. Revenue under leases providing for ~~a payment equal to a percentage of the gross farm proceeds are~~variable rent may be recorded at the guaranteed crop insurance minimums and recognized ratably over the lease term during the crop year. Upon notification from the grain or packing facility that a future contract for delivery of the harvest has been finalized or when the tenant has notified the Company of the total amount of gross farm proceeds, revenue is recognized for the excess of the actual gross farm proceeds and the previously recognized minimum guaranteed insurance.

~~Most~~Fixed Rent and Variable Rent: Certain of ~~our farming~~the Company’s leases ~~range from two to three years~~provide for ~~row crops and one to seven years for permanent crops. Leases in place as of September 30, 2017~~a minimum fixed rent plus variable rent based on gross farm revenue.

The Company’s leases generally have terms ranging from one to ~~25 years.~~three years, with some extending up to 40 years (e.g., renewable energy leases). Payments received in advance are included in deferred revenue until they are earned. As of September 30, ~~2017~~2023 and December 31, ~~2016,~~2022, the Company had ~~$3.9~~less than $0.1 million ~~and $1.0 million, respectively,~~for each period in deferred revenue.

The following sets forth a summary of rental income recognized ~~for~~during the three and nine months ended September 30, ~~2017~~2023 and ~~2016:~~2022:

Rental income recognized

For the three months ended

For the nine months ended

September 30,

September 30,
(in thousands)

2017

2016

2017


2016
Leases in effect at the beginning of the year

$
3,187

$
3,098

$
9,348

$
9,760
Leases entered into during the year(1)

7,920

3,066

19,033

6,702

$
11,107

$
6,164

$
28,381

$
16,462

~~(1)~~

~~Includes all leases resulting from acquisitions completed during the period including those leases acquired as a result of the AFCO mergers.~~


	Rental income recognized
		For the three months ended				For the nine months ended
		September 30,				September 30,
(in thousands)		2023		2022		2023			2022
Leases in effect at the beginning of the year		$	8,709	$	7,008	$	27,153	$	22,558
Leases entered into during the year			723		2,073		1,357		5,265
		$	9,432	$	9,081	$	28,510	$	27,823

1213

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Future minimum ~~lease~~fixed rent payments from tenants under all non-cancelable leases in place as of September 30, ~~2017,~~2023, including lease advances when contractually due, but excluding crop share and tenant reimbursement of expenses, for the remainder of ~~2017~~2023 and each of the next four years and thereafter as of September 30, ~~2017~~2023 are as follows:

(in thousands)

Future rental

Year Ending December 31,

payments

2017 (remaining three months)

$
9,456

2018

26,559

2019

19,704

2020

7,548

2021

3,263

Thereafter

4,122

$
70,652


(in thousands)	Future rental
Year Ending December 31,	payments
2023 (remaining three months)	$	8,842
2024		32,184
2025		20,069
2026		13,313
2027		8,892
Thereafter		35,876
	$	119,176

Since lease renewal periods are exercisable at the option of the lessee, the preceding table presents future minimum lease payments due during the initial lease term only.

~~The~~Tenant Reimbursements: Certain of the Company’s leases provide for tenants to reimburse the Company for property taxes and other expenses. Tenant reimbursements are recognized on a straight-line basis each year over the applicable term of the lease.

Crop Sales: For farms directly operated through the TRS, the Company records revenue from the sale of harvested crops when the harvested crop has been contracted to be delivered to a grain or packing facility and title has transferred. During the three months ended September 30, 2023 and 2022, revenues from the sale of harvested crops recognized were $0.8 million and $2.5 million, respectively. Revenues from the sale of harvested crops ~~totaling $0.6 million~~ ~~and $0.8 million~~ ~~were~~ recognized for the nine months ended September 30, ~~2017~~2023 and ~~2016,~~2022 were $1.7 million and $4.3 million, respectively. The cost of harvested crops sold was $0.7 million and $1.7 million, respectively, ~~and $0.2 million~~ ~~and $0.6 million being recognized~~ during the three months ended September 30, ~~2017~~2023 and ~~2016,~~2022. During the nine months ended September 30, 2023 and 2022, the cost of harvested crops sold was $2.6 million and $4.4 million, respectively. Harvested crops delivered under marketing contracts are recorded using the fixed price of the marketing contract at the time of delivery to a grain or packing facility. Harvested crops delivered without a marketing contract are recorded using the market price at the date the harvested crop is delivered to the grain or packing facility and title has transferred.

Other Revenue: Other revenue includes crop insurance proceeds, auction fees, brokerage fees, interest income, and property management income. Crop insurance proceeds are recognized when the amount is determinable and collectible. Crop insurance proceeds are generally received in lieu of crop sales on farms directly operated through the TRS. The Company generates auction revenue by contracting with a real estate owner to market and auction farm property. Successful bidders sign a purchase agreement immediately following the auction. Auction fee revenue is recognized upon completion of the auction. The Company generates real estate brokerage commissions by acting as a broker for real estate investors or owners seeking to buy or sell farm property. Revenue from brokerage fees is recognized upon completion of the transaction. Property management revenue is recognized over the term of the contract as services are being provided. The Company collects property management fees in advance of the commencement of property management activities on behalf of third parties and includes them in deferred revenue until they are earned over the life of the contract. Interest income is recognized on loans and financing receivables on an accrual basis over the life of the loans. Direct origination costs are netted against loan origination fees and are amortized over the life of the note using the straight-line method, which approximates the effective interest method, as an adjustment to interest income which is included as a component of other revenue in the Company’s Consolidated Statements of Operations for the three and nine months ended September 30, 2023 and 2022.

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The following table presents other revenue that is disaggregated by revenue source for the three and nine months ended September 30, 2023 and 2022:


	For the three months ended				For the nine months ended
	September 30,				September 30,
(in thousands)	2023		2022		2023			2022
Auction and brokerage fees	$	46	$	401	$	550	$	1,852
Crop insurance proceeds		—		—		624		1,925
Property management income		234		174		656		497
Other (e.g., interest income)		386		130		1,271		504
	$	666	$	705	$	3,101	$	4,778

Note 3—Concentration Risk

Credit Risk

For the three and nine months ended September 30, ~~2017,~~2023, the Company had ~~one~~no significant ~~tenant~~tenants representing a tenant concentration ~~as presented~~of 10% or greater of period revenue. Revenue for the three and nine months ended September 30, 2023 is not necessarily indicative of actual revenue for the entire year ending December 31, 2023. The Company receives a significant portion of its variable rental payments in the ~~table below.~~fourth quarter of each year, typically resulting in at least one tenant concentration of 10% or greater revenue in that quarter and for the year. If ~~the Company’s~~a significant tenant fails to make rental payments to the Company or elects to terminate its leases, and the land cannot be re-leased on satisfactory terms, there ~~could~~may be a material adverse effect on the Company’s financial performance and the Company’s ability to continue operations. Rental income received is recorded on a straight-line basis over the applicable lease term. The following table presents the amount of the rental income and percentage of the Company’s total rental income received from the Company’s significant tenant.performance.

Rental income recognized

Rental income recognized

For the three months ended September 30,

For the nine months ended September 30,
($ in thousands)

2017

2016


2017

2016

Tenant A(1)

$
2,091

18.8
%
$
—

—
%

$
4,071

14.3
%
$
—

—
%

~~(1)~~

~~Tenant A is a tenant who is currently leasing a number of permanent crop farms in California~~.

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Geographic Risk

The following table summarizes the percentage of approximate total acres owned as of September 30, ~~2017~~2023 and ~~2016~~2022, and the ~~percentage of rental income~~fixed and variable rent recorded by the Company for the three and nine months ended September 30, ~~2017~~2023 and ~~2016~~2022 by ~~region:~~location of the farm:

Approximate %

Rental Income(1)

of total acres

For the three months ended

For the nine months ended

As of September 30,

September 30,

September 30,
Location of Farm(2)

2017

2016

2017

2016

2017

2016

Corn belt

30.8
%
29.3
%

33.7
%
40.2
%

35.5
%
37.5
%
Delta and South

18.8
%
21.8
%

9.3
%
11.4
%

10.0
%
11.7
%
High Plains

20.4
%
24.1
%

8.6
%
15.8
%

9.3
%
15.6
%
Southeast

25.8
%
24.8
%

18.3
%
32.6
%

21.2
%
35.2
%
West Coast

4.2
%
—
%

30.1
%
—
%

24.0
%
—
%

100.0
%
100.0
%

100.0
%
100.0
%

100.0
%
100.0
%


	Approximate %				Rental Income ⁽¹⁾
	of total acres				For the three months ended				For the nine months ended
	As of September 30,				September 30,				September 30,
Location of Farm ⁽²⁾	2023		2022		2023		2022		2023		2022
Corn Belt	30.9	%	29.1	%	32.1	%	44.7	%	43.9	%	41.4	%
Delta and South	22.9	%	20.4	%	16.4	%	13.4	%	14.1	%	14.8	%
High Plains	16.4	%	18.1	%	13.7	%	9.8	%	10.9	%	9.3	%
Southeast	22.2	%	25.1	%	22.5	%	23.4	%	23.0	%	23.3	%
West Coast	7.6	%	7.3	%	15.3	%	8.7	%	8.1	%	11.2	%
	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

⁽¹⁾

~~(1)~~

Due to regional disparities in the use of leases with ~~crop share components~~variable rent and seasonal variations in the recognition of ~~crop share~~variable rent revenue, regional comparisons by rental income are not fully representative of each ~~region's income producing~~region’s income-producing capacity until a full year is taken into account.

⁽²⁾

~~(2)~~

Corn Belt includes farms located in Illinois, Indiana, Iowa, Michigan, Missouri and eastern Nebraska. Delta and South includes farms located in Arkansas, Louisiana, ~~and~~ Mississippi. High Plains includes farms located in Colorado, Kansas, western Nebraska, and Texas. Southeast includes farms located in Alabama, Florida, Georgia, North Carolina, South Carolina and Virginia. West Coast includes farms located in California.

Note 4—Related Party Transactions

On July 21, 2015, the Company entered into a lease agreement with American Agriculture Aviation LLC (“American Ag Aviation”) for the use of a private plane. American Ag Aviation is a Colorado limited liability company that is owned 100% by ~~Mr. Pittman.~~Paul A. Pittman, the Company’s Executive Chairman. The private plane was generally utilized when commercial air travel was not readily available or practical to and from a particular location. The Company ~~incurred~~paid costs of ~~$0.16~~$0.00 million and ~~$0.14~~$0.02 million during the three months ended September 30, 2023 and 2022, respectively, and $0.02 million and $0.09 million during the nine months ended September 30, ~~2017~~2023 and ~~2016 and $0.02 million and $0.05 million,~~2022, respectively, ~~during the three months ended September 30, 2017 and 2016 from~~to American Ag Aviation for use of the aircraft in accordance with the lease agreement. These costs were recognized based on the nature of the associated use of the aircraft consistently with other travel expenses, as follows: (i) general and administrative - expensed as general and administrative expenses within the Company’s consolidated statements of operations; (ii) land acquisition (accounted for

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as an asset acquisition) - allocated to the acquired real estate assets within the Company’s consolidated balance sheets; and (iii) land acquisition (accounted for as a business combination) - expensed as acquisition and due diligence costs within the Company’s consolidated statements of operations. In August 2023, due to American Ag Aviation’s planned disposition of its private plane, the Company does not expect to incur any further costs with American Ag Aviation after September 30, 2023.

On January 20, 2021, the Company entered into property sale and long-term management agreements with the OZ Fund. The OZ Fund is a Delaware limited liability company whose manager is the brother of Thomas P. Heneghan, one of the Company's independent directors. Mr. Heneghan has an indirect investment in the OZ Fund. As of September 30, 2023 and December 31, 2022, the Company had a 9.97% interest for both periods in the OZ Fund. The aggregate balance of the Company’s equity method investment in the OZ Fund was approximately $4.1 million and $4.2 million as of September 30, 2023 and December 31, 2022, respectively, including aggregate capital contributions of $1.7 million, for both periods, and aggregate distributions of $0.0 million and less than $0.1 million, respectively, from inception of the joint venture through September 30, 2023 and December 31, 2022. The Company’s capital contributions are capped at $20.0 million. Under the terms of the long-term management agreement, the Company earns a quarterly management fee equal to (i) 0.2125% times gross book value per quarter of the gross book value under $50 million and (ii) 0.2000% times gross book value per quarter of the gross book value in excess of $50 million and under $100 million and (iii) 0.1875% times gross book value per quarter of gross book value in excess of $100 million. The Company earned management fees of $0.1 million for each of period during the three months ended September 30, 2023 and 2022 and $0.4 million and $0.3 million during the nine months ended September 30, 2023 and 2022, respectively.

Note 5—Real Estate

During the nine months ended September 30, ~~2017,~~2023, the Company completed 15 acquisitions ~~which~~of three properties in the Corn Belt and Delta and South region. Aggregate consideration for these acquisitions totaled $20.0 million. No intangible assets were ~~accounted~~acquired through this acquisition.

During the nine months ended September 30, 2022, the Company completed twelve acquisitions, consisting of twelve properties in the Corn Belt region. Aggregate consideration for ~~as asset~~these acquisitions ~~in Illinois, South Carolina, South Dakota, Arkansas, Michigan, Georgia, Kansas, California, and Colorado. Consideration~~ totaled ~~$111.6 million and was comprised of cash, shares of common stock and Common units.~~$36.9 million. No intangible assets were acquired through these acquisitions.

The estimated fair values for the assets acquired and the liabilities assumed are preliminary and are subject to change as additional information related to the fair value of the assets and liabilities becomes available. Subsequent adjustments to the preliminary purchase price allocation are not expected to have a material impact to the Company's consolidated financial statements. The following outlines the impact of the completion of the AFCO Mergers accounted for as a business combination as of September 30, 2017:

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($ in thousands)

Land, at cost
$
181,072
Irrigation improvements

26,155
Permanent plantings

48,513
Buildings

1,499
In-place leases(1)

1,139
Lease origination costs

264
Cash

3,832
Other assets

1,831
Inventory

99
Deferred revenue

(4,434)
Other liabilities

(13,826)
Gross Total Consideration

246,144
Mortgage notes and bonds payable, net

(75,000)
Total Consideration
$
171,144

~~(1)~~

~~Weighted average amortization period of the in-place lease liability is 3 years.~~

During the period the Company recorded a measurement period adjustment in relation to property tax accruals in the amount of $0.6 million recognized in other liabilities. As the amount was recovered through tenant reimbursements, the Company also increased the other assets category by $0.6 million.

The Company also recorded a measurement period adjustment in relation to deferred revenue associated with acquired leases in the amount of $1.1 million with a corresponding change in land of $0.8 million, irrigation improvements of $0.1 million and permanent plantings of $0.2 million. The statement of operations impact of this adjustment is immaterial to the three months ended September 30, 2017.

The Company has included the results of operations for the acquired real estate in the consolidated statements of operations from the dates of acquisition. The real estate acquired in business combinations during the nine months ended September 30, 2017 contributed $10.1 million to total revenue and $2.4 million to net income.

The pro forma information presented below does not purport to represent what the actual results of operations of the Company would have been had the business combination outlined above occurred as of the beginning of the periods presented, nor does it purport to predict the results of operations of future periods. The pro forma information is presented below as if the real estate acquired in the business combination during the nine months ended September 30, 2017 had been acquired as of January 1, 2016.

For the three months ended

For the nine months ended
($ in thousands)

September 30,

September 30,
Proforma

2017

2016

2017

2016
Revenue

$
12,046

$
6,946

$
30,655

$
17,669
Pro forma estimate(1)

-

4,146

993

11,244
Total operating revenue

$
12,046

$
11,092

$
31,648

$
28,913

Net income (loss)

$
2,610

$
100

$
2,630

$
(513)
Pro forma estimate

-

431

(367)

2,141
Total net income

$
2,610

$
531

$
2,263

$
1,628

Net income (loss) available to common stockholders of Farmland Partners Inc.

$
221

$
(467)

$
(1,935)

$
(869)

Earnings per share basic and diluted

Income (loss) per basic share attributable to common stockholders

$
0.01

$
(0.02)

$
(0.06)

$
(0.03)
Income (loss) per diluted share attributable to common stockholders

$
0.01

$
(0.02)

$
(0.06)

$
(0.03)
Weighted-average number of common shares - basic

32,862

28,447

32,374

27,427
Weighted-average number of common shares - diluted

32,862

28,447

32,374

27,427

~~(1)~~

Represents a linear extrapolation of revenues over the three and nine months ended September 30, 2017 and 2016 and therefore does not take into account the irregularity of certain of the Company's revenue components, such as crop share lease payments.

~~Table of Contents~~

During the nine months ended September 30, ~~2016,~~2023, the Company completed ~~16 acquisitions which were accounted~~dispositions of 54 properties in the Corn Belt, Delta and South, High Plains, Southeast and West Coast regions. The Company received cash consideration for ~~as asset acquisitions in Georgia, South Carolina, Texas, Illinois, and Louisiana. Consideration totaled $261.1~~these dispositions totaling $121.7 million and ~~was comprised~~recognized an aggregate gain on sale of ~~cash, Common units, and Series A preferred units. No intangible assets were acquired through these acquisitions.~~$23.2 million.

The following outlines the fair value allocation of the assets and liabilities acquired as a result of the completion of six acquisitions in Michigan, Mississippi, Texas, Illinois, Colorado and Georgia which were accounted for as business combinations as of September 30, 2016:

($ in thousands)

Land, at cost

$
7,170
Groundwater

634
Irrigation improvements

518
Permanent plantings

763
Below market lease

(29)
Total Consideration

$
9,056

~~Prudential Termination Agreement~~

On February 18, 2017, the Company entered into a Termination Agreement (the “Termination Agreement”) with Prudential Capital Mortgage Company (the “Prudential Sub-Advisor”) pursuant to which the Company and the Prudential Sub-Advisor agreed to terminate, effective as of March 31, 2017, the Amended and Restated Sub-Advisory Agreement (the “Sub-Advisory Agreement”), dated as of October 23, 2015, by and among American Farmland Company, American Farmland Advisors, American Farmland Company L.P. and Prudential and certain related property management agreements (together with the Sub-Advisory Agreement, the “Prudential Agreements”).

The Termination Agreement provided that, as of March 31, 2017, Prudential no longer provides services to the Company under the Prudential Agreements. The Company paid the Prudential Sub-Advisor $1.6 million in cash, which is equal to the fee that would have been owed to Prudential for services through the quarter ended March 31, 2017, plus a termination fee of approximately $0.2 million. The statement of operations impact to the Company forDuring the nine months ended September 30, ~~2017 totaled $0.7 million, which is included in property operating expenses, with~~2022, the ~~remaining $0.9 million being included~~Company completed five dispositions consisting of five properties in the ~~accruals as a component~~Corn Belt, High Plains and Southeast regions. The Company received cash consideration for these dispositions totaling $16.9 million and recognized an aggregate gain on sale of $3.9 million.

During the ~~purchase accounting surrounding the AFCO Mergers as this represented the costs incurred by AFCO prior to the AFCO Mergers.~~

~~Note 6—Notes Receivable~~

~~In August 2015,~~three and nine months ended September 30, 2023 and 2022, the Company ~~introduced~~incurred an immaterial amount of costs related to acquisition and due diligence.

Note 6—Loans and Financing Receivables

The Company offers an agricultural lending product ~~aimed at~~focused on farmers as a complement to the ~~Company's~~Company’s business of acquiring and owning farmland and leasing it to ~~farmers (the “FPI Loan Program”).~~farmers. Under the FPI Loan Program, the Company makes loans to third-party farmers (both tenant and non-tenant) to provide financing for property acquisitions, working capital requirements, ~~and~~ operational farming activities, farming infrastructure projects and for other farming and agricultural real estate related projects. The Company seeks to make loans that are collateralized by farm real estate or growing crops and in principal amounts of ~~$100,000~~$1.0 million or more at fixed interest rates with maturities of up to six years. The Company expects the borrower to repay the loans in accordance with the loan agreements based on farming operations and access to other forms of capital, as permitted.

~~Notes receivable~~In addition to loans made under the FPI Loan Program, the Company, on certain occasions, makes short-term loans to tenants secured by collateral other than real estate, such as growing crops, equipment or inventory, when the Company

Table of Contents

believes such loans will ensure the orderly completion of farming operations on a property owned by the Company for a given crop year and other credit is not available to the borrower.

On November 18, 2022, the Company acquired land and buildings for four agriculture equipment dealerships in Ohio leased to Ag Pro (the seller), under the John Deere brand. In accordance with ASC Topic 842, control is not considered to have transferred to the Company under GAAP and these transactions are accounted for as financing arrangements under ASC 310 “Receivables” rather than as investments in real estate subject to operating leases. The leases mature in November 2037 and contain renewal options for periods up to 20 years from the original maturity date. The discount rate used for the transactions was 6.15%.

As of September 30, 2023 and December 31, 2022, the Company held the following loans and financing receivables:


($ in thousands)		Outstanding as of				Maturity
Loan	Terms	September 30, 2023		December 31, 2022		Date
Loans under FPI Loan Program:
Mortgage Note ⁽¹⁾	Principal & interest due at maturity	$	210	$	217	12/7/2028
Mortgage Note ⁽²⁾	Principal due at maturity & interest due semi-annually		—		2,100	8/18/2023
Mortgage Note ⁽³⁾	Principal due at maturity & interest due quarterly		2,500		2,500	3/3/2025
Total outstanding principal			2,710		4,817
Sale-leaseback transactions accounted for as financing arrangements:
Financing Receivable, net ⁽⁴⁾	Monthly payments in accordance with lease agreement		5,913		5,894	11/17/2037
Financing Receivable, net ⁽⁴⁾	Monthly payments in accordance with lease agreement		4,498		4,498	11/17/2037
Financing Receivable, net ⁽⁴⁾	Monthly payments in accordance with lease agreement		3,562		3,561	11/17/2037
Financing Receivable, net ⁽⁴⁾	Monthly payments in accordance with lease agreement		3,238		3,241	11/17/2037
Total financing receivable			17,211		17,194
Interest receivable (net prepaid interest and points)			52		2
Allowance for credit losses			(92)		(92)
Provision for interest receivable			—		—
Total Loans and financing receivables, net		$	19,881	$	21,921

(1)

The original note was renegotiated and a second note was entered into simultaneously with the borrower during the three months ended March 31, 2017. The note is secured against farmland properties.

(2)

On August 18, 2021, the Company entered into a loan secured against farmland. The loan was repaid in full in September 2023.

(3)

On March 3, 2022, the Company entered into two loans with the same party secured against farmland.

(4)

On November 18, 2022, the Company acquired land and buildings for four agriculture equipment dealerships in Ohio, accounted for as financing transactions. The leases may be extended beyond the stated maturity date, for up to an additional 20 years, at the option of the tenant.

Loans and financing receivables are stated at their unpaid principal balance and include unamortized direct origination costs and accrued interest through the reporting date, less any allowance for losses and unearned borrower paid points.

~~Table~~The Company monitors its receivables based upon historical collection experience, collateral values, current trends, long-term probability of ~~Contents~~

Asdefault (“PD”) and estimated loss given default (“LGD”). Accrued interest write-offs are recognized as credit loss expense. The Company has estimated its credit losses in accordance with ASC 326 to be zero on its loan balances and approximately $0.1 million of allowance for credit losses on its financing receivables as of September 30, ~~2017~~2023 and December 31, ~~2016,~~2022. The Company recorded no credit loss expense related to interest receivables during the ~~Company had~~three and nine months ended September 30, 2023 and 2022, respectively. There were no charge-offs or recoveries for the three and nine months ended September 30, 2023 and 2022. In addition, as of September 30, 2023, all payments under loans and financing receivables have been received in accordance with the agreements.

Table of Contents

The following ~~notes receivable:~~tables detail the allowance for credit losses as of September 30, 2023 and December 31, 2022:

($ in thousands)

Principal Outstanding as of

Maturity
Loan

Payment Terms

September 30, 2017

December 31, 2016

Date
Mortgage Note(1)

Principal & interest due at maturity

$
1,800

$
1,800

1/15/2017
Mortgage Note (2)

Principal & interest due at maturity

240

980

3/16/2022
Mortgage Note (2)

Principal due at maturity & interest due monthly

2,194

-

3/16/2022
Mortgage Note

Principal & interest due at maturity

1,647

-

4/27/2018
Mortgage Note

Principal & interest due at maturity

100

-

1/31/2018
Mortgage Note

Principal due at maturity & interest paid in advance

669

-

2/15/2018
Total outstanding principal

6,650

2,780

Points paid, net of direct issuance costs

(10)

(4)

Interest receivable (net prepaid interest)

311

67

Total notes and interest receivable

$
6,951

$
2,843

~~(1)~~

In January 2016, the maturity date of the note was extended to January 15, 2017 with year one interest received at the time of the extension and principal and remaining interest due at maturity. On July 28, 2017 the Company notified the borrower of default under the Promissory Note. The Company currently believes that collectability is reasonably assured.

~~(2)~~

The original note was renegotiated and a second note was entered into simultaneously with the borrower during the three months ended March 31, 2017. The notes include mortgages on two additional properties in Colorado that include repurchase options for the properties at a fixed price that are exercisable between the second and fifth anniversary of the notes by the borrower.


	September 30, 2023
($ in thousands)	Amortized Cost		Allowance		Loans and financing receivables, net		Allowance as a % of Amortized Cost
Loans under FPI Loan Program	$	2,762	$	—	$	2,762		—	%
Financing Receivables		17,211		(92)		17,119		0.53	%
Totals	$	19,973	$	(92)	$	19,881		0.46	%


	December 31, 2022
($ in thousands)	Amortized Cost		Allowance		Loans and financing receivables, net		Allowance as a % of Amortized Cost
Loans under FPI Loan Program	$	4,819	$	—	$	4,819		—	%
Financing Receivables		17,194		(92)		17,102		0.54	%
Totals	$	22,013	$	(92)	$	21,921		0.42	%

The following chart reflects the roll-forward of the allowance for credit losses for our loans and financing receivables for the nine months ended September 30, 2023 and 2022:


	Nine months ended September 30,
($ in thousands)	2023		2022
Balance at beginning of year	$	(92)	$	—
Initial allowance for financing receivables		—		—
Current period change in credit allowance		—		—
Charge-offs		—		—
Recoveries		—		—
Balance at end of year	$	(92)	$	—

The collateral for the mortgage notes receivable consists of real estate and ~~improvements present on such real estate.~~personal property.

~~Fair Value~~

~~FASB ASC 820-10 establishes a three-level hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon~~We estimate the ~~transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows:~~

~~Level 1—Inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.~~

~~Level 2~~—Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets and inputs that are observable or can be substantially corroborated for the asset or liability, either directly or indirectly.

~~Level 3—Inputs to the valuation methodology are unobservable, supported by little or no market activity and are significant to the fair value measurement.~~

~~The~~ fair value of ~~notes receivable is valued~~loans and financing receivables using Level 3 inputs under the hierarchy established by ~~GAAP and~~GAAP. Fair value is ~~calculated based on a discounted~~estimated by discounting cash ~~flow analysis,~~flows using interest rates based on management’s estimates of market interest rates on ~~mortgage notes~~loans receivable with comparable terms and credit risk whenever the interest rates on the ~~notes~~loans receivable are deemed not to be at market rates. The fair value for financing receivables does not take into consideration any residual value upon the end of the lease term. As of September 30, ~~2017~~2023 and December 31, ~~2016,~~2022, the fair value of the ~~notes receivable~~loans and financing receivables was ~~$6.7~~$12.9 million and ~~$2.8~~$19.6 million, respectively.

1718

Table of Contents

Note 7—Mortgage Notes, Lines of Credit and Bonds Payable

As of September 30, ~~2017~~2023 and December 31, ~~2016,~~2022, the Company had the following indebtedness outstanding:‌


										Book
		Annual								Value of
($ in thousands)		Interest			Principal					Collateral
		Rate as of		Next	Outstanding as of					as of
	Interest	September 30,	Interest Rate	Adjustment	September 30,		December 31,		Maturity	September 30,
Loan	Payment Terms	2023	Terms	Date	2023		2022		Date	2023
Farmer Mac Bond #6	Semi-annual	3.69%	Fixed	N/A	$	13,827	$	13,827	April 2025	$	19,461
Farmer Mac Bond #7	Semi-annual	3.68%	Fixed	N/A		11,160		11,160	April 2025		8,258
Farmer Mac Facility	Monthly	6.83%	SOFR + 1.50%	N/A		75,000		75,000	December 2025		93,757
MetLife Term Loan #1	Semi-annual	5.55%	Fixed for 3 years	N/A		72,623		72,623	March 2026		102,346
MetLife Term Loan #4	Semi-annual	5.55%	Fixed for 3 years	March 2026		9,413		9,880	June 2026		16,152
MetLife Term Loan #5	Semi-annual	5.63%	Fixed for 3 years	January 2026		5,179		5,179	January 2027		7,383
MetLife Term Loan #6	Semi-annual	5.55%	Fixed for 3 years	February 2026		21,726		21,726	February 2027		25,711
MetLife Term Loan #7	Semi-annual	5.87%	Fixed for 3 years	June 2026		15,434		15,699	June 2027		29,322
MetLife Term Loan #8	Semi-annual	4.12%	Fixed for 10 years	December 2027		44,000		44,000	December 2042		110,042
MetLife Term Loan #9	Semi-annual	3.20%	Fixed for 3 years	May 2024		16,800		16,800	May 2028		33,617
MetLife Term Loan #10	Semi-annual	3.00%	Fixed for 3 years	October 2023 ⁽³⁾		48,986		48,985	October 2030		99,709
MetLife Term Loan #11	Semi-annual	2.85%	Fixed for 3 years	October 2024		12,750		12,750	October 2031		27,497
MetLife Term Loan #12	Semi-annual	3.11%	Fixed for 3 years	December 2024		14,359		14,359	December 2031		28,941
MetLife Facility	Quarterly	7.35%	SOFR + 2.10%	N/A		—		—	October 2027		112,240
Rabobank ⁽¹⁾	Semi-annual	7.15%	SOFR + 1.81%	March 2024 ⁽²⁾		45,533		59,500	March 2028		95,610
Rutledge Facility	Quarterly	7.05%	SOFR + 1.80%	April 2024 ⁽²⁾		16,000		18,000	March 2027		198,104
Total outstanding principal						422,790		439,488		$	1,008,150
Debt issuance costs						(2,326)		(2,613)
Unamortized premium						—		—
Total mortgage notes and bonds payable, net					$	420,464	$	436,875

(1)

The Company has an interest rate swap agreement with Rabobank for $33.2 million notional of fixed SOFR at 2.114% until March 2026 for a weighted average rate of approximately 4.7% (see “Note 10—Hedge Accounting”). After adjusting the $33.2 million of swapped Rabobank debt as fixed rate debt, the ratio of floating rate debt to total debt decreased from 32.3% to 24.4%.

(2)	The adjustment date included in the table above is for the spread noted under “Interest Rate Terms.”

(3)	Effective October 1, 2023, MetLife Term Loan #10 was repriced to 6.36%.

Farmer Mac Debt

Book

Annual

Value of
($ in thousands)

Interest

Principal

Collateral

Rate as of

Outstanding as of

as of

September 30,

September 30,

December 31,

Maturity

September 30,
Loan

Payment Terms

Interest Rate Terms

2017

2017

2016

Date

2017
Farmer Mac Bond #1 (1)

Semi-annual interest only

2.40%

2.40%

$
—

$
20,700

September 2017

$
—
Farmer Mac Bond #2 (2)

Semi-annual interest only

2.35%

2.35%

5,460

5,460

October 2017

9,557
Farmer Mac Bond #3

Semi-annual interest only

2.50%

2.50%

10,680

10,680

November 2017

11,487
Farmer Mac Bond #4

Semi-annual interest only

2.50%

2.50%

13,400

13,400

December 2017

23,588
Farmer Mac Bond #5

Semi-annual interest only

2.56%

2.56%

30,860

30,860

December 2017

61,104
Farmer Mac Bond #6

Semi-annual interest only

3.69%

3.69%

14,915

14,915

April 2025

21,609
Farmer Mac Bond #7

Semi-annual interest only

3.68%

3.68%

11,160

11,160

April 2025

18,441
Farmer Mac Bond #8A

Semi-annual interest only

3.20%

3.20%

41,700

41,700

June 2020

80,929
Farmer Mac Bond #9

Semi-annual interest only

3.35%

3.35%

6,600

6,600

July 2020

7,711

MetLife Term Loan #1(3)

Semi-annual interest only

3.48% adjusted every three years

3.48%

90,000

90,000

March 2026

198,345
MetLife Term Loan #2

Semi-annual interest only

2.66% adjusted every three years

2.66%

16,000

16,000

March 2026

31,677
MetLife Term Loan #3

Semi-annual interest only

2.66% adjusted every three years

2.66%

21,000

21,000

March 2026

27,654
MetLife Term Loan #4(3)

Semi-annual interest only

3.48% adjusted every three years

3.48%

15,685

15,685

June 2026

30,624
MetLife Term Loan #5

Semi-annual interest only

3.26% adjusted every three years

3.26%

8,379

—

January 2027

16,761
MetLife Term Loan #6

Semi-annual interest only

3.21% adjusted every three years

3.21%

27,159

—

February 2027

55,526
MetLife Term Loan #7

Semi-annual interest only

3.45% adjusted every three years

3.45%

21,253

—

June 2027

48,307
Farm Credit of Central Florida

(4)

LIBOR + 2.6875% adjusted monthly

3.92%

5,102

5,102

September 2023

9,688
Prudential

(5)

3.20%

3.20%

6,481

6,600

July 2019

11,643
Rutledge Note Payable #1

Quarterly interest only

3 month LIBOR + 1.3% adjusted quarterly

2.60%

25,000

—

January 2022

46,022
Rutledge Note Payable #2

Quarterly interest only

3 month LIBOR + 1.3% adjusted quarterly

2.60%

25,000

—

January 2022

49,700
Rutledge Note Payable #3

Quarterly interest only

3 month LIBOR + 1.3% adjusted quarterly

2.60%

25,000

—

January 2022

58,985
Rutledge Note Payable #4

Quarterly interest only

3 month LIBOR + 1.3% adjusted quarterly

2.60%

15,000

—

January 2022

28,271
Rutledge Note Payable #5

Quarterly interest only

3 month LIBOR + 1.3% adjusted quarterly

2.60%

30,000

—

January 2022

69,772
Total outstanding principal

465,834

309,862

$
917,401
Debt issuance costs

(1,360)

(1,193)

Unamortized premium

20

110

Total mortgage notes and bonds payable, net

$
464,494

$
308,779

~~(1)~~

~~Bond was repaid in full on September 5, 2017.~~

~~(2)~~

~~Bond was repaid in full on October 23, 2017.~~

~~(3)~~

During the nine months ended September 30, 2017 the Company converted the interest rate on MetLife Term Loans 1 and 4 from variable to fixed rates that can be adjusted to an adjustable rate every three years over their remaining terms.

~~(4)~~

Loan is an amortizing loan with quarterly interest payments that commenced on January 1, 2017 and quarterly principal payments that commence on October 1, 2018, with all remaining principal and outstanding interest due at maturity.

~~(5)~~

~~Loan is an amortizing loan with semi-annual principal and interest payments that commence on July 1, 2017, with all remaining principal and outstanding interest due at maturity.~~

During the remainder of 2017, $60.4 million of the Company’s borrowings will mature. Any cash that the Company uses to satisfy its outstanding debt obligations will reduce the amounts available to acquire additional farms, which could adversely affect our growth prospects. As of September 30, 2017, the Company had $3.1 million in capacity available under the Farm Credit of Central Florida Mortgage Note (as defined below). The Company has signed a non-binding term sheet for a debt facility with a major financial institution, which the Company intends to use to refinance the debt due to mature in 2017. The Company has also signed a non-binding term sheet for a debt facility with a major financial institution to finance a portion of the California property acquisition committed to during the quarter. However, the Company can provide no assurances that the Company will be able to enter into a binding agreement to refinance or secure the debt on similar terms or at all2023 and ~~thus alternative sources of capital may be necessary. As of September 30, 2017, the Company~~

~~Table of Contents~~

had $465.8 million of debt, which may expose the Company to the risk of default under the Company’s debt obligations, restrict the Company’s operations and the Company’s ability to grow the Company’s business and revenues and restrict the Company’s ability to pay distributions to the Company’s stockholders.

~~Farmer Mac Facility~~

~~The Company and~~December 31, 2022, the Operating Partnership ~~are parties to~~had approximately $100.0 million, for each period, in aggregate principal amount outstanding under the ~~Amended and Restated Bond Purchase Agreement, dated as of March 1, 2015 and amended as of June 2, 2015 and August 3, 2015~~bond purchase agreement entered into in October 2022 (the ~~“Bond Purchase Agreement”~~“Farmer Mac Facility”), with Federal Agricultural Mortgage Corporation ~~(“Farmer Mac”)~~ and its wholly owned subsidiary, Farmer Mac Mortgage Securities Corporation ~~a wholly owned subsidiary of~~(collectively, “Farmer Mac”), and $0.0 million, for each period, in additional capacity available under the Farmer Mac ~~as bond purchaser (the “Purchaser”), regarding a secured note purchase facility (the “Farmer~~Facility. The Farmer Mac Facility”) that has a maximum borrowing capacity of $165.0 million. Pursuant to the Bond Purchase Agreement, the Operating Partnership may, from time to time, issue one or more bonds to the Purchaser that will bedebt is secured by ~~pools of mortgage~~ loans which ~~will,~~are, in turn, be secured by ~~first liens~~first-lien mortgages on agricultural real estate owned by wholly owned subsidiaries of the ~~Company. The mortgage loans may have effective loan-to-value~~Operating Partnership. While Farmer Mac Bond #6 and Farmer Mac Bond #7 bear fixed interest rates of ~~up to 60%~~3.69% and 3.68%, respectively, the Farmer Mac Facility bears interest of one-month term SOFR + 1.50% on drawn amounts and an unused commitment fee of 0.20%. ~~Prepayment of each bond issuance is not permitted unless otherwise agreed upon by all parties to~~In connection with the ~~Bond Purchase Agreement.~~

~~On September 5, 2017~~agreements, the Company ~~repaid in~~entered into a guaranty agreement whereby the Company agreed to guarantee the full ~~a $20.7 million bond that was due~~performance of the Operating Partnership’s duties and ~~payable on that date,~~obligations under the Farmer Mac ~~facility.~~

~~As of September 30, 2017 and December 31, 2016, the Operating Partnership had approximately $134.8 million and approximately $155.5 million outstanding, respectively, under the Farmer Mac facility.~~debt. The Farmer Mac ~~facility~~debt is subject to the Company’s ongoing compliance with a number of customary affirmative and negative covenants, as well as ~~financial covenants, including:~~ a maximum leverage ratio of not more than 60%~~; a minimum fixed charge coverage ratio of 1.50 to 1.00; and a minimum tangible net worth requirement.~~. The Company was in compliance with all applicable covenants at September 30, ~~2017. On October 23 2017, the Company repaid in full the Farmer Mac #2 bond with an outstanding principal balance of $5.5 million.~~

In connection with the Bond Purchase Agreement, on March 1, 2015, the Company and the Operating Partnership also entered into an amended and restated pledge and security agreement (the “Pledge Agreement”) in favor of the Purchaser and Farmer Mac, pursuant to which the Company and the Operating Partnership agreed to pledge, as collateral for the Farmer Mac Facility, all of their respective right, title and interest in (i) mortgage loans with a value at least equal to 100% of the aggregate principal amount of the outstanding bond held by the Purchaser and (ii) such additional collateral as necessary to have total collateral with a value at least equal to 110% of the outstanding notes held by the Purchaser.2023. In addition, ~~the Company agreed to guarantee the full performance of the Operating Partnership’s duties and obligations under the Pledge Agreement~~.

The Bond Purchase Agreement and the Pledge Agreement include customary events of default, the occurrence of any of which, after any applicable cure period, would permit the Purchaser and Farmer Mac to, among other things, accelerate payment of all amounts outstanding under the Farmer Mac Facility, ~~and to exercise its remedies with respect to the pledged collateral, including foreclosure and sale of the agricultural real estate underlying the pledged mortgage loans.~~

~~Bridge Loan~~

~~On February 29, 2016, two wholly owned subsidiaries of~~ the Operating Partnership ~~(together,~~may request that Farmer Mac purchase additional bonds up to an additional $200.0 million, which Farmer Mac may approve at its sole discretion.

MetLife Term Debt

As of September 30, 2023 and December 31, 2022, the “Bridge Borrower”) entered into a term loan agreement (the “Bridge Loan Agreement”) with MSD FPI Partners, LLC, an affiliate of MSD Partners, L.P. (the “Bridge Lender”), that provided for a loan of $53.0Company had $261.3 million ~~(the “Bridge Loan”),~~and $262.0 million in aggregate principal amount outstanding, respectively, under the ~~proceeds of which were used primarily to fund the cash portion~~credit agreements between certain of the ~~consideration for the acquisition of the Forsythe farms, which was completed on March 2, 2016. During the nine months ended September 30, 2016, the Company accrued~~Company’s subsidiaries and ~~paid debt issuance costs on the Bridge Loan totaling $173,907, and interest totaling $2,271,867, of which $2,120,000, or 4.0%, of the Bridge Loan's principal amount, was considered additional interest paid on issuance. The Bridge Loan was paid in full, including accrued interest, and without prepayment penalty, on March 29, 2016 using proceeds from the MetLife Term Loans, as described below.~~

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~~MetLife Term Loans~~

On March 29, 2016, five wholly owned subsidiaries of the Operating Partnership entered into a loan agreement (the “First MetLife Loan Agreement”) and, together with the Second MetLife Loan Agreement, the “MetLife Loan Agreements”) with Metropolitan Life Insurance Company (“MetLife”~~), which provides for a total of $127.0 million of term loans, comprised of (i) a $90.0 million term loan (“Term Loan 1”), (ii) a $16.0 million term loan (“Term Loan 2”)~~ and (iii) a $21.0 million term loan (“Term Loan 3” and, together with Term Loan 1 and Term Loan 2, the “Initial MetLife Term Loans” and, together with Term Loan 4, Term Loan 5, Term Loan 6 and Term Loan 7 described below,collectively, the “MetLife ~~Term Loans”~~credit agreements”). The proceeds of the Initial MetLife Term Loans were used to repay existing debt (including amounts outstanding under the Bridge Loan), to acquire additional properties and for general corporate purposes. Each Initial MetLife Term Loan is collateralized by first lien mortgages on certain of the Company’s properties.

On June 29, 2016, five wholly owned subsidiaries of the Operating Partnership entered into a loan agreement (the “Second MetLife Loan Agreement”) with MetLife which provides for a loan of approximately $15.7 million to the Company with a maturity date of June 29, 2026 (“Term Loan 4”). Interest on Term Loan 4 is payable semi-annually and accrues at a floating rate that will be adjusted quarterly to a rate per annum equal to the greater of (a) the three-month LIBOR plus an initial floating rate spread of 1.750%, which may be adjusted by MetLife on each of September 29, December 29, March 29 and June 29 of each year to an interest rate equal to the greater of (a) the three month LIBOR plus the floating rate spread or (b) 2.00% per annum. Term Loan 4 initially bears interest at a rate of 2.39% per annum until September 29, 2016, and on September 29, 2016 the rate changed to 2.60% per annum. Effective March 29, 2017, the Company exercised its option to convert the interest rate on Term Loan 4 from a floating rate to an adjustable rate. The new adjustable rate is 3.48% which may be adjusted by MetLife on each of March 29, 2020 and March 29, 2023. Proceeds from Term Loan 4 were used to acquire additional properties and for general corporate purposes.

Interest on Term Loan 1 is payable semi-annually and accrues at a floating rate that will be adjusted quarterly to a rate per annum equal to the greater of (a) the three-month LIBOR plus an initial floating rate spread of 1.750%, which may be adjusted by MetLife on each of March 29, 2019, March 29, 2022 and March 29, 2025 to an interest rate consistent with interest rates quoted by MetLife for substantially similar loans secured by real estate substantially similar to the Company’s properties securing Term Loan 1 or (b) 2.000% per annum. Term Loan 1 bore interest at a rate of 2.40% per annum until September 29, 2016, and on September 29, 2016 the rate changed to 2.60% per annum. Effective March 29, 2017, the Company exercised its option to convert the interest rate on Term Loan 4 from a floating rate to an adjustable rate. The new adjustable rate is 3.48% which may be adjusted by MetLife on each of March 29, 2020 and March 29, 2023.Subject to certain conditions, the Company may at any time during the term of Term Loan 1 elect to have all or any portion of the unpaid balance of Term Loan 1 bear interest at a fixed rate that is initially established by the lender in its sole discretion that may be adjusted from time to time to an interest rate consistent with interest rates quoted by MetLife for substantially similar loans secured by real estate substantially similar to the Company’s properties securing Term Loan 1. On any floating rate adjustment date, the Company may prepay any portion of Term Loan 1 that is not subject to a fixed rate without penalty.

Interest on Term Loan 2 and Term Loan 3 is payable semi-annually and accrues at an initial rate of 2.66% per annum, which may be adjusted by MetLife on each of March 29, 2019, March 29, 2022 and March 29, 2025 to an interest rate consistent with interest rates quoted by MetLife for substantially similar loans secured by real estate substantially similar to the Company’s properties securing Term Loan 2 and Term Loan 3.

Subject to certain conditions, amounts outstanding under Term Loan 2 and Term Loan 3, as well as any amounts outstanding under Term Loan 1 that are subject to a fixed interest rate, may be prepaid without penalty up to 20% of the original principal amounts of such loans per year or in connection with any rate adjustments. Any other prepayments under the Initial MetLife Term Loans generally are subject to a minimum prepayment premium of 1.00%.

In connection with the Initial MetLife Term Loans, on March 29, 2016, the Company and the Operating Partnership each entered into a separate guaranty (the “Initial MetLife Guaranties”) whereby the Company and the Operating Partnership jointly and severally agreed to unconditionally guarantee all of the borrowers’ obligations under the First MetLife Loan Agreement.

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In connection with the Term Loan 4, on June 29, 2016, the Company and the Operating Partnership each entered into a separate guaranty (the “Term Loan 4 Guaranties”) whereby the Company and the Operating Partnership jointly and severally agreed to unconditionally guarantee all of the borrowers’ obligations under the Second MetLife Loan Agreement.

On January 12, 2017, five wholly owned subsidiaries of the Operating Partnership entered into a loan agreement (the “Fifth MetLife Loan Agreement”) with MetLife which provides for a loan of approximately $8.4 million to the Company with a maturity date of January 12, 2027 (“Term Loan 5”). Interest on Term Loan 5 is payable semi-annually and accrues at a 3.26% per annum fixed rate, and may be adjusted by MetLife on each of January 12, 2020, January 12, 2023 and January 12, 2026 at the option of the Lender to a rate that is consistent with similar loans. Proceeds from Term Loan 5 were used to acquire additional properties and for general corporate purposes.

In connection with the Term Loan 5, on January 12, 2017, the Company and the Operating Partnership each entered into a separate guaranty (the “Term Loan 5 Guaranties”) whereby the Company and the Operating Partnership jointly and severally agreed to unconditionally guarantee all of the borrowers’ obligations under the Fifth MetLife Loan Agreement.

On February 14, 2017, a wholly owned subsidiary of the Operating Partnership entered into a loan agreement (the “Sixth MetLife Loan Agreement”) with MetLife which provides for a loan of approximately $27.2 million to the Company with a maturity date of February 14, 2027 (“Term Loan 6”). Interest on Term Loan 6 is payable semi-annually and accrues at a 3.21% per annum fixed rate, and may be adjusted by MetLife on each of February 14, 2020, February 14, 2023 and February 14, 2026 at the option of the Lender to a rate that is consistent with similar loans. Proceeds from Term Loan 6 were used to acquire additional properties.

In connection with the Term Loan 6, on February 14, 2017, the Company and the Operating Partnership each entered into a separate guaranty (the “Term Loan 6 Guaranties) whereby the Company and the Operating Partnership jointly and severally agreed to unconditionally guarantee all of the borrowers’ obligations under the Sixth MetLife Loan Agreement.

On June 7, 2017, a wholly owned subsidiary of the Operating Partnership, entered into a loan agreement (the “Seventh MetLife Loan Agreement”) with MetLife which provides for a loan of approximately $21.3 million to the Company with a maturity date of June 7, 2027 (“Term Loan 7”). Interest on Term Loan 7 is payable semi-annually and accrues at a 3.45% per annum fixed rate, and may be adjusted by MetLife on each of June 7, 2020, June 7, 2023 and June 7, 2026 at the option of the Lender to a rate that is consistent with similar loans. Proceeds from Term Loan 7 were used to acquire additional properties.

In connection with the Term Loan 7, on June 7, 2017, the Company and the Operating Partnership each entered into a separate guaranty (the “Term Loan 7 Guaranties” together with the Initial MetLife Guaranties, the Term Loan 4 Guaranties, the Term Loan 5 Guaranties and the Term Loan 6 Guaranties, the “MetLife Guaranties”) whereby the Company and the Operating Partnership jointly and severally agreed to unconditionally guarantee all of the borrowers’ obligations under the Seventh MetLife Loan Agreement.

Each of the MetLife ~~Loan Agreements~~credit agreements contains a number of customary affirmative and negative covenants, including the requirement to maintain a loan to value ratio of no greater than 60%.

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The Company also has a $75.0 million credit facility with MetLife ~~Guaranties also contain~~that provides the Company with access to additional liquidity on a ~~number~~revolving credit basis at a floating rate of ~~customary affirmative~~interest equal to SOFR plus 210 basis points. As of September 30, 2023, no amounts had been borrowed and ~~negative covenants.~~all $75.0 million remained available under the senior secured revolving line of credit entered into by the Operating Partnership with MetLife in October 2022 (the “MetLife Facility”). As of September 30, 2023, the Company was in compliance with all covenants under the MetLife credit agreements and MetLife guarantees.

On each adjustment date for MetLife Term Loans #1-10, MetLife may, at its option, adjust the rate of interest to any rate of interest determined by MetLife consistent with rates for substantially similar loans secured by real estate substantially similar to the collateral. For MetLife Term Loan #11, the interest rate will be adjusted to the greater of the three-year U.S. treasury rate plus 2.20% or 2.85%. For MetLife Term Loan #12, the interest rate will be adjusted to the greater of the three-year U.S. treasury rate plus 2.10%, or 2.75%. At the time of rate adjustment, the Company may make a prepayment equal to the unpaid principal balance for each of the MetLife loans. Otherwise, the Company may make a prepayment equal to 20% to 50% of the unpaid principal balance (depending on the tranche of debt) during a calendar year without penalty.

Rabobank Mortgage Note

As of September 30, 2023 and December 31, 2022, the Company and the Operating Partnership had $45.5 million and $59.5 million in aggregate principal amount outstanding, respectively, under the Rabobank mortgage note. The Company was in compliance with all covenants under the ~~MetLife Term Loans~~Rabobank mortgage note as of September 30, ~~2017.~~2023.

~~Each~~Rutledge Facility

As of ~~the MetLife Loan Agreements includes certain customary events of default, including a cross-default provision related to other outstanding indebtedness of the borrowers,~~September 30, 2023 and December 31, 2022, the Company and the Operating Partnership ~~the occurrence of which, after any applicable cure period, would permit MetLife, among other things, to accelerate payment of all amounts~~had $16.0 million and $18.0 million in aggregate principal amount, respectively, outstanding under a credit agreement with Rutledge Investment Company (“Rutledge”) referred to herein as the ~~MetLife Term Loans and~~Rutledge Facility. In February 2023, the total facility size was decreased from $112 million to ~~exercise its remedies~~$109 million. In September 2023, in connection with ~~respect to~~ the ~~pledged collateral, including foreclosure and sale~~disposition of ~~the Company’s~~certain properties that ~~collateralize~~served as collateral for the ~~MetLife Term Loans.~~

~~Farm Credit of Central Florida Mortgage Note~~

~~On August 31, 2016, a wholly owned subsidiary of~~Rutledge Facility, the ~~Operating Partnership entered into a loan agreement (the “Farm Credit Mortgage Note”) with Farm Credit of Central Florida (“Farm Credit”) which provides for a loan of approximately~~

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~~$8.2~~facility size was decreased from $109 million to ~~the Company with a maturity date of September 1, 2023.~~$98 million. As of September 30, ~~2017 and December 31, 2016, approximately $5.1~~2023, $82.0 million ~~had been drawn down~~remained available under this ~~facility. Interest on Farm Credit Mortgage Note is payable quarterly~~facility and ~~accrues at a floating rate that will be adjusted monthly to a rate per annum equal~~the Company was in compliance with all covenants under the loan agreements relating to the ~~one-month LIBOR~~Rutledge Facility.

The interest rate for the credit facility is based on three-month SOFR, plus ~~2.6875%~~an applicable margin. The applicable margin for the credit facility is 1.80% to 2.25%, ~~which is subject to adjustment~~depending on the ~~first day~~applicable pricing level in effect. As of ~~September 2016,~~April 1, 2023, the applicable margin changed to 1.80%. Generally, the Rutledge Facility contains terms consistent with the Company’s prior loans with Rutledge, including, among others, the representations and ~~on the first day~~warranties, affirmative, negative and financial covenants and events of each month thereafter. Principal is payable quarterly commencing on October 1, 2018, with all remaining principal and outstanding interest due at maturity. Proceeds from the Farm Credit Mortgage Note are to be used for the acquisition and development of additional properties.default.

The Farm Credit Mortgage Note contains a number of customary affirmative and negative covenants, as well as a covenant requiring the Company to maintain a debt service coverage ratio of 1.25 to 1.00 beginning on December 31, 2019.

~~Prudential Note~~

On December 21, 2016, a wholly owned subsidiary of the Operating Partnership entered into a loan agreement with The Prudential Insurance Company of America (“Prudential”) which provides for a loan of approximately $6.6 million to the Company with a maturity date of July 1, 2019 (the “Prudential Note”). Interest on the Prudential Note is payable in cash semi-annually and accrues at a fixed rate of 3.20% per annum. Proceeds from the Prudential Note were used for the acquisition of additional properties.

~~Beginning on December 21, 2017, the Prudential Note requires the Company to maintain a loan to value no greater than 60%.~~

~~Rutledge Credit Facilities~~

Upon closing of the AFCO Mergers, by virtue of AFCO OP becoming a subsidiary of the Company, the Company assumed AFCO’s outstanding indebtedness under four loan agreements (the “Existing Rutledge Loan Agreements”) between AFCO OP and Rutledge Investment Company (“Rutledge”), which are further described below:

Loan Agreement, dated as of December 5, 2013, with respect to a $25,000,000 senior secured credit facility bearing interest at an annual rate of 3 month LIBOR plus 1.3%. The loan agreement requires AFCO OP to make quarterly interest payments on April 1, July 1, October 1 and January 1 of each calendar year. Additionally, the loan agreement requires AFCO OP to pay a quarterly non-usage fee equal to 0.25% per ~~annum~~ ~~of the committed loan amount minus the average outstanding principal balance of the loan amount over the prior three-month period.~~

Loan Agreement, dated as of January 14, 2015, with respect to a $25,000,000 senior secured credit facility bearing interest at an annual rate of 3 month LIBOR plus 1.3%. The loan agreement requires AFCO OP to make quarterly interest payments on April 1, July 1, October 1 and January 1 of each calendar year. Additionally, the loan agreement requires AFCO OP to pay a quarterly non-usage fee equal to 0.25% per annum of the committed loan amount minus the average outstanding principal balance of the loan amount over the prior three-month period.

Loan Agreement, dated as of August 18, 2015, with respect to a $25,000,000 senior secured credit facility bearing interest at an annual rate of 3 month LIBOR plus 1.3%. The loan agreement requires AFCO OP to make quarterly interest payments on April 1, July 1, October 1 and January 1 of each calendar year. Additionally, the loan agreement requires AFCO OP to pay a quarterly non-usage fee equal to 0.25% per annum of the committed loan amount minus the average outstanding principal balance of the loan amount over the prior three-month period.

Loan Agreement, dated as of December 22, 2015, with respect to a $15,000,000 senior secured credit facility bearing interest at an annual rate of 3 month LIBOR plus 1.3%. The loan agreement requires AFCO OP to make quarterly interest payments on April 1, July 1, October 1 and January 1 of each calendar year. Additionally, the loan agreement requires AFCO OP to pay a quarterly non-usage fee equal to 0.25% per annum of the committed loan amount minus the average outstanding principal balance over the loan amount of the prior three-month period.

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In connection with the ~~completion of the AFCO Mergers, on February 3, 2017, AFCO OP, in its capacity as a wholly owned subsidiary of the Company and the Operating Partnership, and~~ Rutledge entered into the Second Amendment (the “Rutledge Amendment”) to the Existing Rutledge Loan Agreements. Pursuant to the Rutledge Amendment, among other things, the maturity dates for each of the Existing Rutledge Loan Agreements were extended to January 1, 2022 and the aggregate loan value under the Existing Rutledge Loan Agreements may not exceed 50% of the appraised value of the collateralized properties. Certain AFCO properties acquired by the Company in the Mergers serve as collateral under the Existing Rutledge Loan Agreements.

On February 3, 2017, the Company and the Operating Partnership each entered into guaranty agreements (the “Existing Loan Guarantees”) pursuant to which they unconditionally guarantee the obligations of AFCO OP under the Existing Loan Agreements.

~~In addition, in connection with the completion of the Mergers, on February 3, 2017, AFCO OP entered into a fifth loan~~ agreement, with Rutledge Investment Company (the “Fifth Rutledge Loan Agreement” and together with the Existing Rutledge Loan Agreements, as amended, the “Rutledge Loan Agreements”), with respect to a senior secured credit facility in the aggregate amount of $30.0 million, with a maturity date of January 1, 2022 and an annual interest rate of 3 month LIBOR plus 1.3%. The Fifth Rutledge Loan Agreement requires AFCO OP to make quarterly interest payments. Additionally, the Fifth Rutledge Loan Agreement contains certain customary affirmative and negative covenants, including (i) AFCO OP must pay a quarterly non-usage fee equal to 0.25% of the committed loan amount minus the average outstanding principal balance of the loan amount during the prior three-month period, (ii) AFCO OP must maintain a leverage ratio of 60% or less and (iii) the aggregate amounts outstanding under all of the Rutledge Loans may not exceed 50% of the aggregate appraised value of the properties serving as collateral under the Rutledge Loan Agreements.

~~On February 3, 2017,~~ the Company and the Operating Partnership each entered into separate guarantees ~~(the “Fifth Loan Guarantees”~~whereby the Company and ~~together with~~ the ~~Existing Loan Guarantees, the “Guarantees”) whereby they are required~~Operating Partnership jointly and severally agreed to unconditionally guarantee ~~AFCO OP’s~~the obligations under the ~~Fifth~~ Rutledge ~~Loan Agreement. As~~Facility (the “Rutledge guarantees”). The Rutledge guarantees contain a number of customary affirmative and negative covenants.

LIBOR

On July 1, 2023, the Rabobank Mortgage Note, the Company’s only remaining indebtedness with a maturity date beyond 2023 that had exposure to LIBOR, was converted to a SOFR-based instrument. Accordingly, as of September 30, ~~2017 $0 remains available under this facility.~~

~~As of September 30, 2017,~~2023, the Company ~~was in compliance~~did not have any indebtedness with ~~all covenants under the Rutledge Loan Agreements.~~a maturity date beyond 2023 that has exposure to LIBOR.

Debt Issuance Costs

Costs incurred by the Company in obtaining debt are deducted from the face amount of mortgage notes and bonds payable. During the nine months ended September 30, 2017, $0.8 million in costs were incurred in conjunction with the MetLife and Rutledge Term Loans. During the nine months ended September 30, 2016, the Company paid 4.0% of the principal amount of the MSD Bridge Loan, or $2,120,000, as additional interest on issuance. Debt issuance costs are amortized using the straight-line method, which approximates the effective interest method, over the respective terms of the related indebtedness. Any unamortized amounts upon early repayment of

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mortgage notes payable are written off in the period in which repayment occurs. Fully amortized deferred financing fees are removed from the balance sheet upon maturity or repayment of the underlying debt. Accumulated amortization of deferred financing fees was ~~$0.5~~$1.7 million and $~~0.7~~$1.2 million as of September 30, ~~2017~~2023 and December 31, ~~2016,~~2022, respectively.

Aggregate Maturities

As of September 30, ~~2017,~~2023, aggregate maturities of long-term debt for the succeeding years are as follows:

($ in thousands)

Year Ending December 31,

Future Maturities

2017 (remaining three months)

$
60,400

2018

—

2019

6,481

2020

48,300

2021

—

Thereafter

350,653

$
465,834


($ in thousands)
Year Ending December 31,	Future Maturities
2023 (remaining three months)	$	—
2024		2,100
2025		102,087
2026		84,136
2027		60,439
Thereafter		174,028
	$	422,790

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Fair Value

The fair value of the mortgage notes payable is valued using Level 3 inputs under the hierarchy established by GAAP and is calculated based on a discounted cash flow analysis, using interest rates based on management’s estimates of market interest rates on long-term debt with comparable terms whenever the interest rates on the mortgage notes payable are deemed not to be at market rates. As of September 30, ~~2017~~2023 and December 31, ~~2016,~~2022, the fair value of the mortgage notes payable was ~~$458.9~~$391.9 million and ~~$300.1~~$405.0 million, respectively.

Note 8—Commitments and Contingencies

The Company is not currently subject to any known material contingencies arising from its business operations, nor to any material known or threatened litigation other than as discussed below.

Office Leases

The Company has five leases in place for office space with payments ranging between $750 and $13,711 per month and lease terms expiring between November 2024 and November 2025. Beginning in 2020, the Company recognized right of use assets and related lease liabilities in the consolidated balance sheets. The Company estimated the value of the lease liabilities using discount rates ranging from 3.35% to 6.47%, equivalent to the rates we would pay on a secured borrowing with similar terms to the lease at the inception of the lease. Options to extend the lease are excluded in our minimum lease terms unless the option is reasonably certain to be exercised. During the three months ended September 30, 2023 and 2022, our total lease cost was $0.07 million and $0.06 million, respectively. Our total lease cost for the nine months ended September 30, 2023 and 2022 was $0.20 million and $0.17 million, respectively. Minimum annual rental payments under these operating leases, reconciled to the lease liability included in our consolidated balance sheets, are as follows (in thousands):


($ in thousands)	Future rental
Year Ending December 31,	payments
2023 (remaining three months)	$	34
2024		247
2025		205
2026		—
2027		—
Thereafter		—
Total lease payments		486
Less: imputed interest		(32)
Lease liability	$	454

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Litigation

On ~~October 26, 2016,~~July 2, 2021, the Company filed a ~~purported class action lawsuit was filed~~complaint against First Sabrepoint Capital Management, LP, Sabrepoint Capital Partners, LP, Sabrepoint Capital Participation, LP, George Baxter, and Donald Marchiony (collectively, “Sabrepoint”) in the ~~Circuit Court~~Civil District Courts of Dallas County, Texas seeking relief for Baltimore County, Maryland against AFCO, seeking to represent a proposed class of all AFCO stockholders captioned Parshall v. American Farmland Company et. al., Case No. 24C16005745. The complaint namestheir role, as defendants AFCO, the members of AFCO’s board of directors, AFCO OP, the Company, the Operating Partnership, Farmland Partners OP GP LLC, FPI Heartland LLC, FPI Heartland Operating Partnership, LP and FPI Heartland GP LLC. The complaint alleges that the AFCO directors breached their duties to AFCOalleged in ~~connection with the evaluation and approval of the AFCO Mergers. In addition,~~ the complaint, ~~alleges, among other things, that AFCO, AFCO OP,~~in the ~~Company, Farmland Partners OP GP LLC, FPI Heartland LLC, FPI Heartland Operating Partnership, LP~~previously disclosed 2018 “short and ~~FPI Heartland GP LLC aided and abetted those breaches of duties. On April 18, 2017, the court approved~~distort” scheme to profit from an ~~order~~artificial decline in our stock price. Certain Sabrepoint defendants had prevailed previously on a motion to dismiss the ~~lawsuit without prejudice.~~

~~In April 2015,~~case against them in the Rota Fortunae action in the United State District Court for the District of Colorado (where the state case had been removed) solely on personal jurisdiction grounds. On December 17, 2021, the Company's claims against Sabrepoint in Texas were dismissed by the trial court, which granted (i) Sabrepoint's motion for summary judgment on collateral estoppel grounds, and (ii) motion to dismiss pursuant to the Texas Citizens Participation Act (“TCPA”). On March 21, 2022, after the Company filed a notice signaling an intent to appeal both orders, the Court of Appeals for the Fifth District of Texas (the “Court of Appeals”) entered ~~into~~an order declaring the trial court's TCPA order “VOID because the motion was denied by operation of law….” Accordingly, the Company narrowed its appeal to the trial court's grant of summary judgment. On January 26, 2022, Sabrepoint filed a ~~lease agreement~~motion for ~~office space.~~attorney's fees relating to the defense of that action. The ~~lease expires~~trial court granted the motion for certain fees claimed by Sabrepoint as relating to its pursuit of its TCPA motion, but as noted above, the Court of Appeals subsequently overturned the TCPA order that formed the basis of Sabrepoint’s fee request, mooting the motion and the Court’s order on ~~July 31, 2019. The lease commenced~~the same. On June 30, 2023, the Court of Appeals granted the Company’s appeal, determining that the Company’s claims against Sabrepoint are not barred, reversing the trial court and remanding the case for further proceedings on ~~June 1, 2015 and had~~the merits. On October 13, 2023, Sabrepoint filed a Petition for Review with the Texas Supreme Court, requesting the court to review the Court of Appeals’ decision. While Sabrepoint’s appeal to the Texas Supreme Court will cause additional delay, the Company remains confident that it will ultimately be permitted to proceed with its claims against Sabrepoint.

Repurchase Options

For certain of the Company’s acquisitions, the seller retains the option to repurchase the property at a future date for a price, which is calculated based on an ~~initial monthly payment~~appreciation factor over the original purchase price plus the value of ~~$10,032, which increased to $10,200 and $10,367 in June~~improvements on the property, that, at the time of ~~2016 and June of 2017, respectively, and increases annually thereafter. The~~the acquisition, the Company ~~also entered into two annual leases for farmland and office space on January 1, 2017 and February 2, 2017, respectively.~~expected would be at or above the property’s fair market value at the exercise date. As of September 30, ~~2017, future minimum lease~~2023, the Company had an approximate aggregate net book value of $5.1 million related to assets with unexercised repurchase options, and $15.8 million related to assets with exercised repurchase options. On September 4, 2020, the seller of one such property exercised its right to repurchase approximately 2,860 acres in South Carolina, for which the Company has received non-refundable payments ~~are~~totaling $3.4 million as ~~follows:~~of September 30, 2023. The Company is scheduled to receive a series of non-refundable payments until the closing date, which is currently scheduled to take place on or before January 15, 2025.

($ in thousands)

Future rental

Year Ending December 31,

payments

2017 (remaining three months)

$
44

2018

126

2019

74

2020

—

2021

—

$
244

~~A sale of any~~Employee Retirement Plan

Effective February 1, 2022, the Company amended the Murray Wise Associates 401(k) Profit Sharing Plan and Trust to make it available to all eligible employees of the ~~38 properties contributed to the Company’s portfolio at the time of its initial public offering that would not provide continued tax deferral to Pittman Hough Farms~~Company under revised Farmland Partners Operating Partnership, LP 401(k) Plan (the “FPI 401(k) Plan”). The FPI 401(k) Plan is contractually restricted until the fifth (with respect to certain properties) or seventh (with respect to certain other properties) anniversary of the completion of the formation transactions, which occurred on April 16, 2014. Furthermore, if any such sale or defeasance is foreseeable, the Company is required to notify Pittman Hough Farms and to cooperate with it in considering strategies to defer or mitigate the recognition of gain under the Code, by any of the equity interest holders of the recipient of the Common units.

a defined contribution plan for substantially all employees. The Company has ~~entered into lease agreements~~elected a “safe harbor” plan in which the Company ~~agreed~~plans to ~~complete certain improvement projects on one Florida farm~~make contributions which are determined and ~~four South Carolina farms.~~authorized by the Board of Directors each plan year. As is customary, the Company retains the right to amend the FPI 401(k) Plan at its discretion. The Company made safe harbor contributions of less than $0.1 million and $0.1 million, respectively, during the nine months ended September 30, ~~2017, future capital commitments associated with the projects are as follows:~~2023 and 2022.

($ in thousands)

Future Capital
Year Ending December 31,

Commitments
2017 (remaining three months)

$
4,311
2018

845

$
5,156

~~As of September 30, 2017~~ the Company had the following properties under contract. As of the report date, none of the farm acquisitions below have closed, but are expected to close in Q4 2017 or Q1 2018 and are expected to be accounted for as asset acquisitions.

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($ in thousands)

Purchase
Farm State

Price
South Carolina

$
1,120
California

110,000

$
111,120

~~See~~ ~~“Note 10—Subsequent Events” for properties put under contract subsequent to September 30, 2017.~~

Note 9—Stockholders’ Equity and Non-controlling Interests

Non-controlling ~~Interests~~Interest in Operating Partnership

~~The Company~~FPI consolidates ~~its~~the Operating Partnership. As of September 30, ~~2017~~2023 and December 31, ~~2016,~~2022, FPI owned 97.6% of the ~~Company owned an 85.1% and a 75.1% interest, respectively,~~outstanding interests, for each period, in the Operating Partnership, and the remaining ~~14.9%~~2.4% interests are held in the form of Common units and ~~24.9% interest, respectively, is included in~~comprise non-controlling interests in the Operating Partnership on the consolidated balance sheets. The non-controlling interests in the Operating Partnership ~~are~~consist of both the Common units and the Series A preferred units held by third parties.

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Common Units in ~~the form of Common units.~~Operating Partnership, OP Units

On or after 12 months of becoming a holder of Common units, unless the terms of an agreement with such Common ~~unit holder~~unitholder dictate otherwise, each limited partner, other than the Company, has the right, subject to the terms and conditions set forth in the Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership, as amended (the “Partnership Agreement”), to tender for redemption all or a portion of such Common units in exchange for cash, or in the Company’s sole discretion, for shares of the Company’s common stock on a one-for-one basis. If cash is paid in satisfaction of a redemption request, the amount will be equal to the number of tendered units multiplied by the fair market value ~~of a~~per share of the Company’s common stock on the date of the redemption notice (determined in accordance with, and subject to adjustment under, the terms of the Partnership Agreement). Any redemption request must be satisfied by the Company on or before the close of business on the tenth business day after the Company receives a notice of redemption. ~~On March 27, 2017,~~During the nine months ended September 30, 2023, the Company redeemed 34,000 Common units in exchange for cash of approximately $0.4 million. During the year ended December 31, 2022, the Company issued ~~129,174~~120,000 shares of common stock ~~in exchange for 129,174 Common units that had been tendered for redemption. On April 12, 2017,~~upon the ~~Company issued 328,122 shares~~redemption of common stock in exchange for 328,122 Common units that had been tendered for redemption. On July 10, 2017, the Company issued 118,634 shares of common stock in exchange for 118,634 Common units that had been tendered for redemption. On July 19, 2017, the Company issued 531,827 shares of common stock in exchange for 531,827120,000 Common units that had been tendered for redemption. There were ~~4.5 million and 3.0~~approximately 1.2 million outstanding Common units eligible to be tendered for redemption as of both September 30, ~~2017~~2023 and December 31, ~~2016, respectively.~~2022.

If the Company gives the limited partners notice of its intention to make an extraordinary distribution of cash or property to its stockholders or effect a merger, a sale of all or substantially all of its assets or any other similar extraordinary transaction, each limited partner may exercise its right to tender its Common units for redemption, regardless of the length of time such limited partner has held its Common units.

Regardless of the rights described above, the Operating Partnership will not have an obligation to issue cash to a unitholder upon a redemption request if the Company elects to redeem Common units for shares of common stock. When a Common unit is redeemed, non-controlling interest in the Operating Partnership is reduced, and stockholders’ equity is increased.

The Operating Partnership intends to continue to make distributions on each Common unit in the same amount as those paid on each share of ~~the Company’s~~FPI’s common stock, with the distributions on the Common units held by ~~the Company~~FPI being utilized to pay dividends to ~~the Company’s~~FPI’s common stockholders.

Pursuant to the consolidation accounting standard with respect to the accounting and reporting for non-controlling interest changes and changes in ownership interest of a subsidiary, changes in parent’s ownership interest when the parent retains controlling interest in the subsidiary should be accounted for as equity transactions. The carrying amount of the non-controlling interest shall be adjusted to reflect the change in its ownership interest in the subsidiary, with the offset to equity attributable to the parent. ~~As a result of equity issuances including and subsequent to~~Changes in the ~~IPO, changes in the~~

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ownership percentages between the Company’s stockholders’ equity and non-controlling interest in the Operating Partnership ~~occurred~~resulted in a decrease and an increase to the non-controlling interest in the Operating Partnership by less than $(0.1) million and $0.8 million during the nine months ended September 30, ~~2017~~2023 and ~~September 30, 2016. During~~2022, respectively, with the ~~nine months ended September 30, 2017, the Company increased the non-controlling interest in the Operating Partnership and decreased~~corresponding offsets to additional ~~paid in capital by $3.1~~ ~~million. During the nine months ended September 30, 2016, the Company decreased the non-controlling interest in the Operating Partnership and increased additional paid in capital by $4.3 million.~~paid-in capital.

Redeemable ~~Non-controlling Interests in Operating Partnership, Class A Common Units~~

On June 2, 2015, the Company issued 1,993,709 Common units in conjunction with an asset acquisition. Beginning on June 2, 2016, the Common units became eligible to be tendered for redemption for cash, or at the Company’s option, for shares of common stock on a one for one basis. In connection with its annual meeting of stockholders held on May 25, 2016, the Company obtained stockholder approval to issue shares of its common stock upon the redemption of 883,724 of the Common units (the “Excess Units”). Prior to such stockholder approval, the Company would have been required to redeem the Excess Units for cash. As the tender for redemption of the Excess Units for shares of common stock was outside of the control of the Company until May 25, 2016, these units were accounted for as mezzanine equity on the consolidated balance sheets as of December 31, 2015. After the redemption became within the control of the Company these excess units formed part of the non-controlling interests in the Operating Partnership. The Company elected to accrete the change in redemption value of the Excess Units subsequent to issuance and during the respective 12-month holding period, after which point the units were marked to redemption value at each reporting period.

~~Redeemable Non-controlling~~Non-Controlling Interests in Operating Partnership, Series A ~~preferred units~~Preferred Units

On March 2, 2016, the sole general partner of the Operating Partnership entered into Amendment ~~No.1~~No. 1 (the “Amendment”) to the Partnership Agreement in order to provide for the issuance, and the designation of the terms and conditions, of the Series A preferred units. ~~Under~~Pursuant to the Amendment, among other things, each Series A preferred unit has a $1,000 liquidation preference and is entitled to receive cumulative preferential cash distributions at a rate of 3.00% per annum of the $1,000 liquidation preference, which is payable annually in arrears on January 15 of each year or the next succeeding business day. The cash distributions are accrued ratably over the year and credited to redeemable non-controlling interest in ~~operating partnership,~~the Operating Partnership, preferred units on the balance sheet with the offset recorded to retained earnings. ~~Dividends on Series A preferred units have been recorded through retained earnings in 2017 as opposed to additional paid in capital in 2016 due to the Company generating retained earnings during 2017.~~ On March 2, 2016, 117,000 Series A preferred units were issued as partial consideration in the ~~March 2, 2016~~acquisition of a portfolio of Illinois ~~farm acquisition.~~farms. Upon any voluntary or involuntary liquidation or dissolution, the Series A preferred units are entitled to a priority distribution ahead of Common units in an amount equal to the liquidation preference plus an amount equal to all distributions accumulated and unpaid to the date of such cash distribution. On May 19, 2022,

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the Company redeemed 5,000 Series A preferred units for $5.0 million plus accrued distributions for an aggregate of $5.1 million in cash. On September 1, 2022, the Company redeemed an additional 5,000 Series A preferred units for $5.0 million plus accrued distributions for an aggregate of $5.1 million in cash. On May 31, 2023, the Company redeemed 8,000 Series A preferred units for $8.0 million plus accrued distributions for an aggregate of $8.1 million in cash. 99,000 Series A preferred units were outstanding as of September 30, 2023. Total liquidation value of such preferred units as of September 30, ~~2017~~2023 and December 31, ~~2016~~2022 was ~~$119.6~~$101.2 million and ~~$119.9~~$110.2 million, ~~respectively,~~respectively, including accrued distributions.

On or after ~~March 2,~~February 10, 2026 ~~the tenth anniversary of the closing of the Forsythe acquisition~~ (the “Conversion Right Date”), holders of the Series A preferred units have the right to convert each Series A preferred unit into a number of Common units equal to (i) the $1,000 liquidation preference plus all accrued and unpaid distributions, divided by (ii) the volume-weighted average price per share of the Company’s common stock for the 20 trading days immediately preceding the applicable conversion date. All Common units received upon conversion may be immediately tendered for redemption for cash or, at the Company’s option, for shares of common stock on a one-for-one basis, subject to the terms and conditions set forth in the Partnership Agreement. Prior to the Conversion Right Date, the Series A preferred units may not be tendered for redemption by the Holder.

On or after ~~March 2,~~February 10, 2021, ~~the fifth anniversary of the closing of the Forsythe acquisition,~~ but prior to the Conversion Right Date, the Operating Partnership has the right to redeem some or all of the Series A preferred units, at any time and from time to time, for cash in an amount per unit equal to the $1,000 liquidation preference plus all accrued and unpaid distributions.

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In the event of a Termination Transaction (as defined in the Partnership Agreement) prior to conversion, holders of the Series A preferred units generally have the right to receive the same consideration as holders of Common units and common stock, on an as-converted basis.

Holders of the Series A preferred units have no voting rights except with respect to (i) the issuance of partnership units of the Operating Partnership senior to the Series A preferred units as to the right to receive distributions and upon liquidation, dissolution or winding up of the Operating Partnership, (ii) the issuance of additional Series A preferred units and (iii) amendments to the Partnership Agreement that materially and adversely affect the rights or benefits of the holders of the Series A preferred units.

The Series A preferred units are accounted for as mezzanine equity on the consolidated balance sheet as the units are convertible and redeemable for shares at a determinable price and date at the option of the holder ~~and~~ upon the occurrence of an event not solely within the control of the Company.

The following table summarizes the changes in ~~the Company’s~~our redeemable non-controlling interest in the Operating Partnership for the nine months ended September 30, ~~2017~~2023 and ~~2016:~~2022:

Common

Series A Preferred Units
($ in thousands)

Redeemable
Common units

Redeemable
non-controlling
interests

Redeemable
Preferred units

Redeemable
non-controlling
interests
Balance at December 31, 2015

884

$
9,695

—

$
—
Issuance of redeemable Common units as partial consideration for real estate acquisition

—

—

117

117,000
Net loss attributable to non-controlling interest

—

(64)

—

—
Accrued distributions to non-controlling interest

—

(113)

—

2,057
Redemption of Common units for Common stock

(884)

(9,518)

Balance at September 30, 2016

—

$
—

117

$
119,057

Balance at December 31, 2016

—

$
—

117

$
119,915
Distributions paid to non-controlling interest

—

—

—

(2,915)
Accrued distributions to non-controlling interest

—

—

—

2,633
Redemption of Common units for common stock

—

—

—

—
Balance at September 30, 2017

—

$
—

117

$
119,633


	Series A Preferred Units
	Redeemable	Redeemable
	Preferred	non-controlling
(in thousands)	units	interests
Balance at December 31, 2021	117	$	120,510
Distribution paid to non-controlling interest	—		(3,510)
Accrued distributions to non-controlling interest	—		2,408
Redemption of Series A preferred units	(10)		(10,000)
Balance at September 30, 2022	107	$	109,408

Balance at December 31, 2022	107	$	110,210
Distribution paid to non-controlling interest	—		(3,210)
Accrued distributions to non-controlling interest	—		2,228
Redemption of Series A preferred units	(8)		(8,000)
Balance at September 30, 2023	99	$	101,228

~~Series B Participating Preferred Stock~~

On August 17, 2017, the Company and the Operating Partnership entered into an underwriting agreement with Raymond James & Associates, Inc. and Jefferies LLC, as representatives of the underwriters, pursuant to which the Company sold 6,037,500 shares of its newly designated Series B Participating Preferred Stock, at a public offering price of $25.00 per share, which is the Initial Liquidation Preference (as defined below) of the Series B Participating Preferred Stock.

Shares of Series B Participating Preferred Stock, which represent equity interests in the Company, generally have no voting rights and rank senior to the Company’s common stock with respect to dividend rights and rights upon liquidation. Each preferred share of Series B Participating Preferred Stock is entitled to receive cumulative preferential cash dividends at a rate of 6.00% per annum of the $25 liquidation preference, which is payable quarterly in arrears on the last day of March, June, September and December (the “Initial Liquidation Preference”). Upon liquidation, before any payment or distribution of the assets of the Company is made to or set apart for the holders of equity securities ranking junior to the Series B Participating Preferred Stock, the holders of the Series B Participating Preferred Stock will be entitled to receive the sum of:

~~(i)~~

~~the Initial Liquidation Preference,~~

~~(ii)~~

adjusted by an amount equal to 50% of the cumulative change in the estimated value of farmland in the states in which the Company owned farmland as of June 30, 2017 (measured by reference to a publicly available report released annually by the National Agricultural Statistics Board, the Agricultural Statistics Board and the U.S. Department of Agriculture) (the “FVA Adjustment”), and

~~(iii)~~

~~all accrued and unpaid dividends, subject to a 9.0% cap on total return (the “Final Liquidation Preference”).~~

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After September 30, 2021, but prior to September 30, 2024, the Company at its option, may redeem all, but not less than all, of the then-outstanding shares of Series B Participating Preferred Stock at any time, for cash or for shares of common stock at a price equal to the Final Liquidation Preference plus an amount equal to ~~the product of:~~

~~(i)~~

~~the Final Liquidation Preference, and~~

~~(ii)~~

~~the average change in land values in~~ ~~states in which the Company owned farmland as of June 30, 2017~~ over the immediately preceding four years and multiplied by a constant percentage of 50% and prorated for the number of days between the most recent release of the publicly available land value report used to calculate the FVA Adjustment (if such amount is positive) (the “Premium Amount”).

At any time on or after September 30, 2024, the Company, at its option, may redeem or convert to shares of common stock all, but not less than all, of the then-outstanding shares of Series B Participating Preferred Stock at the redemption price per share equal to:

~~(i)~~

~~the Initial Liquidation Preference, plus~~

~~(ii)~~

~~the FVA Amount, plus~~

~~(iii)~~

~~any accrued and unpaid dividends.~~

The total rate of return on shares of the Series B Participating Preferred Stock is subject to a cap such that the total rate of return, when considering the Initial Liquidation Preference, the FVA Adjustment and the Premium Amount plus accrued and unpaid dividends, will not exceed 9.0%.

In connection with the issuance of the Series B Participating Preferred Stock, the sole general partner of the Operating Partnership entered into Amendment No. 2 to the Partnership Agreement in order to provide for the issuance, and the designation of the terms and conditions, of newly classified 6.00% Series B participating preferred units of limited partnership interest in the Operating Partnership (“Series B participating preferred units”), the economic terms of which are identical to those of the Series B Participating Preferred Stock. The Company contributed the net proceeds from the offering of the Series B Participating Preferred Stock to the Operating Partnership in exchange for 6,037,500 Series B participating preferred units.

The shares of Series B Participating Preferred Stock are accounted for as mezzanine equity on the consolidated balance sheet as the Series B Participating Preferred Stock is convertible and redeemable for common shares at a determinable price and date at the option of the Company and upon the occurrence of an event not solely within the control of the Company.

During the three and nine months ended September 30, 2017 the balance recorded in mezzanine equity relating to the Series B Participating Preferred Stock was $144.2 million. During the quarter the Company declared and paid dividends relating to the Series B Participating Preferred Stock of $1.1 million.

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Distributions

~~Distributions~~

The Company’s ~~board~~Board of ~~directors~~Directors declared and paid the following distributions to common stockholders and holders of Common units for the nine months ended September 30, ~~2017~~2023 and ~~the year ended December 31, 2016:~~2022:

Fiscal Year

Declaration Date

Record Date

Payment Date

Distributions
per Common
Share/OP unit
2017

July 19, 2017

October 2, 2017

October 13, 2017

0.1275

May 9, 2017

June 30, 2017

July 14, 2017

$
0.1275

February 22, 2017

April 1, 2017

April 14, 2017

0.1275

$
0.3825

2016

March 8, 2016

April 1, 2016

April 15, 2016

$
0.1275

May 9, 2016

July 1, 2016

July 15, 2016

0.1275

August 3, 2016

September 30, 2016

October 14, 2016

0.1275

November 3, 2016

January 2, 2017

January 13, 2017

0.1275

$
0.5100


Fiscal Year	Declaration Date	Record Date	Payment Date	Distributions per Common Share/OP unit
2023	October 24, 2022	January 2, 2023	January 17, 2023	$	0.0600
	February 21, 2023	April 3, 2023	April 17, 2023	$	0.0600
	May 3, 2023	July 3, 2023	July 17, 2023	$	0.0600
				$	0.1800

2022	October 26, 2021	January 3, 2022	January 18, 2022	$	0.0500
	February 22, 2022	April 1, 2022	April 15, 2022	$	0.0500
	May 2, 2022	July 1, 2022	July 15, 2022	$	0.0600
				$	0.1600

Additionally, in connection with the 3.00% cumulative preferential distribution on the Series A preferred units, the Company ~~has~~had accrued ~~$2.6~~$2.2 million in distributions payable as of September 30, ~~2017.~~2023. The distributions are payable annually in arrears on January 15 of each year.

In connection with the Series B Participating Preferred Stock, the Company paid $1.1 million in distributions on September 30, 2017 to stockholders of record as of September 15, 2017. As long as shares of Series B Participating Preferred Stock are outstanding, distributions on such shares are payable on the last day of March, June, September and December of each year to stockholders of record on the 15th day of such months.

In general, common stock cash dividends declared by the Company will be considered ordinary income to stockholders for income tax purposes. From time to time, a portion of the Company’s dividends may be characterized as qualified dividends, capital gains or return of capital.

~~Stock~~Share Repurchase ~~Plan~~Program

On March 15, 2017, the Company’s ~~board~~Board of ~~directors~~Directors approved a program to repurchase up to ~~$25,000,000~~$25.0 million in shares of the Company’s common stock. On August 1, 2018, the Board of Directors increased the authority under the share repurchase program by an aggregate of $30.0 million. On November 7, 2019, the Board of Directors approved a $75.0 million increase in the total authorization available under the program, increasing the total availability under the share repurchase program to approximately $88.0 million as of such date. On May 3, 2023, the Company’s Board of Directors, increased the availability under the share repurchase program by an additional $75.0 million. Repurchases under this program may be made from time to time, in amounts and prices as the Company deems appropriate. Repurchases may be made in open market or privately negotiated transactions in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended, subject to market conditions, applicable legal requirements, trading restrictions under the Company’s insider trading policy and other relevant factors. This ~~stock~~share repurchase ~~plan~~program does not obligate the Company to acquire any particular amount of common stock and it may be modified or suspended at any time at the ~~Company's~~Company’s discretion. The Company ~~expects to continue to fund~~funds repurchases under the program using cash on ~~hand. The Company repurchased 841,257 shares for $7.4 million at an average price of $8.85 per share during~~its balance sheet.

During the ~~three and~~ nine months ended September 30, ~~2017.~~2023, the Company repurchased 6,213,405 shares of its common stock at a weighted average price of $11.00 per share. As of September 30, 2023, the Company had approximately $47.0 million of capacity remaining under the stock repurchase plan. In addition, the Company redeemed 34,000 Common units in exchange for cash of approximately $0.4 million.

Equity Incentive Plan

On May ~~3, 2017,~~7, 2021, the Company’s stockholders approved the ~~Second~~Third Amended and Restated ~~Farmland Partners Inc.~~ 2014 Equity Incentive Plan ~~(the “Second Amended Plan”~~(as amended and restated, the “Plan”)~~. The Second Amended Plan, among other things,~~, which increased the aggregate number of shares of the Company’s common stock reserved for issuance from 615,070, which was available under the First Amended and Restated Farmland Partners Inc. Equity Incentive Plan (together with the Second Amended Plan, the “Plan”), to 1,265,851 (including the 529,195 shares of restricted common stock that have been issued under the Plan ~~and 750,000 shares reserved for future issuance).~~to approximately 1.9 million shares. As of September 30, ~~2017,~~2023, there were ~~0.7~~0.4 million of shares available for future ~~grant~~grants under the Plan.

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The Company may issue equity-based awards to officers, non-employee directors, employees, independent contractors and other eligible persons under the Plan. The Plan provides for the grant of stock options, share awards (including restricted stock and restricted stock units), stock appreciation rights, dividend equivalent rights, performance awards, annual incentive cash awards and other ~~equity based~~equity-based awards, including LTIP units, which are convertible on a

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one-for-one basis into Common units. The terms of each grant are determined by the compensation committee of the ~~board~~Board of ~~directors.~~Directors.

From time to time, the Company may award restricted shares of its common stock under the Plan, as compensation to officers, employees, non-employee directors and non-employee consultants. The shares of restricted stock vest generally over a period of time as determined by the compensation committee of the Company’s ~~board~~Board of ~~directors~~Directors at the date of grant. The Company recognizes compensation expense for awards issued to officers, employees and non-employee directors for restricted shares of common stock on a straight-line basis over the vesting period based upon the fair market value of the shares on the date of issuance, adjusted for forfeitures. The Company recognizes compensation expense for awards issued to non-employee consultants in the same period and in the same manner as if the Company paid cash for the underlying services.

A summary of the ~~nonvested~~non-vested restricted shares as of September 30, ~~2017~~2023 and 2022 is as follows:

Weighted

Number of

average grant

(shares in thousands)

shares

date fair value

Unvested at December 31, 2015

145

$
13.87

Granted

119

10.78

Vested

(70)

13.96

Forfeited

(5)

11.09

Unvested at September 30, 2016

189

11.97

Unvested at December 31, 2016

189

11.98

Granted

205

11.30

Vested

(108)

12.84

Forfeited

(7)

10.97

Unvested at September 30, 2017

279

$
11.16


		Weighted
	Number of	average grant
(shares in thousands)	shares	date fair value
Unvested at December 31, 2021	297	$	8.87
Granted	149		11.78
Vested	(173)		8.17
Forfeited	(8)		11.32
Unvested at September 30, 2022	265	$	10.86

Unvested at December 31, 2022	260	$	10.88
Granted	226		10.92
Vested	(132)		10.21
Forfeited	(1)		12.22
Unvested at September 30, 2023	353	$	11.16

~~For~~The Company recognized stock-based compensation and incentive expense related to restricted stock awards of $0.5 million and $0.4 million, for the three months ended September 30, 2023 and 2022, respectively. During the nine months ended September 30, ~~2017~~2023 and ~~2016,~~2022, the Company recognized ~~$1.1 million~~stock-based compensation and $~~0.9 million, respectively, of stock-based compensation~~incentive expense related to restricted stock ~~awards.~~awards of $1.4 million and $1.6 million, respectively. The Company recognized $0.0 million and $0.0 million during the three months ended September 30, 2023 and 2022 and $0.0 million and $0.4 million during the nine months ended September 30, 2023 and 2022, respectively, related to stock-based incentive expense in connection with the November 2021 acquisition of Murray Wise Associates, LLC, which are included in the amounts above. As of September 30, ~~2017~~2023 and December 31, ~~2016,~~2022, there were ~~$2.4~~$2.8 million and $~~1.2~~$1.7 million,, respectively, of total unrecognized compensation costs related to nonvested stock awards, which are expected to be recognized over a weighted-average ~~periods~~period of ~~1.3~~1.9 years. The change in fair value of the shares issued to non-employees to be issued upon vesting is remeasured at the end of each reporting period and is recorded in general and administrative expenses on the consolidated statements of operations. The remaining restricted stock awards issued to non-employees vested during the nine months ended September 30, 2017, resulting in no change in fair value for the three months ended September 30, 2017.

At-the-Market Offering Program (the “ATM Program”)

On ~~September 15, 2015,~~May 6, 2022, the Company entered into equity distribution agreements under which the Company may issue and sell from time to time, through sales agents, shares of its common stock having an aggregate gross sales price of up to ~~$25 million.~~$100.0 million (the “ATM Program”). During the nine months ended September 30, ~~2016,~~2023, the Company sold no shares under the ATM Program and the program had ~~sold an aggregate~~a remaining capacity of ~~844,207~~$50.5 million in shares of common stock available for aggregate proceeds, net of fees, of approximately $9.3 million at a weighted average price per share of $11.06. During the nine months ended September 30, 2017, the Company had made no sales under the ATM Program.issuance.

Deferred Offering Costs

Deferred offering costs include incremental direct costs incurred by the Company in connection with proposed or actual offerings of securities. At the completion of a securities offering, the deferred offering costs are charged ratably as a reduction of the gross proceeds of equity as stock is issued. If an offering is abandoned, the previously deferred offering costs will be charged to operations in the period in which the offering is abandoned. The Company incurred ~~$0.5 million and~~less than $0.1 million in offering costs during ~~the~~each of three and nine months ended September 30, ~~2017~~2023 and ~~2016,~~2022, respectively. As of

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September 30, ~~2017~~2023 and December 31, ~~2016,~~2022, the Company had ~~$0.3~~$0.00 million and ~~$0.2~~ $0.06 million, respectively, in deferred

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offering costs, net of amortization, related to regulatory, legal, accounting and professional service costs associated with proposed or completed offerings of securities.

Earnings (Loss) per Share

The computation of basic and diluted ~~loss~~earnings (loss) per share is as follows:


	For the three months ended				For the nine months ended
	September 30,				September 30,
(in thousands, except per share amounts)	2023		2022		2023		2022
Numerator:
Net income attributable to Farmland Partners Inc.	$	4,210	$	1,094	$	13,596	$	5,115
Less: Nonforfeitable distributions allocated to unvested restricted shares		(21)		(16)		(64)		(47)
Less: Distributions on redeemable non-controlling interests in Operating Partnership, preferred		(743)		(728)		(2,228)		(2,408)
Net income attributable to common stockholders	$	3,446	$	350	$	11,304	$	2,660

Denominator:
Weighted-average number of common shares - basic		48,432		53,495		51,079		49,908
Conversion of preferred units ⁽¹⁾		—		—		—		—
Unvested restricted shares ⁽¹⁾		—		—		—		—
Redeemable non-controlling interest ⁽¹⁾		—		—		—		—
Weighted-average number of common shares - diluted		48,432		53,495		51,079		49,908

Income per share attributable to common stockholders - basic	$	0.07	$	0.01	$	0.22	$	0.05
Income per share attributable to common stockholders - diluted	$	0.07	$	0.01	$	0.22	$	0.05

For the three months ended

For the nine months ended

September 30,

September 30,
(in thousands except per share amounts)

2017

2016

2017

2016
Numerator:

Net profit (loss) attributable to Farmland Partners Inc.

$
2,216

$
70

$
2,277

$
(412)
Less:  Nonforfeitable distributions allocated to unvested restricted shares

(36)

(24)

(116)

(72)
Less:  Distributions on redeemable non-controlling interests in Operating Partnership, Common units

—

—

—

(113)
Less:  Distributions on redeemable non-controlling interests in Operating Partnership, Series A preferred units

(877)

(887)

(2,632)

(2,057)
Less:  Dividends on Series B Participating Preferred Stock

(1,082)

—

(1,082)

—
Net income (loss) attributable to common stockholders

$
221

$
(841)

$
(1,553)

$
(2,654)

Denominator:

Weighted-average number of common shares - basic

32,862

13,683

30,695

12,663
Conversion of Series A preferred units(1)

—

—

—

—
Conversion of Series B Participating Preferred Stock (1)

—

—

—

—
Unvested restricted shares(1)

—

—

—

—
Weighted-average number of common shares - diluted

32,862

13,683

30,695

12,663

Earnings (Loss) per share attributable to common stockholders - basic

$
0.01

$
(0.06)

$
(0.05)

$
(0.21)
Earnings (Loss) per share attributable to common stockholders - diluted

$
0.01

$
(0.06)

$
(0.05)

$
(0.21)

(1)

~~(1)~~

Anti-dilutive for the three and nine months ended September 30, ~~2017~~2023 and ~~2016.~~

2022.

Numerator:

Unvested shares of the Company’s restricted common stock are ~~and until May 26, 2016, the Excess Units were,~~ considered participating securities, which ~~require~~requires the use of the two-class method for the computation of basic and diluted earnings per share. On May 25, 2016, the Company obtained stockholder approval allowing the Company to issue shares of common stock upon the redemption of the Excess Units, which allowed the Company to remove the Excess Units from the mezzanine section of the consolidated balance sheets. As such, as of September 30, 2017, the Company no longer has any Common units included as redeemable non-controlling interests outstanding in the mezzanine section of the consolidated balance sheets.

The limited partners’ outstanding Common units (which may be redeemed for shares of common stock) and Excess Units have been excluded from the diluted earnings per share calculation as there would be no effect on the amounts since the limited partners’ share of income would also be added back to net income. Any anti-dilutive shares have been excluded from the diluted earnings per share calculation. Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. Accordingly, distributed and undistributed earnings attributable to unvested restricted shares (participating securities) have been ~~excluded,~~subtracted, as applicable, from net income or loss attributable to common stockholders utilized in the basic and diluted earnings per share calculations. ~~Net~~

Distributions on preferred interests in the Operating Partnership have been subtracted from net income or loss ~~figures are presented net of non-controlling interests in~~attributable to common stockholders.

Denominator:

Any anti-dilutive shares have been excluded from the diluted earnings per share ~~calculations. The weighted average number of Common units held by the non-controlling interest was 6.1 million and 5.3 million for the nine months ended September 30, 2017 and 2016, respectively.~~calculation.

The outstanding Series A preferred units are non-participating securities and thus are included in the computation of diluted earnings per share on an as-if converted ~~basis. Any anti-dilutive shares~~basis if they are ~~excluded from the diluted earnings per share calculation.~~dilutive. For the three and nine months ended September 30, ~~2017 and September 30, 2016,~~2022, these shares were not included in the diluted earnings per share calculation as they would be anti-dilutive.

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The outstanding shares of Series B Participating Preferred Stock are non-participating securities and thus are included in the computation of diluted earnings per share on an as-if converted basis. Any anti-dilutive shares are excluded from the diluted earnings per share calculation. For the ~~three and~~ nine months ended September 30, ~~2017, these shares were not included in the diluted earnings per share calculation as they would be anti-dilutive.~~

~~For the three months ended September 30, 2016~~2023 and ~~nine months ended September 30, 2017 and 2016,~~2022, diluted weighted average common shares do not include the impact of ~~0.3~~0.4 million and 0.20.3 million ~~respectively,~~ unvested compensation-related shares as they would have been anti-dilutive.

The ~~effect~~limited partners’ outstanding Common units, or the non-controlling interests, (which may be redeemed for shares of ~~these items on~~common stock) have not been included in the diluted earnings per share calculation as there would be no effect on the amounts since the limited partners’ share of income would also be added back to net income, therefore increasing both net

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income and shares. The weighted average number of Common units held by the non-controlling interest was 1.2 million and 1.3 million for the nine months ended September 30, 2023 and 2022, respectively.

Outstanding Equity Awards and Units

The following equity awards and units were outstanding as of September 30, 2023 and December 31, 2022, respectively.


	September 30, 2023	December 31, 2022
Shares	47,985	54,058
Common Units	1,203	1,237
Unvested Restricted Stock Awards	353	260
	49,541	55,555

Note 10—Hedge Accounting

Cash Flow Hedging Strategy

The Company manages economic risks, including interest rate, liquidity, and credit risk, by managing the amount, sources, duration and interest rate exposure of its financing sources. The Company may also use interest rate derivative financial instruments, primarily interest rate swaps. As of September 30, 2023 and December 31, 2022, the Company was a party to one interest rate swap, designated as a hedging instrument, to add stability to interest expense and to manage its exposure to adverse interest rate movements.

For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the entire change in the fair value of the Company’s designated cash flow hedges is recorded to accumulated other comprehensive income, a component of stockholders’ equity in the Company’s consolidated balance sheets.

On March 26, 2020, the Company terminated its existing swap agreement and entered into a new interest rate swap agreement to obtain a more favorable interest rate and to manage interest rate risk exposure, which was effective April 1, 2020. An interest rate swap agreement utilized by the Company effectively modified the Company’s exposure to interest rate risk by converting the Company’s floating-rate debt to a fixed rate basis for the next six years on 50% of the outstanding amount to Rabobank at the time of the agreement, thus reducing the impact of interest rate changes on future interest expense. This agreement involves the receipt of floating rate amounts in exchange for fixed rate interest payments over the life of the agreement without an exchange of the underlying principal amount. The fair value of the de-designated swap was $2.6 million on the termination date. The Company amortized the de-designated swap over the original term utilizing a forward curve analysis of determining monthly amortization out of Other Comprehensive Income through the original termination date (March 1, 2023). During the three months ended September 30, 2023 and 2022, amortization was $0.0 million and $0.1 million, respectively. Amortization for the nine months ended September 30, 2023 and 2022 was $0.2 million and $0.5 million, respectively. The Company’s $2.6 million termination fee was rolled into the new swap and will be paid through March 1, 2026. Termination fees paid during each of the three months ended September 30, 2023 and 2022 were $0.1 million. Termination fees paid during each of the nine months ended September 30, 2023 and 2022 were $0.3 million.

The Company determines the hedge effectiveness of its interest rate swaps at inception by applying a quantitative evaluation of effectiveness using regression analysis. On an ongoing basis the Company applies an initial qualitative assessment of on-going effectiveness and reviews hedge effectiveness through assessing the hedge relationship by comparing the current terms of the swap and the associated debt to ensure they continue to coincide through the continued ability of the Counterparty to the swap to honor its obligations under the swap contract. The qualitative assessment may indicate that the hedge relationship is not highly effective, the Company would then perform a quantitative evaluation using regression analysis. The Company concluded the hedge was highly effective at inception and remained highly effective as of September 30, 2023.

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As of September 30, 2023, the total notional amount of the Company’s receive-variable/pay-fixed interest rate swap was $33.2 million.

The fair value of the Company’s derivative instrument on a recurring basis is set out below:


($ in thousands)
Instrument	Balance sheet location	Level 2 Fair Value
Interest rate swap	Derivative asset	$	2,133

The effect of derivative instruments on the consolidated statements of operations for the periods ended September 30, 2023 and 2022 is set out below:


Cash flow hedging relationships		Location of Gain (Loss) reclassified from Accumulated OCI into income
Interest rate contracts		Interest expense

The amount of noncash gain (loss) recognized in net income was ($0.2) million and $1.3 million during the three months ended September 30, 2023 and 2022, respectively. For the nine months ended September 30, 2023 and 2022, the amount of noncash gain recognized in net income was $2.1 million and $2.0 million, respectively. The net change associated with current period hedging transactions was ($0.3) million and $1.3 million for the three months ended September 30, ~~2017 has been reflected~~2023 and 2022, respectively, and ($0.3) million and $2.9 million for the nine months ended September 30, 2023 and 2022, respectively. The amortization of frozen Accumulated Other Comprehensive Income was $0.0 million and $0.1 million for the three months ended September 30, 2023 and 2022, respectively, and $0.2 million and $0.5 million for the nine months ended September 30, 2023 and 2022, respectively.

The fair values of the Company’s interest rate swap agreements are determined using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash receipts, which is considered a Level 2 measurement under the fair value hierarchy. Level 2 is defined as inputs other than quoted prices in active markets that are either directly or indirectly observable. There were no transfers between Levels 1, 2 or 3 during the ~~dilutive earnings per share calculation.~~nine months ended September 30, 2023. The variable cash receipts are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves.

The following ~~equity awards and units are outstanding~~table outlines the movements in the other comprehensive income account as of September 30, ~~2017~~2023 and December 31, ~~2016, respectively.~~2022:

September 30, 2017

December 31, 2016
Shares

32,353

17,163
Common units

5,724

5,692
Unvested restricted stock

279

188

38,356

23,043


($ in thousands)	September 30, 2023		December 31, 2022
Beginning accumulated derivative instrument gain or loss	$	3,306	$	279
Net change associated with current period hedging transactions		(279)		2,433
Amortization of frozen AOCI on de-designated hedge		198		594
Difference between a change in fair value of excluded components		—		—
Closing accumulated derivative instrument gain or loss	$	3,225	$	3,306

Note ~~10—Subsequent Events~~11—Income Taxes

~~Subsequent~~The TRS income/(loss) before provision for income taxes consisted of the following:


	For the nine months ended
($ in thousands)	September 30, 2023		September 30, 2022
United States	$	(2,715)	$	2,359
International		—		—
Total	$	(2,715)	$	2,359

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The federal and state income tax provision (benefit) is summarized as follows:


	For the nine months ended
($ in thousands)	September 30, 2023		September 30, 2022
Current:
Federal	$	(144)	$	116
State		(41)		—
Other		—		—
Total Current Tax (Benefit) Expense	$	(185)	$	116
Deferred:
Federal		7		13
Total Tax (Benefit) Expense	$	(178)	$	129

Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and (b) operating losses and tax credit carryforwards. The tax effects of significant items comprising the TRS’s deferred taxes as of September 30, 2023 and December 31, 2022 are as follows:


($ in thousands)	September 30, 2023		December 31, 2022
Deferred tax assets:
Net operating loss	$	1,936	$	434
Realized capital losses		78		76
Deferred Revenue		11		—
Total deferred tax assets		2,025		510
Deferred tax liabilities:
Fixed assets	$	(20)	$	(18)
Intangible Assets		(124)		(32)
Total deferred tax liabilities	$	(144)	$	(50)
Valuation Allowance		(1,909)		(480)
Net deferred taxes	$	(28)	$	(20)

ASC 740 requires that the tax benefit of net operating losses, temporary differences and credit carryforwards be recorded as an asset to the ~~quarter end~~extent that management assesses that realization is “more likely than not.” Realization of the ~~Company repurchased an additional 279,210 shares at an average price~~future tax benefits is dependent on the TRS’s ability to generate sufficient taxable income within the carryforward period. Because of ~~$9.15~~the TRS’s recent history of operating losses, and management’s inability to accurately project future taxable income, management believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not likely to be realized and, accordingly, has provided a valuation allowance. The valuation allowance increased by $1.4 million during the nine months ended September 30, 2023. The amount of the valuation allowance for ~~total consideration~~deferred tax assets associated with excess tax deduction from stock-based incentive arrangements that is allocated to contributed capital if the future tax benefits are subsequently recognized is $0.0 million.

Net operating losses and tax credit carryforwards as of ~~$2.6 million.~~September 30, 2023 are as follows:


($ in thousands)	September 30, 2023		Expiration Year
Net operating losses, federal (Post-December 31, 2017)	$	7,513		Does not expire
Net operating losses, state	$	5,243		Various

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The effective tax rate of the TRS’s provision (benefit) for income taxes differs from the federal statutory rate as follows:


	September 30, 2023			December 31, 2022
Statutory Rate		21.00	%		21.00	%
State Tax		13.68	%		3.43	%
Valuation Allowance		(28.14)	%		(18.13)	%
Total		6.54	%		6.30	%

Note 12—Subsequent Events

We have evaluated subsequent events and transactions for potential recognition or disclosure in the financial statements through the day the financial statements were issued.

Dividends

On October 23, 2017 the Company fully repaid the remaining $5.5 million in principal on Farmer Mac Bond #2 which was due and payable on that date. The Company now has a total of $129.3 million outstanding under the Farmer Mac Facility, $54.9 million of which matures prior to the end of 2017.

~~On October 31, 2017, the Company completed one acquisition which is expected to be accounted for as an asset acquisition in South Carolina. Consideration totaled $2.2 million and was paid in cash.~~

~~On October 31, 2017, the Company issued 984,365 shares of common stock in exchange for 984,365 Common units that had been tendered for redemption.~~

~~On November 8, 2017,~~24, 2023, the Company’s ~~board~~Board of ~~directors~~Directors declared a ~~distribution~~quarterly cash dividend of ~~$0.1275~~$0.06 per share of common stock and Common unit payable on January 16, ~~2018~~2024 to ~~holders~~stockholders and unitholders of record as of January ~~1, 2018.~~2, 2024.

~~On November 8, 2017,~~Share Repurchase Program

Subsequent to September 30, 2023, the Company repurchased an additional 152,211 shares of its common stock at a weighted average price of $10.28 per share.

Real Estate Dispositions

Subsequent to September 30, 2023, the Company completed two farm dispositions in the High Plains region for $2.6 million in aggregate consideration. These properties were classified as held for sale as of September 30, 2023.

Borrowings on Credit Facilities

Subsequent to September 30, 2023, the Company made borrowings of $2.0 million against the Company’s ~~board~~lines of ~~directors declared a quarterly cash dividend of $0.375 per share of 6.00% Series B Participating Preferred Stock payable on January 2, 2017 to stockholders of record as of December 15, 2017.~~credit.

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Item 2.~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following analysis of our financial condition and results of operationsshould be read in conjunction with ~~our~~the consolidated financial statements and the notes included elsewhere in this Quarterly Report, as well as the information contained in our Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2022, filed with the Securities Exchange Commission ~~(“SEC”~~(the “SEC”) on February 23, ~~2017,~~2023, which is accessible on the SEC’s website at www.sec.gov. References to “the Company,” “we,” “our,” ~~“us”~~ and ~~“our company”~~“us” refer to Farmland Partners Inc. (“FPI”), a Maryland corporation, together with ~~our~~its consolidated subsidiaries, including Farmland Partners Operating Partnership, L.P., a Delaware limited partnership (the “Operating Partnership”), of which ~~we are~~FPI is the sole member of the sole general partner.

Special Note Regarding Forward-Looking Statements

We make statements in this Quarterly Report on Form 10-Q that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). These forward-looking statements include, without limitation, statements concerning ~~our proposed acquisition of American Farmland Company,~~pending acquisitions and dispositions, projections, predictions, expectations, estimates or forecasts as to our business, financial and operational results, future stock repurchases and other transactions affecting our capitalization, our dividend policy, future economic performance, crop yields and prices and future rental rates for our properties, ongoing litigation, as well as statements of management’s goals and objectives and other similar expressions concerning matters that are not historical facts. When we use the words “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, we intend to identify forward-looking statements. Although we believe 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: the ongoing war in Ukraine and its impact on our tenant’s businesses and the farm economy generally, high inflation and increasing interest rates, the onset of an economic recession in the United States and other countries that impact the farm economy, extreme weather events, such as droughts, tornadoes, hurricanes or floods, the impact of future public health crises on our business and on the economy and capital markets generally, general volatility of the capital markets and the market price of our common stock, changes in our business strategy, availability, terms and deployment of capital, our ability to refinance existing indebtedness at or prior to maturity on favorable terms, or at all, availability of qualified personnel, changes in our industry ~~interest rates~~ or the general economy, the degree and nature of our competition, the outcomes of ongoing litigation, our ability to identify new acquisitions or dispositions and close on pending acquisitions, or dispositions and the other factors described in the risk factors described in Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2022, and in other documents that we file from time to time with the SEC. Given these uncertainties, undue reliance should not be placed on such statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by law.

Overview and Background

~~Overview~~Our primary strategic objective is to utilize our position as a leading institutional acquirer, owner and ~~Background~~

~~We are an internally managed real estate company that owns and seeks to acquire~~manager of high-quality farmland located in agricultural markets throughout North ~~America.~~America to deliver strong risk adjusted returns to investors through a combination of cash dividends and asset appreciation. As of ~~the date of this Quarterly Report on Form 10-Q,~~September 30, 2023, we ~~own~~owned farms with an aggregate of approximately ~~154,164~~147,200 acres in Alabama, Arkansas, California, Colorado, Florida, Georgia, Illinois, Indiana, Kansas, Louisiana, Michigan, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, South Carolina, ~~South Dakota,~~ Texas, and Virginia. In addition, as of September 30, 2023, we owned land and buildings for four agriculture equipment dealerships in Ohio leased to Ag Pro under the John Deere brand and served as property manager for approximately 31,000 acres, including farms in Iowa. As of ~~the date~~September 30, 2023, approximately 70% of ~~this Quarterly Report on Form 10-Q, approximately 75% of the acres in~~ our portfolio ~~are~~(by value) was used to grow primary crops, such as corn, soybeans, wheat, rice and cotton, and approximately ~~25% of the acres in our portfolio~~30% was used to produce specialty crops, such as almonds, citrus, blueberries, ~~vegetables, citrus, nuts~~ and ~~edible beans.~~vegetables. We believe our portfolio gives investors ~~exposure to~~ the economic benefit of increasing global food demand ~~trend~~ in the face of growing scarcity of ~~high quality~~high-quality farmland and will continue to reflect the

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approximate ~~breakdown~~allocation of U.S. agricultural output between primary crops and animal protein (whose production relies principally on primary crops as feed), on one hand, and specialty crops, on the other.

In addition, in August 2015, we announced the launch of the FPI Loan Program, an agricultural lending product aimed at farmers, as a complement to our primary business of acquiring and owning farmland and leasing it to farmers. Underunder the FPI Loan Program, we make loans to third-party farmers (both tenant and non-tenant) to provide ~~partial~~ financing for

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property acquisitions, working capital requirements, ~~and~~ operational farming activities, farming infrastructure projects and for other farming and agricultural real estate related ~~purposes.~~ projects.

~~We were~~FPI was incorporated in Maryland on September 27, 2013, and ~~we are~~is the sole member of the sole general partner of the Operating Partnership, which is a Delaware limited partnership that was formed on September 27, 2013. All of ~~our~~FPI’s assets are held by, and ~~our~~its operations are primarily conducted through, the Operating Partnership and its wholly owned subsidiaries. As of September 30, ~~2017 we own a 85.1% interest in~~2023, FPI owned 97.6% of the ~~Operating Partnership.~~Common units and none of the Series A preferred units. See “Note ~~9 –~~ 9—Stockholders’ Equity and Non-controlling Interests” within the notes to the consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information regarding the non-controlling interests.

~~We have~~FPI has elected to be taxed as a ~~real estate investment trust (“REIT”)~~REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, commencing with ~~our~~its short taxable year ended December 31, 2014.

The following table sets forth our ownership of acreage by ~~region:~~region as of September 30, 2023:


Region ⁽¹⁾	Owned Acres	Managed Acres	Total Acres
Corn Belt ⁽²⁾	45,373	22,027	67,400
Delta and South	33,700	1,489	35,189
High Plains	24,137	1,380	25,517
Southeast	32,752	6,107	38,859
West Coast	11,248	—	11,248
	147,210	31,003	178,213

(1)
~~Region(1)~~		~~Total Acres~~
~~Corn Belt~~		~~47,472~~
~~Delta & South~~		~~28,912~~
~~High Plains~~		~~31,503~~
~~Southeast~~		~~39,805~~
~~West Coast~~		~~6,472~~
		~~154,164~~

~~(1)~~

Corn Belt includes farms located in Illinois, Indiana, Iowa, Michigan, Missouri and eastern Nebraska. Delta and South includes farms located in Arkansas, Louisiana, Mississippi and ~~Mississippi.~~Oklahoma. High Plains includes farms located in Colorado, Kansas, western Nebraska and Texas. Southeast includes farms located in Alabama, Florida, Georgia, North Carolina, South Carolina and Virginia. West Coast includes farms located in California.

(2)	In addition, we own land and buildings for four agriculture equipment dealerships in Ohio leased to Ag Pro under the John Deere brand.

We intend to continue ~~to acquire~~acquiring additional farmland that we believe provides opportunities for risk-adjusted investment returns consistent with our primary strategic objective. We also intend to ~~achieve scale and further diversify our portfolio by geography, crop type and tenants.~~continue to selectively dispose of assets when we believe we can redeploy the proceeds from such sales in a manner that enhances stockholder returns. We also may acquire, and make loans secured by mortgages on, properties related to farming, such as grain storage facilities, grain elevators, feedlots, processing plants and distribution centers, as well as livestock farms or ranches. In addition, we provide volume purchasing services to our tenants, engage directly in farming, and provide property management, auction, and brokerage services through FPI Agribusiness Inc., our taxable REIT subsidiary (the “TRS” or “FPI Agribusiness”)~~, whereby we operate a small number of development properties (approximately 716 acres as~~. As of September 30, ~~2017) relying on custom farming contracts with local farm operators. Additionally,~~2023, the TRS ~~operates a volume purchasing program for participating tenants by working with suppliers to pool tenant purchasing power and create cost savings through bulk orders.~~directly operated 2,108 acres of farmland located in California.

Our principal source of revenue is rent from tenants that conduct farming operations on our farmland. The majority of the leases that are in place as of the date of this Quarterly Report on Form 10-Q have fixed ~~annual rental~~rent payments. Some of our leases have variable rents based on the revenue generated by our farm-operator tenants. We believe that this mix of fixed and variable rents will help insulate us from the variability of farming operations and reduce our credit-risk exposure to farm-operator tenants while making us an attractive landlord in certain regions where variable leases are customary. However, we may be exposed to tenant credit risk and farming operation risks, particularly with respect to leases that do not require advance payment of 100% of the ~~annual~~fixed rent, ~~leases for which the~~variable rent ~~is based on a percentage of a tenant's farming revenues~~arrangements and leases with terms greater than one year.

In addition, ~~an increasing number of our~~for leases that provide for ~~crop share lease~~variable rent payments, ~~which~~ we ~~only~~may recognize revenue up to the amount of the crop insurance ~~minimum, the~~minimum. The excess above crop insurance minimums cannot be recognized as revenue until the tenant enters into a contract to sell their crop. Generally, we expect tenants to enter into contracts to sell their crop following the harvest of the crop.

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~~Recent Developments~~

~~Public Offering of Series B Participating Preferred Stock~~

~~On August 17, 2017, we entered into an underwriting agreement with Raymond James & Associates, Inc. and Jefferies LLC, as representatives~~Impact of the ~~underwriters, pursuant to which we sold 6,037,500 shares our newly designated 6.00% Series B Participating Preferred Stock, $0.01 par value per share, at~~War in Ukraine

Food prices were near record highs even before the invasion of Ukraine. Ukraine and the Russian Federation represent large portions of global trade in a ~~public offering price~~variety of ~~$25.00 per share, which is the initial liquidation preference~~agricultural products (e.g., 34% of ~~the Series B Participating Preferred Stock.~~

~~Shares of Series B Participating Preferred Stock, which represent equity interests in the Company, generally have no voting rights and rank senior~~global wheat exports, according to the ~~Company’s common stock with respect~~International Food Policy Research Institute). The disruption in farming operations in Ukraine, and trade from the Black Sea region has stressed the food supply for many countries that depend on imports of agricultural products from the region, such as Egypt (wheat for food products) and China (corn for livestock).

The Russian Federation is also a major exporter of fertilizers and trade restrictions have hampered the flow of fertilizers to ~~dividend rights~~countries dependent on imports from the Black Sea region. United States farmers, including our tenants, however, generally source fertilizers from the United States and ~~rights upon liquidation. Each share of Series B Participating Preferred Stock entitled~~Canada.

We anticipate that U.S. farmers will continue to ~~receive cumulative preferential cash distributions at a rate of 6.00% per annum of~~be an important contributor to global food imports as Russia continues its aggression against Ukraine, and high demand for primary crops, which are the $25 liquidation preference, which is payable quarterly in arrears on the last day of March, June, September and December (the “Initial Liquidation Preference”). Upon liquidation, before any payment or distribution of the assets of the Company is made to or set apart for the holders of equity securities ranking junior to the Series B Participating Preferred Stock, the holders of the Series B Participating Preferred Stock will be entitled to receive the sum of:

~~(i)~~

~~the Initial Liquidation Preference,~~

~~(ii)~~

~~(iii)~~

~~all accrued and unpaid dividends, subject to a 9.0% cap on total return (the “Final Liquidation Preference”).~~

After September 30, 2021, but prior to September 30, 2024, we at our option, may redeem all, but not less than all, of the then-outstanding shares of Series B Participating Preferred Stock at any time, for cash or convert into sharescore of our ~~common stock, at a price equal to the Final Liquidation Preference plus an amount equal to~~ ~~the product of:~~

~~(i)~~

~~the Final Liquidation Preference, and~~

~~(ii)~~

~~At any time on or after September 30, 2024, the Company, at its option, may redeem all, but not less than all,~~business, together with high commodity prices, will sustain high levels of ~~the then-outstanding shares of Series B Participating Preferred Stock at the:~~

~~(i)~~

~~redemption price per share equal to the Initial Liquidation Preference, plus~~

~~(ii)~~

~~the FVA Amount, plus~~

~~(iii)~~

~~any accrued and unpaid dividends.~~

The total rate of return on shares of the Series B Participating Preferred Stock is subject to a cap such that the rate of return, when considering the Initial Liquidation Preference, the FVA Adjustment and the Premium Amount plus accrued and unpaid dividends, will not exceed 9.0%.

In connection with the issuance of the Series B Participating Preferred Sock, the sole general partner of the Operating Partnership entered into Amendment No. 2 to the Partnership Agreement in order to provideprofitability for the issuance, and the designation of the terms and conditions, of newly classified 6.00% Series B participating preferred units of limited partnership interest in the Operating Partnership, the economic terms of which are identical to those of the Series B Participating Preferred Stock. We contributed the net proceeds from the offering of the Series B Participating Preferred Stock to the Operating Partnership in exchange for 6,037,500 Series B participating preferred units. For more information about our Series B Participating Preferred Stock, see out Current Report on Form 8-K fied on August 16, 2017.

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~~Completed Acquisitions~~

~~AFCO Mergers~~

On February 2, 2017, we completed the previously announced merger with American Farmland Company (“AFCO”) at which time one of our wholly owned subsidiaries was merged with and into American Farmland Company L.P. (“AFCO OP”) with AFCO OP surviving as a wholly owned subsidiary of the Operating Partnership (the “Partnership Merger”), and AFCO merged with and into another one of our wholly owned subsidiaries with such wholly owned subsidiary surviving.

At the effective time of the Company Merger, each share of common stock of AFCO, par value $0.01 per share (“AFCO Common Stock”), issued and outstanding immediately prior to the effective time of the Company Merger (other than any shares of AFCO Common Stock owned by any wholly owned subsidiary of AFCO or by us or the Operating Partnership or any wholly owned subsidiary of us or the Operating Partnership), was automatically converted into the right to receive, subject to certain adjustments, 0.7417 shares of our common stock (the “Company Merger Consideration”). In addition, in connection with the Company Merger, each outstanding AFCO restricted stock unit that had become fully earned and vested in accordance with its terms was, at the effective time of the Company Merger, converted into the right to receive the Company Merger Consideration. We issued 14,763,604 shares of our common stock as consideration in the Company Merger and 17,373 shares of our common stock in respect of fully earned and vested AFCO restricted stock units.

At the effective time of the Partnership Merger, each Common unit of limited partnership interest in AFCO OP issued and outstanding immediately prior to the effective time of the Partnership Merger, was converted automatically into the right to receive, subject to certain adjustments, 0.7417 Common units. We issued 218,525 Common units as consideration in the Partnership Merger.

We believe that following the AFCO Mergers, our portfolio gives investors exposure to the increasing global food demand trend in the face of growing scarcity of high quality farmland and will reflect the approximate breakdown of U.S. ~~agricultural output between primary crops and animal protein (whose production relies principally on primary crops as feed), on one hand, and specialty crops, on the other.~~

~~Acquisitions under Contract~~

On September 22, 2017, we entered into a purchase agreement to acquire three tree nut ranches in California for total consideration of $110 million in cash. The purchase agreement contains certain customary representations, warranties and covenants of the parties, and the acquisition of the Properties is expected to close in December 2017, subject to the satisfaction of certain customary closing conditions. In connection with the closing pursuant to the purchase agreement, the Company expects to enter into a 25-year triple-net lease agreement with the current owner on a revenue share basis with respect to the properties. During the term of the lease, the operator will be responsible for the operation, maintenance and improvements on the properties and will have a right of first refusal if we were to hold the Properties for sale. There can be no assurances that the acquisition will be completed, or that the lease will be entered into, on the expected timeline, on the expected terms or at all. ~~We have signed a non-binding term sheet for a debt facility with a major financial institution to finance a portion of this acquisition.~~farmers. We can provide no assurances ~~that~~as to whether this anticipated increase in profitability will have an impact on rental rates in the regions in which we ~~will be able~~operate.

Inflation and Interest Rates

Most of our farming leases have lease terms of three years for row crops and up to ~~enter into the anticipated debt facility on the expected terms, on the expected timeline or at all.~~

~~On August 1, 2017 the Company contracted to acquire farmland in South Carolina~~seven years for ~~an approximate purchase price of $1.1 million. There can be no assurances that the acquisition will be completed on the expected timeline, on the expected terms or at all.~~

~~Prudential Termination Agreement~~

~~On February 18, 2017, we entered into a Termination Agreement (the “Termination Agreement”) with Prudential Capital Mortgage Company (“the Prudential Sub-Advisor”)~~permanent crops, pursuant to which each tenant is responsible for substantially all of the operating expenses related to the property, including maintenance, water usage and insurance. As a result, we ~~and~~believe that the ~~Prudential Sub-Advisor agreed to terminate, effective as~~effect on us of ~~March 31, 2017, the Amended and Restated Sub-Advisory Agreement (the “Sub-~~

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~~Advisory Agreement”), dated as of October 23, 2015,~~inflationary increases in operating expenses will be borne by and among American Farmland Company, American Farmland Advisors, American Farmland Company L.P. and Prudential and certain related property management agreements (together with the Sub-Advisory Agreement, the “Prudential Agreements”).

~~The Termination Agreement provided that, as of March 31, 2017, Prudential no longer provides services to us~~our tenants under the ~~Prudential Agreements.~~terms of their leases. We ~~paid~~believe that inflationary increases in farmer profitability will impact lease renegotiations upon renewals. Furthermore, high levels of inflation have prompted the ~~Prudential Sub-Advisor $1.6 million~~Board of Governors of the United States Federal Reserve (the “Federal Reserve”) to increase the Federal Reserve’s discount rate, which has led to a significant increase in ~~cash, which is equal to~~market short- and long-term interest rates since the ~~fee~~beginning of 2022. This increase in rates has significantly increased the cost of our floating rate debt and has also significantly increased the cost of certain of our MetLife debt with interest rates that ~~would~~ have been ~~owed to Prudential~~reset since the beginning of 2022. The Federal Reserve may continue this policy of rate raising which would further increase interest expense for ~~services through~~many businesses, including the quarter ended March 31, 2017, plus a termination fee of $0.2 million. The statement of operations impact to the Company for the nine month period ended September 30, 2017 totaled $0.7 million, which is included in property operating expenses, with the remaining $0.9 million being included in the accruals as a component of the purchase accounting surrounding the AFCO Mergers as this represented the costs incurred by AFCO prior to the AFCO Mergers. Company.

Factors That May Influence Future Results of Operations and Farmland Values

The principal factors affecting our operating results and the value of our farmland include long-term global demand for food relative to the global supply of ~~food,~~food; farmland fundamentals and economic conditions in the markets in which we own ~~farmland,~~farmland; and our ability to increase or maintain rental revenues while controlling expenses. We are currently in an environment of appreciating land values, driven by, among other things, inflation, strong commodity prices (further exacerbated by the war in Ukraine) and an outlook for high levels of farmer profitability. Sustained high interest rates can serve as a counter-balancing external factor to this favorable environment. Each year additional farmland in various portions of the world, including the United States, is repurposed for commercial development, thus decreasing the land acreage available for production of grains, oil seeds, permanent and specialty crops necessary to feed the world’s growing population. Although farmland prices may show a decline from time to time, we believe that any reduction in U.S. farmland values overall is likely to be short-lived as global demand for food and agricultural commodities typically exceeds global ~~supply. In addition, although prices for many crops experienced significant declines in 2014, 2015~~supply and ~~2016, we do not believe that such declines represent a trend that will continue over the long term. Rather, we believe that long-term growth trends in global population, GDP per capita and~~quality farmland ~~productivity will result in increased revenues per acre for primary crops over time.~~becomes scarcer.

Demand

We expect that global demand for food, driven primarily by significant increases in the gross domestic product (“GDP”) per capita and global population, ~~and GDP per capita,~~ will continue to be the key driver of farmland values. We ~~further~~ expect that global demand for most crops will continue to grow to keep pace with global population growth, which we anticipate will lead to either higher prices and/or higher yields and, therefore, higher rental rates on our farmland, as well as sustained growth in farmland values over the long-term.growth. We also believe that growth in global GDP per capita, particularly in developing nations, will contribute significantly to increasing demand for primary crops. As global GDP per capita increases, the composition of daily caloric intake is expected to shift away from the direct consumption of primary crops toward more fruits, vegetables and animal-based proteins, which is expected to result in increased demand for primary crops as feed for livestock. According to the United Nations’ Food and Agriculture Organization (“UN FAO”), these factors are expected to require more than one billion additional tons of global annual grain production by 2050, a 45.5% increase from 2005-2007 levels and more than two times the 475 million tons of grain produced in the United States in 2014. Furthermore, weWe believe ~~that, as GDP per capita grows, a significant portion of additional household income is allocated to food and~~ that once individuals increase consumption of ~~and spending on,~~ higher

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quality food, they will strongly resist returning to their former dietary habits, resulting in greater inelasticity in the demand for food. ~~As a result, we believe that, as global demand for food increases,~~We anticipate these factors will lead to either higher crop prices and/or higher yields and, therefore, higher rental rates on our farmland, ~~and the value of our~~as well as sustained growth in farmland ~~will increase~~values over the ~~long-term. Global~~long term.

In addition, global demand for corn and soybeans as inputs in the production of biofuels such as ethanol and soy diesel also could impact the prices of corn and soybeans, which, in the ~~long-term,~~long term, could impact our rental revenues and our results of operations. However, the success of our business strategy is not dependent on growth in demand for biofuels and we do not believe that demand for corn and soybeans as inputs in the production of biofuels will materially impact our results of operations or the value of our farmland, primarily because we believe that growth in ~~global population and~~ GDP per capita and global population will be more significant drivers of global demand for primary crops over the ~~long-term.~~long term.

~~Supply~~

~~Global supply~~Despite advances in income, according to “The State of ~~agricultural commodities is driven~~Food Security and Nutrition in the World 2023,” a report by two primary factors, the number of tillable acres available for crop production and the productivity of the acres being farmed. Although the amount of global cropland in use has gradually increased over time, growth has plateaued over the last 20 years. Cropland area continues to increase in developing countries, but after accounting for expected continuing cropland loss, the UN FAO, ~~projects only 171 million acres will be added~~2.4 billion people were facing food insecurity in 2022. The ongoing war in Ukraine has disrupted supply chains and affected the prices of grain, fertilizer, and energy, further stressing food supplies for developing countries that are dependent on food imports.

Supply

According to the World Bank Group arable land per capita has decreased by approximately 50% from ~~2005-2007~~1961 to ~~2050,~~2018, further exacerbated by international conflicts, as we are seeing with the ongoing war in Ukraine. Typically, additions to cropland are in areas of marginal productivity, while cropland loss, driven by urban development, tends to affect primarily highly productive areas. According to a ~~4.3% increase. Furthermore,~~study published in 2017 in the Proceedings of the National Academy of Sciences, ~~of the~~

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~~United States of America estimates~~urban expansion is expected to take place on cropland that ~~farmland lost to development worldwide~~ is ~~on average 1.8~~1.77 times more productive than the ~~new farmland coming to production. In comparison, world population is expected to grow over the same period to 9.7 billion, a nearly 40% increase. While we expect growth in the~~ global supply of arable land, we also expect that landowners will only put that land into production if increases in commodity prices and the value of farmland cause landowners to benefit economically from using the land for farming rather than alternative uses. We also believe that decreases in the amount of arable land in the United States and globally as a result of increasing urbanization will partially offset the impact of additional supply of farmland.average. The global supply of food is also impacted by the productivity per acre of ~~tillable~~arable land. Historically, productivity gains (measured by average crop yields) have been driven by advances in seed technology, farm equipment, irrigation techniques, and improvements in soil health, chemical ~~fertilizers~~nutrients and ~~pesticides. Furthermore,~~pest control. On the other hand, we expect the ~~increasing~~ shortage of water in many irrigated growing regions in the United States and ~~other growing regions~~ around the globe, often as a result of new water restrictions imposed by laws or regulations, to lead to decreased productivity ~~growth on many acres and, in some cases, cause yields to decline~~ on those acres.

Conditions in Our Existing Markets

Our portfolio ~~spans~~is broadly diversified across numerous farmland markets and crop ~~types, which provides us broad diversification across conditions in these markets.~~types. Across all regions, farmland acquisitions continue to be dominated by buyers who are existing farm owners and ~~operators;~~operators, whereas institutional ~~and investor acquirors remain~~investors constitute a small fraction of the ~~industry.~~industry (less than 5% of total farmland in the United States). We generally see firm demand for high quality properties across all regions and crop types.

~~With regard~~Farmland values are typically very stable, often showing modest increases even in years of commodity price weakness. We expect this trend to ~~leasing dynamics, we~~continue, with modest but consistent annual increases that compound into significant appreciation in the long term. Under certain market conditions, as in 2021 and 2022, with strong commodity prices and farmer profitability, there are periods of accelerating appreciation in farmland values. Leases renegotiated under the robust market conditions experienced in 2021 and 2022 reflected significant rent increases. While the pace of appreciation and transaction volume has slowed in 2023, these metrics remain strong relative to long-term trends.

We believe quality farmland in the United States has a near-zero vacancy rate as a result of the supply and demand fundamentals discussed above. We believe that due to the relatively high fixed costs associated with farming operations (including equipment, labor and knowledge), many farm operators choose to rent additional acres of farmland when it becomes available in order to allocate their fixed costs over additional acres. Our view is that rental rates for farmland are a function of farmland operators’ view of the long-term profitability of farmland, and that many farm operators will compete for farmland even during periods of decreased profitability due to the scarcity of farmland available to rent. In particular, we believe that due to the relatively high fixed costs associated with farming operations (including equipment, labor and knowledge), many farm operators in some circumstances will rent additional acres of farmland when it becomes available in order to allocate their fixed costs over additional acres. Furthermore, because it is generally customary in the industry to provide the existing tenant with the opportunity to re-lease the land at the end of each lease term, we believe that many farm operators will rent additional land that becomes available in order to control the ability to farm that land in future periods. As a result, in our experience, many farm operators will aggressively pursue rental opportunities in their operable geographic area, even when the farmer anticipates lower ~~current~~profits returns or even short-term losses.

In our primary row crop farmland, we see flat to modestly lower rent rates in connection with 2017 lease renewals. This is consistent with, on the one hand, headwinds in primary crop markets and, on the other, tenant demand for leasing high quality farmland. In 2016, we had a higher portion than in 2015 of our fixed cash leases providing for payment of 50% of a year’s rent after harvest rather than substantially all of the lease paid prior to harvest, as compared to 2016. This structure better matches operator cash flows. Given per acre revenue on our primary crop farmland and crop insurance levels, we do not expect that this structure materially changes tenant credit risk. Due to the short term nature of most of our primary crop leases, we believe that a recovery of crop prices and farm profitability will be reflected relatively rapidly in our revenues via increases in rent rates. Across specialty crops, operator profitability generally remains healthy. Participating lease structures are common in many specialty crops and base lease rates are consistent with 2016.

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Lease Expirations

Farm leases are generally ~~short-term~~one to three years in ~~nature.~~duration. As of September 30, ~~2017,~~2023, our portfolio had the following lease expirations as a percentage of approximate acres leased and annual minimum ~~cash~~fixed rents:

($ in thousands)

Year Ending December 31,

Approximate Acres

% of Approximate Acres

Annual Cash Rents

% of Annual Cash Rents

2017 (remaining three months)

30,797

20.0
%

$
6,000

19.3
%
2018

33,978

22.1
%

6,567

21.1
%
2019

57,525

37.4
%

11,045

35.5
%
2020

11,663

7.6
%

4,272

13.7
%
2021

13,184

8.6
%

2,329

7.5
%
2022 and beyond

6,734

4.3
%

860

2.9
%

153,881

100.0
%

$
31,073

100.0
%


($ in thousands)
Year Ending December 31,	Approximate Acres	% of Approximate Acres		Annual Fixed Rents		% of Annual Fixed Rents
2023 (remaining three months)	16,857	11.5	%	$	14,343	32.0	%
2024	39,990	27.1	%		11,749	26.2	%
2025	30,603	20.8	%		6,276	14.0	%
2026	21,935	14.9	%		3,748	8.4	%
2027	19,439	13.2	%		5,466	12.2	%
Thereafter	18,386	12.5	%		3,245	7.2	%
	147,210	100.0	%	$	44,827	100.0	%

As of September 30, 2017, we had 72,681 acres for which lease payments are based on a percentage of farming revenues and 716 acres that are leased to our TRS, which are not included in the table above. From time to time, we may enter into recreational leases on our farms. We expect market rents in the coming year to be flat. Since lease renewal periods are exercisable at the option of the lessee, the preceding table presents future lease expirations during the initial lease term only.

Rental Revenues

Our revenues are primarily generated from renting farmland to operators of farming businesses. Our leases generally have terms ranging from one to ~~ten years.~~three years, with some extending up to 40 years (e.g., renewable energy leases). Although the majority of our leases do not provide the tenant with a contractual right to renew the lease upon its expiration, we believe it is customary to provide the existing tenant with the opportunity to renew the lease, subject to any increase in the rental rate that we may establish. If the tenant elects not to renew the lease at the end of the lease term, the land will be offered to a new tenant. As discussed above, the vacancy rate for quality U.S. farmland is near-zero and there is often competition among prospective tenants for quality farmland; accordingly, we do not believe that re-leasing farmland upon the expiration of existing leases is a significant risk for the Company.

The leases for the majority of the row-crop properties in our portfolio provide that tenants ~~must~~ pay us, ~~at least~~typically, 50% ~~(and often 100%)~~ of ~~the annual~~their fixed farm rent in advance of each spring planting season. As a result, we collect a significant portion of total annual rents in the first calendar quarter of each ~~year. We~~year, which we believe ~~our use of leases pursuant to which at least 50% of the annual rent is payable in advance of each spring planting season~~ mitigates the tenant credit risk associated with the variability of farming operations that could be adversely impacted by poor crop yields, weather conditions, mismanagement, undercapitalization or other factors affecting our tenants. Tenant credit risk is further mitigated by the farming industry practice of purchasing crop insurance in almost every circumstance because it is required by lenders who provide working capital financing to our tenants and due to requirements in our leases. In certain cases, the Company perfects its security interest in the crop insurance proceeds and the underlying growing crops using practices applicable in the state where the farm is located. Prior to acquiring farmland property, we take into consideration the competitiveness of the local farm-operator tenant environment in order to enhance our ability to quickly replace a tenant that is unwilling to renew a lease or is unable to pay a rent payment when it is due. ~~Some~~Many of our leases provide for athe reimbursement by the tenant of the ~~property~~property’s real estate taxes that we ~~pay. We expect that, going forward, a progressively smaller percentage of our leases will provide for such a reimbursement.~~pay in connection with the farms they rent from us.

Expenses

Substantially all of our farm leases are structured in such a way that we are responsible for major maintenance expenses, certain liability and casualty insurance and taxes (which are sometimes reimbursed to us by our tenants), while our tenant is responsible for operating expenses, minor maintenance, water usage and all of the additional input costs related to farming operations on the property, such as seed, fertilizer, labor and fuel. We expect ~~that substantially all of the~~ leases for farmland we acquire in the future will ~~continue~~contain similar features related to ~~be structured in a manner consistent with substantially all of our existing leases.~~expenses. As the owner of the land, we generally only bear costs related to major capital improvements permanently attached to the property, such as irrigation systems, drainage tile, grain storage facilities, permanent plantings or other physical structures customary for farms. In cases where capital expenditures are necessary, we typically seek to offset, over a period of multiple years, the costs of such capital expenditures by increasing rental rates. ~~We also incur the costs associated with maintaining liability and casualty insurance.~~

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We incur costs associated with running a public company, including, among others, costs associated with ~~employing~~ our personnel, Board of Directors, compliance, legal and ~~compliance costs. We incur costs associated with~~accounting, due diligence and acquisitions ~~including,~~(including, among others, travel expenses, and consulting ~~fees, and legal and accounting fees.~~ fees). Inflation in personnel costs, which is impacting many United States businesses, is also likely to impact our expenses.

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We also incur costs associated with managing ~~our farmland.~~farmland assets. The management of our farmland, generally, ~~is not labor or capital intensive because~~has significant economies of scale, as farmland generally has minimal physical structures that require routine inspection and maintenance, and our leases, generally, are structured to require the tenant to pay many of the ~~costs~~operating expenses associated with the property. ~~Furthermore, we believe that our platform is scalable, and we~~We do not expect the expenses associated with managing our portfolio of farmland to increase significantly as the number of farm properties we own increases over time. ~~Rather, we expect that as we continue to add additional farmland to our portfolio, we will be able to achieve economies of scale, which will enable us to reduce our operating costs per acre~~.

Crop Prices

~~Our exposure to~~While many people assume that short-term crop prices have a great impact on farm values, we believe that long-term farmer profitability and revenue per acre, expressed as crop prices multiplied by crop yield, is a much more significant driver of farm value. Crop yield trends in corn and soybeans have been steadily increasing over the last thirty years. After yields for the 2022/2023 marketing year (September 2022 to August 2023) decreased slightly for both corn and soybeans compared to the previous year, the U.S. Department of Agriculture projects yields to be flat for the 2023/2024 marketing year (September 2023 to August 2024). Short-term crop price ~~declines is~~changes have had little effect historically on farmland values. They also have a limited impact on our rental revenue, as most of our leases ~~do not factor~~provide for fixed farm rents, a common approach in ~~per bushel prices and instead are set on a rental rate per acre basis. This approach is common throughout agriculture for several reasons. This approach recognizes that the value of leased land~~agricultural markets, especially with respect to ~~a tenant is more closely linked to the total revenue produced on the property which is driven by crop yield and crop price. This approach~~row crops. Fixed farm rent significantly simplifies the administrative requirements for the landlord and the tenant, significantly. This approach supports the tenants’ desire to maintain access to their leased farms which are in short supply, a concept expanded upon below, by providing the landlord consistent rents. Crop price exposure is also limited because tenants alsoas farmers benefit from the fundamental revenue hedging that occurs when large ~~crops~~crop yields mitigate the effect of lower crop ~~prices triggered by their large crop.~~prices. Similarly, ~~smaller crops~~lower crop yields have a tendency to ~~increase the~~trigger higher crop prices ~~triggered~~ and help increase revenue even when confronted by lower crop yields. Such hedging effect also limits the impact of short-term crop price changes on revenues generated by leases with a ~~smaller crop.~~variable rent component based on farm revenues. Further risk mitigation is available to tenants, and indirectly to us, via crop insurance and hedging programs implemented by tenants. Our TRS also takes advantage of ~~this~~these risk mitigation programs and strategies ~~also.~~

We believe quality farmland in the United States has a near-zero vacancy rate as a result of the supply and demand fundamentals. Our view is that rental rates for farmland are a function of farmland operators’ view of the long-term profitability of farmland, and that many farm operators will compete for farmland even during periods of decreased profitability duewith respect to the scarcity of farmland available to rent. In particular, we believe that due to the relatively high fixed costs associated with farming operations (including equipment, labor and knowledge), many farm operators in some circumstances will rent additional acres of farmland whenproperties it becomes available in order to allocate their fixed costs over additional acres. Furthermore, because it is generally customary in the industry to provide the existing tenant with the opportunity to re-lease the land at the end of each lease term, we believe that many farm operators will rent additional land that becomes available in order to control the ability to farm that land in future periods. As a result, in our experience, many farm operators will aggressively pursue rental opportunities in their operable geography, even when the farmer anticipates lower current returns or short-term losses.directly operates.

~~The value of a crop is~~

Crop prices are affected by many factors that can differ on a yearly basis. Weather conditions and crop ~~disease in major crop production regions worldwide creates~~diseases can create a significant risk of price ~~volatility, which may either increase or decrease the value of the crops that our tenants produce each year. Other material factors adding to the volatility of crop prices are changes~~volatility. Changes in government regulations and policy, fluctuations in global prosperity, fluctuations in foreign trade and export markets and eruptions of military conflicts, as we are seeing in Ukraine, or civil ~~unrest. Prices~~unrest also impact crop prices.

Interest Rates

The Federal Reserve has engaged in a series of significant increases in the discount rate, which is the rate the Federal Reserve charges member banks for ~~many primary crops, particularly corn, experienced meaningful declines in 2014, 2015,~~overnight funds. These increases affect all borrowing rates, and ~~2016. We do not believe~~for variable rate debt and debt with rates that reset periodically, such ~~declines represent~~increases have a ~~trend over the long term. Rather, we believe those declines represented a combination~~direct and relatively immediate impact.

As of correction to historical norms (adjusted for inflation) and high yields induced by farmer planting decisions and unusually favorable weather patterns. We expect that continued long-term growth trends in global population and GDP per capita will result in increased prices for primary crops over time. We expect pricing across specialty crops to generally remain firm relative to 2016 as U.S. and global consumer demand remains strong and supply is broadly balanced to demand. Although annual rental payments under the majoritySeptember 30, 2023, $261.3 million of our ~~leases are not based expressly on the quality~~outstanding indebtedness was subject to interest rates that reset from time to time (excluding our floating rate debt). A total of $174.1 million of such debt was subject to rate resets in 2023, and $125.1 million had been reset as of September 30, 2023. The remainder was reset effective October 1, 2023.

At September 30, 2023, $136.5 million, or ~~profitability~~32.3%, of our ~~tenants' harvests, any~~debt had variable interest rates, however, as stated in “Note 10—Hedge Accounting” to the accompanying consolidated financial statements, the Company has an interest rate swap with Rabobank for $33.2 million, which reduces floating rate exposure. After adjusting the $33.2 million of ~~these factors could adversely affect~~swapped Rabobank debt as fixed rate debt, the ratio of floating rate debt to total debt decreased to 24.4%. Assuming no increase in the level of our ~~tenants' ability to meet their obligations to us~~variable rate debt spreads, if SOFR increased by 1.0%, our cash flow would decrease by approximately $1.0 million per year, and if SOFR decreased by 1.0%, our ~~ability to lease or re-lease properties on favorable terms.~~cash flow would increase approximately $1.0 million per year.

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~~Interest Rates~~

We expect that future changes in interest rates will impact our overall operating performance by, among other things, ~~increasing~~affecting our borrowing ~~costs.~~costs and borrowing costs of our tenants. While we may seek to manage our exposure to future changes in rates through interest rate swap agreements or interest rate caps, portions of our overall outstanding debt will likely remain at floating ~~rates.~~rates or subject to interest rates that reset periodically. In addition, a sustained material increase in interest rates may cause farmland prices to decline if the rise in real interest rates ~~(which is defined as nominal~~(nominal interest rates minus the inflation rate) is not accompanied by rises in the general levels of inflation. However, our business model anticipates that over time the value of our farmland will increase, as it has in the past, at a rate that is equal to or greater than the rate of

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inflation, which may in part offset the impact of rising interest rates on the value of our farmland, but there can be no guarantee that this appreciation will occur to the extent that we anticipate or at all.

International Trade

After an estimated 33% decrease in exports of corn for the 2022/2023 marketing year (September 2022 to August 2023), the U.S. Department of Agriculture (the “USDA”) estimates corn exports will be up 27% for the 2023/2024 marketing year (September 2023 to August 2024). After an estimated 8% decrease in exports of soybeans for the 2022/2023 marketing year, the USDA estimates soybean exports will be down 8% for the 2023/2024 marketing year, due to lower production.

According to the USDA Outlook for Agricultural Trade, the top three export countries from the United States are China, Canada, and Mexico. Exports to China for fiscal year 2022 (October 2021 to September 2022) were a record of $36.4 billion, up 9% from 2021. Exports to Canada were $28.6 billion, up 18% from 2021. Exports to Mexico were $28.0 billion, up 17% from 2021. Exports to China for fiscal year 2023 are forecast to decrease to $33 billion, exports to Mexico are expected to increase to $28.5 billion, and exports to Canada are expected to decrease to $27.8 billion.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with GAAP requires that management make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of our financial statements and the reported amounts of revenues and expenses during the reporting period. Except as set forth in Note 1 to the consolidated financial statements included in this Quarterly Report on Form 10-Q, there have been no changes to our critical accounting policies disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2022.

New or Revised Accounting Standards

For a summary of the new or revised accounting standards, please refer to “Note ~~1 –~~ 1—Organization and Significant Accounting Policies” within the notes to the consolidated financial statements included in this Quarterly Report on Form 10-Q.

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Results of Operations

Comparison of the three months ended September 30, ~~2017~~2023 to the three months ended September 30, ~~2016~~2022


	For the three months ended September 30,

									For the three months ended September 30,
($ in thousands)	2017		2016		$ Change		% Change		2023		2022		$ Change		% Change
OPERATING REVENUES:
Rental income	$	11,107	$	6,164	$	4,943	80	%	$	9,432	$	9,081	$	351	3.9	%
Tenant reimbursements		474		112		362	323	%		705		883		(178)	(20.2)	%
Crop sales										814		2,471		(1,657)	(67.1)	%
Other revenue		465		670		(205)	(31)	%		666		705		(39)	(5.5)	%
Total operating revenues		12,046		6,946		5,100	73	%		11,617		13,140		(1,523)	(11.6)	%


OPERATING EXPENSES
Depreciation, depletion and amortization		2,107		419		1,688	403	%		1,904		1,665		239	14.4	%
Property operating expenses		1,400		548		852	155	%		2,099		2,115		(16)	(0.8)	%
Cost of goods sold										703		1,673		(970)	(58.0)	%
Acquisition and due diligence costs		180		1,712		(1,532)	(89)	%		3		24		(21)	(87.5)	%
General and administrative expenses		1,707		1,587		120	8	%		2,651		2,505		146	5.8	%
Legal and accounting		450		330		120	36	%		398		407		(9)	(2.2)	%
Impairment of assets										3,840		—		3,840	NM
Other operating expenses		88		160		(72)	(45)	%		4		26		(22)	(84.6)	%
Total operating expenses		5,932		4,756		1,176	25	%		11,602		8,415		3,187	37.9	%
OPERATING INCOME		6,114		2,190		3,924	179	%		15		4,725		(4,710)	(99.7)	%


OTHER (INCOME) EXPENSE:
Other income		(135)		(72)		(63)	88	%
Other (income)										(41)		(366)		325	(88.8)	%
(Income) loss from equity method investment										(5)		—		(5)	NM
(Gain) loss on disposition of assets		(44)		—		(44)	NM			(10,293)		48		(10,341)	NM
Interest expense		3,683		2,065		1,618	78	%		6,230		3,891		2,339	60.1	%
Total other expense		3,504		1,993		1,511	76	%		(4,109)		3,573		(7,682)	NM

Net income before income tax expense		2,610		197		2,413	1,225	%

Income tax expense		—		97		(97)	NM


Net income before income tax (benefit) expense										4,124		1,152		2,972	258.0	%

Income tax (benefit) expense										(191)		33		(224)	NM

NET INCOME	$	2,610	$	100	$	2,510	2,510	%	$	4,315	$	1,119	$	3,196	285.6	%

NM=Not Meaningful

~~Table of Contents~~

Our ~~rental~~net income for the ~~period presented~~three months ended September 30, 2023 was ~~impacted~~affected partially by ~~the two acquisitions completed in the last quarter of 2016 and, to a greater extent, the 15~~ acquisitions and dispositions that occurred since the ~~AFCO Mergers completed in~~quarter ended September 30, 2022, as well as lower crop sales and cost of goods sold, higher interest expense and the ~~first three quarters~~impairment of ~~2017. To highlight the effect of changes due to acquisitions, we have separately discussed the rental~~a property classified as held for sale.

Rental income increased $0.4 million, or 3.9%, for the ~~same-property portfolio, which includes only properties owned~~three months ended September 30, 2023 compared to the three months ended September 30, 2022 resulting primarily from increased fixed farm rent and ~~operated~~variable rent on row crops, partially offset by lower solar and recreational rent.

Revenues recognized from tenant reimbursement of property taxes decreased $0.2 million, or 20.2%, for the ~~entirety~~three months ended September 30, 2023 compared to the three months ended September 30, 2022. This decrease was the result of ~~both periods presented. The same-property portfolio for the periods presented includes 110,828 acres, which represents 72% of our current portfolio on an acreage basis.~~asset dispositions.

~~Total rental income under cash leases for the same-property portfolio decreased to $4.9~~Crop sales totaled $0.8 million for the three months ended September 30, ~~2017, from $5.9~~2023 compared to $2.5 million for the three months ended September 30, ~~2016, as a~~2022. This decrease was the result of ~~average annual rent for~~a lower volume of crop sold on citrus farms and the ~~same-property portfolio decreasing year over year~~conversion of blueberry farms from direct operations to ~~$165 per acre~~third party leases in the ~~third quarter of 2017 from $199 in the comparative three-month period~~three months ended September 30, 2016. In the fourth quarter of 2016 we recognized $6.5 million in revenue in connection with the termination of certain leases. Had we recognized such revenue through the remaining life of the cancelled leases, the average annual rent for the same property portfolio would have decreased from $199 in the third quarter of 2016 to $187 in the third quarter of 2017. This decrease is primarily due2023 compared to the fact that more of our leases now require the tenant to pay a portion of its rent through crop share payments rather than through fixed cash rental payments. Under GAAP, we cannot recognize crop sharethree months ended September 30, 2022.

Other revenue ~~until our tenant has a contractual agreement to sell the crop, therefore such revenue is not included in our results of operations~~remained relatively flat at $0.7 million for the three months ended September 30, ~~2017. Management does not believe that same-property rent comparisons for periods shorter than the full year are necessarily indicative~~2023 and 2022.

Table of ~~the expected full year comparison because the majority of bonus~~Contents

Depreciation, depletion and ~~crop share rent payments are expected in the fourth quarter.~~

~~Total rental income~~amortization increased ~~$4.9~~$0.2 million, or ~~80%~~14.4%, for the three months ended September 30, ~~2017, as~~2023 compared to the three months ended September 30, ~~2016, resulting from~~2022. This increase was driven by non-recurring adjustments in the ~~completion~~third quarter of ~~17 acquisitions~~2023 and ~~the AFCO Mergers after September 30, 2016. For~~more depreciable assets placed into service partially offset by asset dispositions and more assets becoming fully depreciated.

Property operating expenses remained relatively flat at $2.1 million for the three months ended September 30, ~~2017, the average annual cash rent~~2023 and 2022.

Cost of goods sold totaled $0.7 million for the ~~entire portfolio remained consistent at $202 per acre~~three months ended September 30, 2023 compared to $1.7 million for the three months ended September 30, 2022. This decrease was the result of lower costs of citrus and the conversion of blueberry farms from direct operations to third party leases in the three months ended September 30, 2023 compared to the ~~same period in 2016.~~three months ended September 30, 2022.

~~Revenues recognized from tenant reimbursement of property taxes increased 323%. This increase is the result of~~ ~~an increased number of leases requiring reimbursement of property taxes to the Company by the tenant.~~

~~Other revenues totaled $0.5 million~~Acquisition and due diligence costs were negligible during the three months ended September 30, ~~2017,~~2023 and remained relatively consistent compared to ~~$0.7 million in the comparative three-month period ended September 30, 2016. The $0.5 million recognized in~~ the three months ended September 30, ~~2017 consisted of $0.2 million realized on crop sales from our farming operation in the TRS, in addition to $0.3 million earned on interest~~2022.

General and ~~amortization of net loan fees from notes receivable compared to $0.6 million and~~administrative expenses increased $0.1 million, respectively, recognized in the three months ended September 30, 2016. Mortgage notes receivable under the FPI Loan Program totaled $7.0 million as of September 30, 2017 compared to $2.9 million as of September 30, 2016.

~~Depreciation, depletion and amortization expense increased $1.7 million,~~ or ~~403%~~5.8%, for the three months ended September 30, ~~2017, as~~2023 compared to the three months ended September 30, 2016, as a result of acquiring approximately $0.3 million in depreciable assets in the last quarter of 2016 and an additional $84.6 million in depreciable assets during the first three quarters of 2017.2022. This ~~change~~increase was primarily driven by anhigher compensation expense partially offset by lower travel expense.

Legal and accounting expenses remained relatively flat at $0.4 million for the three months ended September 30, 2023 and 2022.

Impairment of assets increased ~~investment in permanent crops. Additionally, approximately $0.7~~$3.8 million for the three months ended September 30, 2023 compared to the three months ended September 30, 2022. This increase was ~~invested in~~the result of a property ~~improvements~~classified as held for sale that was written down to its estimated fair value less costs to sell (see “Note 1—Organization and Significant Accounting Policies—Assets Held For Sale” to the accompanying consolidated financial statements).

Other operating expenses were negligible during the ~~last quarter of 2016 along with $11.7 million in property improvements during~~three months ended September 30, 2023 and remained relatively consistent compared to the ~~first~~ three ~~quarters of 2017.~~months ended September 30, 2022.

~~Property operating expenses increased $0.9~~Other income decreased $0.3 million, or ~~155%~~88.8%, for the three months ended September 30, ~~2017, as~~2023 compared to the three months ended September 30, ~~2016,~~2022. This decrease is primarily ~~related~~due to proceeds from a property ~~taxes attributable to properties acquired since~~insurance claim received during the three months ended September 30, ~~2016.~~2022, due to weather-related damage.

~~Acquisition~~(Income) loss from equity method investment was negligible during the three months ended September 30, 2023 and remained relatively consistent compared to the three months ended September 30, 2022.

(Gain) loss on disposition of assets changed from a loss on disposition of assets of less than $0.1 million for the three months ended September 30, 20222 to a gain on disposition of assets of $10.3 million for the three months ended primarily due ~~diligence costs totaled~~the appreciation of farmland value on properties sold relative to book value as well as greater property dispositions in 2023 as compared to 2022.

Interest expense increased $2.3 million, or 60.1%, for the three months ended September 30, 2023 compared to the three months ended September 30, 2022. This increase was the result of an increase in interest rates and a higher outstanding balance of debt.

Income tax expense decreased $0.2 million for the three months ended September 30, 2017 as compared to $1.7 million recognized in the same period of the prior year. Prior year expenses largely related to cost associated with the acquisition of AFCO. The acquisition and due diligence costs recognized in the three months ended September 30, 2017 primarily consisted of $0.1 million of continued expense related to the AFCO Mergers as well as $0.1 million of land acquisition costs related to potential acquisitions that were not pursued further.

~~Table of Contents~~

~~General and administrative expenses increased $0.1 million, or 8%, for the three months ended September 30, 2017, as~~2023 compared to the three months ended September 30, 2016. The increase in general and administrative expenses was largely a result of increased costs related to our continued growth. During the three months ended September 30, 2017, employee compensation expenses increased $0.1 million which includes an increase in employee benefits expenses, as compared with the same period in 2016,2022. This decrease is due to ~~an increase in the number~~tax adjustments of ~~employees from 15 as~~prior period estimates.

Table of ~~September 30, 2016 to 16 as of September 30, 2017.~~ Contents

Legal and accounting expenses increased $0.1 million, or 36%, for the three months ended September 30, 2017, as compared to the three months ended September 30, 2016, primarily as a result of the continued growth of our portfolio and general corporate matters.

Other income increased $0.1 million, or 88%, for the three months ended September 30, 2017, as compared to the three months ended September 30, 2016, primarily due to higher interest income on bank accounts.

Interest expense increased $1.6 million, or 78%, for the three months ended September 30, 2017, as compared to the three months ended September 30, 2016. This increase is the result of an increase in our outstanding borrowings from $303.3 million as of September 30, 2016 to $465.8 million as of September 30, 2017 and increased interest rates. The increase in our total borrowings was primarily driven by the use of debt financing to acquire new properties as well as the debt assumed in the AFCO Mergers.

Comparison of the nine months ended September 30, ~~2017~~2023 to the nine months ended September 30, ~~2016~~2022

For the Nine Months Ended September 30,

($ in thousands)

2017

2016

$ Change

% Change
OPERATING REVENUES:

Rental income

$
28,381

$
16,462

$
11,919

72
%
Tenant reimbursements

1,230

276

954

346
%
Other revenue

1,044

931

113

12
%
Total operating revenues

30,655

17,669

12,986

73
%

OPERATING EXPENSES

Depreciation, depletion and amortization

5,651

1,102

4,549

413
%
Property operating expenses

4,399

1,529

2,870

188
%
Acquisition and due diligence costs

878

1,818

(940)

(52)
%
General and administrative expenses

5,840

4,770

1,070

22
%
Legal and accounting

1,151

882

269

30
%
Other operating expenses

363

248

115

46
%
Total operating expenses

18,282

10,349

7,933

77
%
OPERATING INCOME

12,373

7,320

5,053

69
%

OTHER (INCOME) EXPENSE:

Other income

(157)

(133)

(24)

18
%
(Gain) loss on disposition of assets

48

—

48

NM

Interest expense

9,852

7,869

1,983

25
%
Total other expense

9,743

7,736

2,007

26
%

Net income (loss) before income tax expense

2,630

(416)

3,046

(732)
%

Income tax expense

—

97

(97)

NM

NET INCOME (LOSS)

$
2,630

$
(513)

$
3,143

(613)
%


	For the nine months ended September 30,
($ in thousands)	2023		2022		$ Change		% Change
OPERATING REVENUES:
Rental income	$	28,510	$	27,823	$	687	2.5	%
Tenant reimbursements		2,574		2,470		104	4.2	%
Crop sales		1,689		4,316		(2,627)	(60.9)	%
Other revenue		3,101		4,778		(1,677)	(35.1)	%
Total operating revenues		35,874		39,387		(3,513)	(8.9)	%

OPERATING EXPENSES
Depreciation, depletion and amortization		5,905		5,076		829	16.3	%
Property operating expenses		6,709		6,128		581	9.5	%
Cost of goods sold		2,629		4,444		(1,815)	(40.8)	%
Acquisition and due diligence costs		17		86		(69)	(80.2)	%
General and administrative expenses		8,161		8,613		(452)	(5.2)	%
Legal and accounting		924		2,479		(1,555)	(62.7)	%
Impairment of assets		3,840		—		3,840	NM
Other operating expenses		81		65		16	24.6	%
Total operating expenses		28,266		26,891		1,375	5.1	%
OPERATING INCOME		7,608		12,496		(4,888)	(39.1)	%

OTHER (INCOME) EXPENSE:
Other (income) expense		23		(380)		403	NM
(Income) loss from equity method investment		17		(16)		33	NM
(Gain) on disposition of assets		(23,179)		(3,948)		(19,231)	487.1	%
Interest expense		16,998		11,461		5,537	48.3	%
Total other expense		(6,141)		7,117		(13,258)	NM

Net income before income tax (benefit) expense		13,749		5,379		8,370	155.6	%

Income tax (benefit) expense		(178)		129		(307)	NM

NET INCOME	$	13,927	$	5,250	$	8,677	165.3	%

NM=Not Meaningful

Our ~~rental~~net income for the ~~period presented~~nine months ended September 30, 2023 was ~~impacted~~affected partially by ~~the two acquisitions completed in the last quarter of 2016 and, to a greater extent, the 15~~ acquisitions and dispositions that occurred since the ~~AFCO Mergers completed in~~quarter ended September 30, 2022, as well as lower crop sales, cost of goods sold, auction and brokerage revenue, and legal and accounting expense, higher interest expense and the ~~first three quarters~~impairment of ~~2017. To highlight the effect of changes due to acquisitions, we have separately discussed the rental~~a property classified as held for sale.

Rental income increased $0.7 million, or 2.5%, for the ~~same-property portfolio, which includes only properties owned~~nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 resulting primarily from increased fixed farm rent and ~~operated for the entirety~~solar rent, partially offset by lower variable rent on citrus, grapes, tree nuts and row crops.

Revenues recognized from tenant reimbursement of ~~both periods presented. The same-property portfolio for the periods presented includes 74,420 acres, which represents 48% of our current portfolio on an acreage basis.~~

~~Table of Contents~~

~~Total rental income under cash leases for the same-property portfolio decreased to $8.0~~property taxes remained relatively flat at $2.6 million and $2.5 million for the nine months ended September 30, ~~2017,~~2023 and 2022, respectively.

Crop sales decreased $2.6 million, or 60.9%, for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. This decrease was the result of a lower volume of crop sold on citrus farms and the conversion of blueberry farms from ~~$12.0~~direct operations to third party leases.

Other revenue decreased $1.7 million, or 35.1%, for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. This decrease was primarily due to a decrease of $1.3 million in crop insurance proceeds, $1.3 million in auction and brokerage income partially offset by an increase of $0.9 million in management fees and interest income.

Table of Contents

Depreciation, depletion and amortization increased $0.8 million, or 16.3%, for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. This increase was driven by non-recurring adjustments in the second and third quarters of 2023 and more depreciable assets placed into service partially offset by asset dispositions and more assets becoming fully depreciated.

Property operating expenses increased $0.6 million, or 9.5%, for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 resulting from higher tax, insurance, and cost sharing on a West Coast farm partially offset by lower utilities expense.

Cost of goods sold decreased $1.8 million, or 40.8%, for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. This decrease was the result of a lower volume of crop sold on citrus farms and the conversion of blueberry farms from direct operations to third party leases partially offset by an increase in walnuts in the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022.

Acquisition and due diligence costs remained relatively flat at $0.0 million and $0.1 million for the nine months ended September 30, 2016, as a result of average annual rent for the same-property portfolio decreasing year over year to $145 per acre in the first three quarters of 2017 from $215 in the comparative nine-month period ended September 30, 2016. In the fourth quarter of 2016 we recognized $6.5 million in revenue in connection with the termination of certain leases. Had we recognized such revenue through the remaining life of the cancelled leases, the average annual rent for the same property portfolio would have2023 and 2022, respectively.

General and administrative expenses decreased from $215 in the first three quarters of 2016 to $179 in the first three quarters of 2017. This decrease is primarily due to the fact that more of our leases now require the tenant to pay a portion of its rent through crop share payments rather than through fixed cash rental payments. Under GAAP, we cannot recognize crop share revenue until our tenant has a contractual agreement to sell the crop, therefore such revenue is not included in our results of operations for the nine months ended September 30, 2017. Management does not believe that same-property rent comparisons for periods shorter than the full year are necessarily indicative of the expected full year comparison because the majority of bonus and crop share rent payments are expected in the fourth quarter.

~~Total rental income increased $11.9~~$0.5 million, or ~~72%~~5.2%, for the nine months ended September 30, ~~2017, as~~2023 compared to the nine months ended September 30, ~~2016, resulting entirely from the completion of 17 acquisitions~~2022. This decrease was primarily driven by lower stock-based and the AFCO Mergers after September 30, 2016. For the nine months ended September 30, 2017, the average annual cash rent for the entire portfolio remained consistent at $202 per acre compared to the same period in 2016.incentive compensation as well as lower travel expense partially offset by higher payroll costs.

~~Revenues recognized from tenant reimbursement of property taxes increased 346%. This increase is the result of~~ ~~an increased number of leases requiring reimbursement of property taxes to the Company by the tenant~~.

Other revenues totaled $1.0 million during the nine months ended September 30, 2017, compared to $0.9 million in the comparative nine-month period ended September 30, 2016. The $1.0 million recognized in the nine months ended September 30, 2017 consisted of $0.6 million realized on crop sales from our farming operation in the TRS, in addition to $0.4 million earned on interestLegal and amortization of net loan fees from notes receivable compared to $0.8 million and $0.1 million, respectively, recognized in the nine months ended September 30, 2016. Mortgage notes receivable under the FPI Loan Program totaled $7.0 million as of September 30, 2017 compared to $2.9 million as of September 30, 2016.

~~Depreciation, depletion and amortization expense increased $4.5~~accounting expenses decreased $1.6 million, or ~~413%~~62.7%, for the nine months ended September 30, ~~2017, as~~2023 compared to the nine months ended September 30, ~~2016, as~~2022, due primarily to the successful defense and termination of the stockholder class action litigation that was pending against the Company from July 2018 until dismissal of the litigation by a federal judge on April 6, 2022.

Impairment of assets increased $3.8 million for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. This increase was the result of ~~acquiring approximately $0.3~~a property classified as held for sale that was written down to its estimated fair value less costs to sell (see “Note 1—Organization and Significant Accounting Policies—Assets Held For Sale” to the accompanying consolidated financial statements).

Other operating expenses remained relatively flat at $0.1 million ~~in depreciable assets in~~for the ~~last quarter~~nine months ended September 30, 2023 and 2022.

Other (income) expense changed from other income of ~~2016 and an additional $84.6~~$0.4 million ~~in depreciable assets~~for the three months ended September 30, 2022 to other expense of less than $0.1 million for the three months ended September 30, 2023. This decrease is primarily due to proceeds from a property insurance claim received during the ~~first three quarters~~nine months ended September 30, 2022, due to weather-related damage partially offset by loss on early extinguishment of ~~2017. This change was primarily driven by an increased investment in permanent crops.Additionally, approximately $0.7 million was invested in property improvements~~debt during the ~~last quarter of 2016 along with $11.7 million in property improvements~~nine months ended September 30, 2022.

(Income) loss from equity method investment was negligible during the ~~first three quarters~~nine months ended September 30, 2023 and remained relatively consistent compared to the nine months ended September 30, 2022.

Gain on disposition of ~~2017.~~ assets increased $19.2 million for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 primarily due the appreciation of farmland value on properties sold relative to book value as well as greater property dispositions in 2023 as compared to 2022.

~~Property operating expenses~~Interest expense increased ~~$2.9~~$5.5 million, or ~~188%~~48.3%, for the nine months ended September 30, ~~2017, as~~2023 compared to the nine months ended September 30, ~~2016, primarily related to property taxes attributable to properties acquired since September 30, 2016. The~~2022. This increase ~~in property operating expenses also includes~~was the result of an increase in interest rates partially offset by a lower average balance on outstanding debt.

Income tax expense ~~relating to the Prudential Agreements assumed in the AFCO Mergers and subsequently terminated as of March 31, 2017, totaling $0.7 million compared to no such costs in the same period in 2016.~~

~~Acquisition and due diligence costs totaled $0.9~~decreased $0.3 million for the nine months ended September 30, 2017 as compared to $1.8 million recognized in the same period of the prior year. Prior year costs largely related to the acquisition of AFCO. The acquisition and due diligence costs recognized in the nine months ended September 30, 2017 primarily consisted of $0.5 million of costs related to the AFCO Mergers, $0.2 million of land acquisition costs related to potential acquisitions that were not pursued further, and $0.2 million of miscellaneous acquisition and due diligence expenses.

~~General and administrative expenses increased $1.1 million, or 22%, for the nine months ended September 30, 2017, as~~2023 compared to the nine months ended September 30, 2016. The increase in general and administrative expenses was largely a result of increased costs related to our continued growth. During the nine months ended September 30, 2017, employee compensation expenses increased $0.9 million which includes an increase in employee benefits expenses, as compared with the same period in 2016,2022 This decrease is due to ~~an increase in the number~~tax adjustments of employees from 15 as of September 30, 2016 to 16 as of September 30, 2017. During the nine months ended September 30, 2017, our public company costs increased due to increased investor relations, regulatory, compliance activity~~and general and administrative activity. This activity~~prior period estimates.

4442

Table of Contents

~~amounted to an increase of $0.2 million during the nine months ended September 30, 2017 compared to the same period in 2016.~~

Legal and accounting expenses increased $0.3 million, or 30%, for the nine months ended September 30, 2017, as compared to the nine months ended September 30, 2016, primarily as a result of increased costs related to transactions, including the AFCO Mergers, the continued growth of our portfolio and general corporate matters.

Other operating expenses totaling $0.4 million during the nine months ended September 30, 2017 is related to cost of crop sales on the $0.6 million of revenue recognized on crop sales from our TRS’s farming operations, compared to other operating expenses totaling $0.2 million during the nine months ended September 30, 2016 related to cost of crop sales on the $0.8 million of revenue recognized on crop sales in that period.

~~Other income increased $0.02 million, or 18%, for the nine months ended September 30, 2017, as compared to the nine months ended September 30, 2016, primarily due to higher interest on bank accounts.~~

Interest expense increased $2.0 million, or 25%, for the nine months ended September 30, 2017, as compared to the nine months ended September 30, 2016. This increase resulted from an increase in our outstanding borrowings from $303.3 million as of September 30, 2016 to $465.8 million as of September 30, 2017 and increased interest rates, which was offset by the absence of additional interest expense during the nine months ended September 30, 2017 related to interest and amortization of deferred loan fees associated with the $53.0 million Bridge Loan compared to $2.4 million during the nine months ended September 30, 2016. The increase in our total borrowings was primarily driven by the use of debt financing to acquire new properties as well as the debt assumed in the AFCO Mergers.

Liquidity and Capital Resources

Overview

Liquidity is a measure of our ability to meet potential cash requirements, including ongoing commitments to repay any outstanding borrowings, fund and maintain our assets and operations, acquire new properties, make distributions to our stockholders and ~~to Common~~ unitholders, and fund other general business needs.

~~Our short-term~~High levels of inflation have prompted the Federal Reserve to increase interest rates which has resulted in, and may continue to result in, increased interest expense. We expect to meet our liquidity requirements consist primarily of funds necessary to acquire additional farmland and make other investments consistent with our investment strategy, make principal and interest payments on outstanding borrowings, make distributions necessary to qualify for taxation as a REIT and fund our operations. Our sources of funds primarily will beneeds through cash on hand, undrawn availability under our lines of credit ($157.0 million in availability as of September 30, 2023), operating cash flows, borrowings, proceeds from equity issuances and ~~borrowings from prospective lenders. As at September 30, 2017~~selective asset dispositions where such dispositions are deemed to be in the ~~Company had $129.3 million in cash on hand.~~

During the remainder of 2017, $54.9 million of our borrowings will mature. Any cash that we use to satisfy our outstanding debt obligations will reduce the amounts available to acquire additional farms, which could adversely affect our growth prospects. Asbest interests of the date of this report, we have $3.1 million in capacity available under the Farm Credit of Central Florida Mortgage Note (as defined below). To date, we have repayed all 2017 maturities under the Famer Mac Facility using cash from the Series B Participating Preferred Stock offering. We have signed a non-binding term sheet with a major financial institution for a debt facility, which we intend to use to refinance the debt due to mature in 2017. The Company has also signed a non-binding term sheet for a debt facility with a major financial institution to finance a portion of the California property acquisition committed to during the quarter. However, we can provide no assurances that we will be able to enter into a binding agreement to refinance or secure the debt on similar terms or at all and thus alternative sources of capital may be necessary. ~~As of~~ ~~September 30, 2017, we had $465.8 million of debt, which may expose us to the risk of default under our debt obligations, restrict our operations and our ability to grow our business and revenues and restrict our ability to pay distributions to our stockholders.~~Company.

On August 17, 2017, we completed an underwritten public offering of 6,037,500 shares of Series B Participating Preferred Stock which generated net proceeds of $144.5 million. We intend to use the proceeds from the offering to partially fund our acquisition of the California properties discussed under “—Recent Developments—Acquisitions under Contract” and for future farmland acquistions in accordance with our investment strategy and for general corporate

~~Table of Contents~~

~~purposes. The Company has also used part of the proceeds to make initial debt repayments for maturing bonds under the Farmer Mac Facility,~~ we have signed a non-binding term sheet with a major financial institution for a debt facility, which we intend to use to refinance the remaining debt due to mature in 2017 and to replace cash used from the Series B Participating Preferred Stock offering initially used to make bond repayments.

~~In addition to utilizing current and any future available borrowings,~~May 6, 2022, we entered into equity distribution agreements ~~on September 15, 2015 in connection with the ATM Program,~~ under which ~~the Company has issued~~we may issue and ~~sold~~sell from time to time, through ~~the~~ sales agents, shares of our common stock having an aggregate gross sales price of up to ~~$25 million. Through September 30, 2017, the Company has generated $11.1~~$100.0 million ~~in net cash proceeds under the~~(the “ATM Program”). The ATM Program ~~which~~ is intended to provide cost-effective financing alternatives in the capital markets. We intend to use the net proceeds from the ATM Program, if any, for future farmland acquisitions in accordance with our investment strategy and for general corporate purposes, which may also include originating loans to farmers under our loan program. We only intendcontinue to utilize the ATM Program ifwhen the market price of our common stock ~~reaches~~remains at levels which are deemed appropriate by our ~~board~~Board of ~~directors.~~

~~Consolidated Indebtedness~~

~~Farmer Mac Facility~~

~~We are party to~~Directors. The Company may increase the ~~Amended~~size of the ATM Program in the future. During the three and Restated Bond Purchase Agreement, dated as of March 1, 2015 and amended as of June 2, 2015 and August 3, 2015 (the “Bond Purchase Agreement”), with Federal Agricultural Mortgage Corporation (“Farmer Mac”) and Farmer Mac Mortgage Securities Corporation, a wholly owned subsidiary of Farmer Mac, as bond purchaser (the “Purchaser”), regarding a secured note purchase facility (the “Farmer Mac Facility”) that has a maximum borrowing capacity of $165.0 million. Pursuant to the Bond Purchase Agreement, the Operating Partnership may, from time to time, issue one or more bonds to the Purchaser that will be secured by pools of mortgage loans, which will, in turn, be secured by first liens on agricultural real estate owned by us. The mortgage loans may have effective loan-to-value of up to 60%. Prepayment of each bond issuance is not permitted unless otherwise agreed upon by all parties to the Bond Purchase Agreement.

Onnine months ended September ~~5, 2017~~ 30, 2023, the Company ~~repaid $20.7 million in principal which was due and payable on that date, as a result this facility has been fully repaid.~~

sold no shares under the ATM Program. As of September 30, ~~2017 and December 31, 2016,~~2023, we had ~~approximately $134.8~~$50.5 million ~~and approximately $155.5 million outstanding, respectively,~~in shares of common stock available for issuance under the ~~Farmer Mac Facility. The Farmer Mac Facility is subject~~ATM Program.

Our ability to ~~our ongoing compliance with~~incur additional debt will depend on a number of ~~customary affirmative~~factors, including our degree of leverage, the value of our unencumbered assets, compliance with the covenants under our existing debt agreements, borrowing restrictions that may be imposed by lenders and ~~negative covenants,~~the conditions of debt markets.

When material debt repayments are due within the following 12 months, we work with current and new lenders and other potential sources of capital sufficiently in advance of the debt maturity to ensure that all of our obligations are satisfied in a timely manner. We have a history of being able to refinance or extend our debt obligations to manage our debt maturities. Our ability to access the equity capital markets will depend on a number of factors as well, ~~as financial covenants, including: a maximum leverage ratio~~including general market conditions. We have an effective shelf registration statement with approximately $100 million of ~~not more than 60%; a minimum fixed charge coverage ratio of 1.50 to 1.00; and a minimum tangible net worth requirement. We were in compliance with all applicable covenants at September 30, 2017.~~ ~~On October 23 2017, the Company repaid in full an~~capacity whereby we could issue additional ~~bond with an outstanding principal amount of $5.5 million bringing the total amount of outstanding indebtedness under the Farmer Mac Facility to $129.3 million.~~

In connection with the Bond Purchase Agreement, on March 1, 2015, we and the Operating Partnership also entered into an amended and restated pledge and security agreement (the “Pledge Agreement”) in favor of the Purchaser and Farmer Mac, pursuant toequity or debt securities, which we ~~and~~have done successfully in the ~~Operating Partnership agreed to pledge,~~past as collateral for the Farmer Mac Facility, all of their respective right, title and interest in (i) mortgage loans with a value at least equal to 100% of the aggregate principal amount of the outstanding bond held by the Purchaser and (ii) such additional collateral as necessary to have total collateral with a value at least equal to 110% of the outstanding notes held by the Purchaser. In addition, we agreed to guarantee the full performance of the Operating Partnership’s duties and obligations under the Pledge Agreement.mentioned above. The Company has no material debt maturities due before 2025.

The Bond Purchase Agreement and the Pledge Agreement include customary events of default, the occurrence of any of which, after any applicable cure period, would permit the Purchaser and Farmer Mac to, among other things, accelerate payment of all amounts outstanding under the Farmer Mac Facility and to exercise its remedies with respect to the pledged collateral, including foreclosure and sale of the agricultural real estate underlying the pledged mortgage loans.

~~Table of Contents~~

~~Bridge Loan~~

On February 29, 2016, two wholly owned subsidiaries of the Operating Partnership (together, the “Bridge Borrower”) entered into a term loan agreement (the “Bridge Loan Agreement”) with MSD FPI Partners, LLC, an affiliate of MSD Partners, L.P. (the “Bridge Lender”), that provided for a loan of $53.0 million (the “Bridge Loan”), the proceeds of which were used primarily to fund the cash portion of the consideration for the acquisition of the Forsythe farms, which was completed on March 2, 2016. During the nine months ended September 30, ~~2016, we accrued and paid debt issuance costs on~~2023, the ~~Bridge Loan totaling $173,907, and interest totaling $2,271,867,~~Company repurchased 6,213,405 shares of ~~which $2,120,000, or 4.0%,~~its common stock at a weighted average price per share of ~~the Bridge Loan’s principal amount was considered~~$11.00. We currently have authority to repurchase up to an aggregate of $47.0 million in additional interest paid on issuance. The Bridge Loan was paid in full, including accrued interest, and without prepayment penalty, on March 29, 2016 using proceeds from the MetLife Term Loans, as described below.

~~MetLife Term Loans~~

On March 29, 2016, five wholly owned subsidiaries of the Operating Partnership entered into a loan agreement (the “First MetLife Loan Agreement” and together with the Second MetLife Loan Agreement, the “MetLife Loan Agreements”) with Metropolitan Life Insurance Company (“MetLife”), which provides for a total of $127.0 million of term loans, comprised of (i) a $90.0 million term loan (“Term Loan 1”), (ii) a $16.0 million term loan (“Term Loan 2”) and (iii) a $21.0 million term loan (“Term Loan 3” and, together with Term Loan 1 and Term Loan 2, the “Initial MetLife Term Loans” and, together with Term Loan 4, Term Loan 5, Term Loan 6 and Term Loan 7 (described below), the “MetLife Term Loans”). The proceeds of the Initial MetLife Term Loans were used to repay existing debt (including amounts outstanding under the Bridge Loan), to acquire additional properties and for general corporate purposes. Each Initial MetLife Term Loan is collateralized by first lien mortgages on certainshares of our ~~properties.~~

~~On June 29, 2016, five wholly owned subsidiaries of~~common stock. In addition, the ~~Operating Partnership entered into a loan agreement (the “Second MetLife Loan Agreement”) with MetLife, which provides~~Company redeemed 34,000 Common units in exchange for ~~a loan~~cash of approximately $15.7 million to the Company with a maturity date of June 29, 2026 (“Term Loan 4”). Interest on Term Loan 4 is payable semi-annually and accrues at a floating rate that will be adjusted quarterly to a rate per annum equal to the greater of (a) the three-month LIBOR plus an initial floating rate spread of 1.750%, which may be adjusted by MetLife on each of September 29, December 29, March 29 and June 29 of each year to an interest rate equal to the greater of (a) the three month LIBOR plus the floating rate spread or (b) 2.00% per annum. Term Loan 4 initially bears interest at a rate of 2.39% per annum until September 29, 2016, and on September 29, 2016 the rate changed to 2.60% per annum. Effective March 29, 2017, the Company exercised its option to convert the interest rate on Term Loan 4 from a floating rate to an adjustable rate. The new adjustable rate is 3.48% which may be adjusted by MetLife on each of March 29, 2020 and March 29, 2023. Proceeds from Term Loan 4 were used to acquire additional properties and for general corporate purposes.$0.4 million.

Interest on Term Loan 1 is payable semi-annually and accrues at a floating rate that will be adjusted quarterly to a rate per annum equal to the greater of (a) the three-month LIBOR plus an initial floating rate spread of 1.750%, which may be adjusted by MetLife on each of March 29, 2019, March 29, 2022 and March 29, 2025 to an interest rate consistent with interest rates quoted by MetLife for substantially similar loans secured by real estate substantially similar to the Company’s properties securing Term Loan 1 or (b) 2.000% per annum. Term Loan 1 bore interest at a rate of 2.40% per annum until September 29, 2016 and on September 29, 2016 the rate changed to 2.60% per annum. Effective March 29, 2017, the Company exercised its option to convert the interest rate on Term Loan 4 from a floating rate to an adjustable rate. The new adjustable rate is 3.48% which may be adjusted by MetLife on each of March 29, 2020 and March 29, 2023. Subject to certain conditions, we may at any time during the term of Term Loan 1 elect to have all or any portion of the unpaid balance of Term Loan 1 bear interest at a fixed rate that is initially established by the lender in its sole discretion that may be adjusted from time to time to an interest rate consistent with interest rates quoted by MetLife for substantially similar loans secured by real estate substantially similar to the Company’s properties securing Term Loan 1. On any floating rate adjustment date, we may prepay any portion of Term Loan 1 that is not subject to a fixed rate without penalty.Consolidated Indebtedness

Interest on Term Loan 2 and Term Loan 3 is payable semi-annually and accrues at an initial rate of 2.66% per annum, which may be adjusted by MetLife on each of March 29, 2019, March 29, 2022 and March 29, 2025 to an interest rate consistent with interest rates quoted by MetLife for substantially similar loans secured by real estate substantially similarFor further details relating to our ~~properties securing Term Loan 2 and Term Loan 3.~~

~~Table of Contents~~

~~Subject to certain conditions, amounts outstanding under Term Loan 2 and Term Loan 3,~~consolidated indebtedness as well as any amounts outstanding under Term Loan 1 that are subject to a fixed interest rate, may be prepaid without penalty up to 20% of the original principal amounts of such loans per year or in connection with any rate adjustments. Any other prepayments under the Initial MetLife Term Loans generally are subject to a minimum prepayment premium of 1.00%.

On January 12, 2017, five wholly owned subsidiaries of the Operating Partnership, entered into a loan agreement (the “Fifth MetLife Loan Agreement”) with MetLife which provides for a loan of approximately $8.4 million to the Company with a maturity date of January 12, 2027 (“Term Loan 5”). Interest on Term Loan 5 is payable semi-annually and accrues at a 3.26% per annum fixed rate, and may be adjusted by MetLife on each of January 12, 2020, January 12, 2023 and January 12, 2026 at the option of the Lender to a rate that is consistent with similar loans. Proceeds from Term Loan 5 were used to acquire additional properties and for general corporate purposes.

On February 14, 2017, a wholly owned subsidiary of the Operating Partnership, entered into a loan agreement (the “Sixth MetLife Loan Agreement”) with MetLife which provides for a loan of approximately $27.2 million to the Company with a maturity date of February 14, 2027 (“Term Loan 6”). Interest on Term Loan 6 is payable semi-annually and accrues at a 3.21% per annum fixed rate, and may be adjusted by MetLife on each of February 14, 2020, February 14, 2023 and February 14, 2026 at the option of the Lender to a rate that is consistent with similar loans. Proceeds from Term Loan 6 were used to acquire additional properties.

In connection with the Term Loan 6, on February 14, 2017, the Company and the Operating Partnership each entered into a separate guaranty (the “Term Loan 6 Guaranties”) whereby the Company and the Operating Partnership jointly and severally agreed to unconditionally guarantee all of the borrowers’ obligations under the Sixth MetLife Loan Agreement.

On June 7, 2017, a wholly owned subsidiary of the Operating Partnership entered into a loan agreement (the “Seventh MetLife Loan Agreement”) with MetLife which provides for a loan of approximately $21.3 million to the Company with a maturity date of June 7, 2027 (“Term Loan 7”). Interest on Term Loan 7 is payable semi-annually and accrues at a 3.45% per annum fixed rate, and may be adjusted by MetLife on each of June 7, 2020, June 7, 2023 and June 7, 2026 at the option of the Lender to a rate that is consistent with similar loans. Proceeds from Term Loan 7 were used to acquire additional properties.

In connection with the Term Loan 7, on June 7, 2017, the Company and the Operating Partnership each entered into a separate guaranty (the “Term Loan 7 Guaranties” and, together with the Initial MetLife Guaranties, the Term Loan 4 Guaranties, the Term Loan 5 Guaranties and the Term Loan 6 Guaranties, the “MetLife Guaranties”) whereby the Company and the Operating Partnership jointly and severally agreed to unconditionally guarantee all of the borrowers’ obligations under the Seventh MetLife Loan Agreement.

Each of the MetLife Loan Agreements contains a number of customary affirmative and negative covenants, including the requirement to maintain a loan to value ratio of no greater than 60%. The MetLife Guaranties also contain a number of customary affirmative and negative covenants.

~~Table of Contents~~

Each of the MetLife Loan Agreements includes certain customary events of default, including a cross-default provision related to other outstanding indebtedness of the borrowers, the Company and the Operating Partnership, the occurrence of which, after any applicable cure period, would permit MetLife, among other things, to accelerate payment of all amounts outstanding under the MetLife Term Loans and to exercise its remedies with respect to the pledged collateral, including foreclosure and sale of the Company’s properties that secure the MetLife Term Loans. As of September 30, ~~2017 there was $199.5 million outstanding under the MetLife Term Loans~~2023, refer to “Note 7—Mortgage Notes, Line of Credit and ~~we were in compliance with all covenants under the MetLife Loan Agreements.~~

~~Farm Credit of Central Florida Mortgage Note~~

On August 31, 2016, a wholly owned subsidiary of the Operating Partnership entered into a loan agreement (the “Farm Credit Mortgage Note”) with Farm Credit of Central Florida (“Farm Credit”) which provides for a loan of approximately $8.2 million to the Company with a maturity date of September 1, 2023. As of September 30, 2017 and December 31, 2016, approximately $5.1 million had been drawn down under this facility. Interest on the Farm Credit Mortgage Note is payable quarterly and accrues at a floating rate that will be adjusted monthly to a rate per annum equal to the one-month LIBOR plus 2.6875% which is subject to adjustment on the first day of September 2016, and on the first day of each month thereafter. Principal is payable quarterly commencing on October 1, 2018, with all remaining principal and outstanding interest due at maturity. Proceeds from Farm Credit Mortgage Note are to be used for the acquisition and development of additional land.

The Farm Credit Mortgage Note contains a number of customary affirmative and negative covenants, as well as a covenant requiring us to maintain a debt service coverage ratio of 1.25 to 1.00 beginning on December 31, 2019.

~~Prudential Note~~

~~Beginning on December 21, 2017, the Prudential Note requires the Company to maintain a loan to value no greater than 60%.~~

~~Rutledge Credit Facilities~~

Loan Agreement, dated as of December 5, 2013, with respect to a $25,000,000 senior secured credit facility bearing interest at an annual rate of 3 month LIBOR plus 1.3%. The loan agreement requires AFCO OP to make quarterly interest payments on April 1, July 1, October 1 and January 1 of each calendar year. Additionally, the loan agreement requires AFCO OP to pay a quarterly non-usage fee equal to 0.25% per annum of the committed loan amount minus the average outstanding principal balance of the loan amount over the prior three-month period.

~~Table of Contents~~

In connection with the completion of the AFCO Mergers, on February 3, 2017, AFCO OP, in its capacity as a wholly owned subsidiary of the Company and the Operating Partnership, and Rutledge entered into the Second Amendment and the “Rutledge Amendment”) to the Existing Rutledge Loan Agreements. Pursuant to the Rutledge Amendment, among other things, the maturity dates for each of the Existing Rutledge Loan Agreements were extended to January 1, 2022 and the aggregate loan value under the Existing Rutledge Loan Agreements may not exceed 50% of the appraised value of the collateralized properties. Certain AFCO properties acquired by the CompanyBonds Payable” in the ~~AFCO Mergers serve as collateral under the Existing Rutledge Loan Agreements.~~

On February 3, 2017, the Company and the Operating Partnership each entered into guaranty agreements (the “Existing Loan Guarantees”) pursuant to which they will unconditionally guarantee the obligations of AFCO OP under the Existing Loan Agreements.

~~In addition,~~financial statements included elsewhere in connection with the Completion of the Mergers, on February 3, 2017, AFCO OP entered into a fifth loan agreement with Rutledge Investment Company (the “Fifth Rutledge Loan Agreement” and together with the Existing Rutledge Loan Agreements, as amended, the “Rutledge Loan Agreements”), with respect to a senior secured credit facility in the aggregate amount of $30 million, with a maturity date of January 1, 2022 and an annual interest rate of 3 month LIBOR plus 1.3%. The Fifth Rutledge Loan Agreement requires AFCO OP to make quarterly interest payments. Additionally, the Fifth Rutledge Loan Agreement contains certain customary affirmative and negative covenants, including (i) AFCO OP must pay a quarterly non-usage fee equal to 0.25% of the committed loan amount minus the average outstanding principal balance of the loan amount during the prior three-month period, (ii) AFCO OP must maintain a leverage ratio of 60% or less and (iii) the aggregate amounts outstanding under all of the Rutledge Loans may not exceed 50% of the aggregate appraised value of the properties serving as collateral under the Rutledge Loan Agreements.

On February 3, 2017, the Company and the Operating Partnership each entered into separate guarantees (the “Fifth Loan Guarantees” and together with the Existing Loan Guarantees, the “Guarantees”) whereby they are required to unconditionally guarantee AFCO OP’s obligations under the Fifth Rutledge Loan Agreement. As of September 30, 2017 $0 remains available under this facility.

~~As of the date of~~ this Quarterly Report ~~there is an aggregate of $120.0 million outstanding under Rutledge Loan Agreements. As of September 30, 2017, we were in compliance with all covenants under the Rutledge Loan Agreements.~~on Form 10-Q.

Sources and Uses of Cash and Cash Equivalents

The following table summarizes our cash flows for the nine months ended September 30, ~~2017~~2023 and ~~2016:~~2022:

For the nine months ended September 30,
(in thousands)

2017

2016
Net cash (used in) provided by operating activities

$
(3,401)

$
3,614
Net cash used in investing activities

$
(114,200)

$
(127,349)
Net cash provided by financing activities

$
199,733

$
117,410


	For the nine months ended September 30,
(in thousands)	2023		2022
Net cash and cash equivalents provided by operating activities	$	5,732	$	8,756
Net cash and cash equivalents provided by (used in) investing activities	$	99,566	$	(25,725)
Net cash and cash equivalents (used in) financing activities	$	(106,895)	$	(4,333)

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Comparison of the nine months ended September 30, ~~2017~~2023 to the nine months ended September 30, ~~2016~~2022

As of September 30, ~~2017,~~2023, we had ~~$129.3~~$6.1 million of cash and cash equivalents compared to ~~$17.2~~$8.9 million at September 30, ~~2016.~~2022.

Cash Flows from Operating Activities

Net cash and cash equivalents provided by operating activities decreased ~~$7.0~~by $3.0 million primarily as a result of the following:

●

Receipt of ~~$28.2~~$28.7 million in ~~cash~~fixed rents, $1.9 million in variable rent and $2.0 million in tenant reimbursements for the nine months ended September 30, ~~2017,~~2023 as compared to ~~receiving $16.3~~the receipt of $25.0 million in ~~cash~~fixed rents, $2.1 million in variable rents, and $0.5 million in tenant reimbursements in the nine months ended September 30, ~~2016;~~

2022;

●

~~An increase~~A change in depreciation, depletion and amortization of ~~$1.8~~$5.9 million ~~in cash paid~~ for ~~interest as compared to~~ the nine months ended September 30, ~~2016;~~

~~An increase of approximately $4.6~~2023 compared to $5.1 million ~~in cash paid~~ for ~~other operating expenses as compared to~~ the nine months ended September 30, ~~2016; and~~

2022;

●

~~Cash payments totaling $12.5~~Gain on disposition of assets during the nine months ended September 30, 2023 of $23.2 million ~~made in relation~~as compared to ~~settling assumed obligations as part of~~$3.9 million during the ~~AFCO Mergers.~~

nine months ended September 30, 2022; and

●

A change in accounts receivable of $1.4 million for the nine months ended September 30, 2023 compared to $(1.9) million for the nine months ended September 30, 2022.

Cash Flows from Investing Activities

Net cash ~~used for~~and cash equivalents provided by (used in) investing activities ~~decreased $13.1~~increased by $125.3 million primarily as a result of the following:

●

Completing 15 acquisitions and the AFCO Mergers during the nine months ended September 30, 2017 for aggregate cash consideration of $92.7 million, as compared to $122.4 million in aggregate cash consideration for 22Property acquisitions during the nine months ended September 30, ~~2016;~~

2023 of $20.0 million as compared to $36.9 million during the nine months ended September 30, 2022;

●

Property dispositions during the nine months ended September 30, 2023 for cash consideration of $121.7 million as compared to $16.9 million during the nine months ended September 30, 2022;

●

An increase of ~~$12.6~~$1.3 million ~~in investments~~ in real estate improvements as compared to the nine months ended September 30, ~~2016;~~

2022;

●

~~A $0.1 million decrease~~Investment in ~~principal on notes receivable received by the Company as compared to~~equity method investees during the nine months ended September 30, ~~2016;~~

~~A $3.9~~2023 of $0.0 million ~~increase in notes receivable issued by the Company~~ as compared to $0.7 million during the nine months ended September 30, ~~2016.~~

2022;

●

Collections on notes receivable under the FPI Loan Program and financing receivables of $2.1 million during the nine months ended September 30, 2023 as compared to $1.6 million during the nine months ended September 30, 2022; and

●

Issuances of notes receivable under the FPI Loan Program and financing receivables of $0.0 million during the nine months ended September 30, 2023 as compared to $3.5 million during the nine months ended September 30, 2022.

Cash Flows from Financing Activities

Net cash ~~provided by~~and cash equivalents used in financing activities increased ~~$82.3~~by $102.6 million primarily as a result of the following:

●

Borrowings from mortgage notes payable ~~decreased $99.0 million as compared to the borrowings~~ during the nine months ended September 30, ~~2016;~~

~~Debt payments decreased $63.9~~2023 of $77.5 million as compared to $114.0 million during the nine months ended September 30, ~~2016 which includes the pay-off of the $53.0 million Bridge Loan;~~

2022;

●

~~A $9.3 million decrease in proceeds from the At the Market offering as compared to~~Repayments on mortgage notes payable during the nine months ended September 30, ~~2016;~~

~~A $7.4~~2023 of $94.2 million ~~increase in common stock repurchased~~ as compared to $216.9 million during the nine months ended September 30, ~~2016;~~

2022;

●

~~A $2.9 million increase in dividends paid on Series A preferred units as compared to~~Net proceeds from the ATM Program during the nine months ended September 30, ~~2016;~~

~~Increase~~2023 of ~~$5.7~~$0.0 million ~~in dividends paid on common stock~~ as compared to $121.3 million during the nine months ended September 30, ~~2016;~~

2022;

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●

~~Increase of $144.5 million in proceeds from issuance of the Series B Participating Preferred Stock as compared to~~Common stock repurchases during the nine months ended September 30, ~~2016;~~

~~Increase~~2023 of ~~$1.1~~$68.4 million ~~in dividends paid on Series B, Participating Preferred Stock~~ as compared to $0.0 million during the nine months ended September 30, ~~2016;~~

2022;

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●

~~An increase in distributions~~Redemption of ~~$0.2 million to non-controlling interests as compared to~~Series A preferred units during the nine months ended September 30, ~~2016;~~

~~A $0.5~~2023 of $8.1 million ~~increase in the payments associated with offering costs~~ as compared to $10.2 million during the nine months ended September 30, ~~2016.~~

2022; and

●

Dividends on common stock during the nine months ended September 30, 2023 of $9.4 million as compared to $7.9 million during the nine months ended September 30, 2022.

~~Off-Balance Sheet Arrangements~~

~~As of September 30, 2017, we did not have any off-balance sheet arrangements.~~

Non-GAAP Financial Measures

Funds from Operations (“FFO”) and Adjusted Funds from Operations (“AFFO”)

We calculate FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts, or ~~NAREIT. NAREIT~~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), impairment write-downs of depreciated property, and ~~after~~ adjustments for unconsolidated partnerships and joint ventures. FFO is a supplemental non-GAAP financial measure. Management presents FFO as a supplemental performance measure because it believes that FFO is beneficial to investors as a starting point in measuring our 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. We believe that, as a widely recognized measure of the performance of REITs, FFO will be used by investors as a basis to compare our operating performance with that of other REITs.

However, because FFO excludes depreciation and amortization and captures neither the changes in the value of our properties that result from use or market conditions nor the level of capital expenditures necessary to maintain the operating performance of improvements on our properties, all of which have real economic effects and could materially impact our results from operations, the utility of FFO as a measure of our performance is limited. In addition, other equity REITs may not calculate FFO in accordance with the ~~NAREIT~~Nareit definition as we do, and, accordingly, our FFO may not be comparable to such other REITs’ FFO. Accordingly, FFO should be considered only as a supplement to net income as a measure of our performance. FFO should not be used as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends or service indebtedness. FFO also should not be used as a supplement to or substitute for cash flow from operating activities computed in accordance with GAAP.

We do not, however, believe that FFO is the only measure of ~~the sustainability of~~ our operating performance. Changes in GAAP accounting and reporting rules that were put in effect after the establishment of ~~NAREIT’s~~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 our operating performance. Therefore, in addition to FFO, we present 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 our 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 our 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 our performance in comparison to other REITs. However, other REITs may use different methodologies for calculating AFFO and AFFO per share, fully diluted, and, accordingly, our 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 our liquidity, nor are they indicative of funds available to fund our cash needs, including our ability to make distributions.

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AFFO is calculated by adjusting FFO to exclude or include the income and expenses that we believe are not reflective of the sustainability of our ongoing operating performance, as further explained below:

●

Real estate related acquisition and due diligence costs. Acquisition (including audit fees associated with these acquisitions) and due diligence costs are incurred for investment purposes and, therefore, do not correlate with the ongoing operations of our portfolio. We believe that excluding these costs from AFFO provides useful supplemental information reflective of the realized economic impact of our leases, which is useful in assessing the sustainability of our operating performance. ~~Acquisition and due diligence costs totaled $0.9 million and $1.8 million for the periods ended September 30, 2017, and 2016, respectively. Real estate related acquisition and due diligence costs~~for the period ended September 30, 2016 included $2.3 million in interest and loan fees associated with the short-term Bridge Loan and the Forsythe acquisition and as the interest and fees are a non-recurring item they have been excluded from the AFFO calculation. Included in the $2.3 millionThe Company incurred an immaterial amount of interest and loan fees is only a portion of the interest, approximately $2.1 million, or 4% of the Bridge Loan's principal amount, which was considered additional interest paid on issuance. A portion of the audit fees we incur are directly related to acquisitions, which varies with the number and complexity of the acquisitions we evaluate and complete in a given period. As such, these costs do not correlate with the ongoing operations of our portfolio. Total acquisition related audit fees excluded from AFFO totaled $0.2 million and $0.1 million for the period ended September 30, 2017, and 2016, respectively. Also included in real estate related acquisition and due diligence costs ~~for~~during the ~~period~~three and nine months ended September 30, ~~2017 is $0.7 million in fees paid to the Prudential Sub-Advisor following the completion of the AFCO Mergers, including a $160,000 termination fee.~~2023 and 2022. We believe that excluding these costs from AFFO provides useful supplemental information reflective of the realized economic impact of our current acquisition strategy, which is useful in assessing the sustainability of our operating performance. These exclusions also ~~improves~~improve the comparability of our results over each reporting period and of ~~our~~the Company with other real estate operators.

●

~~Stock based compensation.~~ ~~Stock based~~Stock-based compensation and incentive.Stock-based compensation and incentive is a non-cash expense and, therefore, does not correlate with the ongoing operations. We believe that excluding these costs from AFFO improves the comparability of our results over each reporting period and of ~~our~~the Company with other real estate operators.

●

~~Indirect offering costs.~~ ~~Indirect offering costs~~Deferred impact of interest rate swap terminations. When an interest rate swap is terminated and the related termination fees are rolled into a new swap, the terminated swap's termination fees ~~for services incurred by~~are amortized over what would have been the ~~Company~~remaining life of the terminated swap, while the related contractual and financial obligations extend over the life of the new swap. We believe that, with this adjustment, AFFO better reflects the actual cash cost of the fixed interest rate we are obligated to ~~grow~~pay under the new swap agreement, and maintain an active institutional investor presence. As we continue to acquire more farms, our ability to access capital through the equity markets will remain a critical component of our growth strategy. As of September 30, 2015, we began excluding indirect offering costs from AFFO as we believe it improvesresults in improved comparability of our results ~~over each~~across reporting ~~period and of our Company with other real estate operators. Prior to this date the company did not incur indirect offering costs.~~

periods.

●

Distributions on Series A preferred units. Dividends on Series A preferred units, which are convertible into Common units on or after ~~March 2,~~February 10, 2026, have a fixed and certain impact on our cash flow, ~~thus they~~and therefore are ~~subtracted~~excluded from ~~FFO.~~AFFO. We believe this improves the comparability of ~~our~~the Company with other real estate operators.

●

~~Dividends on Series B Participating Preferred Stock. Dividends on Series B Participating Preferred Stock, which may be redeemed for cash or converted into shares of common stock on or after~~ ~~September 30, 2021, have a fixed and certain impact on our cash flow, thus they are subtracted from FFO. We believe this improves comparability of our Company with other real estate operators.~~

Common shares fully diluted. In accordance with GAAP, common shares used to calculate earnings per share are presented on a weighted average basis. Common shares on a fully diluted basis includes shares of common stock, Common units, ~~redeemable Common units~~ and unvested shares of restricted stock outstanding at the end of the period on a share equivalent basis, because all shares are participating securities and thus share in the performance of the Company. The conversion of Series A preferred units is excluded from the calculation of common shares fully diluted as they are not participating securities, ~~thus don’t~~and therefore do not share in the performance of the Company and their impact on shares outstanding is uncertain.

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The following table sets forth a reconciliation of net income (loss) to FFO, AFFO and net income (loss) ~~income~~ available to common stockholders per share to AFFO per share, fully diluted, the most directly comparable GAAP equivalents, respectively, for the periods indicated below ~~as previously reported~~ (unaudited):


	For the three months ended September 30,				For the nine months ended September 30,

									For the three months ended September 30,				For the nine months ended September 30,
(in thousands except per share amounts)	2017		2016		2017		2016		2023		2022		2023		2022
Net income (loss)	$	2,610	$	100	$	2,630	$	(513)
Net income									$	4,315	$	1,119	$	13,927	$	5,250
(Gain) loss on disposition of assets										(10,293)		48		(23,179)		(3,948)
Depreciation, depletion and amortization		2,107		419		5,651		1,102		1,904		1,665		5,905		5,076
Impairment of assets										3,840		—		3,840		—
FFO		4,717		519		8,281		589	$	(234)	$	2,832	$	493	$	6,378

Stock based compensation		309		333		1,091		889
Indirect equity offering costs		—		24		—		72

Stock-based compensation and incentive										509		351		1,474		1,595
Deferred impact of interest rate swap terminations										—		19		198		113
Real estate related acquisition and due diligence costs		250		1,735		1,760		4,172		3		24		17		86
Dividends on Series B Participating Preferred Stock and distributions on Series A preferred units		(1,959)		(887)		(3,714)		(2,057)
Distributions on Preferred units and stock										(743)		(728)		(2,228)		(2,408)
AFFO	$	3,317	$	1,724	$	7,418	$	3,665	$	(465)	$	2,498	$	(46)	$	5,764


AFFO per diluted weighted average share data:


AFFO weighted average common shares		38,997		19,711		37,118		18,576		49,997		55,000		52,652		51,563

Net income (loss) per share available to common stockholders	$	0.01	$	(0.06)	$	(0.05)	$	(0.21)

Net income available to common stockholders of Farmland Partners Inc.									$	0.07	$	0.01	$	0.22	$	0.05
Income available to redeemable non-controlling interest and non-controlling interest in operating partnership		0.06		0.07		0.12		0.19		0.01		0.01		0.05		0.06
Depreciation, depletion and amortization		0.05		0.02		0.15		0.06		0.04		0.03		0.11		0.10
Stock based compensation		0.01		0.02		0.03		0.05
Real estate related acquisition and due diligence costs		0.01		0.09		0.05		0.22
Dividends on Series B Participating Preferred Stock and distributions on Series A preferred units		(0.05)		(0.05)		(0.10)		(0.11)
Impairment of assets										0.08		0.00		0.07		0.00
Stock-based compensation and incentive										0.01		0.01		0.03		0.03
(Gain) on disposition of assets										(0.21)		0.00		(0.44)		(0.08)
Distributions on Preferred units and stock										(0.01)		(0.01)		(0.04)		(0.05)
AFFO per diluted weighted average share	$	0.09	$	0.09	$	0.20	$	0.20	$	(0.01)	$	0.05	$	0.00	$	0.11

The following table sets forth a reconciliation of AFFO share information to basic weighted average common shares outstanding, the most directly comparable GAAP equivalent, for the periods indicated below (unaudited):


	For the three months ended September 30,		For the nine months ended September 30,

					For the three months ended September 30,		For the nine months ended September 30,
(in thousands)	2017	2016	2017	2016	2023	2022	2023	2022
Basic weighted average shares outstanding	32,862	13,683	30,695	12,663	48,432	53,495	51,079	49,908
Weighted average Common units on an as-if converted basis	5,846	5,840	6,139	5,265
Weighted average OP units on an as-if converted basis					1,212	1,239	1,229	1,347
Weighted average unvested restricted stock	289	188	284	177	353	266	344	308
Weighted average redeemable non-controlling interest in operating partnership	—	—	—	471
AFFO weighted average common shares	38,997	19,711	37,118	18,576	49,997	55,000	52,652	51,563

~~EBITDA~~EBITDAre

The Company calculates Earnings Before Interest Taxes Depreciation and ~~Adjusted EBITDA~~

~~Earnings before~~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 ~~taxes,~~expense, income tax, depreciation and amortization, ~~(“EBITDA”)~~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 ~~our~~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. ~~EBITDA is not a measure defined in accordance with GAAP. We believe~~The Company believes that ~~EBITDA~~EBITDAre is a ~~standard~~useful performance measure commonly reported and will be widely used by analysts and investors in ~~our~~the Company’s industry. However, while ~~EBITDA~~EBITDAre is a performance measure widely used across ~~several industries, we do~~the Company’s industry, the Company does not believe that it correctly captures ~~our~~the Company’s business operating performance because it includes non-cash expenses and recurring adjustments that are necessary to better understand ~~our~~the Company’s business operating performance. Therefore, in addition to ~~EBITDA, our~~EBITDAre, management uses ~~adjusted EBITDA (“~~Adjusted ~~EBITDA”),~~EBITDAre, a non-GAAP measure.

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We further adjust ~~EBITDA~~EBITDAre for certain additional items such as ~~stock based~~stock-based compensation and incentive, indirect offering costs, real estate acquisition related audit fees and real estate related acquisition and due diligence costs (for a full discussion of these adjustments, see AFFO adjustments discussed above) that we consider necessary to understand our operating performance. As of September 30, 2015, we began excluding indirect offering costs from EBITDA as we believe it improves comparability of our results over each reporting period and of our Company with other real estate operators. Prior to this date the Company had not incurred any indirect offering costs. We believe that Adjusted ~~EBITDA~~EBITDAre provides useful

~~Table of Contents~~

supplemental information to investors regarding our ongoing operating performance that, when considered with net income and ~~EBITDA,~~EBITDAre, is beneficial to an investor’s understanding of our operating performance.

~~EBITDA~~EBITDAre and Adjusted ~~EBITDA~~EBITDAre have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

●

~~EBITDA~~EBITDAre and Adjusted ~~EBITDA~~EBITDAre do not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;

●

~~EBITDA~~EBITDAre and Adjusted ~~EBITDA~~EBITDAre do not reflect changes in, or cash requirements for, our working capital needs;

●

~~EBITDA~~EBITDAre and Adjusted ~~EBITDA~~EBITDAre do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debt;

●

Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and ~~EBITDA~~EBITDAre and Adjusted ~~EBITDA~~EBITDAre do not reflect any cash requirements for these replacements; and

●

Other companies in our industry may calculate ~~EBITDA~~EBITDAre and Adjusted ~~EBITDA~~EBITDAre differently than we do, limiting the usefulness as a comparative measure.

Because of these limitations, ~~EBITDA~~EBITDAre and Adjusted ~~EBITDA~~EBITDAre should not be considered as a measure of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results of operations and using ~~EBITDA~~EBITDAre and Adjusted ~~EBITDA~~EBITDAre only as a supplemental measure of our performance.

The following table sets forth a reconciliation of our net income to our ~~EBITDA~~EBITDAre and Adjusted ~~EBITDA~~EBITDAre for the periods indicated below (unaudited):

For the three months ended

For the nine months ended

September 30,

September 30,
(in thousands)

2017

2016

2017

2016
Net income (loss)

$
2,610

$
100

$
2,630

$
(513)
Interest expense

3,683

2,065

9,852

7,869
Income tax expense

—

97

—

97
Depreciation, depletion and amortization

2,107

419

5,651

1,102
EBITDA

$
8,400

$
2,681

$
18,133

$
8,555

Stock-based compensation

309

333

1,091

889
Indirect equity offering costs

—

24

—

72
Real estate related acquisition and due diligence costs

250

1,735

1,760

1,901
Adjusted EBITDA

$
8,959

$
4,773

$
20,984

$
11,417


	For the three months ended				For the nine months ended
	September 30,				September 30,
(in thousands)	2023		2022		2023		2022
Net income	$	4,315	$	1,119	$	13,927	$	5,250
Interest expense		6,230		3,891		16,998		11,461
Income tax (benefit) expense		(191)		33		(178)		129
Depreciation, depletion and amortization		1,904		1,665		5,905		5,076
Impairment of assets		3,840		—		3,840		—
(Gain) loss on disposition of assets		(10,293)		48		(23,179)		(3,948)
EBITDAre	$	5,805	$	6,756	$	17,313	$	17,968

Stock-based compensation and incentive		509		351		1,474		1,595
Real estate related acquisition and due diligence costs		3		24		17		86
Adjusted EBITDAre	$	6,317	$	7,131	$	18,804	$	19,649

~~Inflation~~Seasonality

Most of our farming leases are two to three years for row crops and one to seven years for permanent crops, pursuant to which each tenant is responsible for substantially all of the operating expenses related to the property, including maintenance, water usage and insurance. As a result, we believe that the effect on us of inflationary increases in operating expenses may be offset in part by the operating expenses that are passed through to our tenants and by contractual rent increases because our leases will be renegotiated every one to five years. We ~~do not believe that inflation has had a material impact on our historical financial position or results of operations.~~

~~Seasonality~~

Because the leases for a majority of the properties in our portfolio require payment of at least 50% of the annual rent in advance of each spring planting season, we receive a significant portion of our cash rental payments in the first calendar quarter of each year, although we recognize rental revenue from ~~these~~fixed-rate farmland leases on a pro rata basis over the non-cancellable term of the lease in accordance with ~~GAAP.~~

accounting principles generally accepted in the United States (“GAAP”). Notwithstanding GAAP accounting requirements to spread rental revenue over the lease term, a significant portion of fixed rent is received in a lump sum before planting season, in the first quarter, and after harvest, in the fourth quarter. We receive a significant portion of our variable rental payments in the fourth calendar quarter of each year, following harvest, with only a portion of such payments being recognized ratably through the year in accordance with GAAP, in relation to crop insurance contracts entered into by our tenants. The highly seasonal nature of the agriculture industry causes seasonality in our

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business to some extent. Our financial performance should be evaluated on an annual basis, which eliminates impacts of seasonality and other similar factors that may cause our quarterly results to vary during the course of the year.

Item 3.Quantitative and Qualitative Disclosures About Market Risk

Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that affect market-sensitive instruments. In pursuing our business strategies, the primary market risk to which we are exposed is interest rate risk. Our primary interest rate exposure will be ~~the daily LIBOR.~~SOFR. We may use fixed interest rate financing to manage our exposure to fluctuations in interest rates. On a limited basis, we also ~~may~~ use derivative financial instruments to manage interest rate risk. We ~~will~~do not use such derivatives for trading or other speculative purposes.

At September 30, ~~2017, $125.1~~2023, $136.5 million, or ~~27%~~32.3%, of our debt had variable interest ~~rates.~~rates however, as stated in “Note 10—Hedge Accounting” to the accompanying consolidated financial statements, the Company has an interest rate swap with Rabobank for $33.2 million, which reduces floating rate exposure. After adjusting the $33.2 million of swapped Rabobank debt as fixed rate debt, the ratio of floating rate debt to total debt decreased from 32.3% to 24.4%. Assuming no increase in the level of our variable rate debt spreads, if ~~interest rates~~SOFR increased by 1.0%, ~~or 100 basis points,~~ our cash flow would decrease by approximately ~~$1.3~~$1.0 million per ~~year. At September 29, 2017, LIBOR was approximately 123 basis points. Assuming no increase in the level of our variable rate debt,~~year, and if ~~LIBOR were reduced to 0 basis points,~~SOFR decreased by 1.0%, our cash flow would increase approximately ~~$1.6~~$1.0 million per year.

Item 4.Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

~~As required by~~We have established disclosure controls and procedures, as defined in Rule ~~13a-15(b)~~13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to management, ~~has~~including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.

We have evaluated, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures. Based upon ~~this~~their evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our ~~disclosure controls~~disclosures and procedures were effective at a reasonable level of assurance as of the end of the period covered by this report.

Limitations on the Effectiveness of Controls

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Changes in Internal ~~Control~~Controls over Financial Reporting

There were no changes in the Company’s internal ~~control~~controls over financial reporting during the ~~quarter~~nine months ended September 30, ~~2017~~2023 that have materially affected, or are reasonably likely to materially affect, the Company’s internal ~~control~~controls over financial reporting.

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PART II. OTHER INFORMATION

Item 1.Legal Proceedings.

For information regarding legal proceedings as of September 30, 2023, see Note 8 to our Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

~~The nature of our business exposes our properties, us and the Operating Partnership to the risk of claims and litigation in the normal course of business.~~

Item 1A.Risk Factors.

As of September 30, ~~2017, There have been~~2023, there were no material changes from the risk factors previously disclosed in response to “Part I -– Item 1A. ~~“Risk Factors”~~‘Risk Factors’” in our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2022, filed with the SEC on February 23, ~~2017.~~2023.

~~Table of Contents~~

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds.

Issuer Purchases of Equity Securities

Unregistered Sales of Equity Securities

None.

Share Repurchase Program

On March 15, 2017, our ~~board~~Board of ~~directors~~Directors approved a program to repurchase up to ~~$25,000,000~~$25.0 million in shares of our common stock. Repurchases under this program may be made from time to time, in amounts and prices as we deem appropriate. Repurchases may be made in open market or privately negotiated transactions in compliance with Rule 10b-18 under the Exchange Act, subject to market conditions, applicable legal requirements, trading restrictions under our insider trading policy and other relevant factors. This share repurchase program does not obligate us to acquire any particular amount of common stock, and it may be modified or suspended at any time at our discretion. We expect to fund repurchases under the program using cash on ~~its~~our balance sheet. On August 1, 2018, our Board of Directors increased the authority under the share repurchase to $38.5 million. On November 7, 2019, the Board of Directors approved an additional $50 million under the share repurchase program. On May 3, 2023, the Company’s Board of Directors approved a $75.0 million increase in the total authorization available under the program, increasing the total availability under the share repurchase program to approximately $88.0 million as of such date. As of September 30, 2023, we had $47.0 million of capacity remaining under the program.

Issuer Purchases of Equity Securities

Our ~~repurchase activity for~~purchases of equity securities during the three months ended September 30, ~~2017~~2023, including repurchases under the share repurchase program isare presented in the following table.


(in thousands except per share amounts)	Total Number of Common Shares Purchased ⁽¹⁾	Average Price Paid per Share		Total Number of Preferred Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet be Purchased Under the Share Repurchase Program
July 1, 2023 - July 31, 2023	117	$	12.22	—	$	—	117	$	52,340
August 1, 2023 - August 31, 2023	—		—	—		—	—		52,340
September 1, 2023 - September 30, 2023	501		10.58	—		—	501		47,027
Total	618	$	10.89	—	$	—	618

($ in thousands)

Total Shares Purchased

Average Price Paid per Share

Total Number of Shares Purchased as Part of Publicly announced Plans or Programs

Approximate Dollar Value of Shares that May Yet be Purchased Under the Share Repurchase Program
July 1, 2017 - July 31, 2017

—

$
—

—

$
25,000
August 1, 2017 - August 31, 2017

274

8.54

274

22,660
September 1, 2017 - September 30, 2017

567

9.00

567

17,555
Total

841

$
8.85

841

$
17,555

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⁽¹⁾ The total number of shares purchased includes shares of our common stock transferred to us in order to satisfy tax withholding obligations incurred upon the vesting of restricted stock awards held by our employees.

~~As of the date of this report~~

Subsequent to September 30, 2023, the Company ~~has repuchased 1,120,467~~repurchased an additional 152,211 shares ~~for $9,999,998~~of common stock at ana weighted average price of ~~$8.92.~~$10.28.

Item 3.Defaults Upon Senior Securities.

None.

Item 4.Mine Safety Disclosures.

Not applicable.

Item 5.Other ~~information.~~Information.

Rule 10b5-1 Plan Adoptions and Modifications

None.

Item 6.Exhibits.

The exhibits on the accompanying Exhibit Index are filed, furnished or incorporated by reference (as stated therein) as part of this Quarterly Report on Form 10-Q.

~~Table of Contents~~

Exhibit Index


Exhibit Number	Description of Exhibit
10.1*		~~Purchase Agreement, dated as of September 22, 2017, by and between Farmland Partners Inc., Farmland Partners Operating Partnership, LP and Olam International~~
31.1*	Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
~~101.INS~~101*	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, were formatted in Inline XBRL Instance Document*(Extensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income (Loss), (iv) Consolidated Statements of Changes in Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
~~101.SCH~~104*	Cover Page Interactive Data File – the cover page XBRL Taxonomy Extension Schema*
~~101.CAL~~		XBRL Taxonomy Extension Calculation Linkbase*
~~101.DEF~~		XBRL Taxonomy Extension Definition Linkbase*
~~101.LAB~~ ~~101.PRE~~		XBRL Taxonomy Extension Label Linkbase* XBRL Taxonomy Extension Presentation Linkbase* tags are embedded within the Inline XBRL.

* Filed herewith

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SIGNATURES

~~SIGNATURES~~

Pursuant to the requirements of the Securities Exchange Act of 1934, ~~as amended,~~ the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		Farmland Partners Inc.
	~~Farmland Partners Inc.~~
Date: October 26, 2023
~~Dated: November 9, 2017~~	/s/ ~~Paul A. Pittman~~Luca Fabbri
	~~Paul A. Pittman~~	Luca Fabbri
	~~Executive Chairman~~	President and Chief Executive Officer
		(Principal Executive Officer)

~~Dated: November 9, 2017~~Date: October 26, 2023		/s/ ~~Luca Fabbri~~James Gilligan
	~~Luca Fabbri~~	James Gilligan
		Chief Financial Officer and Treasurer
		(Principal Financial and Accounting Officer)

5952


	September 30,		December 31,
	2017		2016
ASSETS
Land, at cost	$	835,986	$	551,392
Grain facilities		10,732		6,856
Groundwater		12,072		11,933
Irrigation improvements		50,660		15,988
Drainage improvements		8,146		4,757
Permanent plantings		51,868		1,845
Other		6,615		2,901
Construction in progress		7,843		1,615
Real estate, at cost		983,922		597,287
Less accumulated depreciation		(8,309)		(3,224)
Total real estate, net		975,613		594,063
Deposits		1,161		5,721
Cash		129,298		47,166
Notes and interest receivable, net		6,951		2,843
Deferred offering costs		280		216
Deferred financing fees, net		370		—
Accounts receivable, net		3,205		4,181
Inventory		92		283
Prepaid and other assets		2,746		1,056
TOTAL ASSETS	$	1,119,716	$	655,529

LIABILITIES AND EQUITY
LIABILITIES
Mortgage notes, line of credit and bonds payable, net	$	464,494	$	308,779
Dividends and distributions payable		4,882		2,938
Accrued interest		2,886		1,538
Accrued property taxes		1,523		1,225
Deferred revenue (See Note 2)		3,876		982
Accrued expenses		3,525		4,558
Total liabilities		481,186		320,020

Series B Participating Preferred Stock		144,223		—
Redeemable non-controlling interests in operating partnership, Series A preferred units		119,633		119,915

EQUITY
Common stock, $0.01 par value, 500,000,000 shares authorized; 32,632,150 shares issued and outstanding at September 30, 2017, and 17,351,446 shares issued and outstanding at December 31, 2016		322		172
Additional paid in capital		342,313		172,100
Retained earnings		2,665		4,103
Cumulative dividends		(26,948)		(14,473)
Non-controlling interests in operating partnership		56,322		53,692
Total equity		374,674		215,594

TOTAL LIABILITIES, SERIES B PARTICIPATING PREFERRED STOCK, REDEEMABLE NON-CONTROLLING INTERESTS IN OPERATING PARTNERSHIP AND EQUITY	$	1,119,716	$	655,529


	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
OPERATING REVENUES:
Rental income (See Note 2)	$	11,107	$	6,164	$	28,381	$	16,462
Tenant reimbursements		474		112		1,230		276
Other revenue		465		670		1,044		931
Total operating revenues		12,046		6,946		30,655		17,669

OPERATING EXPENSES
Depreciation, depletion and amortization		2,107		419		5,651		1,102
Property operating expenses		1,400		548		4,399		1,529
Acquisition and due diligence costs		180		1,712		878		1,818
General and administrative expenses		1,707		1,587		5,840		4,770
Legal and accounting		450		330		1,151		882
Other operating expenses		88		160		363		248
Total operating expenses		5,932		4,756		18,282		10,349
OPERATING INCOME		6,114		2,190		12,373		7,320

OTHER (INCOME) EXPENSE:
Other income		(135)		(72)		(157)		(133)
(Gain) loss on disposition of assets		(44)		—		48		—
Interest expense		3,683		2,065		9,852		7,869
Total other expense		3,504		1,993		9,743		7,736

Net income (loss) before income tax expense		2,610		197		2,630		(416)

Income tax expense		—		97		—		97

NET INCOME (LOSS)		2,610		100		2,630		(513)

Net (income) loss attributable to non-controlling interests in operating partnership		(394)		(30)		(353)		37
Net (income) loss attributable to redeemable non-controlling interests in operating partnership		—		—		—		64

Net income (loss) attributable to the Company		2,216		70		2,277		(412)

Nonforfeitable distributions allocated to unvested restricted shares		(36)		(24)		(116)		(72)
Distributions on redeemable non-controlling interests in operating partnership, Common units		—		—		—		(113)
Distributions on redeemable non-controlling interests in operating partnership, Series A preferred units and dividends on Series B Participating Preferred Stock		(1,959)		(887)		(3,714)		(2,057)

Net income (loss) available to common stockholders of Farmland Partners Inc.	$	221	$	(841)	$	(1,553)	$	(2,654)

Basic and diluted per common share data:
Basic net income (loss) available to common stockholders	$	0.01	$	(0.06)	$	(0.05)	$	(0.21)
Diluted net income (loss) available to common stockholders	$	0.01	$	(0.06)	$	(0.05)	$	(0.21)
Basic weighted average common shares outstanding		32,862		13,683		30,695		12,663
Diluted weighted average common shares outstanding		32,862		13,683		30,695		12,663
Dividends declared per common share	$	0.1275	$	0.1275	$	0.3825	$	0.3825


	Stockholders’ Equity
	Common Stock									Non‑controlling
				Additional						Interests in
				Paid-in		Retained		Cumulative		Operating		Total
	Shares	Par Value		Capital		Earnings		Dividends		Partnership		Equity
Balance at December 31, 2015	11,979	$	118	$	114,783	$	659	$	(7,188)	$	30,162	$	138,534

Net loss	—		—		—		(412)		—		(37)		(449)
Grant of unvested restricted stock	119		—		—		—		—		—		—
Issuance of stock under the at-the-market offering, net of costs of $81	844		10		9,224		—		—		—		9,234
Conversion of Common units to shares of common stock	1,109		11		10,450		—		—		(10,461)		—
Stock based compensation	—		—		892		—		—		—		892
Dividends and distributions accrued or paid	—		—		(2,057)		—		(5,073)		(2,232)		(9,362)
Issuance of Common units as partial consideration for asset acquisition	—		—		—		—		—		28,825		28,825
Reclassification of Common units from mezzanine equity	—		—		—		—		—		9,519		9,519
Forfeiture of unvested restricted stock	(5)		—		(3)		—		—		—		(3)
Adjustments to non-controlling interests resulting from changes in ownership of operating partnership	—		—		4,282		—		—		(4,282)		—
Balance at September 30, 2016	14,046	$	139	$	137,571	$	247	$	(12,261)	$	51,494	$	177,190

Balance at December 31, 2016	17,351		172		172,100		4,103		(14,473)		53,692		215,594

Net income	—		—		—		2,277		—		353		2,630
Grant of unvested restricted stock	205		—		—		—		—		—		—
Costs incurred related to the at-the-market offering	—		—		(119)		—		—		—		(119)
Conversion of Common units to shares of common stock	1,108		11		10,944		—		—		(10,955)		—
Stock based compensation	—		—		1,100		—		—		—		1,100
Dividends and distributions accrued or paid	—		—		—		(3,715)		(12,475)		(2,398)		(18,588)
Issuance of common stock as partial consideration for asset acquisition and business combination	14,815		148		168,835		—		—		—		168,983
Issuance of Common units as partial consideration for business combination	—		—		—		—		—		2,494		2,494
Issuance of Common units as partial consideration for asset acquisitions	—		—		—		—		—		10,035		10,035
Repurchase and cancellation of shares	(841)		(9)		(7,437)		—		—		—		(7,446)
Forfeiture of unvested restricted stock	(6)		—		(9)		—		—		—		(9)
Adjustments to non-controlling interests resulting from changes in ownership of operating partnership	—		—		(3,101)		—		—		3,101		—
Balance at September 30, 2017	32,632	$	322	$	342,313	$	2,665	$	(26,948)	$	56,322	$	374,674


	Rental income recognized
	For the three months ended				For the nine months ended
	September 30,				September 30,
(in thousands)	2017		2016		2017			2016
Leases in effect at the beginning of the year	$	3,187	$	3,098	$	9,348	$	9,760
Leases entered into during the year(1)		7,920		3,066		19,033		6,702
	$	11,107	$	6,164	$	28,381	$	16,462


(in thousands)	Future rental
Year Ending December 31,	payments
2017 (remaining three months)	$	9,456
2018		26,559
2019		19,704
2020		7,548
2021		3,263
Thereafter		4,122
	$	70,652


	Approximate %				Rental Income(1)
	of total acres				For the three months ended				For the nine months ended
	As of September 30,				September 30,				September 30,
Location of Farm(2)	2017		2016		2017		2016		2017		2016
Corn belt	30.8	%	29.3	%	33.7	%	40.2	%	35.5	%	37.5	%
Delta and South	18.8	%	21.8	%	9.3	%	11.4	%	10.0	%	11.7	%
High Plains	20.4	%	24.1	%	8.6	%	15.8	%	9.3	%	15.6	%
Southeast	25.8	%	24.8	%	18.3	%	32.6	%	21.2	%	35.2	%
West Coast	4.2	%	—	%	30.1	%	—	%	24.0	%	—	%
	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%


($ in thousands)
Land, at cost	$	181,072
Irrigation improvements		26,155
Permanent plantings		48,513
Buildings		1,499
In-place leases(1)		1,139
Lease origination costs		264
Cash		3,832
Other assets		1,831
Inventory		99
Deferred revenue		(4,434)
Other liabilities		(13,826)
Gross Total Consideration		246,144
Mortgage notes and bonds payable, net		(75,000)
Total Consideration	$	171,144


($ in thousands)
Land, at cost	$	7,170
Groundwater		634
Irrigation improvements		518
Permanent plantings		763
Below market lease		(29)
Total Consideration	$	9,056


($ in thousands)		Principal Outstanding as of				Maturity
Loan	Payment Terms	September 30, 2017		December 31, 2016		Date
Mortgage Note(1)	Principal & interest due at maturity	$	1,800	$	1,800	1/15/2017
Mortgage Note (2)	Principal & interest due at maturity		240		980	3/16/2022
Mortgage Note (2)	Principal due at maturity & interest due monthly		2,194		-	3/16/2022
Mortgage Note	Principal & interest due at maturity		1,647		-	4/27/2018
Mortgage Note	Principal & interest due at maturity		100		-	1/31/2018
Mortgage Note	Principal due at maturity & interest paid in advance		669		-	2/15/2018
Total outstanding principal			6,650		2,780
Points paid, net of direct issuance costs			(10)		(4)
Interest receivable (net prepaid interest)			311		67
Total notes and interest receivable		$	6,951	$	2,843


									Book
			Annual						Value of
($ in thousands)			Interest	Principal					Collateral
			Rate as of	Outstanding as of					as of
			September 30,	September 30,		December 31,		Maturity	September 30,
Loan	Payment Terms	Interest Rate Terms	2017	2017		2016		Date	2017
Farmer Mac Bond #1 (1)	Semi-annual interest only	2.40%	2.40%	$	—	$	20,700	September 2017	$	—
Farmer Mac Bond #2 (2)	Semi-annual interest only	2.35%	2.35%		5,460		5,460	October 2017		9,557
Farmer Mac Bond #3	Semi-annual interest only	2.50%	2.50%		10,680		10,680	November 2017		11,487
Farmer Mac Bond #4	Semi-annual interest only	2.50%	2.50%		13,400		13,400	December 2017		23,588
Farmer Mac Bond #5	Semi-annual interest only	2.56%	2.56%		30,860		30,860	December 2017		61,104
Farmer Mac Bond #6	Semi-annual interest only	3.69%	3.69%		14,915		14,915	April 2025		21,609
Farmer Mac Bond #7	Semi-annual interest only	3.68%	3.68%		11,160		11,160	April 2025		18,441
Farmer Mac Bond #8A	Semi-annual interest only	3.20%	3.20%		41,700		41,700	June 2020		80,929
Farmer Mac Bond #9	Semi-annual interest only	3.35%	3.35%		6,600		6,600	July 2020		7,711

MetLife Term Loan #1(3)	Semi-annual interest only	3.48% adjusted every three years	3.48%		90,000		90,000	March 2026		198,345
MetLife Term Loan #2	Semi-annual interest only	2.66% adjusted every three years	2.66%		16,000		16,000	March 2026		31,677
MetLife Term Loan #3	Semi-annual interest only	2.66% adjusted every three years	2.66%		21,000		21,000	March 2026		27,654
MetLife Term Loan #4(3)	Semi-annual interest only	3.48% adjusted every three years	3.48%		15,685		15,685	June 2026		30,624
MetLife Term Loan #5	Semi-annual interest only	3.26% adjusted every three years	3.26%		8,379		—	January 2027		16,761
MetLife Term Loan #6	Semi-annual interest only	3.21% adjusted every three years	3.21%		27,159		—	February 2027		55,526
MetLife Term Loan #7	Semi-annual interest only	3.45% adjusted every three years	3.45%		21,253		—	June 2027		48,307
Farm Credit of Central Florida	(4)	LIBOR + 2.6875% adjusted monthly	3.92%		5,102		5,102	September 2023		9,688
Prudential	(5)	3.20%	3.20%		6,481		6,600	July 2019		11,643
Rutledge Note Payable #1	Quarterly interest only	3 month LIBOR + 1.3% adjusted quarterly	2.60%		25,000		—	January 2022		46,022
Rutledge Note Payable #2	Quarterly interest only	3 month LIBOR + 1.3% adjusted quarterly	2.60%		25,000		—	January 2022		49,700
Rutledge Note Payable #3	Quarterly interest only	3 month LIBOR + 1.3% adjusted quarterly	2.60%		25,000		—	January 2022		58,985
Rutledge Note Payable #4	Quarterly interest only	3 month LIBOR + 1.3% adjusted quarterly	2.60%		15,000		—	January 2022		28,271
Rutledge Note Payable #5	Quarterly interest only	3 month LIBOR + 1.3% adjusted quarterly	2.60%		30,000		—	January 2022		69,772
Total outstanding principal					465,834		309,862		$	917,401
Debt issuance costs					(1,360)		(1,193)
Unamortized premium					20		110
Total mortgage notes and bonds payable, net				$	464,494	$	308,779


($ in thousands)
Year Ending December 31,	Future Maturities
2017 (remaining three months)	$	60,400
2018		—
2019		6,481
2020		48,300
2021		—
Thereafter		350,653
	$	465,834


($ in thousands)	Future Capital
Year Ending December 31,	Commitments
2017 (remaining three months)	$	4,311
2018		845
	$	5,156



($ in thousands)		Purchase
Farm State		Price
South Carolina	$	1,120
California		110,000
	$	111,120


	Common			Series A Preferred Units
($ in thousands)	Redeemable Common units	Redeemable non-controlling interests		Redeemable Preferred units	Redeemable non-controlling interests
Balance at December 31, 2015	884	$	9,695	—	$	—
Issuance of redeemable Common units as partial consideration for real estate acquisition	—		—	117		117,000
Net loss attributable to non-controlling interest	—		(64)	—		—
Accrued distributions to non-controlling interest	—		(113)	—		2,057
Redemption of Common units for Common stock	(884)		(9,518)
Balance at September 30, 2016	—	$	—	117	$	119,057

Balance at December 31, 2016	—	$	—	117	$	119,915
Distributions paid to non-controlling interest	—		—	—		(2,915)
Accrued distributions to non-controlling interest	—		—	—		2,633
Redemption of Common units for common stock	—		—	—		—
Balance at September 30, 2017	—	$	—	117	$	119,633


Fiscal Year	Declaration Date	Record Date	Payment Date	Distributions per Common Share/OP unit
2017	July 19, 2017	October 2, 2017	October 13, 2017		0.1275
	May 9, 2017	June 30, 2017	July 14, 2017	$	0.1275
	February 22, 2017	April 1, 2017	April 14, 2017		0.1275
				$	0.3825

2016	March 8, 2016	April 1, 2016	April 15, 2016	$	0.1275
	May 9, 2016	July 1, 2016	July 15, 2016		0.1275
	August 3, 2016	September 30, 2016	October 14, 2016		0.1275
	November 3, 2016	January 2, 2017	January 13, 2017		0.1275
				$	0.5100


		Weighted
	Number of	average grant
(shares in thousands)	shares	date fair value
Unvested at December 31, 2015	145	$	13.87
Granted	119		10.78
Vested	(70)		13.96
Forfeited	(5)		11.09
Unvested at September 30, 2016	189		11.97

Unvested at December 31, 2016	189		11.98
Granted	205		11.30
Vested	(108)		12.84
Forfeited	(7)		10.97
Unvested at September 30, 2017	279	$	11.16


($ in thousands)
Year Ending December 31,	Approximate Acres	% of Approximate Acres		Annual Cash Rents		% of Annual Cash Rents
2017 (remaining three months)	30,797	20.0	%	$	6,000	19.3	%
2018	33,978	22.1	%		6,567	21.1	%
2019	57,525	37.4	%		11,045	35.5	%
2020	11,663	7.6	%		4,272	13.7	%
2021	13,184	8.6	%		2,329	7.5	%
2022 and beyond	6,734	4.3	%		860	2.9	%
	153,881	100.0	%	$	31,073	100.0	%



($ in thousands)	Total Shares Purchased		Average Price Paid per Share	Total Number of Shares Purchased as Part of Publicly announced Plans or Programs		Approximate Dollar Value of Shares that May Yet be Purchased Under the Share Repurchase Program
July 1, 2017 - July 31, 2017	—	$	—	—	$	25,000
August 1, 2017 - August 31, 2017	274		8.54	274		22,660
September 1, 2017 - September 30, 2017	567		9.00	567		17,555
Total	841	$	8.85	841	$	17,555