Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2022 | Jul. 22, 2022 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-36405 | |
Entity Registrant Name | Farmland Partners Inc. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 46-3769850 | |
Entity Address, Address Line One | 4600 South Syracuse Street, Suite 1450 | |
Entity Address, City or Town | Denver | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80237-2766 | |
City Area Code | 720 | |
Local Phone Number | 452-3100 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | FPI | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 53,046,074 | |
Entity Central Index Key | 0001591670 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
ASSETS | ||
Land, at cost | $ 960,593 | $ 945,951 |
Grain facilities | 10,918 | 10,754 |
Groundwater | 12,602 | 10,214 |
Irrigation improvements | 53,431 | 52,693 |
Drainage improvements | 12,528 | 12,606 |
Permanent plantings | 53,698 | 53,698 |
Other | 6,975 | 6,848 |
Construction in progress | 12,804 | 10,647 |
Real estate, at cost | 1,123,549 | 1,103,411 |
Less accumulated depreciation | (41,562) | (38,303) |
Total real estate, net | 1,081,987 | 1,065,108 |
Deposits | 531 | 58 |
Cash | 19,696 | 30,171 |
Assets held for sale | 83 | 530 |
Notes and interest receivable, net | 5,855 | 6,112 |
Right of use asset | 387 | 107 |
Deferred offering costs | 83 | 40 |
Accounts receivable, net | 2,457 | 4,900 |
Derivative asset | 698 | |
Inventory | 2,962 | 3,059 |
Equity method investments | 4,148 | 3,427 |
Intangible assets, net | 1,912 | 1,915 |
Goodwill | 2,706 | 2,706 |
Prepaid and other assets | 1,655 | 3,392 |
TOTAL ASSETS | 1,125,160 | 1,121,525 |
LIABILITIES | ||
Mortgage notes and bonds payable, net | 424,474 | 511,323 |
Lease liability | 387 | 107 |
Dividends payable | 3,239 | 2,342 |
Derivative liability | 785 | |
Accrued interest | 2,991 | 3,011 |
Accrued property taxes | 1,851 | 1,762 |
Deferred revenue | 1,317 | 45 |
Accrued expenses | 7,826 | 9,564 |
Total liabilities | 442,085 | 528,939 |
Commitments and contingencies (See Note 8) | ||
Redeemable non-controlling interest in operating partnership, Series A preferred units | 113,680 | 120,510 |
EQUITY | ||
Common stock, $0.01 par value, 500,000,000 shares authorized; 52,742,449 shares issued and outstanding at June 30, 2022, and 45,474,145 shares issued and outstanding at December 31, 2021 | 515 | 444 |
Additional paid in capital | 623,748 | 524,183 |
Retained deficit | (2,456) | (4,739) |
Cumulative dividends | (67,446) | (61,853) |
Other comprehensive income | 1,857 | 279 |
Non-controlling interests in operating partnership | 13,177 | 13,762 |
Total equity | 569,395 | 472,076 |
TOTAL LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS IN OPERATING PARTNERSHIP AND EQUITY | $ 1,125,160 | $ 1,121,525 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2022 | Dec. 31, 2021 |
Consolidated Balance Sheets | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 52,742,449 | 45,474,145 |
Common stock, shares outstanding | 52,742,449 | 45,474,145 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
OPERATING REVENUES: | ||||
Rental income | $ 9,196 | $ 8,291 | $ 18,741 | $ 18,551 |
Total operating revenues | 12,357 | 10,013 | 26,247 | 21,589 |
OPERATING EXPENSES | ||||
Depreciation, depletion and amortization | 1,660 | 1,885 | 3,411 | 3,820 |
Property operating expenses | 2,058 | 1,708 | 4,013 | 3,639 |
Cost of goods sold | 1,333 | 667 | 2,772 | 917 |
Acquisition and due diligence costs | 62 | |||
General and administrative expenses | 3,004 | 1,897 | 6,108 | 3,514 |
Legal and accounting | 816 | 2,901 | 2,072 | 5,643 |
Other operating expenses | 31 | 36 | 2 | |
Total operating expenses | 8,902 | 9,058 | 18,474 | 17,535 |
OPERATING INCOME | 3,455 | 955 | 7,773 | 4,054 |
OTHER (INCOME) EXPENSE: | ||||
Other income | (34) | (8) | (14) | (52) |
Income from equity method investment | (8) | (15) | ||
Gain on disposition of assets | (3,335) | (74) | (3,995) | (3,467) |
Interest expense | 3,743 | 3,902 | 7,570 | 7,961 |
Total other expense | 366 | 3,820 | 3,546 | 4,442 |
Net income (loss) before income tax expense | 3,089 | (2,865) | 4,227 | (388) |
Income tax expense | 96 | 96 | ||
NET INCOME (LOSS) | 2,993 | (2,865) | 4,131 | (388) |
Net (income) loss attributable to non-controlling interests in operating partnership | (77) | 130 | (110) | 13 |
Net income (loss) attributable to the Company | 2,916 | (2,735) | 4,021 | (375) |
Nonforfeitable distributions allocated to unvested restricted shares | (16) | (14) | (31) | (28) |
Distributions on Series A Preferred Units and Series B Preferred Stock | (840) | (3,055) | (1,680) | (6,120) |
Net income (loss) available to common stockholders of Farmland Partners Inc. | $ 2,060 | $ (5,804) | $ 2,310 | $ (6,523) |
Basic and diluted per common share data: | ||||
Basic net income (loss) available to common stockholders | $ 0.04 | $ (0.19) | $ 0.05 | $ (0.21) |
Diluted net income (loss) available to common stockholders | $ 0.04 | $ (0.19) | $ 0.05 | $ (0.21) |
Basic weighted average common shares outstanding (in shares) | 50,362 | 31,072 | 48,084 | 30,747 |
Diluted weighted average common shares outstanding (in shares) | 50,362 | 31,072 | 48,084 | 30,747 |
Dividends declared per common share | $ 0.06 | $ 0.05 | $ 0.11 | $ 0.10 |
Tenant reimbursements | ||||
OPERATING REVENUES: | ||||
Revenue | $ 809 | $ 839 | $ 1,587 | $ 1,777 |
Crop sales | ||||
OPERATING REVENUES: | ||||
Revenue | 1,150 | 237 | 1,845 | 453 |
Other revenue | ||||
OPERATING REVENUES: | ||||
Revenue | $ 1,202 | $ 646 | $ 4,074 | $ 808 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Consolidated Statements of Comprehensive Income (Loss) | ||||
Net income (loss) | $ 2,993 | $ (2,865) | $ 4,131 | $ (388) |
Amortization of OCI | 141 | 236 | 313 | 530 |
Net change associated with current period hedging activities | 330 | (266) | 1,265 | 942 |
Comprehensive income (loss) | 3,464 | (2,895) | 5,709 | 1,084 |
Comprehensive income (loss) attributable to non-controlling interests | (77) | 130 | (110) | 13 |
Net income (loss) attributable to Farmland Partners Inc. | $ 3,387 | $ (2,765) | $ 5,599 | $ 1,097 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity and Other Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | Common stock | Additional Paid-in Capital | Retained Earnings (Deficit) | Cumulative Dividends. | Other Comprehensive Income (Loss) | Non-controlling Interests in Operating Partnership | Total |
Balance at Dec. 31, 2020 | $ 297 | $ 345,870 | $ 1,037 | $ (54,751) | $ (2,380) | $ 15,841 | $ 305,914 |
Balance (in shares) at Dec. 31, 2020 | 30,571 | ||||||
Increase (decrease) in shareholders' equity | |||||||
Net income (loss) | 2,360 | 117 | 2,477 | ||||
Grant of unvested restricted stock (in shares) | 113 | ||||||
Forfeiture of unvested restricted stock (in shares) | (3) | ||||||
Stock based compensation | 251 | 251 | |||||
Dividends accrued or paid | (3,065) | (1,540) | (74) | (4,679) | |||
Conversion of common units to shares of common stock | $ 1 | 1,697 | (1,698) | ||||
Conversion of common units to shares of common stock (in shares) | 159 | ||||||
Net change associated with current period hedging transactions | 1,501 | 1,501 | |||||
Adjustments to non-controlling interest resulting from changes in ownership of operating partnership | 38 | (38) | |||||
Balance at Mar. 31, 2021 | $ 298 | 347,856 | 332 | (56,291) | (879) | 14,148 | 305,464 |
Balance (in shares) at Mar. 31, 2021 | 30,840 | ||||||
Increase (decrease) in shareholders' equity | |||||||
Net income (loss) | (2,735) | (130) | (2,865) | ||||
Issuance of stock | $ 19 | 25,281 | 25,300 | ||||
Issuance of stock (in shares) | 1,955 | ||||||
Grant of unvested restricted stock (in shares) | 16 | ||||||
Stock based compensation | 334 | 334 | |||||
Dividends accrued or paid | (3,054) | (1,641) | (74) | (4,769) | |||
Net change associated with current period hedging transactions | (29) | (29) | |||||
Adjustments to non-controlling interest resulting from changes in ownership of operating partnership | (172) | 172 | |||||
Balance at Jun. 30, 2021 | $ 317 | 373,299 | (5,457) | (57,932) | (908) | 14,116 | 323,435 |
Balance (in shares) at Jun. 30, 2021 | 32,811 | ||||||
Balance at Dec. 31, 2021 | $ 444 | 524,183 | (4,739) | (61,853) | 279 | 13,762 | 472,076 |
Balance (in shares) at Dec. 31, 2021 | 45,474 | ||||||
Increase (decrease) in shareholders' equity | |||||||
Net income (loss) | 1,106 | 33 | 1,139 | ||||
Issuance of stock | $ 29 | 38,264 | 38,293 | ||||
Issuance of stock (in shares) | 2,913 | ||||||
Grant of unvested restricted stock (in shares) | 147 | ||||||
Forfeiture of unvested restricted stock (in shares) | (1) | ||||||
Shares withheld for income taxes on vesting of equity-based compensation | (185) | (185) | |||||
Shares withheld for income taxes on vesting of equity-based compensation (in shares) | (14) | ||||||
Stock based compensation | 642 | 642 | |||||
Dividends accrued or paid | (878) | (2,428) | (68) | (3,374) | |||
Net change associated with current period hedging transactions | 1,107 | 1,107 | |||||
Adjustments to non-controlling interest resulting from changes in ownership of operating partnership | (187) | 187 | |||||
Balance at Mar. 31, 2022 | $ 473 | 562,717 | (4,511) | (64,281) | 1,386 | 13,914 | 509,698 |
Balance (in shares) at Mar. 31, 2022 | 48,519 | ||||||
Increase (decrease) in shareholders' equity | |||||||
Net income (loss) | 2,915 | 77 | 2,992 | ||||
Issuance of stock | $ 41 | 60,108 | 60,149 | ||||
Issuance of stock (in shares) | 4,121 | ||||||
Forfeiture of unvested restricted stock (in shares) | (7) | ||||||
Shares withheld for income taxes on vesting of equity-based compensation | (1) | (1) | |||||
Shares withheld for income taxes on vesting of equity-based compensation (in shares) | (1) | ||||||
Stock based compensation | 185 | 185 | |||||
Dividends accrued or paid | (859) | (3,165) | (75) | (4,099) | |||
Conversion of common units to shares of common stock | $ 1 | 1,213 | (1,214) | ||||
Conversion of common units to shares of common stock (in shares) | 110 | ||||||
Net change associated with current period hedging transactions | 471 | 471 | |||||
Adjustments to non-controlling interest resulting from changes in ownership of operating partnership | (474) | 474 | |||||
Balance at Jun. 30, 2022 | $ 515 | $ 623,748 | $ (2,455) | $ (67,446) | $ 1,857 | $ 13,176 | $ 569,395 |
Balance (in shares) at Jun. 30, 2022 | 52,742 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income (loss) | $ 4,131 | $ (388) |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation, depletion and amortization | 3,411 | 3,820 |
Amortization of deferred financing fees and discounts/premiums on debt | 176 | 172 |
Amortization of net origination fees related to notes receivable | (16) | |
Stock-based compensation | 827 | 585 |
Stock-based incentive | 417 | |
(Gain) on disposition of assets | (3,995) | (3,467) |
Income from equity method investment | (15) | |
Proceeds from litigation settlement | 550 | |
Bad debt expense | 24 | |
Amortization of dedesignated interest rate swap | 167 | 530 |
Loss on early extinguishment of debt | 162 | |
Changes in operating assets and liabilities: | ||
(Increase) Decrease in accounts receivable | 2,262 | 326 |
(Increase) Decrease in interest receivable | 1 | (47) |
(Increase) Decrease in other assets | 1,212 | 1,081 |
(Increase) Decrease in inventory | 96 | 375 |
Increase (Decrease) in accrued interest | 239 | (219) |
Increase (Decrease) in accrued expenses | (2,086) | 2,588 |
Increase (Decrease) in deferred revenue | 1,329 | 2,337 |
Increase (Decrease) in accrued property taxes | 96 | (26) |
Net cash provided by operating activities | 8,438 | 8,217 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Real estate acquisitions | (28,164) | (30,003) |
Real estate and other improvements | (2,672) | (1,353) |
Investment in equity method investees | (705) | |
Principal receipts on notes receivable | 1,577 | 6 |
Origination fees on notes receivable | 60 | |
Issuance of note receivable | (3,500) | |
Proceeds from sale of property | 16,901 | 28,649 |
Net cash used in investing activities | (16,503) | (2,701) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Borrowings from mortgage notes payable | 112,000 | 14,000 |
Repayments on mortgage notes payable | (198,942) | (19,976) |
Proceeds from ATM offering | 98,403 | 25,301 |
Issuance of stock | 39 | |
Participating preferred stock repurchased | (650) | |
Payment of debt issuance costs | (244) | (73) |
Payment of swap fees | (73) | (73) |
Redemption of Series A preferred units | (5,058) | |
Dividends on common stock | (4,702) | (3,072) |
Shares withheld for income taxes on vesting of equity-based compensation | (186) | |
Distributions to non-controlling interests in operating partnership, common | (136) | (156) |
Net cash provided by (used in) financing activities | (2,409) | 7,426 |
NET INCREASE (DECREASE) IN CASH | (10,474) | 12,942 |
CASH, BEGINNING OF PERIOD | 30,171 | 27,217 |
CASH, END OF PERIOD | 19,697 | 40,159 |
Cash paid during period for interest | 7,044 | 7,217 |
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING TRANSACTIONS: | ||
Convertible notes receivable | 2,417 | |
Additions to real estate improvements included in accrued expenses | 92 | 238 |
Swap fees payable included in accrued interest | 146 | 146 |
Prepaid property tax liability acquired in acquisitions | 49 | |
Deferred offering costs amortized through equity in the period | 52 | 79 |
Right of Use Asset | 387 | 178 |
Lease Liability | 387 | 178 |
Non-cash conversion of notes receivable to real estate | 2,135 | |
Common stock | ||
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING TRANSACTIONS: | ||
Dividend payable, common stock | 3,165 | 1,641 |
Common Unit Holders | ||
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING TRANSACTIONS: | ||
Dividend payable, common units | 75 | 74 |
Series A Preferred Units | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Distributions on preferred units/stock | (3,510) | (3,510) |
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING TRANSACTIONS: | ||
Dividend payable, common units | 1,700 | |
Distributions payable, Series A preferred units | $ 1,680 | 1,755 |
Series B Participating Preferred Stock | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Distributions on preferred units/stock | $ (4,365) |
Organization and Significant Ac
Organization and Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2022 | |
Organization and Significant Accounting Policies | |
Organization and Significant Accounting Policies | Note 1—Organization and Significant Accounting Policie s Organization Farmland Partners Inc. (“FPI”), collectively with its subsidiaries, is an internally managed real estate company that owns and seeks to acquire high-quality farmland located in agricultural markets throughout North America. FPI was incorporated in Maryland on September 27, 2013. 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. All of 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 June 30, 2022, FPI owned a 97.4% interest in the Operating 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”), 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 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 the affairs of FPI. As of June 30, 2022, the Operating Partnership owns a 9.97% equity interest in an unconsolidated equity method investment that holds 10 properties (see “Note 1—Convertible Notes Receivable”, “Note 1—Equity Method Investments”, and “Note 4—Related Party Transactions”). References to the “Company,” “we,” “us,” or “our” mean collectively FPI and its consolidated subsidiaries, including the Operating Partnership. As of June 30, 2022, the Company owned a portfolio of approximately 160,100 acres of farmland which are consolidated in these financial statements. In addition, the Company serves as property manager over approximately 25,200 acres of farmland. On August 17, 2017, the Company issued 6,037,500 shares of its newly designated 6.00% Series B Participating Preferred Stock, $0.01 par value per share (the “Series B Participating Preferred Stock”) in an underwritten public offering. On October 4, 2021, the Company converted all 5,806,797 shares of the outstanding Series B Participating Preferred Stock into shares of common stock. (See “Note 9—Stockholders’ Equity—Series B Participating Preferred Stock” for more information on the Series B Participating Preferred Stock). On March 16, 2015, the Company formed FPI Agribusiness Inc., a wholly owned subsidiary (the “TRS” or “FPI Agribusiness”), as a taxable REIT subsidiary. We engage directly in farming, provide property management, auction, and brokerage services and volume purchasing services to our tenants through the TRS. As of June 30, 2022, the TRS performed direct farming operations on 2,973 acres of farmland owned by the Company located in California and Michigan. All references to numbers and percent of acres within this report are unaudited. Principles of Combination and Consolidation The accompanying consolidated financial statements 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 FPI and the Operating Partnership. All significant intercompany balances and transactions have been eliminated in consolidation. Interim Financial Information The information in the accompanying consolidated financial statements of the Company as of December 31, 2021 and June 30, 2022 and for the three and six months ended June 30, 2022 and 2021 is unaudited. The accompanying financial statements include adjustments based on management’s estimates (consisting of normal and recurring accruals), which the Company considers necessary for a fair presentation of the results for the periods. The financial information should be read in conjunction with the consolidated financial statements for the year ended December 31, 2021, 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 March 1, 2022. Operating results for the three and six months ended June 30, 2022 are not necessarily indicative of actual operating results for the entire year ending December 31, 2022. 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. 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 could materially differ from those estimates for a variety of reasons, including, without limitation, the impacts of the ongoing coronavirus (“COVID-19”) pandemic, the war in Ukraine, substantially higher prices for oil and 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 business. Real Estate Acquisitions When the Company acquires farmland where substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset, or a 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 of similar assets, and contains acquired inputs and processes which have the ability to contribute to the creation of outputs, these acquisitions are accounted for as business combinations. The Company considers single identifiable assets as tangible assets that are attached to and cannot be physically removed and used separately from another tangible asset without incurring significant cost or significant diminution in utility or fair value. The Company considers similar assets as assets that have a similar nature and risk characteristics. Whether the Company’s acquisitions are treated as an asset acquisition under ASC 360 or a business combination under ASC 805, the fair value of the purchase price is allocated among the assets acquired and any liabilities assumed by valuing the property as if it were 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, the Company allocates the purchase price of the real estate based upon 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. The Company allocates the purchase price to the 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, water availability and the sale 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 value of the difference between prevailing market rates and the in-place rates measured over a period equal to the remaining term of the lease for above market leases, 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. The purchase price is allocated to in-place lease values and tenant relationships, if they are acquired, 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 are included as an intangible asset and have been 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 above and below market leases, in-place lease values, and 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 are 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. During the three and six months ended June 30, 2022 and 2021, the Company incurred an immaterial amount of costs related to acquisition and due diligence. Total consideration for acquisitions may include a combination of cash and equity securities. When equity securities are issued, the Company determines the fair value of the equity securities issued based on the number of shares or units issued multiplied by the price per share or unit. Using information available at the time of a 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 year from the acquisition date when incomplete information exists as of the respective reporting date, the Company may adjust the preliminary purchase price allocations after obtaining more information about assets acquired and liabilities assumed at the date of acquisition. Real Estate Sales The Company recognizes gains from the sales of real estate assets generally at the time the title is transferred and consideration is received. Liquidity Policy The Company manages its liquidity position and expected liquidity needs taking into consideration current cash balances, undrawn availability under its lines of credit, and reasonably expected cash receipts. The business model of the Company, and of real estate investment companies in general, relies on 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 also has a deep portfolio of real estate assets which management believes could be readily liquidated if necessary to fund any immediate liquidity needs. As of June 30, 2022, we had $424.5 million of mortgage and other debt against a portfolio of real estate assets with a net book value of $1.1 billion. We also have an effective shelf registration statement with approximately $100 million of capacity pursuant to which we could issue additional equity or debt securities, and during six months ended June 30, 2022, we raised $98.4 million of equity capital from our At-the-Market Equity Offering Program (the “ATM Program”). Notes and Interest Receivable Notes receivable are stated at their unpaid principal balance and include unamortized direct origination costs, prepaid interest and accrued interest through the reporting date, less any allowance for losses and unearned borrower paid points. Management determines the appropriate classification of debt securities at the time of issuance and reevaluates such designation as of each balance sheet date. As of June 30, 2022 and December 31, 2021, the Company had four and five notes outstanding, respectively, under the Company’s loan program (the “FPI Loan Program”) and have designated each of the notes receivable as loans. Loans are stated at amortized cost, adjusted for amortization of premiums and accretion of discounts to maturity computed under the straight-line method, which approximates the effective interest method. Such amortization, including interest, is included in other revenue within our Consolidated Statements of Operations. See “Note 6—Notes Receivable.” Convertible Notes Receivable On January 20, 2021, the Company entered into property sale and long-term management agreements with Promised Land Opportunity Zone Farms I, LLC (the "OZ Fund"), a private investment fund focused on acquiring and improving farmland in qualified opportunity zones in the United States, as designated under U.S. tax provisions enacted in 2017. On March 5, 2021, the Company sold nine farms to the OZ Fund. On March 31, 2021, the Company sold an additional property to the OZ Fund. As consideration for the 10 farms sold to the OZ Fund, the Company received approximately $19.1 million in cash and approximately $2.4 million in convertible notes receivable (the “OZ Convertible Notes”), resulting in a gain on disposition of assets totaling $2.4 million. The OZ Convertible Notes had an interest rate of 1.35% and an aggregate principal balance of $2.4 million. On July 16, 2021, the Company provided notice to the OZ Fund that it was converting its OZ Convertible Notes, and accrued interest thereon, into membership interests in the OZ Fund, in accordance with the terms of the OZ Convertible Notes. The value of the conversion was $2.4 million and the Company’s membership interests in the OZ Fund were approximately 7.6% upon conversion and increased to 9.97% as of June 30, 2022 after subsequent capital contributions. Please refer to “Note 4—Related Party Transactions.” Allowance for Notes and Interest Receivable A note is placed on non-accrual status when management determines, after considering economic and business conditions and collection efforts, that the note is impaired or collection of interest is doubtful. The accrual of interest on the instrument ceases when there is concern that principal or interest due according to the note agreement will not be collected. Any payment received on such non-accrual notes are recorded as interest income when the payment is received. The note is reclassified as accrual-basis once interest and principal payments become current. The Company periodically reviews the value of the underlying collateral of farm real estate for the note receivable and evaluates whether the value of the collateral continues to provide adequate security for the note. Should the value of the underlying collateral become less than the outstanding principal and interest, the Company will determine whether an allowance is necessary. Any uncollectible interest previously accrued is also charged off. As of June 30, 2022, we believe the value of the underlying collateral for each of the notes to be sufficient and in excess of the respective outstanding principal and accrued interest and no notes are currently on non-accrual status. Accounts Receivable Accounts receivable are presented at face value, net of the allowance for doubtful accounts. The Company records an allowance for doubtful accounts, reducing the receivables balance to an amount that it estimates is collectible from our customers. Estimates used in determining the allowance for doubtful accounts are based on historical collection experience, current trends, aging of accounts receivable and periodic credit evaluations of the Company’s customers’ financial condition. The Company creates an allowance for accounts receivable when it becomes apparent, based upon age or customer circumstances, that an amount may not be collectible, such that all current expected losses are sufficiently reserved for at each reporting period. The Company considered its current expectations of future economic conditions, including the impact of COVID-19, when estimating its allowance for doubtful accounts. The allowance for doubtful accounts was less than $0.1 million as of June 30, 2022 and December 31, 2021. An allowance for doubtful accounts is recorded on the Consolidated Statement 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. Inventory The costs of growing crops on farms under direct operations are accumulated until the time of harvest at the lower of cost or net realizable 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 and is included in other operating expenses. The cost of harvested crop sold was $1.3 million and $0.7 million, respectively, for the three months ended June 30, 2022 and 2021. For the six months ended June 30, 2022 and 2021, the cost of harvested crop sold was $2.8 million and $0.9 million, respectively. Harvested crop inventory on farms under direct operations includes costs accumulated both during the growing and harvesting phases and are stated at the lower of those costs 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 broker’s commissions, freight and other marketing costs. General inventory, such as fertilizer, seeds and pesticides, is valued at the lower of cost or net realizable value. As of June 30, 2022 and December 31, 2021, inventory consisted of the following: (in thousands) June 30, 2022 December 31, 2021 Harvested crop $ — $ 164 Growing crop 2,962 2,895 $ 2,962 $ 3,059 Equity Method Investments As partial consideration for certain transactions with the OZ Fund, the Company received the OZ Convertible Notes, which on July 16, 2021, were converted into a 7.6% equity interest upon conversion and increased to 9.97% as of June 30, 2022. As of June 30, 2022 and December 31, 2021, the aggregate balance of the Company’s equity method investment in the OZ Fund was approximately $4.1 million and $3.4 million, respectively, including aggregate capital contributions of $1.7 million and $1.0 million through June 30, 2022 and December 31, 2021, respectively. The OZ Fund will exist until an event of dissolution occurs, as defined in the limited liability company agreement of the OZ Fund (the “Fund Agreement”). Under the Fund Agreement, the Manager of the OZ Fund may call for additional capital contributions from its members to fund expenses, property acquisitions and capital improvements in accordance with each members’ funding ratio. The Company’s capital contributions are capped at $20.0 million. Under the Fund Agreement, any available cash, after the allowance for the payment of all obligations, operating expenses and capital improvements, is distributed to the members at least annually. For each fiscal year, net income or loss is allocated to the members pro rata in accordance with their percentage interest. Business Combinations The Company recognizes and measures the assets acquired and liabilities assumed in a business combination based on their estimated fair values as of date of acquisition, with any difference recorded as goodwill. Management engages an independent valuation specialist, as applicable, to assist with the determination of fair value of the assets acquired, liabilities assumed, and resulting goodwill, based on recognized business valuation methodologies. If the initial accounting for the business combination is incomplete by the end of the reporting period in which the acquisition occurs, an estimate will be recorded. Subsequent to the acquisition, and not later than one year from the acquisition date, the Company will record any measurement period adjustments to the initial estimate based on new information obtained that would have existed as of the acquisition date. An adjustment that arises from information obtained that did not exist as of the date of the acquisition will be recorded in the period of the adjustment. Acquisition and due diligence costs that arise as a result of a business combination are expensed as incurred. On November 15, 2021, we acquired 100% of the membership interests of Murray Wise Associates, LLC (“MWA”), an agricultural asset management, brokerage and auction company, for total transaction value of $8.1 million, comprised of $5.3 million of consideration paid at closing, net of $2.8 million of closing adjustments. The consideration paid at closing was comprised of $2.2 million in cash and $3.1 million in shares of our common stock. The primary reason for the acquisition was to increase the Company’s breadth of activities in the farmland sector, while adding additional sources of revenue and market insight. As a result of the acquisition, MWA became a wholly owned subsidiary of the TRS. The Company issued an aggregate of 248,734 shares of common stock at a price of $12.61 per share in connection with the closing of the acquisition. The Company has entered into an incentive compensation agreement providing for the issuance of up to $3.0 million in shares of common stock for the benefit of current and prospective MWA employees aside from Murray Wise, who was appointed to our Board of Directors in connection with the closing of the acquisition, the receipt of which is tied to achieving certain profitability and asset-under-management objectives within three years following the closing of the transaction. Stock-based incentive expense related to these awards will be recognized ratably over the same three The Company recorded goodwill of $2.7 million, trade names and trademarks of $1.9 million, and customer relationships of $0.1 million, as part of the purchase of MWA. Goodwill represents the difference between the purchase consideration and the net assets acquired, including identifiable intangible assets. The factors giving rise to goodwill are primarily related to (a) entry into new lines of business which are complimentary to FPI’s existing business operations, and (b) acquired workforce-in-place, including Murray Wise, who has extensive experience in the industry, and became a member of our Board of Directors in connection with the closing of the transaction, as described above. The following table presents a summary of the Company's purchase accounting entries: ($ in thousands) MWA Purchase Consideration: Accounting Cash consideration $ 2,161 Stock consideration 3,147 Total consideration $ 5,308 Amounts recognized for fair value of assets acquired and liabilities assumed: Cash and cash equivalents $ 1,305 Fixed Assets 110 Goodwill 2,706 Intangible assets 1,915 Net Liabilities (728) Total Fair Value $ 5,308 Net cash used in the transaction: Cash paid in transaction $ (2,161) Cash acquired in transaction 1,305 Net cash used in the transaction $ (856) Goodwill and Intangible Assets Goodwill represents the excess of the purchase price over the estimated fair value of the net assets acquired in the acquisition of a business. Goodwill is not amortized, but rather is tested for impairment annually in the fourth quarter and when events or changes in circumstances indicate that the fair value of a reporting unit with goodwill has been reduced below its carrying value. The impairment test requires allocating goodwill and other assets and liabilities to reporting units. The fair value of each reporting unit is determined and compared to the carrying value of the reporting unit. The fair value is calculated using the expected present value of future cash flows method. Significant assumptions used in the cash flow forecasts include future net operating margins, discount rates and future capital requirements. If the fair value of the reporting unit is less than the carrying value, including goodwill, the excess of the book value over the fair value of goodwill is charged to net income as an impairment expense. During the three and six months ended June 30, 2022, the Company did not incur any impairment charges related to goodwill. Amortization of intangible assets with definite lives is calculated using the straight-line method, which is reflective of the benefit pattern in which the estimated economic benefit is expected to be received over the estimated useful life of the intangible asset. Intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the intangible asset may not be recoverable. If the sum of the expected undiscounted future cash flows related to the asset is less than the carrying amount of the asset, an impairment loss is recognized based on the fair value of the asset. Trade names and trademarks have an indefinite life and, therefore, are not subject to amortization. Customer relationships are subject to amortization and are amortized over a period of 12 years. During the three and six months ended June 30, 2022, the Company recorded amortization of customer relationships of less than $0.1 million for each period. Fair Value The Company is required to disclose fair value as further explained in “Note 6—Notes Receivable”, “Note 7—Mortgage Notes, Lines of Credit and Bonds Payable” and “Note 10—Hedge Accounting”. FASB ASC 820-10 establishes a three-level hierarchy for the disclosure of fair value measurements. The valuation hierarchy is based upon 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. Hedge Accounting ASC 815 requires the Company to recognize all of its derivative instruments as either assets or liabilities in the consolidated balance sheet at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, the company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge or a hedge of a net investment in a foreign operation. For derivative instruments not designated as hedging instruments, the gain or loss is recognized in the consolidated statements of operations during the reporting period. The Company manages economic risks, including interest rate, liquidity, and credit risk, by managing the amount, sources, duration and interest rate exposure of its funding. The Company may also use interest rate derivative financial instruments, namely interest rate swaps. The Company may enter into marketing contracts to sell commodities. Derivatives and hedge accounting guidance requires a company to evaluate these contracts to determine whether the contracts are derivatives. Certain contracts that meet the definition of a derivative may be exempt from derivative accounting if designated as normal purchase or normal sales. The Company evaluates all contracts at inception to determine if they are derivatives and if they meet the normal purchase and normal sale designation requirements. The Company has in place one interest rate swap agreement with Rabobank to add stability to interest expense and to manage its exposure to interest rate movements. This agreement qualifies as a cash flow hedge and is actively evaluated for ongoing effectiveness (see “Note 10—Hedge Accounting”). 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 shareholders’ equity in the Company’s consolidated balance sheets. Additionally, the Company assesses whether the derivative used in its hedging transaction is expected to be highly effective in offsetting changes in the fair value or cash flows of the hedged item. The Company discontinues hedge accounting when it is determined that a derivative has ceased to be or is not expected to be highly effective as a hedge, and then reflects changes in fair value of the derivative in earnings after termination of the hedge relationship. New or Revised Accounting Standards Recently adopted In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 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 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 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 chang |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2022 | |
Revenue Recognition | |
Revenue Recognition | Note 2—Revenue Recognition Fixed Rent: Variable Rent: 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. Fixed Rent and Variable Rent: Tenant Reimbursements: Crop Sales: Other Revenue: Leases in place as of June 30, 2022 have terms ranging from one two one The following sets forth a summary of rental income recognized during the three and six months ended June 30, 2022 and 2021: Rental income recognized For the three months ended For the six months ended June 30, June 30, (in thousands) 2022 2021 2022 2021 Leases in effect at the beginning of the year $ 7,798 $ 7,263 $ 15,549 $ 16,734 Leases entered into during the year 1,398 1,028 3,192 1,817 $ 9,196 $ 8,291 $ 18,741 $ 18,551 Future minimum fixed rent payments from tenants under all non-cancelable leases in place as of June 30, 2022, including lease advances when contractually due, but excluding crop share and tenant reimbursement of expenses, for the remainder of 2022 and each of the next four years and thereafter as of June 30, 2022 are as follows: (in thousands) Future rental Year Ending December 31, payments 2022 (remaining six months) $ 16,632 2023 26,802 2024 18,647 2025 9,125 2026 4,080 Thereafter 33,470 $ 108,756 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. |
Concentration Risk
Concentration Risk | 6 Months Ended |
Jun. 30, 2022 | |
Concentration Risk | |
Concentration Risk | Note 3—Concentration Risk Credit Risk For the three and six months ended June 30, 2022, the Company had no significant tenants representing a tenant concentration of 10% or greater of period revenue. Revenue for the three and six months ended June 30, 2022 are not necessarily indicative of actual revenue for the entire year ending December 31, 2022. The Company receives a significant portion of its variable rental payments in the fourth quarter of each year, typically resulting in at least one tenant concentration of 10% or greater revenue in that quarter. If 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 may be a material adverse effect on the Company’s financial performance and the Company’s ability to continue operations. Geographic Risk The following table summarizes the percentage of approximate total acres owned as of June 30, 2022 and 2021, and the fixed and variable rent recorded by the Company for the three and six months ended June 30, 2022 and 2021 by location of the farm: Approximate % Rental Income (1) of total acres For the three months ended For the six months ended As of June 30, June 30, June 30, Location of Farm (2) 2022 2021 2022 2021 2022 2021 Corn Belt 28.8 % 27.3 % 40.1 % 39.5 % 39.8 % 36.8 % Delta and South 20.5 % 20.4 % 13.3 % 9.5 % 15.5 % 10.6 % High Plains 18.2 % 18.8 % 9.1 % 10.0 % 9.0 % 8.0 % Southeast 25.2 % 26.1 % 24.3 % 25.7 % 23.3 % 27.3 % West Coast 7.3 % 7.4 % 13.2 % 15.3 % 12.4 % 17.3 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % (1) Due to regional disparities in the use of leases with variable rent and seasonal variations in the recognition of variable rent revenue, regional comparisons by rental income are not fully representative of each region’s income-producing capacity until a full year is taken into account. (2) Corn Belt includes farms located in Illinois, Michigan, Missouri and eastern Nebraska. Delta and South includes farms located in Arkansas, Louisiana, Mississippi. High Plains includes farms located in Colorado, Kansas, western Nebraska, and South Dakota. Southeast includes farms located in Florida, Georgia, North Carolina, South Carolina and Virginia. West Coast includes farms located in California. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2022 | |
Related Party Transactions | |
Related Party Transactions | 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 Paul A. Pittman, the Company’s Chairman and Chief Executive Officer. The private plane is generally utilized when commercial air travel is not readily available or practical to and from a particular location. The Company paid costs of $0.04 million and $0.05 million during the three months ended June 30, 2022 and 2021, respectively, and $0.07 million and $0.09 million during the six months ended June 30, 2022 and 2021, respectively, 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 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. 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. On March 5, 2021, the Company sold nine farms to the OZ Fund. On March 31, 2021, the Company sold an additional property to the OZ Fund. As consideration for the 10 farms sold to the OZ Fund, the Company received approximately $19.1 million in cash and approximately $2.4 million in convertible notes receivable (the “OZ Convertible Notes”), resulting in a gain on disposition of assets totaling $2.4 million. On July 16, 2021, the OZ Convertible Notes were converted into a 7.6% equity interest in the OZ Fund. As of June 30, 2022, the Company had a 9.97% interest in the OZ Fund. 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 $0.10 million and $0.05 million, respectively, during the three months ended June 30, 2022 and 2021 and $0.21 million and $0.06 million, respectively, during the six months ended June 30, 2022 and 2021. |
Real Estate
Real Estate | 6 Months Ended |
Jun. 30, 2022 | |
Real Estate | |
Real Estate | Note 5—Real Estate During the six months ended June 30, 2022, the Company completed nine acquisitions, consisting of nine properties, in the Corn Belt region. Aggregate consideration for these acquisitions totaled $28.2 million. No intangible assets were acquired through these acquisitions. During the six months ended June 30, 2021, the Company completed four acquisitions, consisting of four properties, in the Corn Belt and Delta and South regions. Aggregate consideration for these acquisitions totaled $29.9 million. No intangible assets were acquired through these acquisitions. During the six months ended June 30, 2022, the Company completed five dispositions consisting of five properties in the 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 $4.0 million. During the six months ended June 30, 2021, the Company completed seven dispositions consisting of fifteen properties in the Corn Belt, Southeast, and Delta and South regions. The Company received cash consideration for these dispositions totaling $28.6 million and $2.4 million of convertible notes receivable (which were subsequently converted to membership interests in the OZ Fund on July 16, 2021), and recognized an aggregate gain on sale of $3.5 million. |
Notes Receivable
Notes Receivable | 6 Months Ended |
Jun. 30, 2022 | |
Notes Receivable | |
Notes Receivable | Note 6—Notes Receivable The Company offers an agricultural lending product (the “FPI Loan Program”) focused on farmers as a complement to the Company’s business of acquiring and owning farmland and leasing it to 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, 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 $1.0 million or more at fixed interest rates with maturities of up to six years. The Company expects the borrower to repay the loans in accordance with the loan agreements based on farming operations and access to other forms of capital, as permitted. In addition to loans made under the FPI Loan Program, the Company, on certain occasions, makes short-term loans to tenants secured by collateral other than real estate, such as growing crops, equipment or inventory, when the Company believes such loans will ensure the orderly completion of farming operations on a property owned by the Company for a given crop year and other credit is not available to the borrower. Notes receivable are stated at their unpaid principal balance and include unamortized direct origination costs and accrued interest through the reporting date, less any allowance for losses and unearned borrower paid points. The Company monitors its receivables based upon historical collection experience, collateral values and current trends. Accrued interest write-offs are recognized as credit loss expense. The Company’s estimated zero expected credit losses on its notes receivable principal balances as of June 30, 2022 and December 31, 2021. The Company recorded no credit loss expense related to interest receivables during the three and six months ended June 30, 2022 and 2021, respectively. As of June 30, 2022 and December 31, 2021, the Company held the following notes receivable: ($ in thousands) Principal Outstanding as of Maturity Loan Payment Terms June 30, 2022 December 31, 2021 Date Mortgage Note (1) Principal & interest due at maturity $ 217 $ 223 12/7/2028 Mortgage Note (1) Principal due at maturity & interest due monthly — 2,135 3/16/2022 Mortgage Note (2) Principal due at maturity & interest due quarterly — 1,571 6/23/2023 Mortgage Note (3) Principal due at maturity & interest due semi-annually 2,100 2,100 8/18/2023 Mortgage Note (4) Principal due at maturity & interest due quarterly 1,000 — 11/28/2022 Mortgage Note (4) Principal due at maturity & interest due quarterly 2,500 — 3/3/2025 Total outstanding principal 5,817 6,029 Interest receivable (net prepaid interest and points) 38 83 Provision for interest receivable — — Total notes and interest receivable $ 5,855 $ 6,112 (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 notes included mortgages on two additional properties in Colorado that included repurchase options for the properties at a fixed price that were exercisable by the buyer between the third and fifth anniversary of the issuance of the notes and expired on March 16, 2022 unexercised. Upon expiration of the repurchase options, the properties are no longer accounted for as financing transactions and became owned by the Company. They are included in real estate on the accompanying consolidated balance sheets based on the net unpaid note balances. (2) On July 27, 2021, the Company entered into a loan secured against farmland, which was repaid in full on April 13, 2022. (3) On August 18, 2021, the Company entered into a loan secured against farmland. (4) On March 3, 2022, the Company entered into two loans with the same party secured against farmland. The collateral for the mortgage notes receivable consists of real estate, personal property and growing crops. The fair value of notes receivable 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 mortgage notes receivable with comparable terms and credit risk whenever the interest rates on the notes receivable are deemed not to be at market rates. As of June 30, 2022 and December 31, 2021, the fair value of the notes receivable was $6.3 million and $6.0 million, respectively. |
Mortgage Notes, Lines of Credit
Mortgage Notes, Lines of Credit and Bonds Payable | 6 Months Ended |
Jun. 30, 2022 | |
Mortgage Notes, Lines of Credit and Bonds Payable | |
Mortgage Notes, Lines of Credit and Bonds Payable | Note 7—Mortgage Notes, Lines of Credit and Bonds Payable As of June 30, 2022 and December 31, 2021, the Company had the following indebtedness outstanding: Book Annual Value of ($ in thousands) Interest Principal Collateral Rate as of Outstanding as of as of June 30, June 30, December 31, Maturity June 30, Loan Payment Terms Interest Rate Terms 2022 2022 2021 Date 2022 Farmer Mac Bond #6 Semi-annual interest only 3.69% 3.69% $ 13,827 $ 13,827 April 2025 $ 21,438 Farmer Mac Bond #7 Semi-annual interest only 3.68% 3.68% 11,160 11,160 April 2025 18,584 MetLife Term Loan #1 Semi-annual interest only 3.30% fixed until 2023 3.30% 72,622 83,206 March 2026 182,578 MetLife Term Loan #2 Semi-annual interest only 3.60% fixed until 2025 3.60% — 16,000 March 2026 — MetLife Term Loan #3 Semi-annual interest only 3.60% fixed until 2025 3.60% — 16,800 March 2026 — MetLife Term Loan #4 Semi-annual interest only 3.30% fixed until 2023 3.30% 9,880 13,017 June 2026 25,694 MetLife Term Loan #5 Semi-annual interest only 3.50% fixed until 2023 3.50% 5,179 6,779 January 2027 10,096 MetLife Term Loan #6 Semi-annual interest only 3.45% fixed until 2023 3.45% 21,726 27,158 February 2027 58,087 MetLife Term Loan #7 Semi-annual interest only 3.20% fixed until 2023 3.20% 15,698 16,198 June 2027 29,629 MetLife Term Loan #8 Semi-annual interest only 4.12% fixed until 2027 4.12% 44,000 44,000 December 2042 110,042 MetLife Term Loan #9 Semi-annual interest only 3.20% fixed until 2024 3.20% 16,800 16,800 May 2028 33,652 MetLife Term Loan #10 Semi-annual interest only 3.00% fixed until 2023 3.00% 48,985 49,874 October 2030 103,867 MetLife Term Loan #11 Semi-annual interest only 2.85% fixed until 2024 2.85% 12,750 12,750 October 2031 27,102 MetLife Term Loan #12 Semi-annual interest only 3.11% fixed until 2024 3.11% 14,359 14,359 December 2031 28,884 Rabobank (1) Semi-annual interest only LIBOR + 1.70% adjustable every two years 2.82% 59,500 59,500 March 2028 129,117 Rutledge Facility Quarterly interest only SOFR + 1.95% 2.60% 80,000 112,000 March 2027 231,751 Total outstanding principal 426,486 513,428 $ 1,010,521 Debt issuance costs (2,012) (2,105) Unamortized premium — — Total mortgage notes and bonds payable, net $ 424,474 $ 511,323 (1) The Company has an interest rate swap agreement with Rabobank to add stability to interest expense and to manage our exposure to interest rate movements (see “Note 10—Hedge Accounting”). Farmer Mac Facility As of June 30, 2022 and December 31, 2021, the Company had approximately $25.0 million outstanding under the Farmer Mac facility. The Farmer Mac facility 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 June 30, 2022. MetLife Term Loans As of June 30, 2022 and December 31, 2021, the Company had $262.0 million and $316.9 million outstanding, respectively, under the loan agreements between certain of the Company’s subsidiaries and Metropolitan Life Insurance Company (“MetLife”) (together, the “MetLife loan agreements”). 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%. In connection with each of the MetLife loan agreements, FPI and the Operating Partnership each entered into separate guarantees whereby FPI and the Operating Partnership jointly and severally agree to unconditionally guarantee the obligations under the Metlife loan agreements (the “MetLife guarantees”). The MetLife guarantees contain a number of customary affirmative and negative covenants. The Company was in compliance with all covenants under the MetLife loan agreements and MetLife guarantees as of June 30, 2022. 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, FPI 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 loans and to exercise its remedies with respect to the pledged collateral, including foreclosure and sale of the Company’s properties that collateralize the MetLife loans. Rutledge Credit Facility On February 18, 2022, the Company and the Operating Partnership, as guarantors, and American Farmland Company L.P. (“AFCO”), a wholly owned subsidiary of the Company as the borrower, entered into an Amended, Restated and Consolidated Loan Agreement (the “Consolidated Loan Agreement”) with Rutledge Investment Company ("Rutledge"), pursuant to which the parties agreed to consolidate the Company's five outstanding promissory notes with Rutledge (the "Legacy Rutledge Loans") into a single revolving credit loan in an aggregate principal amount of up to $112.0 million (the "Consolidated Loan") maturing on March 1, 2027 (the "Maturity Date" and collectively, the “Refinancing”). As a condition to Rutledge providing the Refinancing, the Company and the Operating Partnership individually entered into Amended and Restated Guaranty Agreements with Rutledge, each dated as of February 18, 2022 (each, a “Guaranty Agreement”) whereby we are required to unconditionally guarantee AFCO's obligations under the Consolidated Loan, and AFCO entered into that certain Consolidation of Notes and Modification and Extension Agreement with Rutledge, dated as of February 18, 2022 (the “Modification Agreement,” and together with the Consolidated Loan Agreement and the Guaranty Agreements, the “Refinancing Agreements”). As of June 30, 2022 and December 31, 2021, the Company and the Operating Partnership had $80.0 million and $112.0 million, respectively, outstanding under the Rutledge Facility. As of June 30, 2022, $32.0 remains available under this facility and the Company was in compliance with all covenants under the loan agreements relating to the Rutledge Facility. The interest rate for the Consolidated Loan is based on three-month SOFR, plus an applicable margin. The applicable margin for the Consolidated Loan is 1.80% to 2.25%, depending on the applicable pricing level in effect. The Company previously paid a commitment fee to Rutledge equal to 0.50% of the aggregate principal amount of the Consolidated Loan. Generally, the Consolidated Loan Agreement contains terms consistent with the Legacy Rutledge Loans, including, among others, the representations and warranties, affirmative, negative and financial covenants and events of default. The Company will owe no prepayment penalty if it elects to repay the Consolidated Loan in full before the Maturity Date. Rabobank Mortgage Note As of June 30, 2022 and December 31, 2021, the Company and the Operating Partnership had $59.5 million and $59.5 million outstanding, respectively, under the Rabobank mortgage note. The Company was in compliance with all covenants under the Rabobank mortgage note as of June 30, 2022. LIBOR The use of LIBOR was phased out at the end of 2021, although the phase out of U.S. dollar LIBOR has been delayed until mid-2023. Currently, no official replacement rate has been identified. As of June 30, 2022, the Company’s only indebtedness with maturity beyond 2023 that has exposure to LIBOR was the Rabobank Mortgage Note. There can be no assurances as to what the alternative base rate will be in the event that LIBOR is discontinued, and the Company can provide no assurances whether that base rate will be more or less favorable than LIBOR. The Company intends to monitor the developments with respect to the continued phasing out of LIBOR and will work with its lenders to ensure that any transition away from LIBOR will have minimal impact on its financial condition, but can provide no assurances regarding the impact of LIBOR discontinuation. Debt Issuance Costs Costs incurred by the Company in obtaining debt are deducted from the face amount of mortgage notes and bonds payable. 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 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 $1.0 million and $1.7 million as of June 30, 2022 and December 31, 2021, respectively. Aggregate Maturities As of June 30, 2022, aggregate maturities of long-term debt for the succeeding years are as follows: ($ in thousands) Year Ending December 31, Future Maturities 2022 (remaining six months) $ — 2023 — 2024 2,100 2025 27,087 2026 84,602 Thereafter 312,697 $ 426,486 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 June 30, 2022 and December 31, 2021, the fair value of the mortgage notes payable was $401.3 million and $522.7 million, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies. | |
Commitments and Contingencies | 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. The Company has four leases in place for office space with monthly payments ranging between $850 and $13,377 per month and lease terms expiring between December 2022 and October 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 a discount rate of 3.35%, equivalent to the rate 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. Our total lease cost for the three months ended June 30, 2022 and 2021 was $0.06 million and $0.04 million, respectively. For the six months ended June 30, 2022 and 2021, total lease cost was $0.12 million and $0.08 million, respectively. Minimum annual rental payments under these operating leases, reconciled to the lease liability included in our consolidated balance sheets, are as follows (in thousands): ($ in thousands) Future rental Year Ending December 31, payments 2022 (remaining six months) $ 115 2023 183 2024 62 2025 44 2026 — Thereafter — Total lease payments 404 Less: imputed interest (17) Lease liability $ 387 Litigation Summary of litigation matters discussed below: ● The Brokop Class Action: On April 6, 2022, the Court issued an order granting the Company’s motion for summary judgment in full, and on April 7, 2022, the Court entered a final judgment dismissing Brokop’s claims with prejudice. That judgment became final on May 6, 2022, when the period for Brokop to appeal the judgment expired. ● The Winter Derivative Action: In light of the judgment dismissing the Brokop Class Action, the parties stipulated to the dismissal of the Winter Derivative Action, and the court entered a dismissal order on May 9, 2022. ● The Luger Derivative Action: The parties filed a joint notice of voluntary dismissal of the appeal in the Luger Action on May 11, 2022, and the court ordered dismissal of the case on May 18, 2022. On July 11, 2018, a purported class action lawsuit, captioned Kachmar v. Farmland Partners Inc. (the “Kachmar Action”), was filed in the United States District Court for the District of Colorado against the Company and certain of our officers by a purported Company stockholder. The complaint alleges, among other things, that our disclosure related to the FPI Loan Program was materially false and misleading in violation of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder. On August 17, 2018, a second purported class action, captioned Mariconda v. Farmland Partners Inc. was filed in the United States District Court for the District of Colorado (the “Brokop Action”). As discussed below, the current named plaintiff in that action is a purported FPI shareholder named Don Brokop. The complaint filed in the Brokop Action alleged substantially identical claims to those alleged in the Kachmar Action. Several purported shareholders moved to consolidate the Kachmar Action and the Brokop Action and for appointment as lead plaintiff. On November 13, 2018, the plaintiff in the Kachmar Action voluntarily dismissed the Kachmar Action. On December 3, 2018, the court appointed two purported stockholders of the Company, the Turner Insurance Agency, Inc. and Cecilia Turner (the “Turners”), as lead plaintiffs in the Brokop Action. On March 11, 2019, the Turners and additional plaintiff Obelisk Capital Management filed an amended complaint in the Brokop Action. On June 18, 2019, the court denied the defendants’ motion to dismiss the amended complaint in the Brokop Action. The defendants answered the amended complaint on July 2, 2019. On December 6, 2019, plaintiffs voluntarily dismissed Obelisk Capital Management from the case. In connection with Obelisk Capital Management’s dismissal from the case, defendants filed a motion for judgment on the pleadings on December 10, 2019, which automatically stayed discovery in the action pending the court’s determination of the motion. On December 16, 2019, plaintiffs filed a motion for class certification, seeking to certify the case as a class action on behalf of purchasers of Farmland Partners’ common stock between November 12, 2015 and July 10, 2018 and to have the Turners and purported stockholder Don Brokop appointed as class representatives. On December 27, 2019, plaintiffs filed a motion for leave to file a second amended complaint to add Brokop as an additional plaintiff in place of Obelisk Capital Management. On December 8, 2020, the court granted the Turners’ motion to amend to add Brokop as an additional plaintiff and denied the Company’s motion for judgment on the pleadings. As a result, the automatic discovery stay was lifted and the court entered a schedule for proceedings going forward. The Company, Mr. Pittman, and Mr. Fabbri filed an opposition to plaintiffs’ motion for class certification on February 8, 2021. On February 17, 2021, plaintiffs filed a motion to withdraw the Turners as lead plaintiffs and to substitute Brokop as lead plaintiff. On June 7, 2021, the court granted the motion to withdraw the Turners and substitute Brokop as lead plaintiff. The parties completed fact discovery on June 29, 2021. On July 23, 2021, Magistrate Judge Nina Wang issued a Report and Recommendation to the district court recommending that Brokop’s motion for class certification be granted in part and denied in part. Specifically, the magistrate judge recommended that the district court deny the motion as to purchasers of Farmland Partners common stock between November 12, 2015 and December 14, 2016 and grant the motion as to purchasers between December 14, 2016 and July 11, 2018. On September 30, 2021, the district court issued an order adopting in part the magistrate judge’s recommendation and certifying a plaintiff class of purchasers of FPI stock between February 23, 2017 and July 11, 2018. Discovery concluded in the Brokop Action on October 1, 2021. On November 16, 2021, the Company, Mr. Pittman, and Mr. Fabbri moved for summary judgment dismissing Brokop’s claims and Brokop moved for partial summary judgment. On April 6, 2022, the Court issued an order granting the Company’s motion for summary judgment in full and denying Brokop’s motion for summary judgment. On April 7, 2022, the Court entered judgment dismissing Brokop’s claims with prejudice. That judgment became final on May 6, 2022, when the time for Brokop to appeal the judgment expired. On December 18, 2018, a purported stockholder of the Company, Jack Winter, filed a complaint in the Circuit Court for Montgomery County, Maryland (the “Winter Action”), purporting to assert breach of fiduciary duty claims derivatively on the Company’s behalf against the Company’s directors and certain of the Company’s officers. The Winter Action alleges, among other things, that the Company’s directors and certain of the Company’s officers breached their fiduciary duties to the Company by allowing the Company to make allegedly false and misleading disclosures related to the FPI Loan Program, as alleged in the Brokop Action. On April 26, 2019, Winter voluntarily dismissed his complaint in the Circuit Court for Montgomery County Maryland. On May 14, 2019, Winter re-filed his complaint in the United States District Court for the District of Colorado. In light of the judgment dismissing the Brokop Action, Winter voluntarily dismissed the Winter Action on May 9, 2022. On November 25, 2019, another purported shareholder, Shawn Luger, filed a complaint derivatively on behalf of the Company and against certain of our officers in the Circuit Court for Baltimore City, Maryland (the “Luger Action”). The Luger Action complaint made similar claims to those in the Brokop and Winter Actions. On February 14, 2020, another purported shareholder, Brent Hustedde, filed a complaint derivatively on behalf of the Company and against certain of our officers in Maryland state court (the “Hustedde Action”). The Hustedde Action complaint made similar claims to those in the Brokop, Winter, Luger, and Barber Actions. On September 23, 2020, the Court consolidated the Luger and Hustedde action under the caption In re Farmland Partners Inc. Stockholder Litigation (the “Stockholder Litigation”). Luger and Hustedde (the “Derivative Plaintiffs”), the plaintiffs in the Stockholder Litigation, filed a consolidated amended complaint on October 30, 2020. The Company moved to dismiss the complaint in the Stockholder Litigation on December 15, 2020. On June 3, 2021, the court granted the Company’s motion to dismiss and dismissed the consolidated amended complaint in the Stockholder Litigation as to all defendants. On July 7, 2021, the Derivative Plaintiffs filed a notice of appeal, appealing the order dismissing their consolidated amended complaint to the Maryland Court of Special Appeals. In light of the dismissal of the Brokop Action, Luger agreed to voluntarily dismiss his appeal. The parties filed a joint notice of voluntary dismissal of the appeal in the Luger Action on May 11, 2022, and on May 18, 2022 the court ordered dismissal of the case. On July 24, 2018, we filed a lawsuit in the District Court, Denver County, Colorado, against “Rota Fortunae” (a pseudonym for Quinton Mathews, the individual behind Rota Fortunae) and numerous co-conspirators (collectively, “Wheel of Fortune”) in response to an article posted on Seeking Alpha that makes numerous allegations about the Company that we believe to be false or materially misleading. We believe that as a consequence of Wheel of Fortune’s internet posting, which we alleged was published in connection with a “short and distort” scheme to profit from an artificial decline in our stock price, the trading price of our common stock declined by approximately 40%. On June 20, 2021, Quinton Mathews (a.k.a. “Rota Fortunae”) entered into a settlement agreement with the Company in which he agreed to pay the Company a multiple of the profits he made when the Company’s common stock price fell in connection with the Wheel of Fortune article. The Company’s beliefs that Wheel of Fortune’s article was part of a short and distort attack on the Company was confirmed when Quinton Mathews issued a press release admitting he and his advisory clients shorted the Company in advance of the article and profited from the decline it caused, and further admitted that many of the key statements in that article – which he acknowledged led to the stock’s decline - were false. Following the parties’ settlement, the Court granted a joint stipulated motion to dismiss the case on June 29, 2021. On July 2, 2021, the Company filed a complaint against First Sabrepoint Capital Management, LP, Sabrepoint Capital Partners, LP, Sabrepoint Capital Participation, LP, George Baxter, and Donald Marchiony (collectively, “Sabrepoint”) in the Civil District Courts of Dallas County, Texas seeking relief for their role, as alleged in the complaint, in the short and distort scheme. Certain Sabrepoint defendants had prevailed previously on a motion to dismiss the 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 Farmland Partners filed a notice signaling an intent to appeal both orders, the Court of Appeals for the Fifth District of Texas entered an order declaring the trial court's TCPA order “VOID because the motion was denied by operation of law….” Accordingly, Farmland Partners narrowed its appeal to the trial court's grant of summary judgment, and is confident that the order will be overturned and the litigation will be allowed to proceed. On January 26, 2022, Sabrepoint filed a motion for attorney's fees relating to the defense of that action. The 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 the same. The parties are currently briefing the narrowed appeal before the Texas Court of Appeals. 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 appreciation factor over the original purchase price plus the value of improvements on the property, that, at the time of the acquisition, the Company expected would be at or above the property’s fair market value at the exercise date. As of June 30, 2022, the Company has an approximate aggregate net book value of $8.3 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. The Company received a non-refundable initial payment of $2.9 million upon exercise, plus additional payments of $0.3 million in February 2021, $0.1 million in January 2022 and $0.1 million in February 2022. 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. 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 Company under revised Farmland Partners Operating Partnership, LP 401(k) Plan (the “FPI 401(k) Plan”). The FPI 401(k) Plan is a defined contribution plan for substantially all employees. The Company has elected a “safe harbor” plan in which the Company plans to make contributions which are determined and 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 has safe harbor contributions of less than $0.1 million for six months ended June 30, 2022. |
Stockholders' Equity and Non-co
Stockholders' Equity and Non-controlling Interests | 6 Months Ended |
Jun. 30, 2022 | |
Stockholders' Equity and Non-controlling Interests | |
Stockholders' Equity and Non-controlling Interests | Note 9—Stockholders’ Equity and Non-controlling Interests Non-controlling Interest in Operating Partnership FPI consolidates the Operating Partnership. As of June 30, 2022 and December 31, 2021, FPI owned 97.4% and 97.0% of the outstanding interests, respectively, in the Operating Partnership, and the remaining 2.6% and 3.0% interests, respectively, are held in the form of Common units and comprise non-controlling interests in the Operating Partnership on the consolidated balance sheets. The non-controlling interests in the Operating Partnership are considered to be both the Common units and the Series A preferred units. Common Units in 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 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 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. During the six months ended June 30, 2022 and the year ended December 31, 2021, the Company issued 110,000 and 281,453, respectively, of shares of common stock upon redemption of 110,000 and 281,453, respectively, of Common units that had been tendered for redemption. There were 1.2 million and 1.4 million outstanding Common units eligible to be tendered for redemption as of June 30, 2022 and December 31, 2021, respectively. 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 FPI’s common stock, with the distributions on the Common units held by FPI being utilized to pay dividends to 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. Changes in the ownership percentages between the Company’s stockholders’ equity and non-controlling interest in the Operating Partnership resulted in an increase/(decrease) the non-controlling interest in the Operating Partnership by $0.7 million and less than $0.1 million during the six months ended June 30, 2022 and 2021, respectively, with the corresponding offsets to additional paid-in capital. Redeemable Non-Controlling Interests in Operating Partnership, Series A Preferred Units On March 2, 2016, the sole general partner of the Operating Partnership entered into Amendment 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. 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 the Operating Partnership, preferred units on the balance sheet with the offset recorded to retained earnings. On March 2, 2016, 117,000 Series A preferred units were issued as partial consideration in the acquisition of a portfolio of Illinois 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, 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, resulting in 112,000 Series A preferred units outstanding following such redemption. Total liquidation value of such preferred units as of June 30, 2022 and December 31, 2021 was $113.7 million and $120.5 million, respectively, including accrued distributions. On or after February 10, 2026 (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 February 10, 2021, 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. 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 upon the occurrence of an event not solely within the control of the Company. The following table summarizes the changes in our redeemable non-controlling interest in the Operating Partnership for the six months ended June 30, 2022 and 2021: Series A Preferred Units Redeemable Redeemable Preferred non-controlling (in thousands) units interests Balance at December 31, 2020 117 $ 120,510 Distribution paid to non-controlling interest — (3,510) Accrued distributions to non-controlling interest — 1,755 Balance at June 30, 2021 117 $ 118,755 Balance at December 31, 2021 117 $ 120,510 Distribution paid to non-controlling interest — (3,510) Accrued distributions to non-controlling interest — 1,680 Redemption of Series A preferred units (5) (5,000) Balance at June 30, 2022 112 $ 113,680 Series B Participating Preferred Stock On August 17, 2017, the Company 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. The shares of Series B Participating Preferred Stock were accounted for as mezzanine equity on the consolidated balance sheet, as the Series B Participating Preferred Stock was 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. On October 4, 2021, the Company converted all 5,806,797 shares of the outstanding Series B Participating Preferred Stock into shares of common stock. Each share of Series B Participating Preferred Stock was converted into 2.0871798 shares of common stock, or 12,119,829 shares of common stock in total, less any fractional shares. Holders of the Series B Participating Preferred Stock received cash in lieu of fractional shares. Distributions The Company’s Board of Directors declared and paid the following distributions to common stockholders and holders of Common units for the six months ended June 30, 2022 and 2021: Fiscal Year Declaration Date Record Date Payment Date Distributions per Common Share/OP unit 2022 October 26, 2021 January 3, 2022 January 18, 2022 $ 0.0500 February 22, 2022 April 1, 2022 April 15, 2022 $ 0.0500 $ 0.1000 2021 November 3, 2020 January 1, 2021 January 15, 2021 $ 0.0500 February 11, 2021 April 1, 2021 April 15, 2021 $ 0.0500 $ 0.1000 Additionally, in connection with the 3.00% cumulative preferential distribution on the Series A preferred units, the Company has accrued $1.7 million in distributions payable as of June 30, 2022. The distributions are payable annually in arrears on January 15 of each year. 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. Share Repurchase Program On March 15, 2017, the Company’s Board of Directors approved a program to repurchase up to $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 increased the authority under the program by an additional $50.0 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 share repurchase program does not obligate the Company to acquire any particular amount of common stock and may be modified or suspended at any time at the Company’s discretion. The Company funds repurchases under the program using cash on its balance sheet. During the six months ended June 30, 2022, the Company repurchased no shares of its common stock. As of June 30, 2022, the Company had approximately $40.5 million of capacity under the stock repurchase plan. Equity Incentive Plan On May 7, 2021, the Company’s stockholders approved the Third Amended and Restated 2014 Equity Incentive Plan (as amended and restated, the “Plan”), which increased the aggregate number of shares of the Company’s common stock reserved for issuance under the Plan to approximately 1.9 million shares. As of June 30, 2022, there were 0.6 million shares available for future grants under the Plan. 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 awards, including LTIP units, which are convertible on a one-for-one basis into Common units. The terms of each grant are determined by the compensation committee of the Board of 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 of 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 non-vested restricted shares as of June 30, 2022 and 2021 is as follows: Weighted Number of average grant (shares in thousands) shares date fair value Unvested at December 31, 2021 297 $ 8.87 Granted 147 11.75 Vested (171) 8.13 Forfeited (8) 11.32 Unvested at June 30, 2022 265 $ 10.86 The Company recognized stock-based compensation and incentive expense related to restricted stock awards of $0.6 million and $0.3 million, f or or At-the-Market Offering Program (the “ATM Program”) On October 29, 2021, 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 $75.0 million (the " $75.0 million ATM Program”). In connection with its entry into these distribution agreements, the Company terminated the equity distribution agreements, each dated as of May 14, 2021, for its prior ATM Program. On 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 $100.0 million (the " $100.0 million ATM Program”). During the six months ended June 30, 2022, the Company sold 4,594,625 shares and generated $63.1 million in gross proceeds and $62.4 million in net proceeds under the $75.0 million ATM Program and sold 2,436,463 shares and generated $36.4 million in gross proceeds and $36.1 million in net proceeds under the $100.0 million ATM Program for totals of 7,031,088 shares and $99.5 million and $98.4 million in gross and net proceeds, respectively. 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 less than $0.1 million and $0.2 million in offering costs during the six months ended June 30, 2022 and 2021, respectively. As of June 30, 2022 and December 31, 2021, the Company had $0.08 million and $0.04 million, respectively, for each period in deferred 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 earnings (loss) per share is as follows: For the three months ended For the six months ended June 30, June 30, (in thousands, except per share amounts) 2022 2021 2022 2021 Numerator: Net income (loss) attributable to Farmland Partners Inc. $ 2,916 $ (2,735) $ 4,021 $ (375) Less: Nonforfeitable distributions allocated to unvested restricted shares (16) (14) (31) (28) Less: Distributions on redeemable non-controlling interests in Operating Partnership, preferred (840) (3,055) (1,680) (6,120) Less: Dividends on Series B Participating Preferred Stock — — — — Net income (loss) attributable to common stockholders $ 2,060 $ (5,804) $ 2,310 $ (6,523) Denominator: Weighted-average number of common shares - basic 50,362 31,072 48,084 30,747 Conversion of preferred units (1 — — — — Unvested restricted shares (1 — — — — Redeemable non-controlling interest (1 — — — — Weighted-average number of common shares - diluted 50,362 31,072 48,084 30,747 Income (loss) per share attributable to common stockholders - basic $ 0.04 $ (0.19) $ 0.05 $ (0.21) Income (loss) per share attributable to common stockholders - diluted $ 0.04 $ (0.19) $ 0.05 $ (0.21) (1) Anti-dilutive for the three and six months ended June 30, 2022 and 2021 Numerator: Unvested shares of the Company’s restricted common stock are considered participating securities, which requires the use of the two-class method for the computation of basic and diluted earnings per share. 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 subtracted, as applicable, from net income or loss attributable to common stockholders utilized in the basic and diluted earnings per share calculations. Distributions on preferred interests in the Operating Partnership have been subtracted from net income or loss attributable to common stockholders. Denominator: Any anti-dilutive shares have been excluded from the diluted earnings per share 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, if they are dilutive. For the three and six months ended June 30, 2022 and 2021, these shares were not included in the diluted earnings per share calculation as they would be anti-dilutive. 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, if they are dilutive. For the three and six months ended June 30, 2021, these shares were not included in the diluted earnings per share calculation as they would be anti-dilutive. For the six months ended June 30, 2022 and 2021, diluted weighted average common shares do not include the impact of 0.3 million and 0.3 million, respectively, unvested compensation-related shares as they would have been anti-dilutive. The limited partners’ outstanding Common units, or the non-controlling interests, (which may be redeemed for shares of 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 income and shares. The weighted average number of Common units held by the non-controlling interest was 1.3 million and 1.5 million for the six months ended June 30, 2022 and 2021, respectively. Outstanding Equity Awards and Units The following equity awards and units were outstanding as of June 30, 2022 and December 31, 2021, respectively. June 30, 2022 December 31, 2021 Shares 52,477 45,177 Common Units 1,247 1,357 Redeemable Common Units — — Unvested Restricted Stock Awards 265 297 53,989 46,831 |
Hedge Accounting
Hedge Accounting | 6 Months Ended |
Jun. 30, 2022 | |
Hedge Accounting | |
Hedge Accounting | 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 June 30, 2022 and December 31, 2021, 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 shareholders’ 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 is amortizing 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). Amortization for the three months ended June 30, 2022 and 2021 was $0.1 million and $0.2 million, respectively. Amortization for the six months ended June 30, 2022 and 2021 was $0.3 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 the three and six months ended June 30, 2022 and 2021, were $0.1 million and $0.2 million, respectively. 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 remains highly effective as of June 30, 2022. As of June 30, 2022, 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 $ 698 The effect of derivative instruments on the consolidated statements of operations for the periods ended June 30, 2022 and 2021 is set out below: Cash flow hedging relationships Location of Gain (Loss) reclassified from Accumulated OCI into income Interest rate contracts Interest expense For the three months ended June 30, 2022 and 2021, the amount of noncash loss recognized in net income was $0.4 million and $0.3 million, respectively. For the six months ended June 30, 2022 and 2021, the amount of noncash loss recognized in net income was $0.7 million and $2.3 million, respectively. The net change associated with current period hedging transactions was $0.5 million and less than $(0.1) million and for the three months ended June 30, 2022 and 2021, respectively, and $1.6 million and $1.5 million for the six months ended June 30, 2022 and 2021, respectively. The amortization of frozen Accumulated Other Comprehensive Income was $0.1 million and $0.2 million for the three months ended June 30, 2022 and 2021, respectively, and $0.3 million and $0.5 million for the six months ended June 30, 2022 and 2021, respectively. The fair values of the Company’s interest rate swap agreements are determined using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash receipts, which is considered a Level 2 measurement under the fair value hierarchy. Level 2 is defined as inputs other than quoted prices in active markets that are either directly or indirectly observable. There were no transfers between Levels 1, 2 or 3 during the six months ended June 30, 2022. The variable cash receipts are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. The following table outlines the movements in the other comprehensive income account as of June 30, 2022 and December 31, 2021: ($ in thousands) June 30, 2022 December 31, 2021 Beginning accumulated derivative instrument gain or loss $ 279 $ (2,380) Net change associated with current period hedging transactions 1,265 1,676 Amortization of frozen AOCI on de-designated hedge 313 983 Difference between a change in fair value of excluded components — — Closing accumulated derivative instrument gain or loss $ 1,857 $ 279 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2022 | |
Income Taxes | |
Income Taxes | Note 11—Income Taxes The TRS income/(loss) before provision for income taxes consisted of the following: For the Six Months Ended ($ in thousands) June 30, 2022 United States $ 1,690 International — Total $ 1,690 The federal and state income tax provision (benefit) is summarized as follows: For the Six Months Ended ($ in thousands) June 30, 2022 Current: Federal $ 86 Deferred: Federal 10 Total Tax Expense $ 96 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 June 30, 2022 are as follows: For the Six Months Ended ($ in thousands) June 30, 2022 Deferred tax assets: Net operating loss $ 828 Inventory reserve 16 Total deferred tax assets 844 Deferred tax liabilities: Net operating loss $ (34) Inventory reserve (49) Total deferred tax liabilities $ (83) Valuation Allowance (771) Net deferred taxes $ (10) ASC 740 requires that the tax benefit of net operating losses, temporary differences and credit carryforwards be recorded as an asset to the extent that management assesses that realization is "more likely than not." Realization of the future tax benefits is dependent on the TRS’s ability to generate sufficient taxable income within the carryforward period. Because of the TRS’s recent history of operating losses, and management not being able 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/(decreased) by ($0.3) million during the six months ended June 30, 2022. The amount of the valuation allowance for 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 $0.5 million. Prior year amounts are not material. Net operating losses and tax credit carryforwards as of June 30, 2022 are as follows: ($ in thousands) June 30, 2022 Expiration Year Net operating losses, federal (Post-December 31, 2017) $ 3,532 Does not expire Net operating losses, state $ 1,466 Various The effective tax rate of the TRS’s provision (benefit) for income taxes differs from the federal statutory rate as follows: For the Six Months Ended June 30, 2022 Statutory Rate 21.00 % State Tax 0.61 % Valuation Allowance (17.39) % Total 4.22 % |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2022 | |
Subsequent Events | |
Subsequent Events | 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 July 26, 2022, the Company’s Board of Directors declared a quarterly cash dividend of $0.06 per share of common stock and Common unit payable on October 17, 2022 to stockholders and unitholders of record as of October 1, 2022. ATM Program Subsequent to June 30, 2022, the Company sold 247,416 shares of common stock generating $3.5 million in net proceeds under the ATM Program. Renewable Energy Project - Notice of Construction On July 28, 2022, the Company received notice from a tenant on several properties in the Corn Belt that it will begin construction of a solar project, resulting in future increased rent. |
Organization and Significant _2
Organization and Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Organization and Significant Accounting Policies | |
Organization | Organization Farmland Partners Inc. (“FPI”), collectively with its subsidiaries, is an internally managed real estate company that owns and seeks to acquire high-quality farmland located in agricultural markets throughout North America. FPI was incorporated in Maryland on September 27, 2013. 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. All of 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 June 30, 2022, FPI owned a 97.4% interest in the Operating 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”), 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 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 the affairs of FPI. As of June 30, 2022, the Operating Partnership owns a 9.97% equity interest in an unconsolidated equity method investment that holds 10 properties (see “Note 1—Convertible Notes Receivable”, “Note 1—Equity Method Investments”, and “Note 4—Related Party Transactions”). References to the “Company,” “we,” “us,” or “our” mean collectively FPI and its consolidated subsidiaries, including the Operating Partnership. As of June 30, 2022, the Company owned a portfolio of approximately 160,100 acres of farmland which are consolidated in these financial statements. In addition, the Company serves as property manager over approximately 25,200 acres of farmland. On August 17, 2017, the Company issued 6,037,500 shares of its newly designated 6.00% Series B Participating Preferred Stock, $0.01 par value per share (the “Series B Participating Preferred Stock”) in an underwritten public offering. On October 4, 2021, the Company converted all 5,806,797 shares of the outstanding Series B Participating Preferred Stock into shares of common stock. (See “Note 9—Stockholders’ Equity—Series B Participating Preferred Stock” for more information on the Series B Participating Preferred Stock). On March 16, 2015, the Company formed FPI Agribusiness Inc., a wholly owned subsidiary (the “TRS” or “FPI Agribusiness”), as a taxable REIT subsidiary. We engage directly in farming, provide property management, auction, and brokerage services and volume purchasing services to our tenants through the TRS. As of June 30, 2022, the TRS performed direct farming operations on 2,973 acres of farmland owned by the Company located in California and Michigan. All references to numbers and percent of acres within this report are unaudited. |
Principles of Combination and Consolidation | Principles of Combination and Consolidation The accompanying consolidated financial statements 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 FPI and the Operating Partnership. All significant intercompany balances and transactions have been eliminated in consolidation. |
Interim Financial Information | Interim Financial Information The information in the accompanying consolidated financial statements of the Company as of December 31, 2021 and June 30, 2022 and for the three and six months ended June 30, 2022 and 2021 is unaudited. The accompanying financial statements include adjustments based on management’s estimates (consisting of normal and recurring accruals), which the Company considers necessary for a fair presentation of the results for the periods. The financial information should be read in conjunction with the consolidated financial statements for the year ended December 31, 2021, 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 March 1, 2022. Operating results for the three and six months ended June 30, 2022 are not necessarily indicative of actual operating results for the entire year ending December 31, 2022. 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. |
Use of Estimates | 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 could materially differ from those estimates for a variety of reasons, including, without limitation, the impacts of the ongoing coronavirus (“COVID-19”) pandemic, the war in Ukraine, substantially higher prices for oil and 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 business. |
Real Estate Acquisitions | Real Estate Acquisitions When the Company acquires farmland where substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset, or a 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 of similar assets, and contains acquired inputs and processes which have the ability to contribute to the creation of outputs, these acquisitions are accounted for as business combinations. The Company considers single identifiable assets as tangible assets that are attached to and cannot be physically removed and used separately from another tangible asset without incurring significant cost or significant diminution in utility or fair value. The Company considers similar assets as assets that have a similar nature and risk characteristics. Whether the Company’s acquisitions are treated as an asset acquisition under ASC 360 or a business combination under ASC 805, the fair value of the purchase price is allocated among the assets acquired and any liabilities assumed by valuing the property as if it were 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, the Company allocates the purchase price of the real estate based upon 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. The Company allocates the purchase price to the 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, water availability and the sale 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 value of the difference between prevailing market rates and the in-place rates measured over a period equal to the remaining term of the lease for above market leases, 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. The purchase price is allocated to in-place lease values and tenant relationships, if they are acquired, 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 are included as an intangible asset and have been 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 above and below market leases, in-place lease values, and 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 are 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. During the three and six months ended June 30, 2022 and 2021, the Company incurred an immaterial amount of costs related to acquisition and due diligence. Total consideration for acquisitions may include a combination of cash and equity securities. When equity securities are issued, the Company determines the fair value of the equity securities issued based on the number of shares or units issued multiplied by the price per share or unit. Using information available at the time of a 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 year from the acquisition date when incomplete information exists as of the respective reporting date, the Company may adjust the preliminary purchase price allocations after obtaining more information about assets acquired and liabilities assumed at the date of acquisition. |
Real Estate Sales | Real Estate Sales The Company recognizes gains from the sales of real estate assets generally at the time the title is transferred and consideration is received. |
Liquidity Policy | Liquidity Policy The Company manages its liquidity position and expected liquidity needs taking into consideration current cash balances, undrawn availability under its lines of credit, and reasonably expected cash receipts. The business model of the Company, and of real estate investment companies in general, relies on 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 also has a deep portfolio of real estate assets which management believes could be readily liquidated if necessary to fund any immediate liquidity needs. As of June 30, 2022, we had $424.5 million of mortgage and other debt against a portfolio of real estate assets with a net book value of $1.1 billion. We also have an effective shelf registration statement with approximately $100 million of capacity pursuant to which we could issue additional equity or debt securities, and during six months ended June 30, 2022, we raised $98.4 million of equity capital from our At-the-Market Equity Offering Program (the “ATM Program”). |
Notes and Interest Receivable | Notes and Interest Receivable Notes receivable are stated at their unpaid principal balance and include unamortized direct origination costs, prepaid interest and accrued interest through the reporting date, less any allowance for losses and unearned borrower paid points. Management determines the appropriate classification of debt securities at the time of issuance and reevaluates such designation as of each balance sheet date. As of June 30, 2022 and December 31, 2021, the Company had four and five notes outstanding, respectively, under the Company’s loan program (the “FPI Loan Program”) and have designated each of the notes receivable as loans. Loans are stated at amortized cost, adjusted for amortization of premiums and accretion of discounts to maturity computed under the straight-line method, which approximates the effective interest method. Such amortization, including interest, is included in other revenue within our Consolidated Statements of Operations. See “Note 6—Notes Receivable.” |
Convertible Notes Receivable | Convertible Notes Receivable On January 20, 2021, the Company entered into property sale and long-term management agreements with Promised Land Opportunity Zone Farms I, LLC (the "OZ Fund"), a private investment fund focused on acquiring and improving farmland in qualified opportunity zones in the United States, as designated under U.S. tax provisions enacted in 2017. On March 5, 2021, the Company sold nine farms to the OZ Fund. On March 31, 2021, the Company sold an additional property to the OZ Fund. As consideration for the 10 farms sold to the OZ Fund, the Company received approximately $19.1 million in cash and approximately $2.4 million in convertible notes receivable (the “OZ Convertible Notes”), resulting in a gain on disposition of assets totaling $2.4 million. The OZ Convertible Notes had an interest rate of 1.35% and an aggregate principal balance of $2.4 million. On July 16, 2021, the Company provided notice to the OZ Fund that it was converting its OZ Convertible Notes, and accrued interest thereon, into membership interests in the OZ Fund, in accordance with the terms of the OZ Convertible Notes. The value of the conversion was $2.4 million and the Company’s membership interests in the OZ Fund were approximately 7.6% upon conversion and increased to 9.97% as of June 30, 2022 after subsequent capital contributions. Please refer to “Note 4—Related Party Transactions.” |
Allowance for Note and Interest Receivable | Allowance for Notes and Interest Receivable A note is placed on non-accrual status when management determines, after considering economic and business conditions and collection efforts, that the note is impaired or collection of interest is doubtful. The accrual of interest on the instrument ceases when there is concern that principal or interest due according to the note agreement will not be collected. Any payment received on such non-accrual notes are recorded as interest income when the payment is received. The note is reclassified as accrual-basis once interest and principal payments become current. The Company periodically reviews the value of the underlying collateral of farm real estate for the note receivable and evaluates whether the value of the collateral continues to provide adequate security for the note. Should the value of the underlying collateral become less than the outstanding principal and interest, the Company will determine whether an allowance is necessary. Any uncollectible interest previously accrued is also charged off. As of June 30, 2022, we believe the value of the underlying collateral for each of the notes to be sufficient and in excess of the respective outstanding principal and accrued interest and no notes are currently on non-accrual status. |
Accounts Receivable | Accounts Receivable Accounts receivable are presented at face value, net of the allowance for doubtful accounts. The Company records an allowance for doubtful accounts, reducing the receivables balance to an amount that it estimates is collectible from our customers. Estimates used in determining the allowance for doubtful accounts are based on historical collection experience, current trends, aging of accounts receivable and periodic credit evaluations of the Company’s customers’ financial condition. The Company creates an allowance for accounts receivable when it becomes apparent, based upon age or customer circumstances, that an amount may not be collectible, such that all current expected losses are sufficiently reserved for at each reporting period. The Company considered its current expectations of future economic conditions, including the impact of COVID-19, when estimating its allowance for doubtful accounts. The allowance for doubtful accounts was less than $0.1 million as of June 30, 2022 and December 31, 2021. An allowance for doubtful accounts is recorded on the Consolidated Statement 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. |
Inventory | Inventory The costs of growing crops on farms under direct operations are accumulated until the time of harvest at the lower of cost or net realizable 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 and is included in other operating expenses. The cost of harvested crop sold was $1.3 million and $0.7 million, respectively, for the three months ended June 30, 2022 and 2021. For the six months ended June 30, 2022 and 2021, the cost of harvested crop sold was $2.8 million and $0.9 million, respectively. Harvested crop inventory on farms under direct operations includes costs accumulated both during the growing and harvesting phases and are stated at the lower of those costs 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 broker’s commissions, freight and other marketing costs. General inventory, such as fertilizer, seeds and pesticides, is valued at the lower of cost or net realizable value. As of June 30, 2022 and December 31, 2021, inventory consisted of the following: (in thousands) June 30, 2022 December 31, 2021 Harvested crop $ — $ 164 Growing crop 2,962 2,895 $ 2,962 $ 3,059 |
Equity Method Investments | Equity Method Investments As partial consideration for certain transactions with the OZ Fund, the Company received the OZ Convertible Notes, which on July 16, 2021, were converted into a 7.6% equity interest upon conversion and increased to 9.97% as of June 30, 2022. As of June 30, 2022 and December 31, 2021, the aggregate balance of the Company’s equity method investment in the OZ Fund was approximately $4.1 million and $3.4 million, respectively, including aggregate capital contributions of $1.7 million and $1.0 million through June 30, 2022 and December 31, 2021, respectively. The OZ Fund will exist until an event of dissolution occurs, as defined in the limited liability company agreement of the OZ Fund (the “Fund Agreement”). Under the Fund Agreement, the Manager of the OZ Fund may call for additional capital contributions from its members to fund expenses, property acquisitions and capital improvements in accordance with each members’ funding ratio. The Company’s capital contributions are capped at $20.0 million. Under the Fund Agreement, any available cash, after the allowance for the payment of all obligations, operating expenses and capital improvements, is distributed to the members at least annually. For each fiscal year, net income or loss is allocated to the members pro rata in accordance with their percentage interest. |
Business Combinations | Business Combinations The Company recognizes and measures the assets acquired and liabilities assumed in a business combination based on their estimated fair values as of date of acquisition, with any difference recorded as goodwill. Management engages an independent valuation specialist, as applicable, to assist with the determination of fair value of the assets acquired, liabilities assumed, and resulting goodwill, based on recognized business valuation methodologies. If the initial accounting for the business combination is incomplete by the end of the reporting period in which the acquisition occurs, an estimate will be recorded. Subsequent to the acquisition, and not later than one year from the acquisition date, the Company will record any measurement period adjustments to the initial estimate based on new information obtained that would have existed as of the acquisition date. An adjustment that arises from information obtained that did not exist as of the date of the acquisition will be recorded in the period of the adjustment. Acquisition and due diligence costs that arise as a result of a business combination are expensed as incurred. On November 15, 2021, we acquired 100% of the membership interests of Murray Wise Associates, LLC (“MWA”), an agricultural asset management, brokerage and auction company, for total transaction value of $8.1 million, comprised of $5.3 million of consideration paid at closing, net of $2.8 million of closing adjustments. The consideration paid at closing was comprised of $2.2 million in cash and $3.1 million in shares of our common stock. The primary reason for the acquisition was to increase the Company’s breadth of activities in the farmland sector, while adding additional sources of revenue and market insight. As a result of the acquisition, MWA became a wholly owned subsidiary of the TRS. The Company issued an aggregate of 248,734 shares of common stock at a price of $12.61 per share in connection with the closing of the acquisition. The Company has entered into an incentive compensation agreement providing for the issuance of up to $3.0 million in shares of common stock for the benefit of current and prospective MWA employees aside from Murray Wise, who was appointed to our Board of Directors in connection with the closing of the acquisition, the receipt of which is tied to achieving certain profitability and asset-under-management objectives within three years following the closing of the transaction. Stock-based incentive expense related to these awards will be recognized ratably over the same three The Company recorded goodwill of $2.7 million, trade names and trademarks of $1.9 million, and customer relationships of $0.1 million, as part of the purchase of MWA. Goodwill represents the difference between the purchase consideration and the net assets acquired, including identifiable intangible assets. The factors giving rise to goodwill are primarily related to (a) entry into new lines of business which are complimentary to FPI’s existing business operations, and (b) acquired workforce-in-place, including Murray Wise, who has extensive experience in the industry, and became a member of our Board of Directors in connection with the closing of the transaction, as described above. The following table presents a summary of the Company's purchase accounting entries: ($ in thousands) MWA Purchase Consideration: Accounting Cash consideration $ 2,161 Stock consideration 3,147 Total consideration $ 5,308 Amounts recognized for fair value of assets acquired and liabilities assumed: Cash and cash equivalents $ 1,305 Fixed Assets 110 Goodwill 2,706 Intangible assets 1,915 Net Liabilities (728) Total Fair Value $ 5,308 Net cash used in the transaction: Cash paid in transaction $ (2,161) Cash acquired in transaction 1,305 Net cash used in the transaction $ (856) |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill represents the excess of the purchase price over the estimated fair value of the net assets acquired in the acquisition of a business. Goodwill is not amortized, but rather is tested for impairment annually in the fourth quarter and when events or changes in circumstances indicate that the fair value of a reporting unit with goodwill has been reduced below its carrying value. The impairment test requires allocating goodwill and other assets and liabilities to reporting units. The fair value of each reporting unit is determined and compared to the carrying value of the reporting unit. The fair value is calculated using the expected present value of future cash flows method. Significant assumptions used in the cash flow forecasts include future net operating margins, discount rates and future capital requirements. If the fair value of the reporting unit is less than the carrying value, including goodwill, the excess of the book value over the fair value of goodwill is charged to net income as an impairment expense. During the three and six months ended June 30, 2022, the Company did not incur any impairment charges related to goodwill. Amortization of intangible assets with definite lives is calculated using the straight-line method, which is reflective of the benefit pattern in which the estimated economic benefit is expected to be received over the estimated useful life of the intangible asset. Intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the intangible asset may not be recoverable. If the sum of the expected undiscounted future cash flows related to the asset is less than the carrying amount of the asset, an impairment loss is recognized based on the fair value of the asset. Trade names and trademarks have an indefinite life and, therefore, are not subject to amortization. Customer relationships are subject to amortization and are amortized over a period of 12 years. During the three and six months ended June 30, 2022, the Company recorded amortization of customer relationships of less than $0.1 million for each period. |
Fair Value | Fair Value The Company is required to disclose fair value as further explained in “Note 6—Notes Receivable”, “Note 7—Mortgage Notes, Lines of Credit and Bonds Payable” and “Note 10—Hedge Accounting”. FASB ASC 820-10 establishes a three-level hierarchy for the disclosure of fair value measurements. The valuation hierarchy is based upon 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. |
Hedge Accounting | Hedge Accounting ASC 815 requires the Company to recognize all of its derivative instruments as either assets or liabilities in the consolidated balance sheet at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, the company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge or a hedge of a net investment in a foreign operation. For derivative instruments not designated as hedging instruments, the gain or loss is recognized in the consolidated statements of operations during the reporting period. The Company manages economic risks, including interest rate, liquidity, and credit risk, by managing the amount, sources, duration and interest rate exposure of its funding. The Company may also use interest rate derivative financial instruments, namely interest rate swaps. The Company may enter into marketing contracts to sell commodities. Derivatives and hedge accounting guidance requires a company to evaluate these contracts to determine whether the contracts are derivatives. Certain contracts that meet the definition of a derivative may be exempt from derivative accounting if designated as normal purchase or normal sales. The Company evaluates all contracts at inception to determine if they are derivatives and if they meet the normal purchase and normal sale designation requirements. The Company has in place one interest rate swap agreement with Rabobank to add stability to interest expense and to manage its exposure to interest rate movements. This agreement qualifies as a cash flow hedge and is actively evaluated for ongoing effectiveness (see “Note 10—Hedge Accounting”). 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 shareholders’ equity in the Company’s consolidated balance sheets. Additionally, the Company assesses whether the derivative used in its hedging transaction is expected to be highly effective in offsetting changes in the fair value or cash flows of the hedged item. The Company discontinues hedge accounting when it is determined that a derivative has ceased to be or is not expected to be highly effective as a hedge, and then reflects changes in fair value of the derivative in earnings after termination of the hedge relationship. |
New or Revised Accounting Standards | New or Revised Accounting Standards Recently adopted In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 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 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 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 modification date or reassessment of the 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. The Company will continue to evaluate its debt, derivative and lease contracts that are eligible for modification relief and expects to apply those elections as needed. |
Organization and Significant _3
Organization and Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Organization and Significant Accounting Policies | |
Schedule of Inventory | (in thousands) June 30, 2022 December 31, 2021 Harvested crop $ — $ 164 Growing crop 2,962 2,895 $ 2,962 $ 3,059 |
Schedule of purchase accounting entries | ($ in thousands) MWA Purchase Consideration: Accounting Cash consideration $ 2,161 Stock consideration 3,147 Total consideration $ 5,308 Amounts recognized for fair value of assets acquired and liabilities assumed: Cash and cash equivalents $ 1,305 Fixed Assets 110 Goodwill 2,706 Intangible assets 1,915 Net Liabilities (728) Total Fair Value $ 5,308 Net cash used in the transaction: Cash paid in transaction $ (2,161) Cash acquired in transaction 1,305 Net cash used in the transaction $ (856) |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Revenue Recognition | |
Summary of rental income recognized | Rental income recognized For the three months ended For the six months ended June 30, June 30, (in thousands) 2022 2021 2022 2021 Leases in effect at the beginning of the year $ 7,798 $ 7,263 $ 15,549 $ 16,734 Leases entered into during the year 1,398 1,028 3,192 1,817 $ 9,196 $ 8,291 $ 18,741 $ 18,551 |
Schedule of future minimum fixed rent payments from tenants under all non-cancelable leases in place | (in thousands) Future rental Year Ending December 31, payments 2022 (remaining six months) $ 16,632 2023 26,802 2024 18,647 2025 9,125 2026 4,080 Thereafter 33,470 $ 108,756 |
Concentration Risk (Tables)
Concentration Risk (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Geographic concentration | |
Concentration Risk | |
Summary of concentrations | Approximate % Rental Income (1) of total acres For the three months ended For the six months ended As of June 30, June 30, June 30, Location of Farm (2) 2022 2021 2022 2021 2022 2021 Corn Belt 28.8 % 27.3 % 40.1 % 39.5 % 39.8 % 36.8 % Delta and South 20.5 % 20.4 % 13.3 % 9.5 % 15.5 % 10.6 % High Plains 18.2 % 18.8 % 9.1 % 10.0 % 9.0 % 8.0 % Southeast 25.2 % 26.1 % 24.3 % 25.7 % 23.3 % 27.3 % West Coast 7.3 % 7.4 % 13.2 % 15.3 % 12.4 % 17.3 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % (1) Due to regional disparities in the use of leases with variable rent and seasonal variations in the recognition of variable rent revenue, regional comparisons by rental income are not fully representative of each region’s income-producing capacity until a full year is taken into account. (2) Corn Belt includes farms located in Illinois, Michigan, Missouri and eastern Nebraska. Delta and South includes farms located in Arkansas, Louisiana, Mississippi. High Plains includes farms located in Colorado, Kansas, western Nebraska, and South Dakota. Southeast includes farms located in Florida, Georgia, North Carolina, South Carolina and Virginia. West Coast includes farms located in California. |
Notes Receivable (Tables)
Notes Receivable (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Notes Receivable | |
Schedule of notes receivable | ($ in thousands) Principal Outstanding as of Maturity Loan Payment Terms June 30, 2022 December 31, 2021 Date Mortgage Note (1) Principal & interest due at maturity $ 217 $ 223 12/7/2028 Mortgage Note (1) Principal due at maturity & interest due monthly — 2,135 3/16/2022 Mortgage Note (2) Principal due at maturity & interest due quarterly — 1,571 6/23/2023 Mortgage Note (3) Principal due at maturity & interest due semi-annually 2,100 2,100 8/18/2023 Mortgage Note (4) Principal due at maturity & interest due quarterly 1,000 — 11/28/2022 Mortgage Note (4) Principal due at maturity & interest due quarterly 2,500 — 3/3/2025 Total outstanding principal 5,817 6,029 Interest receivable (net prepaid interest and points) 38 83 Provision for interest receivable — — Total notes and interest receivable $ 5,855 $ 6,112 (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 notes included mortgages on two additional properties in Colorado that included repurchase options for the properties at a fixed price that were exercisable by the buyer between the third and fifth anniversary of the issuance of the notes and expired on March 16, 2022 unexercised. Upon expiration of the repurchase options, the properties are no longer accounted for as financing transactions and became owned by the Company. They are included in real estate on the accompanying consolidated balance sheets based on the net unpaid note balances. (2) On July 27, 2021, the Company entered into a loan secured against farmland, which was repaid in full on April 13, 2022. (3) On August 18, 2021, the Company entered into a loan secured against farmland. (4) On March 3, 2022, the Company entered into two loans with the same party secured against farmland. |
Mortgage Notes, Lines of Cred_2
Mortgage Notes, Lines of Credit and Bonds Payable (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Mortgage Notes, Lines of Credit and Bonds Payable | |
Schedule of indebtedness outstanding | Book Annual Value of ($ in thousands) Interest Principal Collateral Rate as of Outstanding as of as of June 30, June 30, December 31, Maturity June 30, Loan Payment Terms Interest Rate Terms 2022 2022 2021 Date 2022 Farmer Mac Bond #6 Semi-annual interest only 3.69% 3.69% $ 13,827 $ 13,827 April 2025 $ 21,438 Farmer Mac Bond #7 Semi-annual interest only 3.68% 3.68% 11,160 11,160 April 2025 18,584 MetLife Term Loan #1 Semi-annual interest only 3.30% fixed until 2023 3.30% 72,622 83,206 March 2026 182,578 MetLife Term Loan #2 Semi-annual interest only 3.60% fixed until 2025 3.60% — 16,000 March 2026 — MetLife Term Loan #3 Semi-annual interest only 3.60% fixed until 2025 3.60% — 16,800 March 2026 — MetLife Term Loan #4 Semi-annual interest only 3.30% fixed until 2023 3.30% 9,880 13,017 June 2026 25,694 MetLife Term Loan #5 Semi-annual interest only 3.50% fixed until 2023 3.50% 5,179 6,779 January 2027 10,096 MetLife Term Loan #6 Semi-annual interest only 3.45% fixed until 2023 3.45% 21,726 27,158 February 2027 58,087 MetLife Term Loan #7 Semi-annual interest only 3.20% fixed until 2023 3.20% 15,698 16,198 June 2027 29,629 MetLife Term Loan #8 Semi-annual interest only 4.12% fixed until 2027 4.12% 44,000 44,000 December 2042 110,042 MetLife Term Loan #9 Semi-annual interest only 3.20% fixed until 2024 3.20% 16,800 16,800 May 2028 33,652 MetLife Term Loan #10 Semi-annual interest only 3.00% fixed until 2023 3.00% 48,985 49,874 October 2030 103,867 MetLife Term Loan #11 Semi-annual interest only 2.85% fixed until 2024 2.85% 12,750 12,750 October 2031 27,102 MetLife Term Loan #12 Semi-annual interest only 3.11% fixed until 2024 3.11% 14,359 14,359 December 2031 28,884 Rabobank (1) Semi-annual interest only LIBOR + 1.70% adjustable every two years 2.82% 59,500 59,500 March 2028 129,117 Rutledge Facility Quarterly interest only SOFR + 1.95% 2.60% 80,000 112,000 March 2027 231,751 Total outstanding principal 426,486 513,428 $ 1,010,521 Debt issuance costs (2,012) (2,105) Unamortized premium — — Total mortgage notes and bonds payable, net $ 424,474 $ 511,323 (1) The Company has an interest rate swap agreement with Rabobank to add stability to interest expense and to manage our exposure to interest rate movements (see “Note 10—Hedge Accounting”). |
Schedule of aggregate maturities of long-term debt | ($ in thousands) Year Ending December 31, Future Maturities 2022 (remaining six months) $ — 2023 — 2024 2,100 2025 27,087 2026 84,602 Thereafter 312,697 $ 426,486 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies. | |
Schedule of future rental payments | ($ in thousands) Future rental Year Ending December 31, payments 2022 (remaining six months) $ 115 2023 183 2024 62 2025 44 2026 — Thereafter — Total lease payments 404 Less: imputed interest (17) Lease liability $ 387 |
Stockholders' Equity and Non-_2
Stockholders' Equity and Non-controlling Interests (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Stockholders' Equity and Non-controlling Interests | |
Schedule of changes in redeemable non-controlling interest in operating partnership | Series A Preferred Units Redeemable Redeemable Preferred non-controlling (in thousands) units interests Balance at December 31, 2020 117 $ 120,510 Distribution paid to non-controlling interest — (3,510) Accrued distributions to non-controlling interest — 1,755 Balance at June 30, 2021 117 $ 118,755 Balance at December 31, 2021 117 $ 120,510 Distribution paid to non-controlling interest — (3,510) Accrued distributions to non-controlling interest — 1,680 Redemption of Series A preferred units (5) (5,000) Balance at June 30, 2022 112 $ 113,680 |
Schedule of declaration and payment of distribution | Fiscal Year Declaration Date Record Date Payment Date Distributions per Common Share/OP unit 2022 October 26, 2021 January 3, 2022 January 18, 2022 $ 0.0500 February 22, 2022 April 1, 2022 April 15, 2022 $ 0.0500 $ 0.1000 2021 November 3, 2020 January 1, 2021 January 15, 2021 $ 0.0500 February 11, 2021 April 1, 2021 April 15, 2021 $ 0.0500 $ 0.1000 |
Summary of non-vested shares | Weighted Number of average grant (shares in thousands) shares date fair value Unvested at December 31, 2021 297 $ 8.87 Granted 147 11.75 Vested (171) 8.13 Forfeited (8) 11.32 Unvested at June 30, 2022 265 $ 10.86 |
Schedule of computation of basic and diluted earnings (loss) per share | For the three months ended For the six months ended June 30, June 30, (in thousands, except per share amounts) 2022 2021 2022 2021 Numerator: Net income (loss) attributable to Farmland Partners Inc. $ 2,916 $ (2,735) $ 4,021 $ (375) Less: Nonforfeitable distributions allocated to unvested restricted shares (16) (14) (31) (28) Less: Distributions on redeemable non-controlling interests in Operating Partnership, preferred (840) (3,055) (1,680) (6,120) Less: Dividends on Series B Participating Preferred Stock — — — — Net income (loss) attributable to common stockholders $ 2,060 $ (5,804) $ 2,310 $ (6,523) Denominator: Weighted-average number of common shares - basic 50,362 31,072 48,084 30,747 Conversion of preferred units (1 — — — — Unvested restricted shares (1 — — — — Redeemable non-controlling interest (1 — — — — Weighted-average number of common shares - diluted 50,362 31,072 48,084 30,747 Income (loss) per share attributable to common stockholders - basic $ 0.04 $ (0.19) $ 0.05 $ (0.21) Income (loss) per share attributable to common stockholders - diluted $ 0.04 $ (0.19) $ 0.05 $ (0.21) (1) Anti-dilutive for the three and six months ended June 30, 2022 and 2021 |
Schedule of equity awards and units outstanding | June 30, 2022 December 31, 2021 Shares 52,477 45,177 Common Units 1,247 1,357 Redeemable Common Units — — Unvested Restricted Stock Awards 265 297 53,989 46,831 |
Hedge Accounting (Tables)
Hedge Accounting (Tables) - Designated as Hedging Instrument - Cash Flow Hedging | 6 Months Ended |
Jun. 30, 2022 | |
Derivative Contracts | |
Schedule of fair value of derivative instruments | ($ in thousands) Instrument Balance sheet location Level 2 Fair Value Interest rate swap Derivative asset $ 698 |
Schedule of effect of derivative instruments on the consolidated statement of operations | The effect of derivative instruments on the consolidated statements of operations for the periods ended June 30, 2022 and 2021 is set out below: Cash flow hedging relationships Location of Gain (Loss) reclassified from Accumulated OCI into income Interest rate contracts Interest expense |
Schedule of movement in other comprehensive income | ($ in thousands) June 30, 2022 December 31, 2021 Beginning accumulated derivative instrument gain or loss $ 279 $ (2,380) Net change associated with current period hedging transactions 1,265 1,676 Amortization of frozen AOCI on de-designated hedge 313 983 Difference between a change in fair value of excluded components — — Closing accumulated derivative instrument gain or loss $ 1,857 $ 279 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Income Taxes | |
Schedule of TRS income (loss) before provision for income taxes | The TRS income/(loss) before provision for income taxes consisted of the following: For the Six Months Ended ($ in thousands) June 30, 2022 United States $ 1,690 International — Total $ 1,690 |
Schedule of federal and state income tax provision (benefit) | The federal and state income tax provision (benefit) is summarized as follows: For the Six Months Ended ($ in thousands) June 30, 2022 Current: Federal $ 86 Deferred: Federal 10 Total Tax Expense $ 96 |
Schedule of TRS deferred tax assets | For the Six Months Ended ($ in thousands) June 30, 2022 Deferred tax assets: Net operating loss $ 828 Inventory reserve 16 Total deferred tax assets 844 Deferred tax liabilities: Net operating loss $ (34) Inventory reserve (49) Total deferred tax liabilities $ (83) Valuation Allowance (771) Net deferred taxes $ (10) |
Summary of net operating losses and tax credit carryforwards | ($ in thousands) June 30, 2022 Expiration Year Net operating losses, federal (Post-December 31, 2017) $ 3,532 Does not expire Net operating losses, state $ 1,466 Various |
Schedule of components of income tax rate | For the Six Months Ended June 30, 2022 Statutory Rate 21.00 % State Tax 0.61 % Valuation Allowance (17.39) % Total 4.22 % |
Organization and Significant _4
Organization and Significant Accounting Policies (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||||||
Aug. 17, 2021 $ / shares shares | Jun. 30, 2022 USD ($) a agreement $ / shares | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) a agreement $ / shares | Jun. 30, 2021 USD ($) | Dec. 31, 2021 $ / shares | Oct. 04, 2021 shares | Aug. 17, 2017 shares | |
Organization and Significant Accounting Policies | ||||||||
Revenues from the sale of harvested crops | $ | $ 1.2 | $ 0.2 | $ 1.8 | $ 0.5 | ||||
Area of real estate property | 160,100 | 160,100 | ||||||
Area of real estate property company serves as property manager | 25,200 | |||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||||
Minimum | ||||||||
Organization and Significant Accounting Policies | ||||||||
Percentage of rent received during first quarter or second half of the year | 50% | |||||||
Limited partner | Operating Partnership | ||||||||
Organization and Significant Accounting Policies | ||||||||
Ownership interest (as a percent) | 97.40% | 97.40% | ||||||
TRS. | ||||||||
Organization and Significant Accounting Policies | ||||||||
Area of real estate property | 2,973 | 2,973 | ||||||
OZ Fund, Private Investment Fund | ||||||||
Organization and Significant Accounting Policies | ||||||||
Equity interest | 9.97% | 9.97% | ||||||
Number of properties | agreement | 10 | 10 | ||||||
Series B Participating Preferred Stock | ||||||||
Organization and Significant Accounting Policies | ||||||||
Shares, Outstanding | shares | 5,806,797 | |||||||
Shares issued under underwriting agreement | shares | 6,037,500 | 6,037,500 | ||||||
Preference dividend (as a percent) | 6% | |||||||
Par value | $ / shares | $ 0.01 |
Organization and Significant _5
Organization and Significant Accounting Policies - Additional disclosures (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||
Jul. 01, 2022 USD ($) | Nov. 15, 2021 USD ($) $ / shares shares | Jul. 16, 2021 USD ($) | Mar. 31, 2021 USD ($) item | Mar. 05, 2021 item | Mar. 31, 2021 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) item | Jun. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) item | |
Deferred Financing Fees | |||||||||||
Accumulated amortization of deferred financing fees | $ 1,000 | $ 1,000 | $ 1,700 | ||||||||
Total outstanding principal | 5,817 | 5,817 | 6,029 | ||||||||
Convertible Notes Receivable | |||||||||||
Received cash | 16,900 | $ 28,600 | |||||||||
Convertible notes receivable | $ 2,400 | 2,400 | |||||||||
Gain on sale of assets | 3,335 | 74 | 3,995 | 3,467 | |||||||
Value of conversion | $ 2,400 | ||||||||||
Amount available from shelf registration | 100,000 | ||||||||||
Mortgage and other debt | 424,500 | 424,500 | |||||||||
Net book value | 1,081,987 | 1,081,987 | 1,065,108 | ||||||||
Deferred Offering Costs Incurred | 100 | 200 | |||||||||
Deferred offering costs | 83 | 83 | 40 | ||||||||
Accounts Receivable | |||||||||||
Allowance for doubtful accounts | 100 | 100 | 100 | ||||||||
Inventory | |||||||||||
Cost of harvested crop included in property operating expenses | 1,300 | 700 | 2,800 | 900 | |||||||
Harvested crop | 164 | ||||||||||
Growing crop | 2,962 | 2,962 | 2,895 | ||||||||
Total inventory | 2,962 | 2,962 | 3,059 | ||||||||
Business Combinations | |||||||||||
Accrued expenses | 7,826 | 7,826 | 9,564 | ||||||||
Operating revenues | 12,357 | 10,013 | 26,247 | 21,589 | |||||||
Net income | 2,993 | (2,865) | 4,131 | (388) | |||||||
Consideration: | |||||||||||
Cash consideration | 29,900 | ||||||||||
Total consideration | 28,200 | ||||||||||
Amounts recognized for fair value of assets acquired and liabilities assumed: | |||||||||||
Goodwill | 2,706 | 2,706 | $ 2,706 | ||||||||
Intangible assets | 0 | $ 0 | $ 0 | $ 0 | |||||||
Intangible assets | |||||||||||
Amortization period | 12 years | ||||||||||
Income tax | |||||||||||
Income tax expense | (96) | $ (96) | |||||||||
ATM Program | |||||||||||
Convertible Notes Receivable | |||||||||||
Net proceeds | 98,400 | ||||||||||
Murray Wise Associates, LLC ("MWA") | |||||||||||
Business Combinations | |||||||||||
Business acquisition, percentage acquired | 100% | ||||||||||
Transaction value | $ 8,100 | ||||||||||
Closing adjustments | $ 2,800 | ||||||||||
Number of shares issued | shares | 248,734 | ||||||||||
Stock price per share | $ / shares | $ 12.61 | ||||||||||
Shares issued for the benefit of current and prospective employee | $ 3,000 | ||||||||||
Period to achieve profitability and management objectives | 3 years | ||||||||||
Share Based payment award, expiration period | 3 years | ||||||||||
Share-based compensation expense | 200 | 400 | |||||||||
Accrued expenses | 400 | 400 | |||||||||
Goodwill acquired | 2,700 | ||||||||||
Acquired trade names and trademarks | 1,900 | 1,900 | |||||||||
Acquired customer relationships | $ 100 | $ 100 | |||||||||
Consideration: | |||||||||||
Cash consideration | $ 2,161 | ||||||||||
Stock consideration | 3,147 | ||||||||||
Total consideration | 5,308 | ||||||||||
Amounts recognized for fair value of assets acquired and liabilities assumed: | |||||||||||
Cash and cash equivalents | 1,305 | ||||||||||
Fixed Assets | 110 | ||||||||||
Goodwill | 2,706 | ||||||||||
Intangible assets | 1,915 | ||||||||||
Net Liabilities | (728) | ||||||||||
Total Fair Value | 5,308 | ||||||||||
Cash paid in transaction | (2,161) | ||||||||||
Cash acquired in transaction | 1,305 | ||||||||||
Net cash used in the transaction | $ (856) | ||||||||||
Promised Land Opportunity Zone Farms I, LLC | |||||||||||
Convertible Notes Receivable | |||||||||||
Number of farms sold | item | 10 | 9 | |||||||||
Received cash | $ 19,100 | ||||||||||
Interest rate (as a percent) | 1.35% | 1.35% | |||||||||
Convertible notes receivable | $ 2,400 | $ 2,400 | $ 2,400 | $ 2,400 | |||||||
Gain on sale of assets | $ 2,400 | ||||||||||
Subsequent event | ATM Program | |||||||||||
Convertible Notes Receivable | |||||||||||
Net proceeds | $ 3,500 | ||||||||||
Maximum | |||||||||||
Intangible assets | |||||||||||
Intangible assets amortization | $ 100 | $ 100 | |||||||||
Opportunity Zone Fund LLC | |||||||||||
Convertible Notes Receivable | |||||||||||
Noncontrolling ownership interest (as a percent) | 7.60% | 9.97% | 9.97% | ||||||||
Operating Partnership | |||||||||||
Convertible Notes Receivable | |||||||||||
Noncontrolling ownership interest (as a percent) | 7.60% | 9.97% | 9.97% | ||||||||
FPI Loan Program | |||||||||||
Deferred Financing Fees | |||||||||||
Number of notes issued | item | 4 | 5 | |||||||||
OZ Fund, Private Investment Fund | |||||||||||
Convertible Notes Receivable | |||||||||||
Equity interest | 9.97% | 9.97% | |||||||||
Aggregate equity method investment | $ 4,100 | $ 4,100 | $ 3,400 | ||||||||
Additional capital contributions | 20,000 | ||||||||||
Aggregate capital contributions | $ 1,700 | $ 1,000 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Revenue Recognition, Milestone Method [Line Items] | |||||
Deferred revenue | $ 1,317 | $ 1,317 | $ 45 | ||
Leases in effect at the beginning of the year | 7,798 | $ 7,263 | 15,549 | $ 16,734 | |
Leases entered into during the year | 1,398 | 1,028 | 3,192 | 1,817 | |
Rental income recognized | 9,196 | 8,291 | 18,741 | 18,551 | |
Revenues from the sale of harvested crops | 1,200 | $ 200 | 1,800 | $ 500 | |
Future minimum fixed rent payments | |||||
2022 (remaining six months) | 16,632 | 16,632 | |||
2023 | 26,802 | 26,802 | |||
2024 | 18,647 | 18,647 | |||
2025 | 9,125 | 9,125 | |||
2026 | 4,080 | 4,080 | |||
Thereafter | 33,470 | 33,470 | |||
Total future minimum lease payments | $ 108,756 | $ 108,756 | |||
Minimum | |||||
Revenue Recognition, Milestone Method [Line Items] | |||||
Percentage of rent received during first quarter or second half of the year | 50% | ||||
Row crops, term | 2 years | ||||
Permanent crops, term | 1 year | ||||
Maximum | |||||
Revenue Recognition, Milestone Method [Line Items] | |||||
Row crops, term | 3 years | ||||
Permanent crops, term | 7 years | ||||
Deferred revenue | $ 100 | ||||
Lease in place | Minimum | |||||
Revenue Recognition, Milestone Method [Line Items] | |||||
Terms of farm leases | 1 year | 1 year | |||
Lease in place | Maximum | |||||
Revenue Recognition, Milestone Method [Line Items] | |||||
Terms of farm leases | 40 years | 40 years |
Concentration Risk (Details)
Concentration Risk (Details) - Geographic concentration | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Approximate total acres | ||||
Concentration Risk | ||||
Concentration risk (as a percent) | 100% | 100% | ||
Approximate total acres | Cornbelt | ||||
Concentration Risk | ||||
Concentration risk (as a percent) | 28.80% | 27.30% | ||
Approximate total acres | Delta and South | ||||
Concentration Risk | ||||
Concentration risk (as a percent) | 20.50% | 20.40% | ||
Approximate total acres | High Plains | ||||
Concentration Risk | ||||
Concentration risk (as a percent) | 18.20% | 18.80% | ||
Approximate total acres | Southeast | ||||
Concentration Risk | ||||
Concentration risk (as a percent) | 25.20% | 26.10% | ||
Approximate total acres | West Coast | ||||
Concentration Risk | ||||
Concentration risk (as a percent) | 7.30% | 7.40% | ||
Rental income | ||||
Concentration Risk | ||||
Concentration risk (as a percent) | 100% | 100% | 100% | 100% |
Rental income | Cornbelt | ||||
Concentration Risk | ||||
Concentration risk (as a percent) | 40.10% | 39.50% | 39.80% | 36.80% |
Rental income | Delta and South | ||||
Concentration Risk | ||||
Concentration risk (as a percent) | 13.30% | 9.50% | 15.50% | 10.60% |
Rental income | High Plains | ||||
Concentration Risk | ||||
Concentration risk (as a percent) | 9.10% | 10% | 9% | 8% |
Rental income | Southeast | ||||
Concentration Risk | ||||
Concentration risk (as a percent) | 24.30% | 25.70% | 23.30% | 27.30% |
Rental income | West Coast | ||||
Concentration Risk | ||||
Concentration risk (as a percent) | 13.20% | 15.30% | 12.40% | 17.30% |
Related Party Transactions (Det
Related Party Transactions (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||
Mar. 31, 2021 USD ($) item | Mar. 05, 2021 item | Mar. 31, 2021 USD ($) item | Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Jul. 16, 2021 | Jul. 21, 2015 | |
Related Party Transactions | |||||||||
Received cash | $ 16,900,000 | $ 28,600,000 | |||||||
Gain on sale of assets | $ 3,335,000 | $ 74,000 | 3,995,000 | 3,467,000 | |||||
Convertible Notes Receivable | 2,400,000 | 2,400,000 | |||||||
Opportunity Zone Fund LLC | |||||||||
Related Party Transactions | |||||||||
Received cash | $ 19,100,000 | ||||||||
Gain on sale of assets | 2,400,000 | ||||||||
Convertible Notes Receivable | $ 2,400,000 | 2,400,000 | |||||||
American Agriculture Aviation, LLC | Lease agreements | |||||||||
Related Party Transactions | |||||||||
Related party, transaction amount | $ 40,000 | 50,000 | $ 70,000 | 90,000 | |||||
Opportunity Zone Fund LLC | |||||||||
Related Party Transactions | |||||||||
Noncontrolling ownership interest (as a percent) | 9.97% | 9.97% | 7.60% | ||||||
Paul A. Pittman | American Agriculture Aviation, LLC | |||||||||
Related Party Transactions | |||||||||
Related party transaction, percentage of ownership interest held by related party | 100% | ||||||||
Promised Land Opportunity Zone Farms I, LLC | |||||||||
Related Party Transactions | |||||||||
Management fee | $ 100,000 | $ 50,000 | $ 210,000 | $ 60,000 | |||||
Number of farms sold | item | 10 | 9 | |||||||
Received cash | $ 19,100,000 | ||||||||
Gain on sale of assets | 2,400,000 | ||||||||
Convertible Notes Receivable | $ 2,400,000 | $ 2,400,000 | $ 2,400,000 | $ 2,400,000 | |||||
Promised Land Opportunity Zone Farms I, LLC | Opportunity Zone Fund LLC | |||||||||
Related Party Transactions | |||||||||
Number of farms sold | item | 9 | 10 | |||||||
Gross Book Value Less Than $50 Million | |||||||||
Related Party Transactions | |||||||||
Percentage of gross book value | 0.2125% | ||||||||
Gross book value | $ 50,000,000 | ||||||||
Gross Book Value Excess of 50 Million and Under 100 Millions | |||||||||
Related Party Transactions | |||||||||
Percentage of gross book value | 0.20% | ||||||||
Gross book value | $ 50,000,000 | ||||||||
Gross Book Value Excess of 50 Million and Under 100 Millions | Maximum | |||||||||
Related Party Transactions | |||||||||
Gross book value | $ 100,000,000 | ||||||||
Gross Book Value Excess of 100 Million | |||||||||
Related Party Transactions | |||||||||
Percentage of gross book value | 0.1875% | ||||||||
Gross book value | $ 100,000,000 |
Real Estate (Details)
Real Estate (Details) $ in Millions | 6 Months Ended | |
Jun. 30, 2022 USD ($) property item | Jun. 30, 2021 USD ($) item | |
Farms acquired and allocation of purchase price | ||
Number of acquisitions | item | 9 | 4 |
Number of properties acquired | 9 | 4 |
Aggregate purchase price | $ 28.2 | |
Consideration paid in cash | $ 29.9 | |
Intangible assets | $ 0 | $ 0 |
Number of dispositions | item | 5 | 7 |
Number of properties sold | 5 | 15 |
Proceeds from sale of real estate | $ 16.9 | $ 28.6 |
Convertible notes receivable | 2.4 | |
Aggregate gain on sale | $ 4 | $ 3.5 |
Notes Receivable (Details)
Notes Receivable (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Mar. 02, 2022 loan | Jun. 30, 2022 USD ($) item | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) item | Jun. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | Mar. 31, 2021 USD ($) | Aug. 31, 2015 USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Credit loss expense | $ 0 | $ 0 | $ 0 | $ 0 | ||||
Total outstanding principal | 5,817 | 5,817 | $ 6,029 | |||||
Interest receivable (net prepaid interest and points) | 38 | 38 | 83 | |||||
Total notes and interest receivable | 5,855 | 5,855 | 6,112 | |||||
Number of loans | loan | 2 | |||||||
Convertible notes receivable | $ 2,400 | $ 2,400 | ||||||
Notes receivable | 6,300 | 6,300 | 6,000 | |||||
Promised Land Opportunity Zone Farms I, LLC | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Convertible notes receivable | 2,400 | 2,400 | $ 2,400 | |||||
Mortgage Note Maturing on 12/7/2028 | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Total outstanding principal | $ 217 | $ 217 | 223 | |||||
Mortgage Note Maturing on 12/7/2028 | Colorado | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Number of additional properties | item | 2 | 2 | ||||||
Mortgage Note Maturing on 3/16/2022 | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Total outstanding principal | 2,135 | |||||||
Mortgage Note Maturing on 3/16/2022 | Colorado | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Number of additional properties | item | 2 | 2 | ||||||
Mortgage Note Maturing on 6/23 2023 | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Total outstanding principal | 1,571 | |||||||
Mortgage Note Maturing on 8/18/2023 | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Total outstanding principal | $ 2,100 | $ 2,100 | 2,100 | |||||
Mortgage Note Maturing on 11/28/2022 | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Total outstanding principal | 1,000 | 1,000 | ||||||
Mortgage Note Maturing on 3/3/2025 | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Total outstanding principal | 2,500 | 2,500 | ||||||
FPI Loan Program | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Expected credit losses | $ 0 | $ 0 | $ 0 | |||||
FPI Loan Program | Minimum | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Principal amounts | $ 1,000 | |||||||
FPI Loan Program | Maximum | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Debt instrument, term | 6 years |
Mortgage Notes, Lines of Cred_3
Mortgage Notes, Lines of Credit and Bonds Payable (Details) $ in Thousands | 6 Months Ended | ||
Feb. 18, 2022 USD ($) item | Jun. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Mortgage notes payable | |||
Principal outstanding | $ 426,486 | $ 513,428 | |
Debt issuance costs | (2,012) | (2,105) | |
Mortgage notes and bonds payable, net | 424,474 | 511,323 | |
Book value of collateral | 1,010,521 | ||
Accumulated amortization of deferred financing fees | $ 1,000 | 1,700 | |
Commitment fees percentage | 0.50% | ||
Prepayment penalty | $ 0 | ||
Farmer Mac Facility | Secured notes | |||
Mortgage notes payable | |||
Outstanding debt | $ 25,000 | 25,000 | |
Farmer Mac Facility | Secured notes | Minimum | |||
Mortgage notes payable | |||
Fixed charge coverage ratio | 1.50 | ||
Farmer Mac Facility | Secured notes | Maximum | |||
Mortgage notes payable | |||
Leverage ratio (as a percent) | 60% | ||
MetLife | Term Loan | |||
Mortgage notes payable | |||
Outstanding debt | $ 262,000 | 316,900 | |
Maximum loan to value ratio | 60% | ||
Rutledge Credit Facilities | |||
Mortgage notes payable | |||
Outstanding debt | $ 80,000 | 112,000 | |
Remaining borrowing capacity | $ 32,000 | ||
Number of notes issued | item | 5 | ||
Maximum aggregate principal amount | $ 112,000 | ||
SOFR | Minimum | |||
Mortgage notes payable | |||
Margin added to reference rate (as a percent) | 1.80% | ||
SOFR | Maximum | |||
Mortgage notes payable | |||
Margin added to reference rate (as a percent) | 2.25% | ||
Farmer Mac Bond #6 | |||
Mortgage notes payable | |||
Principal outstanding | $ 13,827 | 13,827 | |
Interest rate (as a percent) | 3.69% | ||
Interest Rate (as a percent) | 3.69% | ||
Book value of collateral | $ 21,438 | ||
Farmer Mac Bond #7 | |||
Mortgage notes payable | |||
Principal outstanding | $ 11,160 | 11,160 | |
Interest rate (as a percent) | 3.68% | ||
Interest Rate (as a percent) | 3.68% | ||
Book value of collateral | $ 18,584 | ||
MetLife Term Loan #1 | |||
Mortgage notes payable | |||
Principal outstanding | $ 72,622 | 83,206 | |
Interest rate (as a percent) | 3.30% | ||
Interest Rate (as a percent) | 3.30% | ||
Book value of collateral | $ 182,578 | ||
MetLife Term Loan #2 | |||
Mortgage notes payable | |||
Principal outstanding | 16,000 | ||
Interest rate (as a percent) | 3.60% | ||
Interest Rate (as a percent) | 3.60% | ||
MetLife Term Loan #3 | |||
Mortgage notes payable | |||
Principal outstanding | 16,800 | ||
Interest rate (as a percent) | 3.60% | ||
Interest Rate (as a percent) | 3.60% | ||
MetLife Term Loan #4 | |||
Mortgage notes payable | |||
Principal outstanding | $ 9,880 | 13,017 | |
Interest rate (as a percent) | 3.30% | ||
Interest Rate (as a percent) | 3.30% | ||
Book value of collateral | $ 25,694 | ||
MetLife Term Loan #5 | |||
Mortgage notes payable | |||
Principal outstanding | $ 5,179 | 6,779 | |
Interest rate (as a percent) | 3.50% | ||
Interest Rate (as a percent) | 3.50% | ||
Book value of collateral | $ 10,096 | ||
MetLife Term Loan #6 | |||
Mortgage notes payable | |||
Principal outstanding | $ 21,726 | 27,158 | |
Interest rate (as a percent) | 3.45% | ||
Interest Rate (as a percent) | 3.45% | ||
Book value of collateral | $ 58,087 | ||
MetLife Term Loan #7 | |||
Mortgage notes payable | |||
Principal outstanding | $ 15,698 | 16,198 | |
Interest rate (as a percent) | 3.20% | ||
Interest Rate (as a percent) | 3.20% | ||
Book value of collateral | $ 29,629 | ||
MetLife Term Loan #8 | |||
Mortgage notes payable | |||
Principal outstanding | $ 44,000 | 44,000 | |
Interest rate (as a percent) | 4.12% | ||
Interest Rate (as a percent) | 4.12% | ||
Book value of collateral | $ 110,042 | ||
Metlife Term Loan #9 | |||
Mortgage notes payable | |||
Principal outstanding | $ 16,800 | 16,800 | |
Interest rate (as a percent) | 3.20% | ||
Interest Rate (as a percent) | 3.20% | ||
Book value of collateral | $ 33,652 | ||
Metlife Term Loan #10 | |||
Mortgage notes payable | |||
Principal outstanding | $ 48,985 | 49,874 | |
Interest rate (as a percent) | 3% | ||
Interest Rate (as a percent) | 3% | ||
Book value of collateral | $ 103,867 | ||
Metlife Term Loan #11 | |||
Mortgage notes payable | |||
Principal outstanding | $ 12,750 | 12,750 | |
Interest rate (as a percent) | 2.85% | ||
Interest Rate (as a percent) | 2.85% | ||
Book value of collateral | $ 27,102 | ||
Metlife Term Loan #12 | |||
Mortgage notes payable | |||
Principal outstanding | $ 14,359 | 14,359 | |
Interest rate (as a percent) | 3.11% | ||
Interest Rate (as a percent) | 3.11% | ||
Book value of collateral | $ 28,884 | ||
Rabobank | |||
Mortgage notes payable | |||
Principal outstanding | $ 59,500 | 59,500 | |
Interest Rate (as a percent) | 2.82% | ||
Book value of collateral | $ 129,117 | ||
Rabobank | Secured notes | |||
Mortgage notes payable | |||
Outstanding debt | $ 59,500 | 59,500 | |
Rabobank | LIBOR | |||
Mortgage notes payable | |||
Margin added to reference rate (as a percent) | 1.70% | ||
Rutledge Note Payable#6 | SOFR | |||
Mortgage notes payable | |||
Margin added to reference rate (as a percent) | 1.95% | ||
Rutledge Facility | |||
Mortgage notes payable | |||
Principal outstanding | $ 80,000 | $ 112,000 | |
Interest Rate (as a percent) | 2.60% | ||
Book value of collateral | $ 231,751 |
Mortgage Notes, Lines of Cred_4
Mortgage Notes, Lines of Credit and Bonds Payable - Aggregate Maturities and Fair Value (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Aggregate maturities of long-term debt | ||
2024 | $ 2,100 | |
2025 | 27,087 | |
2026 | 84,602 | |
Thereafter | 312,697 | |
Total | 426,486 | |
Level 3 | Mortgage notes payable | Fair value | ||
Aggregate maturities of long-term debt | ||
Fair value of debt | $ 401,300 | $ 522,700 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||||
Sep. 04, 2020 USD ($) a property | Jul. 24, 2018 | Feb. 28, 2022 USD ($) | Jan. 31, 2022 USD ($) | Feb. 28, 2021 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) lease | Jun. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||||||||||
Total lease cost | $ 60,000 | $ 40,000 | $ 120,000 | $ 80,000 | ||||||
Operating lease discount rate | 3.35% | 3.35% | ||||||||
2022 (remaining six months) | $ 115,000 | $ 115,000 | ||||||||
2023 | 183,000 | 183,000 | ||||||||
2024 | 62,000 | 62,000 | ||||||||
2025 | 44,000 | 44,000 | ||||||||
Total future rental payments | 404,000 | 404,000 | ||||||||
Less: imputed interest | (17,000) | (17,000) | ||||||||
Lease Liability | 387,000 | 387,000 | $ 107,000 | |||||||
Approximate percentage of prior decline in common stock price | 40% | |||||||||
Farms acquired and allocation of purchase price | ||||||||||
Net book value of assets with unexercised options | 8,300,000 | 8,300,000 | ||||||||
Net book value of assets with exercised repurchase options | $ 15,800,000 | 15,800,000 | ||||||||
Minimum | ||||||||||
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||||||||||
Amount of monthly payments | 850 | |||||||||
Maximum | ||||||||||
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||||||||||
Amount of monthly payments | $ 13,377 | |||||||||
Office Space | ||||||||||
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||||||||||
Number of leases in place | lease | 4 | |||||||||
Repurchase option agreement | ||||||||||
Farms acquired and allocation of purchase price | ||||||||||
Number of sellers property exercised | property | 1 | |||||||||
Number of acres sold | a | 2,860 | |||||||||
Received non-refundable initial payment | $ 2,900,000 | $ 100,000 | $ 100,000 | $ 300,000 | ||||||
Safe Harbor plan | Maximum | ||||||||||
401(k) Plan | ||||||||||
Company's contributions in Safe Harbor plan | $ 100,000 |
Stockholders' Equity and Non-_3
Stockholders' Equity and Non-controlling Interests - Distributions (Details) $ in Millions | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 USD ($) shares | Jun. 30, 2021 USD ($) | Dec. 31, 2021 shares | Jul. 16, 2021 | |
The Operating Partnership | ||||
Shareholders' Equity | ||||
Parent ownership interest (as a percent) | 97.40% | 97% | ||
Operating Partnership | ||||
Shareholders' Equity | ||||
Noncontrolling ownership interest (as a percent) | 9.97% | 7.60% | ||
Limited partner | Operating Partnership | ||||
Shareholders' Equity | ||||
Parent ownership interest (as a percent) | 97.40% | |||
Common stock | ||||
Shareholders' Equity | ||||
Common stock issued (in shares) | 110,000 | 281,453 | ||
Common stock upon redemption (in shares) | 110,000 | 281,453 | ||
Non-controlling Interests in Operating Partnership | Operating Partnership | ||||
Shareholders' Equity | ||||
Increase (decrease) to non-controlling interest in the Operating Partnership | $ | $ 0.7 | |||
Non-controlling Interests in Operating Partnership | Maximum | Operating Partnership | ||||
Shareholders' Equity | ||||
Increase (decrease) to non-controlling interest in the Operating Partnership | $ | $ 0.1 | |||
Pittman Hough Farms | The Operating Partnership | ||||
Shareholders' Equity | ||||
Noncontrolling ownership interest (as a percent) | 2.60% | 3% | ||
Pittman Hough Farms | Limited partner | Operating Partnership | ||||
Shareholders' Equity | ||||
Ratio for conversion into common shares | 1 | |||
Redeemable Common Units | Limited partner | ||||
Shareholders' Equity | ||||
OP units outstanding for redemption | 1,200,000 | 1,400,000 |
Stockholders' Equity and Non-_4
Stockholders' Equity and Non-controlling Interests - Redeemable non-controlling interest (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||||
May 19, 2022 USD ($) shares | Apr. 15, 2022 $ / shares | Jan. 18, 2022 $ / shares | Oct. 04, 2021 $ / shares shares | Aug. 17, 2021 $ / shares shares | Apr. 15, 2021 $ / shares | Jan. 15, 2021 $ / shares | Mar. 02, 2016 $ / shares shares | Jun. 30, 2022 USD ($) $ / shares shares | Apr. 15, 2022 $ / shares | Jun. 30, 2021 USD ($) $ / shares shares | Apr. 15, 2021 $ / shares | Jun. 30, 2022 USD ($) $ / shares shares | Jun. 30, 2021 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Aug. 17, 2017 $ / shares shares | |
Change in redeemable non-controlling interest | ||||||||||||||||
Opening balance | $ 120,510 | |||||||||||||||
Ending balance | $ 113,680 | $ 113,680 | $ 120,510 | |||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||||||||||||
Dividends declared per common share | $ / shares | $ 0.0500 | $ 0.0500 | $ 0.0500 | $ 0.0500 | $ 0.06 | $ 0.1000 | $ 0.05 | $ 0.1000 | $ 0.11 | $ 0.10 | ||||||
Common stock | ||||||||||||||||
Change in redeemable non-controlling interest | ||||||||||||||||
Common stock upon redemption (in shares) | shares | 110,000 | 281,453 | ||||||||||||||
Redeemable Preferred OP Units | Preferred Share | ||||||||||||||||
Change in redeemable non-controlling interest | ||||||||||||||||
Opening balance | $ 120,510 | $ 120,510 | ||||||||||||||
Opening balance | $ 120,510 | |||||||||||||||
Opening balance (in shares) | shares | 117,000 | 117,000 | 117,000 | |||||||||||||
Distributions paid to non-controlling interest | $ (3,510) | $ (3,510) | ||||||||||||||
Accrued distributions to non-controlling interest | $ 1,680 | 1,755 | ||||||||||||||
Redemption of preferred units (in shares) | shares | (5,000) | |||||||||||||||
Redemption of preferred units | $ (5,000) | |||||||||||||||
Ending balance | $ 113,680 | $ 118,755 | $ 113,680 | $ 118,755 | ||||||||||||
Ending balance | $ 120,510 | |||||||||||||||
Ending balance (in shares) | shares | 112,000 | 117,000 | 112,000 | 117,000 | 117,000 | |||||||||||
Series A Preferred Units | ||||||||||||||||
Stockholders' Equity and Non-controlling Interests | ||||||||||||||||
Percentage of preferential cash distribution | 3% | |||||||||||||||
Liquidation preference | $ / shares | $ 1,000 | |||||||||||||||
Ratio of OP units redeemable into common stock | 1 | |||||||||||||||
Number of trading days | 20 days | |||||||||||||||
Change in redeemable non-controlling interest | ||||||||||||||||
Redemption of preferred units (in shares) | shares | 5,000 | |||||||||||||||
Redemption of preferred units | $ (5,000) | |||||||||||||||
Repurchase of redeemable noncontrolling interest | $ 5,100 | |||||||||||||||
Ending balance (in shares) | shares | 112,000 | |||||||||||||||
Percentage of cumulative preferential dividends | 3% | |||||||||||||||
Distributions payable | $ 1,700 | |||||||||||||||
Series A Preferred Units | Farm acquisitions | ||||||||||||||||
Stockholders' Equity and Non-controlling Interests | ||||||||||||||||
Liquidation value | $ 113,700 | $ 113,700 | $ 120,500 | |||||||||||||
Series A Preferred Units | Farm acquisitions | Illinois | ||||||||||||||||
Stockholders' Equity and Non-controlling Interests | ||||||||||||||||
Issuance of Common units as partial consideration for asset acquisition (in shares) | shares | 117,000 | |||||||||||||||
Series B Participating Preferred Stock | ||||||||||||||||
Change in redeemable non-controlling interest | ||||||||||||||||
Shares issued under underwriting agreement | shares | 6,037,500 | 6,037,500 | ||||||||||||||
Common stock, issue price (in dollars per share) | $ / shares | $ 2.0871798 | $ 25 | ||||||||||||||
Par value | $ / shares | $ 0.01 | |||||||||||||||
Preference dividend (as a percent) | 6% | |||||||||||||||
Conversion of Stock, Shares Converted | shares | 5,806,797 | |||||||||||||||
Less any fractional shares | shares | 12,119,829 |
Stockholders' Equity and Non-_5
Stockholders' Equity and Non-controlling Interests - Share Repurchase Program (Details) - USD ($) $ in Millions | 6 Months Ended | |||
Nov. 07, 2019 | Aug. 01, 2018 | Jun. 30, 2022 | Mar. 15, 2017 | |
Stockholders' Equity and Non-controlling Interests | ||||
Increase in number of authorized shares | 50,000,000 | 30,000,000 | ||
Share repurchase | ||||
Stockholders' Equity and Non-controlling Interests | ||||
Amount of capacity under stock repurchase plan | $ 40.5 | |||
Share repurchase | Common stock | ||||
Stockholders' Equity and Non-controlling Interests | ||||
Shares repurchased (in shares) | 0 | |||
Maximum | Share repurchase | ||||
Stockholders' Equity and Non-controlling Interests | ||||
Amount approved for share repurchase program | $ 25 |
Stockholders' Equity and Non-_6
Stockholders' Equity and Non-controlling Interests - Summary of the non-vested Restricted Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Jul. 01, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | May 06, 2022 | Oct. 29, 2021 | May 07, 2021 | |
Number of Shares | |||||||||
Unvested at the beginning of the period (in shares) | 265,000 | 297,000 | |||||||
Granted (in shares) | 147,000 | ||||||||
Vested (in shares) | (171,000) | ||||||||
Forfeited (in shares) | (8,000) | ||||||||
Unvested at the end of the period (in shares) | 265,000 | 265,000 | 297,000 | ||||||
Weighted Average Grant Date Fair Value | |||||||||
Unvested at the beginning of the period (in dollars per share) | $ 10.86 | $ 8.87 | |||||||
Granted (in dollars per share) | 11.75 | ||||||||
Vested (in dollars per share) | 8.13 | ||||||||
Forfeited (in dollars per share) | 11.32 | ||||||||
Unvested at the end of the period (in dollars per share) | $ 10.86 | $ 10.86 | $ 8.87 | ||||||
Stock offering, maximum sales value | $ 100,000 | $ 75,000 | |||||||
Issuance of stock | $ 39 | ||||||||
Deferred offering costs incurred | 100 | $ 200 | |||||||
Deferred offering costs | $ 83 | 83 | $ 40 | ||||||
Murray Wise Associates, LLC ("MWA") | |||||||||
Weighted Average Grant Date Fair Value | |||||||||
Share-based compensation expense | 200 | 400 | |||||||
ATM Program | |||||||||
Weighted Average Grant Date Fair Value | |||||||||
Stock offering, maximum sales value | 75,000 | 75,000 | $ 75,000 | ||||||
Net proceeds | $ 98,400 | ||||||||
Prior $50 million ATM Program | |||||||||
Weighted Average Grant Date Fair Value | |||||||||
Issuance of stock (in shares) | 7,031,088 | ||||||||
Gross proceeds | $ 99,500 | ||||||||
Net proceeds | $ 98,400 | ||||||||
$75.0 million ATM Program | |||||||||
Weighted Average Grant Date Fair Value | |||||||||
Issuance of stock (in shares) | 4,594,625 | ||||||||
Gross proceeds | $ 63,100 | ||||||||
Net proceeds | 62,400 | ||||||||
$100.0 million ATM Program | |||||||||
Weighted Average Grant Date Fair Value | |||||||||
Stock offering, maximum sales value | 100,000 | $ 100,000 | $ 100,000 | ||||||
Issuance of stock (in shares) | 2,436,463 | ||||||||
Gross proceeds | $ 36,400 | ||||||||
Net proceeds | 36,100 | ||||||||
Restricted shares | |||||||||
Weighted Average Grant Date Fair Value | |||||||||
Share-based compensation expense | 600 | $ 300 | 1,200 | $ 600 | |||||
Total unrecognized compensation costs related to non-vested stock awards | $ 2,400 | $ 2,400 | $ 1,600 | ||||||
Weighted average period over which unrecognized compensation costs is expected to be recognized | 2 years 1 month 6 days | ||||||||
Restricted shares | Third Amended Plan | |||||||||
Weighted Average Grant Date Fair Value | |||||||||
Maximum shares of common stock to be issued | 1,900,000 | ||||||||
Number of shares available for future grant | 600,000 | 600,000 | |||||||
Subsequent event | ATM Program | |||||||||
Weighted Average Grant Date Fair Value | |||||||||
Issuance of stock (in shares) | 247,416 | ||||||||
Net proceeds | $ 3,500 |
Stockholders' Equity and Non-_7
Stockholders' Equity and Non-controlling Interests - Earnings (loss) per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Numerator: | ||||
Net income attributable to Farmland Partners Inc. | $ 2,916 | $ (2,735) | $ 4,021 | $ (375) |
Less: Nonforfeitable distributions allocated to unvested restricted shares | (16) | (14) | (31) | (28) |
Net income (loss) available to common stockholders of Farmland Partners Inc. | $ 2,060 | $ (5,804) | $ 2,310 | $ (6,523) |
Denominator: | ||||
Weighted-average number of common shares - basic (in shares) | 50,362 | 31,072 | 48,084 | 30,747 |
Weighted-average number of common shares - diluted (in shares) | 50,362 | 31,072 | 48,084 | 30,747 |
Income (loss) per share attributable to common stockholders - basic | $ 0.04 | $ (0.19) | $ 0.05 | $ (0.21) |
Income (loss) per share attributable to common stockholders - diluted | $ 0.04 | $ (0.19) | $ 0.05 | $ (0.21) |
Preferred Units | ||||
Numerator: | ||||
Less: Distributions and dividends | $ (840) | $ (3,055) | $ (1,680) | $ (6,120) |
Stockholders' Equity and Non-_8
Stockholders' Equity and Non-controlling Interests - Units held by the non-controlling interest (Details) - shares shares in Millions | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Compensation-related shares | ||
Excluded from diluted earnings per share calculation | ||
Anti-dilutive compensation-related shares outstanding | 0.3 | 0.3 |
Operating Partnership | ||
Excluded from diluted earnings per share calculation | ||
Weighted average number of units | 1.3 | 1.5 |
Stockholders' Equity and Non-_9
Stockholders' Equity and Non-controlling Interests - Equity awards and units outstanding (Details) - shares | Jun. 30, 2022 | Dec. 31, 2021 |
Class of Stock [Line Items] | ||
Equity awards and units outstanding | 53,989 | 46,831 |
Restricted shares | ||
Class of Stock [Line Items] | ||
Equity awards and units outstanding | 265 | 297 |
Limited partner | ||
Class of Stock [Line Items] | ||
Equity awards and units outstanding | 1,247 | 1,357 |
Common stock | ||
Class of Stock [Line Items] | ||
Equity awards and units outstanding | 52,477 | 45,177 |
Hedge Accounting (Details)
Hedge Accounting (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 USD ($) item | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) item | Jun. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) item | |
Derivative Contracts | |||||
Fair value of derivative instruments | $ 698 | $ 698 | |||
Movements in other comprehensive income | |||||
Beginning accumulated derivative instrument gain or loss | 279 | $ (2,380) | $ (2,380) | ||
Net change associated with current period hedging activities | 330 | $ (266) | 1,265 | 942 | 1,676 |
Amortization of frozen AOCI on de-designated hedge | 141 | 236 | 313 | 530 | 983 |
Closing accumulated derivative instrument gain or loss | 1,857 | 1,857 | $ 279 | ||
Designated as Hedging Instrument | Interest rate contract | |||||
Derivative Contracts | |||||
Amount of noncash loss recognized | 400 | 300 | 700 | 2,300 | |
Hedging transactions, net change | 500 | 1,600 | 1,500 | ||
Amortization of frozen AOCI | $ 100 | 200 | $ 300 | 500 | |
Designated as Hedging Instrument | Interest rate contract | Maximum | |||||
Derivative Contracts | |||||
Hedging transactions, net change | (100) | ||||
Designated as Hedging Instrument | Interest Rate Swap | |||||
Derivative Contracts | |||||
Number of interest rate derivatives held | item | 1 | 1 | 1 | ||
Designated as Hedging Instrument | Cash Flow Hedging | Interest Rate Swap | |||||
Derivative Contracts | |||||
Derivative term of contract | 6 years | ||||
Percentage of debt outstanding amount covered by hedging | 50% | 50% | |||
Terminated hedge fair value | $ 2,600 | $ 2,600 | |||
Hedge termination fees | 100 | 200 | |||
Notional amount | 33,200 | 33,200 | |||
Fair value of derivative instruments | 698 | 698 | |||
Movements in other comprehensive income | |||||
Amortization of frozen AOCI on de-designated hedge | $ 100 | $ 200 | $ 300 | $ 500 |
Income Taxes - TRS income (loss
Income Taxes - TRS income (loss) before provision for income taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Taxes | ||||
Net income (loss) before income tax expense | $ 3,089 | $ (2,865) | $ 4,227 | $ (388) |
TRS | ||||
Income Taxes | ||||
United States | 1,690 | |||
Net income (loss) before income tax expense | $ 1,690 |
Income Taxes - Schedule of fede
Income Taxes - Schedule of federal and state income tax provision (benefit) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2022 | Jun. 30, 2022 | |
Deferred: | ||
Income tax expense | $ 96 | $ 96 |
TRS | ||
Current: | ||
Federal | 86 | |
Deferred: | ||
Federal | 10 | |
Income tax expense | $ 96 |
Income Taxes - Schedule of TRS
Income Taxes - Schedule of TRS deferred tax assets (Details) - TRS $ in Thousands | Jun. 30, 2022 USD ($) |
Deferred tax assets: | |
Net operating loss | $ 828 |
Inventory reserve | 16 |
Total deferred tax assets | 844 |
Deferred tax liabilities: | |
Net operating loss | (34) |
Inventory reserve | (49) |
Total deferred tax liabilities | (83) |
Valuation Allowance | (771) |
Net deferred taxes | $ (10) |
Income Taxes - Additional infor
Income Taxes - Additional information (Details) - TRS $ in Thousands | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Income Taxes [Line Items] | |
Increase/(decrease) in valuation allowance | $ (300) |
Unrecognized tax due pertaining to uncertain tax positions | $ 500 |
Income Taxes - Net operating lo
Income Taxes - Net operating losses and tax credit carryforwards (Details) - TRS $ in Thousands | Jun. 30, 2022 USD ($) |
Tax Year 2017 | |
Income Taxes | |
Net operating losses | $ 3,532 |
State | |
Income Taxes | |
Net operating losses | $ 1,466 |
Income Taxes - Components of in
Income Taxes - Components of income tax rate (Details) - TRS | 6 Months Ended |
Jun. 30, 2022 | |
Income Taxes [Line Items] | |
Statutory Rate | 21% |
State Tax | 0.61% |
Valuation Allowance | (17.39%) |
Total | 4.22% |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions | 6 Months Ended | ||
Jul. 26, 2022 | Jul. 01, 2022 | Jun. 30, 2022 | |
ATM Program | |||
Subsequent Events | |||
Net proceeds | $ 98.4 | ||
Subsequent event | ATM Program | |||
Subsequent Events | |||
Common stock issued (in shares) | 247,416 | ||
Net proceeds | $ 3.5 | ||
Limited partner | Subsequent event | |||
Subsequent Events | |||
Dividend declared (per share) | $ 0.06 |