DENVER, Nov. 8, 2017 /PRNewswire/ -- Farmland
Partners Inc. (NYSE: FPI) (the "Company") today reported financial
results for the quarter ended September 30,
2017.
Third Quarter Highlights
- Reported total operating revenues of $12.0 million for the three months ended
September 30, 2017, a 73% increase
over the same period in 2016
- Reported operating income of $6.1
million for the three months ended September 30, 2017, a 179% increase over the same
period
- Reported basic net income available to common stockholders of
$0.01 per share for the quarter ended
September 30, 2017, as compared to
($0.06) per share for the same period
in 2016
- Reported AFFO per share of $0.09
for the quarter ended September 30,
2017, equal to what was reported for the same period in
2016; AFFO per share for the period was negatively impacted
$0.03 per share by dividends from the
Company's recently-issued Series B participating preferred stock
because proceeds are not yet deployed.
- Reported Adjusted EBITDA of $9.0
million for the quarter ended September 30, 2017, an 89% increase over the same
period in 2016
- Raised $144.2 million of net
proceeds through the issuance of approximately 6.0 million shares
of 6.00% Series B participating preferred stock in an underwritten
public offering
- Repurchased $7.4 million shares
of common stock during the quarter ended September 30, 2017 and $2.6 million shares of common stock subsequent to
the end of the quarter through October
4th for a total of $10.0
million shares at a weighted average price of $8.92 per share
- Entered into an agreement to purchase $110 million of permanent crop farmland in
California, which, upon closing,
will be leased to the world's leading almond grower
- Declared a dividend on the Company's common stock of
$0.1275 per share ($0.51 annualized) for the fourth quarter of 2017
– a 5.93% distribution rate based on the Company's closing stock
price on November 7, 2017
"The Olam acquisition was an excellent start to investing our
Series B participating preferred proceeds at yields exceeding our
cost of capital," said Paul Pittman,
CEO of the Company. "Leasing trends are positive this fall. We are
seeing material increases in rents on the new leases we are
currently negotiating in the Corn Belt."
Financial Results
The Company recorded net income of $2.6
million and basic net income available to common
stockholders of $0.01 per share for
the three months ended September 30,
2017, as compared to net income of $0.1 million and basic net income available to
common stockholders of ($0.06) per
share for the same period in 2016.
Adjusted Funds from Operations ("AFFO") was $3.3 million for the three months ended
September 30, 2017, as compared to
$1.7 million for the three months
ended September 30, 2016, and
$7.5 million for the nine months
ended September 30, 2017, as compared
to $3.7 million for the nine months
ended September 30, 2016. AFFO
per fully diluted share was $0.09 for
the three months ended September 30,
2017 equal to what was reported for the three months ended
September 30, 2016, and $0.20 for the nine months ended September 30, 2017, also equal to what was
reported for the nine months ended September
30, 2016. AFFO per share for the three months ended
September 30, 2017 would have been
$0.12 but for the negative impact of
$0.03 due to the dividends on the
Series B participating preferred stock. The Company will not see
the positive revenue impact of investing a portion of the net
proceeds from the preferred offering in the Olam transaction until
2018, as the Olam transaction is currently expected to close in
December 2017.
See "Non-GAAP Financial Measures" for complete definitions of
AFFO and Adjusted EBITDA and the financial tables accompanying this
press release for reconciliations of net income to AFFO and
Adjusted EBITDA.
Operating
Results
The Company recorded total operating revenues of $12.0 million and net operating income of
$10.6 million for the three months
ended September 30, 2017, as compared
to total operating revenues of $7.0
million and net operating income of $6.4 million for the same period in 2016. This
increase in revenue is mostly due to the increased size of the
portfolio, especially the acquisition of the specialty crop
properties in the AFCO acquisition. The Company's operating income
margin increased to 51% during the three months ended September 30, 2017 from 32% for the same period
last year due to the efficiencies associated with the increased
scale of the Company.
The Company decreased its number of employees from 19 to 16
during the quarter ended September 30,
2017.
See "Non-GAAP Financial Measures" for a complete definition of
net operating income and operating income margin the financial
table included in this press release for reconciliations of total
operating revenues to net operating income and for the calculation
of operating income margin.
Acquisition Activity
The Company did not close any acquisitions during the quarter.
Year to date, the company has completed $373.5 million in acquisitions.
During the quarter, the Company announced that it had entered
into an agreement to acquire approximately 5,100 acres of permanent
crop farmland in California from
Olam International Limited ("Olam") for a purchase price of
$110 million. The properties are
located in California's Central
Valley and are dedicated to the production of almonds, pistachios
and walnuts. At closing of the acquisition, the Company will enter
into a 25-year triple-net lease agreement with Olam on a revenue
share basis. During the term of the lease agreement, Olam will
operate and maintain the properties and improvements. Closing of
the acquisition is expected in December
2017, subject to customary conditions.
Capital Markets Activity and Balance Sheet
During the quarter, the Company issued 6,037,500 shares of newly
designated 6.00% Series B participating preferred stock. Net
proceeds from the offering were approximately $144.2 million, after deducting the underwriting
discount and estimated offering expenses payable by the
Company.
During the quarter, the Company also repurchased $7.4 million shares of common stock at a weighted
average price of $8.85 and
$2.6 million shares of common stock
subsequent to the quarter for a total of $10.0 million shares of common stock at a
weighted average price of $8.92 per
share. As of the date of this press release, the Company has
approximately 38.1 million shares of common stock outstanding on a
fully diluted basis, including OP units.
The Company had total debt outstanding of $465.8 million at September 30, 2017, compared to total debt
outstanding of $303.3 million a year
prior. The Company's ratio of net debt to gross assets was 33.8% at
September 30, 2017 compared to 47.9%
at September 30, 2016.
2017 Earnings Guidance
The Company is reaffirming its previously issued AFFO/share
guidance. On August 17, 2017, the
Company issued 6,037,500 shared of participating preferred Series B
stock. The impact of Series B dividends on AFFO per share of common
stock is expected to be approximately $0.03
cents in 3Q17 and $0.06 cents
in 4Q17. Management expects higher than projected revenues from
both row and specialty crops and operating expense cost controls to
offset the impact of dividends associated with the Series B stock.
Please refer to page 15 of the Company's "Q3 2017 Supplemental
Package" for more detail.
Fourth Quarter 2017 Dividend Declaration
The Company announced that its Board of Directors has approved a
quarterly cash dividend of $0.1275
per share to be paid on January 16,
2018 to stockholders of record at the close of business on
January 2, 2018. The annualized
dividend of $0.51 per share
represents an annual distribution rate of 5.93% based on the
Company's closing stock price on November 7,
2017.
The Company's Board of Directors has also approved a quarterly
cash dividend of $0.375 per share of
6.00% Series B participating preferred stock payable on
January 2, 2017 to stockholders on
record on December 15, 2017.
Conference Call Information
The Company has scheduled a conference call on Thursday, November 9, 2017 at 11:00 a.m. (Eastern Time) to discuss its
financial results for the third quarter ended September 30, 2017. The conference call can be
accessed live over the phone toll-free by dialing (866) 262-6804,
or for international callers by dialing (412) 902-4107.
Participants can reference the Farmland Partners Inc. Second
Quarter 2017 Earnings Call. The conference call will also be
available via a live listen-only webcast and can be accessed
through the Investor Relations section of the Company's website,
www.farmlandpartners.com. A replay of the conference call will be
available beginning November 9, 2017
at 1:00 p.m. (Eastern Time) until
November 23, 2017 at 11:59 p.m. (Eastern Time), by dialing (877)
344-7529 (U.S.) or (412) 317-0088 (International); passcode:
10114099. A replay of the webcast will also be accessible on the
Investor Relations website for a limited time following the
event.
About Farmland Partners Inc.
Farmland Partners Inc. is an internally managed real estate
company that owns and seeks to acquire high-quality North American
farmland and makes loans to farmers secured by farm real estate. As
of the date of this release, the Company owns or has under contract
over 160,000 acres in 17 states, including Alabama, Arkansas, California, Colorado, Florida, Georgia, Illinois, Kansas, Louisiana, Michigan, Mississippi, Nebraska, North
Carolina, South Carolina,
South Dakota, Texas and Virginia. We have approximately x crop types
and x tenants. The Company elected to be taxed as a real estate
investment trust, or REIT, for U.S. federal income tax purposes,
commencing with the taxable year ended December 31, 2014.
Forward-Looking Statements
This press release includes "forward-looking statements" within
the meaning of the federal securities laws, including, without
limitation, statements with respect to proposed and pending
acquisitions, including the Olam acquisition, the impact of
dividends payable on the Series B participating preferred stock on
AFFO, financing activities, crop yields and prices and anticipated
rental rates. Forward-looking statements generally can be
identified by the use of forward-looking terminology such as "may,"
"should," "could," "would," "predicts," "potential," "continue,"
"expects," "anticipates," "future," "intends," "plans," "believes,"
"estimates" or similar expressions or their negatives, as well as
statements in future tense. Although the Company believes that the
expectations reflected in such forward-looking statements are based
upon reasonable assumptions, beliefs and expectations, such
forward-looking statements are not predictions of future events or
guarantees of future performance and our actual results could
differ materially from those set forth in the forward-looking
statements. Some factors that might cause such a difference include
the following: general volatility of the capital markets and the
market price of the Company's common stock or Series B
participating preferred stock, changes in the Company's business
strategy, availability, terms and deployment of capital, the
Company's ability to refinance existing indebtedness at or prior to
maturity on favorable terms, or at all, availability of qualified
personnel, changes in the Company's industry, interest rates or the
general economy, adverse developments related to crop yields or
crop prices, the degree and nature of the Company's competition,
the timing, price or amount of repurchases, if any, under the
Company's share repurchase program, the ability to consummate
acquisitions under contract and the other factors described in the
section entitled "Risk Factors" in our Annual Report on Form 10-K
for the year ended December 31, 2016,
and our other filings with the Securities and Exchange
Commission. Any forward-looking information presented herein
is made only as of the date of this press release, and we do not
undertake any obligation to update or revise any forward-looking
information to reflect changes in assumptions, the occurrence of
unanticipated events, or otherwise.
Farmland Partners
Inc.
|
Consolidated Balance
Sheets
|
As of September 30,
2017 and December 31, 2016
|
(Unaudited, in
thousands except par value and share data)
|
|
|
|
September
30,
|
|
December 31,
|
|
|
2017
|
|
2016
|
ASSETS
|
|
|
|
|
|
|
Land, at
cost
|
|
$
|
835,986
|
|
$
|
551,392
|
Grain
facilities
|
|
|
10,732
|
|
|
6,856
|
Groundwater
|
|
|
12,072
|
|
|
11,933
|
Irrigation
improvements
|
|
|
50,660
|
|
|
15,988
|
Drainage
improvements
|
|
|
8,146
|
|
|
4,757
|
Permanent
plantings
|
|
|
51,868
|
|
|
1,845
|
Other
|
|
|
6,615
|
|
|
2,901
|
Construction in
progress
|
|
|
7,843
|
|
|
1,615
|
Real estate, at
cost
|
|
|
983,922
|
|
|
597,287
|
Less accumulated
depreciation
|
|
|
(8,309)
|
|
|
(3,224)
|
Total real estate,
net
|
|
|
975,613
|
|
|
594,063
|
Deposits
|
|
|
1,161
|
|
|
5,721
|
Cash
|
|
|
129,298
|
|
|
47,166
|
Notes and interest
receivable, net
|
|
|
6,951
|
|
|
2,843
|
Deferred offering
costs
|
|
|
280
|
|
|
216
|
Deferred financing
fees, net
|
|
|
370
|
|
|
—
|
Accounts receivable,
net
|
|
|
3,205
|
|
|
4,181
|
Inventory
|
|
|
92
|
|
|
283
|
Prepaid and other
assets
|
|
|
2,746
|
|
|
1,056
|
TOTAL
ASSETS
|
|
$
|
1,119,716
|
|
$
|
655,529
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
Mortgage notes, line
of credit and bonds payable, net
|
|
$
|
464,494
|
|
$
|
308,779
|
Dividends and
distributions payable
|
|
|
4,882
|
|
|
2,938
|
Accrued
interest
|
|
|
2,886
|
|
|
1,538
|
Accrued property
taxes
|
|
|
1,523
|
|
|
1,225
|
Deferred revenue (See
Note 2)
|
|
|
3,876
|
|
|
982
|
Accrued
expenses
|
|
|
3,525
|
|
|
4,558
|
Total
liabilities
|
|
|
481,186
|
|
|
320,020
|
|
|
|
|
|
|
|
Participating
preferred stock
|
|
|
144,223
|
|
|
—
|
Redeemable
non-controlling interests in operating partnership, preferred
units
|
|
|
119,633
|
|
|
119,915
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
Common stock, $0.01
par value, 500,000,000 shares authorized; 32,632,150 shares issued
and outstanding at September 30, 2017, and 17,351,446 shares issued
and outstanding at December 31, 2016
|
|
|
322
|
|
|
172
|
Additional paid in
capital
|
|
|
342,313
|
|
|
172,100
|
Retained
earnings
|
|
|
2,665
|
|
|
4,103
|
Cumulative
dividends
|
|
|
(26,948)
|
|
|
(14,473)
|
Non-controlling
interests in operating partnership
|
|
|
56,322
|
|
|
53,692
|
Total
equity
|
|
|
374,674
|
|
|
215,594
|
|
|
|
|
|
|
|
TOTAL LIABILITIES,
SERIES B PARTICIPATING PREFERRED STOCK, REDEEMABLE NON-CONTROLLING
INTERESTS IN OPERATING PARTNERSHIP AND EQUITY
|
|
$
|
1,119,716
|
|
$
|
655,529
|
Farmland Partners
Inc.
|
Consolidated
Statements of Operations
|
For the three and
nine months ended September 30, 2017 and 2016
|
(Unaudited, in
thousands except per share amounts)
|
|
|
|
For the Three
Months Ended
|
|
For the Nine
Months Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
OPERATING
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
income
|
|
$
|
11,107
|
|
$
|
6,164
|
|
$
|
28,381
|
|
$
|
16,462
|
Tenant
reimbursements
|
|
|
474
|
|
|
112
|
|
|
1,230
|
|
|
276
|
Other
revenue
|
|
|
465
|
|
|
670
|
|
|
1,044
|
|
|
931
|
Total operating
revenues
|
|
|
12,046
|
|
|
6,946
|
|
|
30,655
|
|
|
17,669
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation,
depletion and amortization
|
|
|
2,107
|
|
|
419
|
|
|
5,651
|
|
|
1,102
|
Property operating
expenses
|
|
|
1,400
|
|
|
548
|
|
|
4,399
|
|
|
1,529
|
Acquisition and due
diligence costs
|
|
|
180
|
|
|
1,712
|
|
|
878
|
|
|
1,818
|
General and
administrative expenses
|
|
|
1,707
|
|
|
1,587
|
|
|
5,840
|
|
|
4,770
|
Legal and
accounting
|
|
|
450
|
|
|
330
|
|
|
1,151
|
|
|
882
|
Other operating
expenses
|
|
|
88
|
|
|
160
|
|
|
363
|
|
|
248
|
Total operating
expenses
|
|
|
5,932
|
|
|
4,756
|
|
|
18,282
|
|
|
10,349
|
OPERATING
INCOME
|
|
|
6,114
|
|
|
2,190
|
|
|
12,373
|
|
|
7,320
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER (INCOME)
EXPENSE:
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
income
|
|
|
(135)
|
|
|
(72)
|
|
|
(157)
|
|
|
(133)
|
(Gain) loss on
disposition of assets
|
|
|
(44)
|
|
|
—
|
|
|
48
|
|
|
—
|
Interest
expense
|
|
|
3,683
|
|
|
2,065
|
|
|
9,852
|
|
|
7,869
|
Total other
expense
|
|
|
3,504
|
|
|
1,993
|
|
|
9,743
|
|
|
7,736
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
before income tax expense
|
|
|
2,610
|
|
|
197
|
|
|
2,630
|
|
|
(416)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
|
—
|
|
|
97
|
|
|
—
|
|
|
97
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
(LOSS)
|
|
|
2,610
|
|
|
100
|
|
|
2,630
|
|
|
(513)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (income) loss
attributable to non-controlling interests in operating
partnership
|
|
|
(394)
|
|
|
(30)
|
|
|
(353)
|
|
|
37
|
Net (income) loss
attributable to redeemable non-controlling interests in operating
partnership
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to the Company
|
|
|
2,216
|
|
|
70
|
|
|
2,277
|
|
|
(412)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonforfeitable
distributions allocated to unvested restricted
shares
|
|
|
(36)
|
|
|
(24)
|
|
|
(116)
|
|
|
(72)
|
Distributions on
redeemable non-controlling interests in operating partnership,
common units
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(113)
|
Distributions on
redeemable non-controlling interests in operating partnership,
Series A preferred units and dividends on Series B Participating
Preferred Stock
|
|
|
(1,959)
|
|
|
(887)
|
|
|
(3,714)
|
|
|
(2,057)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
available to common stockholders of Farmland Partners
Inc.
|
|
$
|
221
|
|
$
|
(841)
|
|
$
|
(1,553)
|
|
$
|
(2,654)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted per
common share data:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income
(loss) available to common stockholders
|
|
$
|
0.01
|
|
$
|
(0.06)
|
|
$
|
(0.05)
|
|
$
|
(0.21)
|
Diluted net income
(loss) available to common stockholders
|
|
$
|
0.01
|
|
$
|
(0.06)
|
|
$
|
(0.05)
|
|
$
|
(0.21)
|
Basic weighted
average common shares outstanding
|
|
|
32,862
|
|
|
13,683
|
|
|
30,695
|
|
|
12,663
|
Diluted weighted
average common shares outstanding
|
|
|
32,862
|
|
|
13,683
|
|
|
30,695
|
|
|
12,663
|
Dividends declared
per common share
|
|
$
|
0.1275
|
|
$
|
0.1275
|
|
$
|
0.3825
|
|
$
|
0.3825
|
Farmland Partners
Inc.
|
Reconciliation of
Non-GAAP Measures
|
For the three and
nine months ended September 30, 2017 and 2016
|
(Unaudited, in
thousands except per share amounts)
|
|
|
|
For the three months ended
September 30,
|
|
For the nine months ended
September 30,
|
(in thousands
except per share amounts)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net income
(loss)
|
|
$
|
2,610
|
|
$
|
100
|
|
$
|
2,630
|
|
$
|
(513)
|
Depreciation,
depletion and amortization
|
|
|
2,107
|
|
|
419
|
|
|
5,651
|
|
|
1,102
|
FFO
|
|
|
4,717
|
|
|
519
|
|
|
8,281
|
|
|
589
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock based
compensation
|
|
|
309
|
|
|
333
|
|
|
1,091
|
|
|
889
|
Indirect equity
offering costs
|
|
|
—
|
|
|
24
|
|
|
—
|
|
|
72
|
Real estate related
acquisition and due diligence costs
|
|
|
250
|
|
|
1,735
|
|
|
1,760
|
|
|
4,172
|
Dividends on Series B
Participating Preferred Stock and distributions on Series A
preferred units
|
|
|
(1,959)
|
|
|
(887)
|
|
|
(3,714)
|
|
|
(2,057)
|
AFFO
|
|
$
|
3,317
|
|
$
|
1,724
|
|
$
|
7,418
|
|
$
|
3,665
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO per diluted
weighted average share data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO weighted average
common shares
|
|
|
38,997
|
|
|
19,711
|
|
|
37,118
|
|
|
18,576
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share available to common stockholders
|
|
$
|
0.01
|
|
$
|
(0.06)
|
|
$
|
(0.05)
|
|
$
|
(0.21)
|
Income available to
redeemable non-controlling interest and non-controlling interest in
operating partnership
|
|
|
0.06
|
|
|
0.07
|
|
|
0.12
|
|
|
0.19
|
Depreciation,
depletion and amortization
|
|
|
0.05
|
|
|
0.02
|
|
|
0.15
|
|
|
0.06
|
Stock based
compensation
|
|
|
0.01
|
|
|
0.02
|
|
|
0.03
|
|
|
0.05
|
Real estate related
acquisition and due diligence costs
|
|
|
0.01
|
|
|
0.09
|
|
|
0.05
|
|
|
0.22
|
Dividends on Series B
Participating Preferred Stock and distributions on Series A
preferred units
|
|
|
(0.05)
|
|
|
(0.05)
|
|
|
(0.10)
|
|
|
(0.11)
|
AFFO per diluted
weighted average share
|
|
$
|
0.09
|
|
$
|
0.09
|
|
$
|
0.20
|
|
$
|
0.20
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended
|
|
For the nine months
ended
|
|
|
September
30,
|
|
September
30,
|
(in
thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net income
(loss)
|
|
$
|
2,610
|
|
$
|
100
|
|
$
|
2,630
|
|
$
|
(513)
|
Interest
expense
|
|
|
3,683
|
|
|
2,065
|
|
|
9,852
|
|
|
7,869
|
Income tax
expense
|
|
|
—
|
|
|
97
|
|
|
—
|
|
|
97
|
Depreciation,
depletion and amortization
|
|
|
2,107
|
|
|
419
|
|
|
5,651
|
|
|
1,102
|
EBITDA
|
|
$
|
8,400
|
|
$
|
2,681
|
|
$
|
18,133
|
|
$
|
8,555
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
|
309
|
|
|
333
|
|
|
1,091
|
|
|
889
|
Indirect equity
offering costs
|
|
|
—
|
|
|
24
|
|
|
—
|
|
|
72
|
Real estate related
acquisition and due diligence costs
|
|
|
250
|
|
|
1,735
|
|
|
1,760
|
|
|
1,901
|
Adjusted
EBITDA
|
|
$
|
8,959
|
|
$
|
4,773
|
|
$
|
20,984
|
|
$
|
11,417
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
For the Nine
Months Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Total operating
revenues
|
$
|
12,046
|
|
$
|
6,946
|
|
$
|
30,655
|
|
$
|
17,669
|
Property operating
expenses
|
|
1,400
|
|
|
548
|
|
|
4,399
|
|
|
1,529
|
Net operating
income
|
|
|
10,646
|
|
|
6,398
|
|
|
26,256
|
|
|
16,140
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
For the Nine
Months Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Operating
income
|
|
|
6,114
|
|
|
2,190
|
|
|
12,373
|
|
|
7,320
|
Total operating
revenues
|
|
12,046
|
|
|
6,946
|
|
|
30,655
|
|
|
17,669
|
Operating income
margin
|
|
|
51%
|
|
|
32%
|
|
|
40%
|
|
|
41%
|
Non-GAAP Financial Measures
The Company considers the following non-GAAP measures as useful
to investors as key supplemental measures of its performance: FFO,
NOI, AFFO, EBITDA and Adjusted EBITDA. These non-GAAP financial
measures should be considered along with, but not as alternatives
to, net income or loss as a measure of the Company's operating
performance. FFO, NOI, AFFO, EBITDA and Adjusted EBITDA, as
calculated by the Company, may not be comparable to other companies
that do not define such terms exactly as the Company.
FFO
The Company calculates FFO in accordance with the standards
established by the National Association of Real Estate Investment
Trusts, or NAREIT. NAREIT defines FFO as net income (loss)
(calculated in accordance with GAAP), excluding gains (or losses)
from sales of depreciable operating property, plus real estate
related depreciation, depletion and amortization (excluding
amortization of deferred financing costs), and after adjustments
for unconsolidated partnerships and joint ventures. Management
presents FFO as a supplemental performance measure because it
believes that FFO is beneficial to investors as a starting point in
measuring the Company's operational performance. Specifically, in
excluding real estate related depreciation and amortization and
gains and losses from sales of depreciable operating properties,
which do not relate to or are not indicative of operating
performance, FFO provides a performance measure that, when compared
year over year, captures trends in occupancy rates, rental rates
and operating costs. The Company also believes that, as a widely
recognized measure of the performance of REITs, FFO will be used by
investors as a basis to compare the Company's operating performance
with that of other REITs. However, other equity REITs may not
calculate FFO in accordance with the NAREIT definition as the
Company does, and, accordingly, the Company's FFO may not be
comparable to such other REITs' FFO.
AFFO
The Company calculates AFFO by adjusting FFO to exclude the
income and expenses that the Company believes are not reflective of
the sustainability of the Company's ongoing operating performance,
including, but not limited to, real estate related acquisition and
due diligence costs and stock-based compensation.
Changes in GAAP accounting and reporting rules that were put in
effect after the establishment of NAREIT's definition of FFO in
1999 result in the inclusion of a number of items in FFO that do
not correlate with the sustainability of the Company's operating
performance. Therefore, in addition to FFO, the Company
presents AFFO and AFFO per share, fully diluted, both of which are
non-GAAP measures. Management considers AFFO a useful
supplemental performance metric for investors as it is more
indicative of the Company's operational performance than FFO. AFFO
is not intended to represent cash flow or liquidity for the period,
and is only intended to provide an additional measure of the
Company's operating performance. Even AFFO, however, does not
properly capture the timing of cash receipts, especially in
connection with full-year rent payments under lease agreements
entered into in connection with newly acquired farms. Management
considers AFFO per share, fully diluted to be a supplemental metric
to GAAP earnings per share. AFFO per share, fully diluted provides
additional insight into how the Company's operating performance
could be allocated to potential shares outstanding at a specific
point in time. Management believes that AFFO is a widely recognized
measure of the operations of REITs, and presenting AFFO will enable
investors to assess the Company's performance in comparison to
other REITs. However, other REITs may use different methodologies
for calculating AFFO and AFFO per share, fully diluted and,
accordingly, the Company's AFFO and AFFO per share, fully diluted
may not always be comparable to AFFO and AFFO per share amounts
calculated by other REITs. AFFO and AFFO per share, fully diluted
should not be considered as an alternative to net income (loss) or
earnings per share (determined in accordance with GAAP) as an
indication of financial performance, or as an alternative to net
income (loss) earnings per share (determined in accordance with
GAAP) as a measure of the Company's liquidity, nor are they
indicative of funds available to fund the Company's cash needs,
including its ability to make distributions.
EBITDA and Adjusted EBITDA
Earnings Before Interest, Taxes, Depreciation and Amortization
("EBITDA") is a key financial measure used to evaluate the
Company's operating performance but should not be construed as an
alternative to operating income, cash flows from operating
activities or net income, in each case as determined in accordance
with GAAP. The Company believes that EBITDA is a standard
performance measure commonly reported and widely used by analysts
and investors in the Company's industry. However, while EBITDA is a
performance measure widely used across several industries, the
Company does not believe that it correctly captures the Company's
business operating performance because it includes non-cash
expenses and recurring adjustments that are necessary to better
understand the Company's business operating performance.
Therefore, in addition to EBITDA, management uses Adjusted EBITDA,
a non-GAAP measure.
The Company calculates Adjusted EBITDA by adjusting EBITDA for
certain items such as stock-based compensation and real estate
related acquisition and due diligence costs that the Company
considers necessary to understand its operating performance. The
Company believes that Adjusted EBITDA provides useful supplemental
information to investors regarding the Company's ongoing operating
performance that, when considered with net income and EBITDA, is
beneficial to an investor's understanding of the Company's
operating performance. However, EBITDA and Adjusted EBITDA have
limitations as analytical tools and should not be considered in
isolation or as a substitute for analysis of the Company's results
as reported under GAAP.
Net Operating Income
The Company calculates net operating income as total operating
revenues (rental income, tenant reimbursements and other revenue)
less property operating expenses (direct property expenses and real
estate taxes). Since net operating income excludes general and
administrative expenses, interest expense, depreciation and
amortization, acquisition-related expenses, other income and losses
and extraordinary items, it provides a performance measure that,
when compared year over year, reflects the revenues and expenses
directly associated with owning and leasing farmland real estate,
providing a perspective not immediately apparent from net income.
However, net operating income should not be viewed as an
alternative measure of the Company's financial performance since it
does not reflect general and administrative expenses, interest
expense, depreciation and amortization costs, other income and
losses.
Operating Income Margin
The Company calculates operating income margin as Operating
Income divided by Total Revenues, expressed as a percentage. The
Company believes that operating income margin is a useful measure
in managing the business and is beneficial to an investor's
understanding of the Company's operating performance.
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content:http://www.prnewswire.com/news-releases/farmland-partners-inc-reports-third-quarter-2017-results-300552331.html
SOURCE Farmland Partners Inc.