DENVER, Aug. 6, 2019 /PRNewswire/ -- Farmland Partners
Inc. (NYSE: FPI) (the "Company") today reported financial results
for the quarter ended June 30,
2019.
Second Quarter 2019 Highlights
- Reported total operating revenues of $10.9 million, a 4.1% decrease over the same
period in 2018
- Reported year-to-date total operating revenues of $21.8 million, a 3.5% decrease over the same
period in 2018
- Reported operating income of $4.0
million, a 23.8% decrease over the same period in 2018
- Reported year-to-date operating income of $8.5 million, a 15.3% decrease over the same
period in 2018
- Reported a basic net income to common stockholders of
$0.09 per share
- Reported total net income of $6.5
million, a 565.1% increase over the same period in 2018
- Reported Adjusted EBITDAre of $6.5
million, a 16.8% decrease over the same period in 2018
- Reported AFFO per share of -$0.05
- Completed farm dispositions totaling $29.7 million
- Repurchased $12.9 million in
shares of common stock at a weighted average price of $6.49 per share, and $0.5
million of Series B Participating Preferred Stock at a
weighted average price of $23.68 per
share.
"The farm economy is facing headwinds. However, the Company
continued to successfully execute on its strategy to
opportunistically sell assets at material premiums to purchase
price and used those proceeds to repurchase stock and pay down
debt. Since we began that process, we have closed on $67.4 million in asset dispositions at an
approximately 20% premium to net book value," said Paul A. Pittman, the Company's CEO.
Financial Results
For the three months ended June 30,
2019, the Company recorded a net income of $6.5 million and a basic net income to common
stockholders of $0.09 per share, as
compared to a net income of $1.0
million and a basic net loss to common stockholders of
$0.07 per share for the same period
during 2018. For the six months ended June
30, 2019, the Company recorded a net income of $6.5 million and a basic net loss to common
stockholders of $0.01 per share, as
compared to a net income of $1.5
million and a basic net loss to common stockholders of
$0.15 per share for the same period
during 2018. The increase in net income from the prior year is due
largely to gains on asset sales.
For the three months ended June 30,
2019, the Company recorded Adjusted Funds from Operations
("AFFO") of -$1.6 million and AFFO
per fully diluted share of -$0.05, as
compared to AFFO of $0.2 million and
AFFO per fully diluted share of $0.01
for the same period during 2018. For the six months ended
June 30, 2019, the Company recorded
AFFO of -$2.6 million and AFFO per
fully diluted share of -$0.08, as
compared to AFFO of $0.2 million and
AFFO per fully diluted share of $0.01
for the same period during 2018. The decline in operating income
and AFFO from the prior year is largely due to a decrease in
revenues (see discussion in "Operating Results" below),
non-recurring legal expenses related to the Rota Fortunae
short-and-distort attack on the Company, and increased interest
rates.
See "Non-GAAP Financial Measures" for complete definitions of
AFFO and Adjusted EBITDAre and the financial tables accompanying
this press release for reconciliations of net income to AFFO and
Adjusted EBITDAre.
Operating
Results
For the three months ended June 30,
2019, the Company recorded total operating revenues of
$10.9 million, as compared to
$11.4 million for the same period
during 2018. For the six months ended June
30, 2019, the Company recorded total operating revenues of
$21.8 million, as compared to
$22.6 million for the same period
during 2018. The decline in operating revenues from the prior year
is due largely to asset dispositions and secondarily to the poor
operating environment in the U.S. agriculture economy.
For the three months ended June 30,
2019, the Company recorded total operating income of
$4.0 million and net operating income
("NOI") of $8.7 million, as compared
to total operating income of $5.2
million and NOI of $9.3
million for the same period in 2018. For the six months
ended June 30, 2019, the Company
recorded total operating income of $8.5
million and NOI of $17.7
million, as compared to total operating income of
$10.0 million and NOI of $18.8 million for the same period in
2018.
See "Non-GAAP Financial Measures" for a complete definition of
NOI and the financial table included in this press release for
reconciliations of net income to NOI.
Acquisition and Disposition Activity
During the quarter, the Company completed $29.7 million in farm dispositions, resulting in
a 35.0% gain over gross book value. Subsequent to quarter end, the
Company completed additional dispositions for total gross proceeds
of $1.1 million, resulting in a 52.3%
gain over gross book value.
Balance Sheet
During the quarter, the Company repurchased 2.0 million shares
of common stock at a weighted average price of $6.49 per share for an aggregate purchase price
of $12.9 million. The Company also
repurchased 22,828 shares of the Series B Participating Preferred
stock at a weighted average price of $23.68 per share for an aggregate purchase price
of $0.5 million. Subsequent to
quarter end and as of the date of this press release, the
Company has repurchased an additional 0.2 million shares of common
stock at a weighted average price of $7.04 per share for an aggregate purchase price
of $1.7 million.
As of June 30, 2019, the Company
had 32,240,860 shares of common stock outstanding on a fully
diluted basis. As of the date of this press release, the Company
had 31,999,588 shares of common stock outstanding on fully
diluted basis.
During the quarter the Company repaid $5.1 million in outstanding debt. Subsequent to
the quarter's end, the Company repaid an additional $1.1 million in outstanding debt.
The Company had total debt outstanding of $514.0 million at June 30,
2019, compared to total debt outstanding of $525.3 million at December
31, 2018.
Dividend Declarations
The Company announced that its Board of Directors has declared a
quarterly cash dividend of $0.05 per
share of common stock and per Class A Common OP unit. The
dividends are payable on October 15,
2019, to stockholders and unit holders of record on
October 1, 2019.
The Company also announced today that its Board of Directors has
declared a quarterly cash dividend of $0.3750 per share of Series B Participating
Preferred Stock. The dividends are payable on September 30, 2019, to holders of Series B
Participating Preferred Stock of record on September 16, 2019.
Conference Call Information
The Company has scheduled a conference call on August 7, 2019 at 11:00
a.m. (Eastern Time) to discuss its financial results for the
quarter ended June 30, 2019. The call
can be accessed live over the phone toll-free by dialing
1-866-262-6804 (U.S.), or 1-855-669-9657 (Canada), or 1-412-902-4107
(International). Participants can reference the Farmland
Partners Inc. Second Quarter 2019 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 August 7,
2019 at 1:00 p.m. (Eastern
Time) until August 21, 2019 at
11:59 p.m. (Eastern Time), by dialing
1-877-344-7529 (U.S.), or 1-855-669-9658 (Canada), or 1-412-317-0088 (International);
passcode: 10133882. A replay of the webcast will also be accessible
on the Investor Relations section of the Company's website for a
limited time following the event.
About Farmland Partners Inc.
Farmland Partners Inc. is an internally managed real estate
company that owns and seeks to acquire high-quality North American
farmland and makes loans to farmers secured by farm real estate. As
of the date of this release, the Company owns approximately 158,000
acres in 17 states, including Alabama, Arkansas, California, Colorado, Florida, Georgia, Illinois, Kansas, Louisiana, Michigan, Mississippi, Nebraska, North
Carolina, South Carolina,
South Dakota, Texas and Virginia. We have approximately 26 crop types
and over 100 tenants. The Company elected to be taxed as a real
estate investment trust, or REIT, for U.S. federal income tax
purposes, commencing with the taxable year ended December 31, 2014.
Forward-Looking Statements
This press release includes "forward-looking statements" within
the meaning of the federal securities laws, including, without
limitation, statements with respect to our outlook, proposed and
pending acquisitions and dispositions, the potential impact of
trade disputes and recent hurricanes on the Company's results,
financing activities, crop yields and prices and anticipated rental
rates. Forward-looking statements generally can be identified by
the use of forward-looking terminology such as "may," "should,"
"could," "would," "predicts," "potential," "continue," "expects,"
"anticipates," "future," "intends," "plans," "believes,"
"estimates" or similar expressions or their negatives, as well as
statements in future tense. Although the Company believes that the
expectations reflected in such forward-looking statements are based
upon reasonable assumptions, beliefs and expectations, such
forward-looking statements are not predictions of future events or
guarantees of future performance and our actual results could
differ materially from those set forth in the forward-looking
statements. Some factors that might cause such a difference include
the following: general volatility of the capital markets and the
market price of the Company's common stock 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, 2018,
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 June 30, 2019
(Unaudited) and December 31, 2018
|
(in thousands except
par value and share data)
|
|
|
|
June
30,
|
|
December 31,
|
|
|
2019
|
|
2018
|
ASSETS
|
|
|
|
|
|
|
Land, at
cost
|
|
$
|
935,486
|
|
$
|
957,516
|
Grain
facilities
|
|
|
12,103
|
|
|
12,184
|
Groundwater
|
|
|
11,473
|
|
|
11,473
|
Irrigation
improvements
|
|
|
53,398
|
|
|
53,458
|
Drainage
improvements
|
|
|
12,311
|
|
|
12,271
|
Permanent
plantings
|
|
|
52,905
|
|
|
52,989
|
Other
|
|
|
7,827
|
|
|
8,196
|
Construction in
progress
|
|
|
10,217
|
|
|
10,262
|
Real estate, at
cost
|
|
|
1,095,720
|
|
|
1,118,349
|
Less accumulated
depreciation
|
|
|
(21,747)
|
|
|
(18,202)
|
Total real estate,
net
|
|
|
1,073,973
|
|
|
1,100,147
|
Deposits
|
|
|
-
|
|
|
-
|
Cash
|
|
|
22,359
|
|
|
16,891
|
Notes and interest
receivable, net
|
|
|
7,753
|
|
|
11,877
|
Right of Use
Asset
|
|
|
135
|
|
|
-
|
Deferred offering
costs
|
|
|
218
|
|
|
218
|
Deferred financing
fees, net
|
|
|
217
|
|
|
261
|
Accounts receivable,
net
|
|
|
4,579
|
|
|
6,136
|
Inventory
|
|
|
708
|
|
|
341
|
Prepaid and other
assets
|
|
|
1,881
|
|
|
3,638
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
$
|
1,111,823
|
|
$
|
1,139,509
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
Mortgage notes and
bonds payable, net
|
|
$
|
512,469
|
|
$
|
523,641
|
Lease
Liability
|
|
|
135
|
|
|
-
|
Dividends
payable
|
|
|
1,613
|
|
|
1,681
|
Derivative
liability
|
|
|
1,735
|
|
|
865
|
Accrued
interest
|
|
|
4,469
|
|
|
4,296
|
Accrued property
taxes
|
|
|
2,013
|
|
|
1,666
|
Deferred
revenue
|
|
|
5,254
|
|
|
238
|
Accrued
expenses
|
|
|
3,554
|
|
|
3,581
|
Total
liabilities
|
|
|
531,242
|
|
|
535,968
|
|
|
|
|
|
|
|
Series B
Participating Preferred Stock, $0.01 par value, 100,000,000 shares
authorized; 5,973,959 shares issued and outstanding at June 30,
2019, and 6,013,587 December 31, 2018
|
|
|
145,154
|
|
|
143,758
|
Redeemable
non-controlling interest in operating partnership, Series A
preferred units
|
|
|
118,755
|
|
|
120,510
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
Common stock, $0.01
par value, 500,000,000 shares authorized; 29,844,349 shares issued
and outstanding at June 30, 2019, and 30,594,592 shares issued and
outstanding at December 31, 2018
|
|
|
290
|
|
|
300
|
Additional paid in
capital
|
|
|
335,256
|
|
|
332,996
|
Retained
earnings
|
|
|
4,660
|
|
|
4,852
|
Cumulative
dividends
|
|
|
(45,778)
|
|
|
(42,695)
|
Other comprehensive
income
|
|
|
(1,735)
|
|
|
(865)
|
Non-controlling
interests in operating partnership
|
|
|
23,979
|
|
|
44,685
|
Total
equity
|
|
|
316,672
|
|
|
339,273
|
|
|
|
|
|
|
|
TOTAL LIABILITIES,
REDEEMABLE NON-CONTROLLING INTERESTS IN OPERATING PARTNERSHIP AND
EQUITY
|
|
$
|
1,111,823
|
|
$
|
1,139,509
|
Farmland Partners
Inc.
|
Consolidated
Statements of Operations
|
For the three months
ended June 30, 2019 and 2018
|
(Unaudited, in
thousands except per share amounts)
|
|
|
|
|
(Unaudited)
|
|
|
For the Three
Months Ended
|
|
|
June
30,
|
|
|
2019
|
|
2018
|
OPERATING
REVENUES:
|
|
|
|
|
|
|
Rental
income
|
|
$
|
9,698
|
|
$
|
10,057
|
Tenant
reimbursements
|
|
|
466
|
|
|
774
|
Crop sales
|
|
|
484
|
|
|
331
|
Other
revenue
|
|
|
300
|
|
|
257
|
Total operating
revenues
|
|
|
10,948
|
|
|
11,419
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
Depreciation and
depletion
|
|
|
2,092
|
|
|
2,126
|
Property operating
expenses
|
|
|
2,188
|
|
|
2,109
|
Acquisition and due
diligence costs
|
|
|
1
|
|
|
-
|
General and
administrative expenses
|
|
|
1,419
|
|
|
1,701
|
Legal and
accounting
|
|
|
1,293
|
|
|
284
|
Other operating
expenses
|
|
|
1
|
|
|
11
|
Total operating
expenses
|
|
|
6,994
|
|
|
6,231
|
OPERATING
INCOME
|
|
|
3,954
|
|
|
5,188
|
|
|
|
|
|
|
|
OTHER (INCOME)
EXPENSE:
|
|
|
|
|
|
|
Other
income
|
|
|
(111)
|
|
|
(90)
|
(Gain) loss on
disposition of assets
|
|
|
(7,491)
|
|
|
(143)
|
Interest
expense
|
|
|
5,031
|
|
|
4,440
|
Total other
expense
|
|
|
(2,571)
|
|
|
4,207
|
|
|
|
|
|
|
|
Net income (loss)
before income tax expense
|
|
|
6,525
|
|
|
981
|
|
|
|
|
|
|
|
Income tax
expense
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
NET INCOME
|
|
|
6,525
|
|
|
981
|
|
|
|
|
|
|
|
Net (income) loss
attributable to non-controlling interests in operating
partnership
|
|
|
(473)
|
|
|
(121)
|
Net (income) loss
attributable to redeemable non-controlling interests in
operating partnership
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
Net income
attributable to the Company
|
|
|
6,052
|
|
|
860
|
|
|
|
|
|
|
|
Nonforfeitable
distributions allocated to unvested restricted
shares
|
|
|
(21)
|
|
|
(41)
|
Distributions on
redeemable non-controlling interests in operating partnership,
preferred units
|
|
|
(3,125)
|
|
|
(3,142)
|
|
|
|
|
|
|
|
Net income (loss)
available to common stockholders of Farmland Partners
Inc.
|
|
$
|
2,906
|
|
$
|
(2,323)
|
|
|
|
|
|
|
|
Basic and diluted per
common share data:
|
|
|
|
|
|
|
Basic net income
(loss) available to common stockholders
|
|
$
|
0.09
|
|
$
|
(0.07)
|
Diluted net income
(loss) available to common stockholders
|
|
$
|
0.08
|
|
$
|
(0.07)
|
Basic weighted
average common shares outstanding
|
|
|
30,637
|
|
|
32,542
|
Diluted weighted
average common shares outstanding
|
|
|
48,370
|
|
|
32,542
|
Dividends declared
per common share
|
|
$
|
0.0500
|
|
$
|
0.1275
|
Farmland Partners
Inc.
|
Reconciliation of
Non-GAAP Measures
|
For the three months
ended June 30, 2019 and 2018
|
(Unaudited, in
thousands except per share amounts)
|
|
|
|
(Unaudited)
|
|
|
For the Three
Months Ended
June 30,
|
(in thousands
except per share amounts)
|
|
2019
|
|
2018
|
Net income
|
|
$
|
6,525
|
|
$
|
981
|
(Gain) loss on
disposition of assets
|
|
|
(7,491)
|
|
|
(143)
|
Depreciation and
depletion
|
|
|
2,092
|
|
|
2,126
|
FFO
|
|
|
1,126
|
|
|
2,964
|
|
|
|
|
|
|
|
Stock based
compensation
|
|
|
382
|
|
|
398
|
Indirect equity
offering costs
|
|
|
—
|
|
|
—
|
Real estate related
acquisition and due diligence costs
|
|
|
1
|
|
|
—
|
Distributions on
Series A preferred units and dividends on Series B participating
preferred stock
|
|
|
(3,125)
|
|
|
(3,142)
|
AFFO
|
|
$
|
(1,616)
|
|
$
|
220
|
|
|
|
|
|
|
|
AFFO per diluted
weighted average share data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO weighted average
common shares
|
|
|
33,456
|
|
|
37,458
|
|
|
|
|
|
|
|
Net (loss) income per
share available to common stockholders
|
|
$
|
0.09
|
|
$
|
(0.07)
|
Income available to
redeemable non-controlling interest and non-controlling interest in
operating partnership
|
|
|
0.10
|
|
|
0.09
|
Depreciation and
depletion
|
|
|
0.06
|
|
|
0.06
|
Stock based
compensation
|
|
|
0.01
|
|
|
0.01
|
Indirect equity
offering costs
|
|
|
—
|
|
|
—
|
Real estate related
acquisition and due diligence costs
|
|
|
—
|
|
|
—
|
(Gain) loss on
disposition of assets
|
|
|
(0.22)
|
|
|
—
|
Distributions on
Series A preferred units and dividends on Series B participating
preferred stock
|
|
|
(0.09)
|
|
|
(0.08)
|
AFFO per diluted
weighted average share
|
|
$
|
(0.05)
|
|
$
|
0.01
|
|
|
(Unaudited)
|
|
|
For the Three
Months Ended
June 30,
|
(in
thousands)
|
|
2019
|
|
2018
|
Net income
|
|
$
|
6,525
|
|
$
|
981
|
Interest
expense
|
|
|
5,031
|
|
|
4,440
|
Income tax
expense
|
|
|
—
|
|
|
—
|
Depreciation and
depletion
|
|
|
2,092
|
|
|
2,126
|
(Gain) Loss on
disposal of assets
|
|
|
(7,491)
|
|
|
(143)
|
EBITDAre
|
|
$
|
6,157
|
|
$
|
7,404
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
|
382
|
|
|
398
|
Indirect equity
offering costs
|
|
|
—
|
|
|
—
|
Real estate related
acquisition and due diligence costs
|
|
|
1
|
|
|
—
|
Adjusted
EBITDAre
|
|
$
|
6,540
|
|
$
|
7,802
|
|
|
(Unaudited)
|
|
|
For the Three
Months Ended
|
|
|
June
30,
|
|
|
2019
|
|
2018
|
OPERATING
REVENUES:
|
|
|
|
|
|
|
Rental
income
|
|
$
|
9,698
|
|
$
|
10,057
|
Tenant
reimbursements
|
|
|
466
|
|
|
774
|
Crop sales
|
|
|
484
|
|
|
331
|
Other
revenue
|
|
|
300
|
|
|
257
|
Total operating
revenues
|
|
$
|
10,948
|
|
$
|
11,419
|
|
|
|
|
|
|
|
Property operating
expenses
|
|
|
2,188
|
|
|
2,109
|
NOI
|
|
$
|
8,760
|
|
$
|
9,310
|
Non-GAAP Financial Measures
The Company considers the following non-GAAP measures as useful
to investors as key supplemental measures of its performance: FFO,
NOI, AFFO, EBITDAre and Adjusted EBITDAre. These non-GAAP financial
measures should be considered along with, but not as alternatives
to, net income or loss as a measure of the Company's operating
performance. FFO, NOI, AFFO, EBITDAre and Adjusted EBITDAre, as
calculated by the Company, may not be comparable to other companies
that do not define such terms exactly as the Company.
FFO
The Company calculates FFO in accordance with the standards
established by the National Association of Real Estate Investment
Trusts, or NAREIT. NAREIT defines FFO as net income (loss)
(calculated in accordance with GAAP), excluding gains (or losses)
from sales of depreciable operating property, plus real estate
related depreciation, depletion and amortization (excluding
amortization of deferred financing costs), and after adjustments
for unconsolidated partnerships and joint ventures. Management
presents FFO as a supplemental performance measure because it
believes that FFO is beneficial to investors as a starting point in
measuring the Company's operational performance. Specifically, in
excluding real estate related depreciation and amortization and
gains and losses from sales of depreciable operating properties,
which do not relate to or are not indicative of operating
performance, FFO provides a performance measure that, when compared
year over year, captures trends in occupancy rates, rental rates
and operating costs. The Company also believes that, as a widely
recognized measure of the performance of REITs, FFO will be used by
investors as a basis to compare the Company's operating performance
with that of other REITs. However, other equity REITs may not
calculate FFO in accordance with the NAREIT definition as the
Company does, and, accordingly, the Company's FFO may not be
comparable to such other REITs' FFO.
AFFO
The Company calculates AFFO by adjusting FFO to exclude the
income and expenses that the Company believes are not reflective of
the sustainability of the Company's ongoing operating performance,
including, but not limited to, real estate related acquisition and
due diligence costs and stock-based compensation.
Changes in GAAP accounting and reporting rules that were put in
effect after the establishment of NAREIT's definition of FFO in
1999 result in the inclusion of a number of items in FFO that do
not correlate with the sustainability of the Company's operating
performance. Therefore, in addition to FFO, the Company
presents AFFO and AFFO per share, fully diluted, both of which are
non-GAAP measures. Management considers AFFO a useful
supplemental performance metric for investors as it is more
indicative of the Company's operational performance than FFO. AFFO
is not intended to represent cash flow or liquidity for the period,
and is only intended to provide an additional measure of the
Company's operating performance. Even AFFO, however, does not
properly capture the timing of cash receipts, especially in
connection with full-year rent payments under lease agreements
entered into in connection with newly acquired farms. Management
considers AFFO per share, fully diluted to be a supplemental metric
to GAAP earnings per share. AFFO per share, fully diluted provides
additional insight into how the Company's operating performance
could be allocated to potential shares outstanding at a specific
point in time. Management believes that AFFO is a widely recognized
measure of the operations of REITs, and presenting AFFO will enable
investors to assess the Company's performance in comparison to
other REITs. However, other REITs may use different methodologies
for calculating AFFO and AFFO per share, fully diluted and,
accordingly, the Company's AFFO and AFFO per share, fully diluted
may not always be comparable to AFFO and AFFO per share amounts
calculated by other REITs. AFFO and AFFO per share, fully diluted
should not be considered as an alternative to net income (loss) or
earnings per share (determined in accordance with GAAP) as an
indication of financial performance, or as an alternative to net
income (loss) earnings per share (determined in accordance with
GAAP) as a measure of the Company's liquidity, nor are they
indicative of funds available to fund the Company's cash needs,
including its ability to make distributions.
EBITDAre and Adjusted EBITDAre
The Company calculates Earnings Before Interest Taxes
Depreciation and Amortization for real estate ("EBITDAre")
in accordance with the standards established by NAREIT in its
September 2017 White Paper. NAREIT
defines EBITDAre as net income (calculated in accordance with GAAP)
excluding interest expense, income tax, depreciation and
amortization, gains or losses on disposition of depreciated
property (including gains or losses on change of control),
impairment write-downs of depreciated property and of investments
in unconsolidated affiliates caused by a decrease in value of
depreciated property in the affiliate, and adjustments to reflect
the entity's pro rata share of EBITDAre of unconsolidated
affiliates. EBITDAre is a key
financial measure used to evaluate the Company's operating
performance but should not be construed as an alternative to
operating income, cash flows from operating activities or net
income, in each case as determined in accordance with GAAP.
The Company believes that EBITDAre is a useful performance measure
commonly reported and will be widely used by analysts and investors
in the Company's industry. However, while EBITDAre is a performance
measure widely used across the Company's industry, the Company does
not believe that it correctly captures the Company's business
operating performance because it includes non-cash expenses and
recurring adjustments that are necessary to better understand the
Company's business operating performance. Therefore, in
addition to EBITDAre, management uses Adjusted EBITDAre, a non-GAAP
measure.
The Company calculates Adjusted EBITDAre by adjusting
EBITDAre for certain items such as stock-based compensation
and real estate related acquisition and due diligence costs that
the Company considers necessary to understand its operating
performance. The Company believes that Adjusted EBITDAre provides
useful supplemental information to investors regarding the
Company's ongoing operating performance that, when considered with
net income and EBITDAre, is beneficial to an investor's
understanding of the Company's operating performance. However,
EBITDAre and Adjusted EBITDAre have limitations as analytical tools
and should not be considered in isolation or as a substitute for
analysis of the Company's results as reported under GAAP.
In prior periods, the Company has presented EBITDA and Adjusted
EBITDA. In accordance with NAREIT's recommendation, beginning with
the Company's reported results for the three months ended
March 31, 2018, the Company is
reporting EBITDAre and Adjusted EBITDAre in place of EBITDA and
Adjusted EBITDA.
Net Operating Income (NOI)
The Company calculates net operating income (NOI) as total
operating revenues (rental income, tenant reimbursements, crop
sales and other revenue) less property operating expenses (direct
property expenses and real estate taxes). Since net operating
income excludes general and administrative expenses, interest
expense, depreciation and amortization, acquisition-related
expenses, other income and losses and extraordinary items, it
provides a performance measure that, when compared year over year,
reflects the revenues and expenses directly associated with owning
and leasing farmland real estate, providing a perspective not
immediately apparent from net income. However, net operating income
should not be viewed as an alternative measure of the Company's
financial performance since it does not reflect general and
administrative expenses, interest expense, depreciation and
amortization costs, other income and losses.
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content:http://www.prnewswire.com/news-releases/farmland-partners-inc-reports-second-quarter-2019-results-300897485.html
SOURCE Farmland Partners Inc.