Financial Data and Key Metrics Changes - Total operating revenues for Q2 2019 were $10.9 million, representing a 4.1% decrease compared to the same period last year, primarily due to asset sales [30] - Operating income for Q2 2019 was $4 million, a decrease of 23.8% year-over-year, influenced by reduced revenues and increased legal expenses [31] - Net income for Q2 2019 was $6.5 million, a significant increase from $981,000 in the same period last year, driven by nonrecurring gains from asset dispositions [31][32] - AFFO per share was negative $0.05, impacted by revenue declines and increased interest rates [32] Business Line Data and Key Metrics Changes - The company sold approximately 5.5% of its portfolio, leading to a revenue decline of about 4.1% [17] - Asset sales totaled $67 million with an average gain of 20% above purchase price, demonstrating successful asset management [22] - The company has reduced administrative costs by over $1 million in the past year, primarily due to personnel changes [18] Market Data and Key Metrics Changes - USDA land value survey indicated farmland values increased by 1.94% from June 2018 to June 2019, with a 2.66% increase in the 17 states where the company operates [14] - Specific regional changes included a 7% increase in California farmland values and a flat change in Illinois [15] Company Strategy and Development Direction - The company remains optimistic about long-term shareholder value despite current agricultural economic headwinds, emphasizing the resilience of farmland as an asset class [8][9] - The strategy includes opportunistic asset sales and share repurchases to enhance shareholder value, particularly as the stock trades at a discount [24][60] - The company is focused on maintaining a diversified portfolio to weather economic cycles effectively [39] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges from the trade war affecting farmer profits, particularly in nut crops, but expressed confidence in the overall resilience of U.S. agriculture [9][10] - The company anticipates a short crop year for corn and soybeans due to adverse weather conditions, which may lead to price increases [12][13] - Management highlighted the importance of crop insurance for tenants, providing stability in rental payments despite market fluctuations [41] Other Important Information - The company has faced legal challenges related to the Rota Fortunae litigation, which has resulted in increased legal costs and reputational damage [19][25] - Interest rate reductions are expected to benefit the company's P&L over time, with potential annual savings of $25 million to $50 million in interest costs [50] Q&A Session Summary Question: Depth of buyer interest in asset sales - Management indicated a strong market for asset sales, primarily from individual buyers rather than asset managers, and noted that most sales have been to operating buyers [35][36] Question: Tenant's ability to afford current rents - Management explained that most rents are cash rents, providing stability, and that crop insurance helps tenants manage costs, although future lease negotiations may be challenging in a downcycle [41][42] Question: Elevated legal costs in Q2 - Management suggested that the recent quarter's legal costs were likely higher than expected but could stabilize in the future, though unpredictability remains [46][48] Question: Impact of recent interest rate reductions on debt - Management believes that recent and anticipated interest rate reductions could lead to significant savings in interest costs, enhancing financial flexibility [50] Question: Farmer revenue and expense situation - Management discussed the balance of input costs and yields, noting that farmers are currently operating near breakeven, which affects their ability to pay rents [51][55] Question: Status of Rota Fortunae litigation - Management provided updates on ongoing litigation against Rota Fortunae, emphasizing the pursuit of damages for shareholder losses and the complexity of the legal process [62][65]

Financial Data and Key Metrics Changes - For Q1 2019, total operating revenues were reported at $10.9 million, a decrease of 2.8% compared to Q1 2018 [11] - Operating income decreased by 6.2% to $4.5 million over the same period [11] - The company reported a basic net loss of approximately $0.10 per share and an AFFO per share of negative $0.03 [11] Business Line Data and Key Metrics Changes - The company completed farm dispositions totaling approximately $4.7 million during the first quarter [11] - Stock buybacks included the purchase of 1.2 million shares of common stock at a weighted average price of $5.61 per share [11] - Subsequent to the quarter end, an additional 0.5 million shares were repurchased at a weighted average price of $6.58, bringing total stock repurchases year-to-date to about $10 million [12] Market Data and Key Metrics Changes - The company continues to sell farms at a profit of approximately 10% to 11% above purchase price [8] - The NAV of the portfolio on a per share basis is still $12 or better, rising due to asset sales and stock buybacks [8] Company Strategy and Development Direction - The company aims to continue selling farms where good returns can be achieved while lightening exposure in certain regions [16] - There is a gradual increase in the percentage of revenues coming from specialty crops, with a target of achieving a balanced portfolio [17] - The company is focused on maintaining a disciplined approach to capital allocation, prioritizing stock buybacks over aggressive asset sales [26] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about the potential negative impact of trade relationships with China on the agricultural industry, but believes any effects on land values and rents will be muted and temporary [9] - The company anticipates that the agricultural market will face challenges due to weather conditions affecting crop planting, which may lead to yield losses [60] - Management remains optimistic about long-term food demand and the fundamental scarcity of farmland, which they believe will support future growth [47] Other Important Information - The company has filed a motion to dismiss a class-action lawsuit, which they believe is meritless [42] - Management indicated that they are not currently considering eliminating the dividend, as they aim to balance the interests of different investors [66] Q&A Session Summary Question: What types of crops and locations of the farms sold thus far in 2019? - The company sells based on local market conditions and aims to achieve good returns while lightening exposure in certain regions, particularly in the Midwest [14][16] Question: How is the company thinking about leverage in relation to asset sales? - The company views asset sales as leverage neutral, with proceeds first used to reduce debt associated with sold farms [18][19] Question: What is the outlook for the acquisition market? - The company is not likely to aggressively accelerate asset sales, as current market conditions do not present significant buying opportunities [22][23] Question: How does the revenue line look on a same-store basis? - Most of the revenue reduction is attributed to tenant reimbursement issues rather than a decrease in actual reimbursements [32][33] Question: What are the challenges faced in specific agricultural regions? - The Northern Plains and High Plains regions are struggling due to transportation costs and market pricing, affecting rental income [37][39] Question: What is the status of the class-action lawsuit? - The company has filed a motion to dismiss the lawsuit, which they believe lacks merit [42] Question: How does the company view the impact of trade negotiations on agriculture? - Management believes that a breakdown in trade negotiations could have a negative short-term impact on farm operators, but long-term effects on land values will be modest [46][47]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-36405 6.00% Series B Participating Preferred Stock, $0.01 par value per share New York Stock Exchange Securities re ...