Reid Griffith/iStock via Getty Images Gladstone Land Corporation (LAND), founded in 1997 and headquartered in McLean, Virginia, is an externally managed agricultural REIT focused on owning and leasing farmland. As this is a conservatively leveraged and highly profitable landlord with strong liquidity, the 6.00% Series B Cumulative Redeemable Preferred Stock (NASDAQ:LANDO) represents a very good choice for dividend portfolios. What stands out here is the current high dividend yield, as well as the significan ...

Financial Data and Key Metrics Changes - For Q3 2023, the company reported a net income of approximately $3.1 million and a net loss to common shareholders of $3 million, or $0.08 per common share [15] - Adjusted FFO for the current quarter was about $5.6 million, or $0.155 per share, compared to $7.2 million, or $0.207 per share in the prior year quarter [15] - Fixed base cash rents decreased by about $400,000, or 2%, from the prior year quarter [16] - Participation rents also decreased by about $600,000 from Q3 of last year [17] - The net asset value per common share increased to $20.33 as of September 30, up from $19.15 at June 30 and $16.56 at Q3 of last year [19] Business Line Data and Key Metrics Changes - The company owns approximately 116,000 acres on 169 farms, valued at about $1.6 billion, with a diversified portfolio across 15 states and 29 growing regions [7] - The company has been selective in farm acquisitions due to higher capital costs, leading to slow acquisition activity [10] - Nine leases were renewed and amended, resulting in an increase in annual net operating income of about $275,000, or 4.7% above prior leases [11] Market Data and Key Metrics Changes - The company has entered into a water transfer agreement allowing the purchase of up to 15,000 acre-feet of water per year through February 2031, with 7,000 acre-feet purchased for 2023 at a cost of about $1.2 million [12] - Inflation remains above the Fed's target, with headline inflation at about 3.7% [13] Company Strategy and Development Direction - The company is focusing on farmland investments that contribute to healthy lifestyles, such as fruits and vegetables, aligning with market trends [23] - The company is cautious about acquisitions, waiting for prices to adjust downward in the current high-interest-rate environment [23] Management's Comments on Operating Environment and Future Outlook - Management noted that inflation and high interest rates are impacting the operating environment, but they expect conditions to improve over time [13][35] - The company believes that the demand for prime farmland remains stable to strong, particularly for crops like berries and vegetables [24] - Management expressed confidence in the long-term value of farmland, emphasizing its intrinsic value and cash flow potential [25] Other Important Information - The company has access to over $170 million in liquidity and about $155 million in unpledged properties [20] - The common dividend was raised to $0.464 per share per month, marking the 32nd increase in the past 35 quarters [22] Q&A Session Summary Question: What other crops are among the challenged operator farms? - Management identified an oversupply of almonds as a current issue, with international purchases down significantly [27][28] Question: Are there other markets experiencing issues? - Management mentioned a vineyard that is not performing as expected [30] Question: What is the rationale for buying incremental water at this point? - Management indicated that income-producing farms are scarce and expensive, making water acquisition a strategic choice [33][34] Question: What is the current cap rate for acquisitions? - Management estimated cap rates around 5.5% or higher, with expectations for them to decrease in the future [37][38] Question: What factors are affecting tenant performance? - Management noted that inflation and grocery store pricing strategies are impacting tenant profitability [39][40] Question: What is driving the increase in NAV? - The increase in NAV was primarily due to the valuation of preferred securities and the fair value of the portfolio [46][47]

PART I FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=4&type=section&id=ITEM%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for the period ended September 30, 2023 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $1.41 billion while total equity remained stable at $731.5 million as of September 30, 2023 Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | **$1,406,112** | **$1,457,251** | | Total real estate, net | $1,304,031 | $1,325,428 | | Cash and cash equivalents | $25,080 | $61,141 | | **Total Liabilities** | **$674,626** | **$725,889** | | Notes and bonds payable, net | $584,098 | $626,400 | | **Total Equity** | **$731,486** | **$731,362** | [Condensed Consolidated Statements of Operations and Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) Nine-month net income rose to $12.7 million, driven by gains on real estate dispositions, improving net loss per common share Operating Results for the Nine Months Ended September 30 (in thousands) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | **Lease revenue, net** | **$65,946** | **$64,445** | | Total operating expenses | $41,276 | $40,091 | | Gain (loss) on dispositions | $5,910 | $(2,100) | | **Net income** | **$12,746** | **$3,606** | | Net loss attributable to common stockholders | $(5,557) | $(10,204) | | **Loss per common share (Basic and diluted)** | **$(0.16)** | **$(0.30)** | Operating Results for the Three Months Ended September 30 (in thousands) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | **Lease revenue, net** | **$23,534** | **$24,209** | | Total operating expenses | $14,136 | $14,566 | | **Net income** | **$3,141** | **$1,806** | | Net loss attributable to common stockholders | $(2,964) | $(3,594) | | **Loss per common share (Basic and diluted)** | **$(0.08)** | **$(0.10)** | [Condensed Consolidated Statements of Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity) Total equity remained stable at $731.5 million, supported by common and preferred stock issuances net of distributions - For the nine months ended September 30, 2023, the company issued 788,045 shares of common stock, raising net proceeds of approximately **$15.1 million**[28](index=28&type=chunk) - The company issued 223,081 shares of Series E Preferred Stock for net proceeds of approximately **$5.0 million** and redeemed 48,913 shares of Series C Preferred Stock for approximately **$1.2 million** during the first nine months of 2023[28](index=28&type=chunk) - Total distributions on common stock were **$14.8 million**, and dividends on cumulative redeemable preferred stock were **$18.3 million** for the nine months ended September 30, 2023[28](index=28&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) A halt in real estate acquisitions led to a significant decrease in investing cash outflow and an overall net decrease in cash Cash Flow Summary for the Nine Months Ended September 30 (in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $22,657 | $23,073 | | Net cash used in investing activities | $(1,086) | $(78,627) | | Net cash (used in) provided by financing activities | $(57,632) | $75,852 | | **Net (decrease) increase in cash** | **$(36,061)** | **$20,298** | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's 169-farm portfolio, debt facilities, equity offerings, and related-party transactions - As of September 30, 2023, the company owned 169 farms across 15 states, totaling 115,593 acres; **California and Florida represent 65.1% and 17.1% of lease revenue**, respectively[45](index=45&type=chunk)[61](index=61&type=chunk) - On June 23, 2023, the company sold a 138-acre parcel of unfarmed land in Florida for $9.6 million, recognizing a **net gain of approximately $6.4 million**[55](index=55&type=chunk) - Subsequent to the quarter end, on October 9, 2023, the company entered an agreement to purchase up to 15,000 acre-feet of water per year and made an initial purchase of **7,000 acre-feet for approximately $1.2 million**[119](index=119&type=chunk) - On October 10, 2023, the Board of Directors declared monthly cash distributions for its common and preferred stock for October, November, and December 2023[123](index=123&type=chunk)[125](index=125&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses portfolio performance, operating results, liquidity, and non-GAAP metrics like NAV per share [Overview and Portfolio](index=28&type=section&id=Overview%20and%20Portfolio) The company owns a diversified portfolio of 169 farms across 15 states, with a concentration in California and Florida - The company owns 169 farms with **115,593 acres** across 15 states, leased to 92 unrelated third-party tenants[129](index=129&type=chunk) Geographic Diversification by Lease Revenue (Nine Months Ended Sep 30, 2023) | State | % of Total Lease Revenue | | :--- | :--- | | California | 65.1% | | Florida | 17.1% | | Washington | 5.3% | | All Others | 12.5% | Upcoming Lease Expirations by Revenue | Year of Expiration | % of Total Lease Revenues | | :--- | :--- | | 2023 (remaining) | 7.2% | | 2024 | 7.8% | | 2025 | 8.4% | | 2026 | 7.0% | | Thereafter | 57.3% | [Results of Operations](index=33&type=section&id=Results%20of%20Operations) Nine-month operating revenues grew 2.3%, while net income surged due to a significant gain on a land sale Comparison of Operating Results (Nine Months Ended Sep 30) | (in thousands) | 2023 | 2022 | % Change | | :--- | :--- | :--- | :--- | | Total operating revenues | $65,946 | $64,445 | 2.3% | | Operating income | $24,670 | $24,354 | 1.3% | | Net income | $12,746 | $3,606 | 253.5% | - Lease revenue from same-property fixed payments increased by $0.4 million (0.7%), while **participation rents on a same-property basis decreased by $0.5 million (16.2%)** in the first nine months of 2023 compared to 2022[166](index=166&type=chunk) - Base management and incentive fees paid to the Adviser **decreased by 7.2% to $7.2 million** for the nine months ended Sep 30, 2023, due to a lower incentive fee earned[165](index=165&type=chunk)[179](index=179&type=chunk) - A **net property and casualty loss of $1.0 million** was recorded in the first nine months of 2023 due to flooding damage in California[184](index=184&type=chunk)[185](index=185&type=chunk) [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains adequate liquidity of $174.4 million, with over 99.9% of its debt at fixed interest rates - Current available liquidity is approximately **$174.4 million**, consisting of cash on hand and availability under its credit facility with MetLife[187](index=187&type=chunk) - **Over 99.9% of borrowings are at fixed rates**, with a weighted-average effective interest rate of 3.35% and a remaining fixed-rate term of 4.3 years[187](index=187&type=chunk) - The company has committed to provide capital for improvements on certain farms, with a total remaining commitment of approximately **$4.3 million** as of September 30, 2023[189](index=189&type=chunk)[190](index=190&type=chunk) Equity Sales since January 1, 2023 (in thousands) | Type of Issuance | Shares Sold | Gross Proceeds | Net Proceeds | | :--- | :--- | :--- | :--- | | Series E Preferred Stock | 225,281 | $5,621 | $5,069 | | Common Stock – ATM Program | 788,045 | $15,240 | $15,087 | [Non-GAAP Financial Information and Net Asset Value](index=43&type=section&id=Non-GAAP%20Financial%20Information%20and%20Net%20Asset%20Value) Diluted AFFO per share was $0.15 for Q3 2023, and the estimated Net Asset Value per common share rose to $20.33 Non-GAAP Performance Per Share | Per Share Data | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | Diluted FFO | $0.18 | $0.18 | $0.45 | $0.52 | | Diluted CFFO | $0.18 | $0.21 | $0.49 | $0.54 | | Diluted AFFO | $0.15 | $0.21 | $0.43 | $0.52 | - The estimated Net Asset Value (NAV) per common share was **$20.33** as of September 30, 2023[221](index=221&type=chunk)[222](index=222&type=chunk) - The NAV per share increased from $19.15 at June 30, 2023, to $20.33 at September 30, 2023, driven by a **$1.36 per share net increase from valuation changes**[223](index=223&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk from interest rates is significantly mitigated by its high proportion of fixed-rate debt - The company's primary market risk exposure is to interest rate changes[227](index=227&type=chunk) - Risk is mitigated as **over 99.9% of borrowings are at fixed rates**, with a weighted-average effective interest rate of 3.35% for a remaining term of 4.3 years[227](index=227&type=chunk) Interest Rate Sensitivity on Fixed-Rate Borrowings (as of Sep 30, 2023) | Change in Market Interest Rates | Fair Value (in thousands) | | :--- | :--- | | -1% | $542,939 | | No change | $527,100 | | +1% | $512,043 | [Controls and Procedures](index=50&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of September 30, 2023[229](index=229&type=chunk) - **No material changes** to the internal control over financial reporting occurred during the third quarter of 2023[231](index=231&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=52&type=section&id=ITEM%201.%20Legal%20Proceedings) The company is not currently subject to any material legal proceedings - As of the filing date, the company is **not subject to any material legal proceedings**[233](index=233&type=chunk) [Risk Factors](index=52&type=section&id=ITEM%201A.%20Risk%20Factors) There have been no material changes to the company's previously disclosed risk factors - There have been **no material changes** to the company's risk factors since its 2022 Form 10-K filing[234](index=234&type=chunk) [Other Information](index=53&type=section&id=ITEM%205.%20Other%20Information) No officer or director adopted or terminated a Rule 10b5-1 trading arrangement during the third quarter of 2023 - No officer or director adopted or terminated a Rule 10b5-1 trading arrangement during the three months ended September 30, 2023[237](index=237&type=chunk) [Exhibits](index=54&type=section&id=ITEM%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate documents and officer certifications

Financial Data and Key Metrics Changes - For Q2 2023, the company reported net income of approximately $7.9 million, with net income to common shareholders of $1.7 million or $0.05 per common share [19] - Adjusted FFO for the current quarter was approximately $3.8 million, or $10.7 per share, compared to $4.5 million, or $12.9 per share in the prior year quarter, primarily due to higher costs incurred to carry uninvested capital [20] - Total related party fees increased by about $156,000, primarily driven by additional assets added to the portfolio over the past year [23] Business Line Data and Key Metrics Changes - The company owns about 116,000 acres across 69 different farms, valued at approximately $1.6 billion, including 45,000 acre-feet of bank water [7] - The total year-over-year impact on operations due to tenant issues resulted in a decrease in net operating income of about $318,000 for Q2 and about $613,000 for the total year so far [9] - Fixed base cash rents increased by about $512,000, or 3% over the prior year quarter, primarily driven by additional revenues from new farms acquired [21] Market Data and Key Metrics Changes - Food prices in grocery stores are showing signs of cooling but continue to outpace inflation, with the "food at home" category up by 4.7% for the 12 months ending June 30 [15] - The overall farmland portfolio continues to perform as expected, with the NCREIF farmland index showing a return of 11.4% over the past 25 years, outperforming both the S&P index and overall REIT indexes [30] Company Strategy and Development Direction - The company is being more selective in farm acquisitions due to high prices and rising interest rates, focusing on farms that contribute to healthy lifestyles, such as fruits and vegetables [10][29] - The company is actively working on water improvement projects in California to ensure long-term water supplies and compliance with state groundwater restrictions [16][17] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding acquisitions due to high borrowing costs and the current pricing of farms, indicating a preference for a conservative capital approach [10][29] - The expectation is that inflation, particularly in the food sector, will continue to increase, positively impacting the values of underlying farmland [32] Other Important Information - The company raised its common dividend to $0.462 per share per month, marking the 31st increase over the past 34 quarters, resulting in a total increase of 54% over that period [27] - The net asset value for common shares at June 30 was $19.15, up by over $2 from the value at March 31, primarily due to changes in the valuation of fixed-rate debt and preferred securities [25] Q&A Session Summary Question: Any acquisitions on your contract today? - The company currently has no acquisitions under contract but is in discussions with farmers. The focus remains on amassing assets in the farming area despite high prices [34] Question: Where are the issues with the operators showing up? - Issues are reflected in both revenue and property operating expenses, with a year-over-year impact on net operating income of about $600,000 due to tenant issues and increased legal fees [38] Question: How should we be thinking about the seasonality of revenues in the back half of the year? - The revenue increase in the second half of the year is expected to be less than in prior years due to the lack of acquisitions, with participation rents being the primary source of revenue growth [41] Question: Can you go through the change in the BC and Series E quickly? - The majority of the change in net asset value calculation comes from the Series C preferred stock, which was marked down significantly after being listed [46]

[PART I FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) Gladstone Land Corporation's unaudited condensed consolidated financial statements for Q2 and six months ended June 30, 2023, detail balance sheets, operations, equity, and cash flows [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2023, total assets slightly decreased to $1.43 billion, liabilities decreased to $693.8 million, and total equity increased to $734.9 million Condensed Consolidated Balance Sheets (in thousands) | Account | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | **$1,428,732** | **$1,457,251** | | Total real estate, net | $1,309,414 | $1,325,428 | | Cash and cash equivalents | $48,208 | $61,141 | | **Total Liabilities** | **$693,798** | **$725,889** | | Notes and bonds payable, net | $593,656 | $626,400 | | **Total Equity** | **$734,934** | **$731,362** | [Condensed Consolidated Statements of Operations and Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) Net income significantly increased to $7.9 million in Q2 2023, driven by a $6.4 million gain on real estate disposition, with lease revenue showing modest growth Key Operating Results (in thousands, except per share data) | Metric | Q2 2023 | Q2 2022 | Six Months 2023 | Six Months 2022 | | :--- | :--- | :--- | :--- | :--- | | **Total operating revenues** | **$21,210** | **$20,293** | **$42,412** | **$40,236** | | Total operating expenses | $13,383 | $12,160 | $27,141 | $25,525 | | Gain (loss) on dispositions | $6,394 | $(305) | $5,914 | $(1,280) | | **Net Income** | **$7,855** | **$613** | **$9,605** | **$1,800** | | Net Income (Loss) to Common Stockholders | $1,727 | $(3,873) | $(2,593) | $(6,610) | | **EPS (Basic and Diluted)** | **$0.05** | **$(0.11)** | **$(0.07)** | **$(0.19)** | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2023, operating cash flow was $22.6 million, investing provided $3.1 million, and financing used $38.6 million, resulting in a $12.9 million net cash decrease Six Months Ended June 30, Cash Flow Summary (in thousands) | Cash Flow Category | 2023 | 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $22,577 | $19,355 | | Net cash provided by (used in) investing activities | $3,101 | $(35,147) | | Net cash (used in) provided by financing activities | $(38,611) | $47,528 | | **Net (Decrease) Increase in Cash** | **$(12,933)** | **$31,736** | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the real estate portfolio of 169 farms, $593.8 million in borrowings, equity issuance activities, and related-party transactions - The company's portfolio consisted of **169 farms totaling 115,593 acres** as of June 30, 2023, with California (63 farms) and Florida (26 farms) being the most significant locations[31](index=31&type=chunk)[32](index=32&type=chunk) - On June 23, 2023, the company sold a 138-acre parcel of unfarmed land in Florida for **$9.6 million**, recognizing a net gain of approximately **$6.4 million**[43](index=43&type=chunk) - Total borrowings stood at **$593.8 million** as of June 30, 2023, with a weighted-average stated interest rate of **3.79%**[53](index=53&type=chunk) - Subsequent to June 30, 2023, the company sold **41,600 shares of Series E Preferred Stock** for gross proceeds of **$1.04 million** and **58,360 shares of common stock** under its ATM program for gross proceeds of **$1.01 million**[110](index=110&type=chunk)[111](index=111&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=27&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses financial performance, portfolio activity, and liquidity, noting a 5.4% revenue increase, $185.4 million in liquidity, and an estimated NAV per common share of $19.15 [Overview](index=27&type=section&id=Overview) Gladstone Land, an agricultural REIT, owns 169 farms across 15 states, diversified with 92 tenants and over 60 crop types, focusing on fresh produce and permanent crops - The company owns **169 farms comprised of 115,593 acres** in 15 states, leased to 92 different, unrelated third-party tenants[118](index=118&type=chunk)[119](index=119&type=chunk) - California and Florida represent the largest geographic concentrations, accounting for **64.0% and 17.7% of total lease revenue**, respectively, for the six months ended June 30, 2023[121](index=121&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Total operating revenues increased 4.5% in Q2 2023 and 5.4% for the six-month period, driven by acquisitions, with operating expenses rising and net income benefiting from a property sale gain Comparison of Operating Results (in thousands) | Metric | Q2 2023 | Q2 2022 | Six Months 2023 | Six Months 2022 | | :--- | :--- | :--- | :--- | :--- | | **Total operating revenues** | **$21,210** | **$20,293** | **$42,412** | **$40,236** | | **Total operating expenses** | **$13,383** | **$12,160** | **$27,141** | **$25,525** | | **Operating income** | **$7,827** | **$8,133** | **$15,271** | **$14,711** | - Lease revenue from properties acquired or disposed of increased significantly, contributing an additional **$1.0 million in Q2 2023** and **$2.1 million in the first six months of 2023** compared to the prior year periods[154](index=154&type=chunk) - The base management fee paid to the Adviser increased due to a larger asset base, while no incentive fee was earned in the first half of 2023, compared to a **$1.1 million fee in the first half of 2022**[167](index=167&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) The company has **$185.4 million in available liquidity**, with over **99.9% of debt at fixed rates**, and will meet future capital needs via cash flow, debt, and equity issuances - Current available liquidity is approximately **$185.4 million**, consisting of cash on hand and availability under the MetLife credit facility[174](index=174&type=chunk) - Over **99.9% of borrowings are at fixed rates**, with a weighted-average effective interest rate of **3.35%** for another **4.6 years**[174](index=174&type=chunk) - Since January 1, 2023, the company has raised gross proceeds of **$4.4 million** from its Series E Preferred Stock offering and **$15.2 million** from its common stock ATM program[189](index=189&type=chunk)[190](index=190&type=chunk) [Non-GAAP Financial Information](index=42&type=section&id=NON-GAAP%20FINANCIAL%20INFORMATION) The company provides non-GAAP metrics, with Diluted AFFO per share at $0.11 for Q2 2023, and an estimated Net Asset Value (NAV) per common share of $19.15 as of June 30, 2023 Non-GAAP Performance Metrics (per share) | Metric | Q2 2023 | Q2 2022 | Six Months 2023 | Six Months 2022 | | :--- | :--- | :--- | :--- | :--- | | Diluted FFO | $0.12 | $0.14 | $0.27 | $0.33 | | Diluted CFFO | $0.13 | $0.14 | $0.31 | $0.33 | | Diluted AFFO | $0.11 | $0.13 | $0.28 | $0.31 | | Distributions Declared | $0.14 | $0.14 | $0.28 | $0.27 | Estimated NAV per Common Share | Date | Estimated NAV per Share | | :--- | :--- | | June 30, 2023 | $19.15 | | March 31, 2023 | $17.12 | [Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's primary market risk is interest rate risk, largely mitigated by over **99.9% of borrowings at fixed rates** with a **3.35% weighted-average effective rate** for **4.6 years** - The company's primary market risk is interest rate risk, which is mitigated by having over **99.9% of its borrowings at fixed rates**[215](index=215&type=chunk) - The weighted-average effective interest rate on fixed-rate debt is **3.35%**, with a remaining fixed term of **4.6 years**[215](index=215&type=chunk) [Controls and Procedures](index=49&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures were effective as of June 30, 2023, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective as of June 30, 2023**[217](index=217&type=chunk) - No material changes were made to the internal control over financial reporting during the quarter ended June 30, 2023[219](index=219&type=chunk) [PART II OTHER INFORMATION](index=51&type=section&id=PART%20II%20OTHER%20INFORMATION) [Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently subject to any material legal proceedings, nor is it aware of any threatened material legal proceedings - The company is not currently subject to any material legal proceedings[221](index=221&type=chunk) [Risk Factors](index=51&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2022 - No material changes to risk factors have occurred since the last Annual Report on Form 10-K[222](index=222&type=chunk) [Exhibits](index=53&type=section&id=Item%206.%20Exhibits) This section provides an index of all exhibits filed with the Form 10-Q, including certifications by the CEO and CFO, and interactive data files (XBRL)

Financial Data and Key Metrics Changes - For Q1 2023, the company reported a net income of approximately $1.8 million and a net loss to common shareholders of $4.3 million or $0.12 per common share [21] - Adjusted FFO for the current quarter was approximately $6 million or $0.17 per share, compared to $6.4 million or $0.185 per share in the prior year quarter [21] - Fixed base cash rents increased by about $850,000 or 4% over the prior year quarter, primarily driven by additional revenues from new farms acquired [22] Business Line Data and Key Metrics Changes - The company owns about 116,000 acres on 169 farms, with a total valuation of approximately $1.6 billion for both land and water [8] - The existing farmland portfolio continues to perform as expected, with a year-over-year impact resulting in a decrease in net operating income of $295,000 due to tenant issues [11] - Five leases were renewed since the beginning of the year, expected to result in an increase in annual net operating income of $598,000 or about 12% [12] Market Data and Key Metrics Changes - The company noted that inflation remains high, with the latest headline inflation number at 5%, down from previous levels but still above the Federal Reserve's target of 2% [14] - Food prices in the food-from-home category are up only by 8.5%, which is expected to help mitigate increases in operating costs for farmers [15] - Water supply in California has improved significantly, with reservoirs at or above historic averages, leading to 100% water allocation for the first time since 2006 [16][17] Company Strategy and Development Direction - The company is being more selective in acquisitions due to rising inflation and interest rates, indicating a cautious approach to capital deployment [11][28] - The focus remains on farmland that grows crops contributing to healthy lifestyles, aligning with market trends towards healthy eating [29][31] - The company expects inflation in the food sector to continue increasing, which should drive up the value of underlying farmland [32] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the performance of the farmland portfolio despite tenant issues, with expectations of continued strong demand for prime farmland [29] - The company is prepared for potential challenges from government actions and market conditions, maintaining a strong liquidity position [59] - Management anticipates that the current economic environment may lead to a deleveraging year rather than growth, but remains open to opportunities if conditions improve [45] Other Important Information - The company raised its common dividend to $0.046 per share per month, marking the 30th increase over the past 33 quarters [27] - The net asset value per common share as of March 31 was $17.12, up slightly from the previous value [25] - The company has over $190 million in liquidity and $130 million in unpledged properties, providing a strong financial cushion [25] Q&A Session Summary Question: Insights on the acquisition market and farm valuations - Management noted that farm sale prices have increased significantly, particularly in the Midwest, leading to a slowdown in acquisitions due to high cap rates [34] Question: Details on the $40 million debt expiration and refinancing plans - Management indicated that $23 million of the maturing debt is due early in 2024, with plans to assess refinancing options based on interest rates at that time [37] Question: Expectations for operating expenses related to the self-operated farm - Management expects operating expenses to decrease once a lease is secured, with current expenses around $100,000 for the quarter [40] Question: Impact of floods on crop yields and harvest - Management expressed optimism about the benefits of increased water supply for crops like nuts and blueberries, while acknowledging some losses in other crops like strawberries [43] Question: Participation rents outlook for the back half of the year - Management anticipates a decrease in participation rents due to the conversion of some leases to fixed payments, but hopes for increased yields in the following year [56]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 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: 001-35795 GLADSTONE LAND CORPORATION | --- | --- | --- | |----------------------- ...

Gladstone Land Corporation (NASDAQ:LAND) Q4 2022 Earnings Conference Call February 22, 2023 8:30 AM ET Company Participants David Gladstone - President and CEO Michael LiCalsi - President, Gladstone Administration, General Counsel and Secretary Lewis Parrish - Chief Financial Officer Conference Call Participants Gaurav Mehta - EF Hutton Rob Stevenson - Janney Montgomery Scott John Massocca - Ladenburg Thalmann Craig Kucera - B Riley Securities Operator Greetings. And welcome to the Gladstone Land Corporatio ...

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, 2022 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: 001-35795 GLADSTONE LAND CORPORATION (Exact name of registrant as specified in its cha ...

Financial Data and Key Metrics Changes - For Q3 2022, the company reported a net income of approximately $1.8 million and a net loss to common shareholders of $3.6 million, equating to $0.074 per common share [20] - Adjusted FFO for Q3 was about $7.2 million, up from $4.5 million in Q2, with AFFO per share increasing to $20.07 from $12.9 [20] - Dividends declared per share rose to $0.137 in Q3 from $0.136 in Q2, driven by an increase in participation rents [21] Business Line Data and Key Metrics Changes - The company acquired four venues in Washington State and Oregon for about $37 million, yielding a net cash yield of approximately 6.2% [9] - Six leases were renewed, expected to increase annual operating income by about $281,000, or 10% over prior leases [10] - Participation rents recorded in Q3 were about $3 million, a significant increase from only $20,000 in the previous quarter [21] Market Data and Key Metrics Changes - Inflation remains high, with the latest headline inflation at 8.2%, while food prices at home increased by 13% [11] - The value of the farmland portfolio increased by about $17 million, or 3.7%, with Florida farms appreciating by an average of 11% [22] - The portfolio was valued at approximately $1.6 billion as of September 30, with a net asset value per common share of $16.56, up by $0.96 from the previous quarter [23] Company Strategy and Development Direction - The company is being more selective in acquisitions due to rising inflation and interest rates, focusing on conservative capital management [9] - Plans to enhance water security include purchasing water on the open market and acquiring long-term water contracts [13] - The company aims to continue investing in farmland that supports healthy lifestyles, aligning with market trends towards fruits and vegetables [27] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about the impact of inflation and rising costs on farmers, particularly regarding water and fertilizer [38] - The company anticipates that food prices will continue to rise, potentially outpacing general inflation, which may benefit farm operators [12] - Management is cautious about new acquisitions, preferring to wait for more favorable market conditions [39] Other Important Information - The company has over $175 million in liquidity and $100 million in unpledged properties, with 99% of borrowings at fixed rates [24][25] - The company has experienced minimal impact from recent interest rate increases, with upcoming debt maturities manageable [26] Q&A Session Summary Question: What percentage of the farms had a value change quarter-over-quarter? - About 1/3 of the portfolio was revalued in Q3, with Q4 expected to be lighter at 18% to 20% [32] Question: What was the impact on the NAV calculation from the debt adjustment? - The debt adjustment impacted NAV by $0.55 per share [33] Question: What is the current cost for new debt? - The current cost for new debt is in the mid-5s, around 5.5% to 5.6% [34] Question: Any commonality on the $1.3 million of late rent payments? - The late rent payments are primarily associated with almond crops in California [42] Question: Can you comment on the water situation for farms with raw crops? - The main concern is with tree crops, particularly almonds, which require significant water [46] Question: What is the breakdown of participation rents? - Pistachios account for about 2/3 of participation rents, with almonds making up 20% to 25% [51] Question: What are the current cap rates for acquisitions? - Cap rates are mixed, with nut farms seeing lower valuations compared to produce farms [58]