Farmland Partners(US:FPI)2025-10-30 20:06Farmland Ownership and Operations - As of September 30, 2025, the company owned approximately 75,600 acres of farmland across multiple states, with 60% allocated to primary crops and 40% to specialty crops [167][168]. - The company’s portfolio includes 1,845 acres of farmland directly operated in California under its taxable REIT subsidiary, FPI Agribusiness Inc. [174]. - The company intends to continue acquiring farmland that offers risk-adjusted investment returns and may also dispose of assets to enhance shareholder returns [174]. - As of September 30, 2025, the company has approximately 75,585 acres leased, with annual minimum fixed rents totaling $20.739 million [187]. - The company recognizes rental revenue from fixed-rate farmland leases on a pro rata basis, with significant portions of fixed rent received before planting season and variable rental payments received after harvest, indicating seasonality in revenue recognition [265]. Revenue and Income - The principal source of revenue is rent from tenants, with a mix of fixed and variable rent payments designed to mitigate credit-risk exposure [175]. - Total operating revenues for the three months ended September 30, 2025, were $11.251 million, a decrease of 15.5% from $13.317 million in the same period in 2024 [207]. - Rental income decreased by $3.8 million, or 38.6%, for the three months ended September 30, 2025, compared to the same period in 2024, primarily due to property dispositions [208]. - Crop sales increased to $2.789 million for the three months ended September 30, 2025, up 6.6% from $2.616 million in the same period in 2024 [210]. - Other revenue rose by $1.523 million, or 160.7%, for the three months ended September 30, 2025, compared to the same period in 2024, mainly due to higher interest income from loans [211]. - Net income for the three months ended September 30, 2025, was $491,000, a decrease of 73.3% from $1.838 million in the same period in 2024 [207]. - The company reported a net income of $10,376,000 for the nine months ended September 30, 2025, compared to $1,194,000 in 2024, indicating a substantial increase [256]. Expenses and Financial Performance - The company incurred interest expense of $2.271 million for the three months ended September 30, 2025, down 58.7% from $5.496 million in the same period in 2024 [207]. - Depreciation, depletion, and amortization decreased by $0.5 million, or 33.7%, for the three months ended September 30, 2025, compared to the same period in 2024 [212]. - Property operating expenses decreased by $0.5 million, or 27.8%, for the three months ended September 30, 2025, primarily due to lower tax, repairs, and maintenance expenses [213]. - General and administrative expenses decreased by $0.4 million, or 14.8%, for the three months ended September 30, 2025, primarily due to prior year stock-based compensation [215]. - Interest expense decreased by $8.4 million, or 53.5%, for the nine months ended September 30, 2025, due to lower outstanding debt and reduced interest rates [237]. Asset Impairment and Dispositions - Impairment of assets was $1.0 million for the three months ended September 30, 2025, compared to $0.0 million in 2024, related to a property on the West Coast [217]. - Impairment of assets was $17.8 million for the nine months ended September 30, 2025, compared to $0.0 million in 2024, related to certain properties [233]. - Net cash used in investing activities increased significantly by $77.8 million, primarily due to property dispositions of $85.5 million in 2025 compared to $1.5 million in 2024 [249]. Cash Flow and Financing - Net cash provided by operating activities increased to $2,233,000 for the nine months ended September 30, 2025, compared to $1,528,000 in 2024, reflecting a growth of approximately 46.2% [246]. - Cash and cash equivalents as of September 30, 2025, were $13.5 million, up from $8.1 million in 2024, representing a year-over-year increase of 66.7% [248]. - Net cash used in financing activities decreased by $146.1 million, with common stock repurchases totaling $37.8 million in 2025, compared to $0 in 2024 [250]. - Borrowings from mortgage notes payable decreased to $23.0 million in 2025 from $81.0 million in 2024, a reduction of 71.5% [253]. Market Conditions and Risks - Global demand for food is expected to drive farmland values, with significant increases in GDP per capita and population contributing to this demand [179]. - The company anticipates sustained growth in farmland values due to increasing global food demand and limited availability of high-quality farmland [178][186]. - The ongoing war in Ukraine and other international conflicts have stressed food supply chains, impacting agricultural product availability [181]. - The company is exposed to risks related to tenant credit and farming operations, particularly with variable rent arrangements [175]. - The company faces primary market risk from interest rate fluctuations, particularly related to SOFR, and employs fixed interest rate financing and derivatives to manage this risk [266]. Shareholder Returns and Dividends - Dividends on common stock increased to $61.2 million in 2025, up from $18.7 million in 2024, representing a growth of 226.7% [253]. - Funds from Operations (FFO) for the nine months ended September 30, 2025, were $6,978,000, an increase from $3,635,000 in 2024, marking an increase of 92.5% [256]. - Adjusted Funds from Operations (AFFO) for the nine months ended September 30, 2025, were $6,468,000, compared to $4,713,000 in 2024, reflecting a growth of 37.2% [256].