Farmland Partners(FPI) - 2021 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Consolidated Financial Statements The unaudited consolidated financial statements for Q2 2021 reflect total assets of $1.104 billion, a net loss of $2.9 million, and increased cash from financing activities Consolidated Balance Sheets As of June 30, 2021, total assets increased to $1.104 billion, driven by higher cash balances, while total equity rose to $323.4 million | Balance Sheet Items (in thousands) | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Total real estate, net | $1,052,510 | $1,053,120 | | Cash | $40,159 | $27,217 | | TOTAL ASSETS | $1,104,319 | $1,090,991 | | Mortgage notes and bonds payable, net | $500,705 | $506,625 | | Total liabilities | $523,013 | $524,801 | | Total equity | $323,435 | $305,914 | | TOTAL LIABILITIES AND EQUITY | $1,104,319 | $1,090,991 | Consolidated Statements of Operations For Q2 2021, the company reported a net loss of $2.9 million, primarily due to a significant increase in legal and accounting expenses compared to the prior year | (in thousands, except per share data) | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Total operating revenues | $10,013 | $10,517 | $21,589 | $22,168 | | Total operating expenses | $9,058 | $6,828 | $17,535 | $13,189 | | Legal and accounting | $2,901 | $848 | $5,643 | $1,330 | | OPERATING INCOME | $955 | $3,689 | $4,054 | $8,979 | | NET INCOME (LOSS) | $(2,865) | $172 | $(388) | $592 | | Net loss available to common stockholders | $(5,804) | $(2,942) | $(6,523) | $(5,679) | | Basic net (loss) per common share | $(0.19) | $(0.10) | $(0.21) | $(0.19) | Consolidated Statements of Comprehensive Income (Loss) The company reported a comprehensive loss of $2.9 million for Q2 2021, while the six-month period showed a comprehensive income of $1.1 million due to hedging activities | (in thousands) | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Net Income (loss) | $(2,865) | $172 | $(388) | $592 | | Net change associated with current period hedging activities | $(266) | $(400) | $942 | $(1,983) | | Comprehensive Income (Loss) | $(2,895) | $19 | $1,084 | $(1,144) | Consolidated Statements of Changes in Equity Total equity increased to $323.4 million by June 30, 2021, primarily due to stock issuance, despite a net loss and dividend payments - Total equity rose to $323.4 million at the end of Q2 2021 from $305.9 million at the start of the year[15] - In Q2 2021, the company issued 1.955 million shares of stock, contributing $25.3 million to equity[15] Consolidated Statements of Cash Flows Net cash from operating activities decreased to $8.2 million, while financing activities provided $7.4 million, largely due to proceeds from an ATM offering | (in thousands) | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $8,217 | $9,982 | | Net cash provided by (used in) investing activities | $(2,701) | $6,707 | | Net cash provided by (used in) financing activities | $7,426 | $(17,652) | | NET INCREASE (DECREASE) IN CASH | $12,942 | $(963) | | CASH, END OF PERIOD | $40,159 | $11,598 | - The company generated $25.3 million from its At-The-Market (ATM) offering in the first six months of 2021, which significantly boosted cash from financing activities[21] Notes to Consolidated Financial Statements The notes provide detailed information on the company's REIT status, accounting policies, real estate transactions, debt, equity, litigation, and subsequent events - The company owns a portfolio of approximately 157,000 acres and elected to be taxed as a REIT[23][24] - During the first six months of 2021, the company completed four acquisitions for $29.9 million and seven dispositions for $31.0 million in cash and convertible notes[66][68] - The company is involved in several class action and derivative lawsuits related to its FPI Loan Program disclosures. It also settled a lawsuit it filed against "Rota Fortunae" for a "short and distort" scheme[96][104] - The company sold 1.95 million shares under its At-the-Market (ATM) program, generating net proceeds of $25.3 million in the first half of 2021[136] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's farmland portfolio, Q2 2021 net loss driven by legal expenses, and liquidity bolstered by a $25.3 million ATM offering - The company's portfolio consists of approximately 157,000 acres, with 70% dedicated to primary crops (corn, soybeans, etc.) and 30% to specialty crops (blueberries, citrus, nuts)[162] - Q2 2021 net loss of $2.9 million was primarily driven by a $2.1 million year-over-year increase in legal and accounting expenses, largely related to litigation against parties involved in a "short and distort" scheme[198][203] - The company generated $25.3 million in net proceeds from its At-the-Market (ATM) equity program through June 30, 2021, enhancing its liquidity for acquisitions and other corporate purposes[222] | (in thousands) | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Net Income (Loss) | $(2,865) | $172 | $(388) | $592 | | FFO | $(1,054) | $1,258 | $(35) | $3,764 | | AFFO | $(3,648) | $(1,406) | $(5,259) | $(1,774) | Item 3. Quantitative and Qualitative Disclosures about Market Risk The company's primary market risk is interest rate risk, with 34.1% of its debt at variable rates, impacting cash flow by $0.8 million for every 100 basis point increase - The primary market risk exposure is interest rate risk associated with variable-rate debt[251] - As of June 30, 2021, 34.1% ($171.5 million) of the company's debt was subject to variable interest rates[252] - A 100 basis point increase in interest rates would result in an approximate annual decrease in cash flow of $0.8 million[252] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2021, with no material changes to internal controls over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[254] - There were no changes in internal controls over financial reporting during the six months ended June 30, 2021, that have materially affected, or are likely to materially affect, these controls[256] PART II. OTHER INFORMATION Item 1. Legal Proceedings This section refers to Note 8 of the Consolidated Financial Statements for details on ongoing legal proceedings, including class action lawsuits and litigation against alleged "short and distort" schemes - For details on legal proceedings, the report directs readers to Note 8 in Part I, Item 1 of the financial statements[257] Item 1A. Risk Factors No material changes to risk factors were reported since the 2020 Annual Report on Form 10-K - No material changes to risk factors were reported since the filing of the 2020 Annual Report on Form 10-K[258] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered equity sales, repurchased 17,000 preferred shares for $0.44 million, with $40.5 million remaining for repurchases - There were no unregistered sales of equity securities during the period[259] | Period | Total Preferred Shares Purchased (in thousands) | Average Price Paid per Share | | :--- | :--- | :--- | | April 2021 | 17 | $25.98 | | May 2021 | 0 | — | | June 2021 | 0 | — | | Total Q2 2021 | 17 | $25.82 | - As of the report date, $40.5 million was still available under the authorized share repurchase program[259][260] Item 3. Defaults Upon Senior Securities The company reported no defaults on its senior securities during the reporting period - None[261] Item 4. Mine Safety Disclosures This item is not applicable to the company's operations - Not applicable[262] Item 5. Other Information No other information was reported for this item - None[262] Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including CEO/CFO certifications and XBRL data files - The report includes standard CEO/CFO certifications and XBRL interactive data files as exhibits[263][264]