Farmland Partners Inc.

10/21/2024 | Press release | Distributed by Public on 10/21/2024 15:01

Unaudited Pro Forma Consolidated Financial Statements Form 8 K

Unaudited Pro Forma Consolidated Financial Statements

On October 16, 2024, Farmland Partners Inc. ("FPI" or the "Company") completed the sale of a portfolio of 46 farms comprising 41,554 acres of farmland located in Arkansas, Florida, Louisiana, Mississippi, Nebraska, Oklahoma, North Carolina and South Carolina (the "Portfolio") for an aggregate purchase price of $289 million in a single transaction (the "Transaction") to Farmland Reserve, Inc., a Utah nonprofit corporation, pursuant to the terms of the purchase and sale agreement entered into on October 2, 2024.

The following unaudited pro forma consolidated financial statements of FPI, collectively with its subsidiaries, each giving effect to the Transaction, are included herein:

● Unaudited pro forma consolidated balance sheet as of June 30, 2024;
● Unaudited pro forma consolidated statement of operations for six months ended June 30, 2024; and
● Unaudited pro forma consolidated statement of operations for the year ended December 31, 2023;

The unaudited pro forma consolidated balance sheet as of June 30, 2024 is presented as if the Transaction closed on June 30, 2024. The unaudited pro forma consolidated statements of operations for the six months ended June 30, 2024 and for the year ended December 31, 2023 have been presented as if the Transaction occurred on January 1, 2023.

The unaudited pro forma consolidated financial statements presented below have been derived from FPI's historical consolidated financial statements. While the historical consolidated financial statements reflect the past financial results of FPI, the unaudited pro forma consolidated financial statements are presented for illustrative purposes only and are not intended to represent or be indicative of FPI's financial position or results of operations had the Transaction been completed as of the beginning of the earliest period presented, nor are they indicative of FPI's future financial condition or results of operations.

The unaudited pro forma consolidated financial statements reflect the transaction accounting adjustments necessary to account for the Transaction. The pro forma adjustments are based upon available information and assumptions that FPI's management believes are reasonable, factually supportable and directly attributable to the Transaction. The actual financial position and results of operations of FPI could differ materially from these estimates. Additional information about the pro forma adjustments can be found in the accompanying notes to the unaudited pro forma consolidated financial statements. The unaudited pro forma consolidated financial statements should be read in conjunction with (i) the historical audited consolidated financial statements and notes thereto in FPI's Annual Report on Form 10-K for the year ended December 31, 2023, (ii) the historical unaudited consolidated financial statements and notes thereto in FPI's Quarterly Report on Form 10-Q for the three and six months ended June 30, 2024 and (iii) other information regarding the Transaction and FPI included in FPI's filings with the U.S. Securities and Exchange Commission from time to time.

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Farmland Partners Inc.

Unaudited Pro Forma Consolidated Balance Sheet

As of June 30, 2024

(in thousands, except par value and share data)

Pro Forma

Pro Forma

Historical (a)

Adjustments (b)

Total

ASSETS

Land, at cost

$

885,993

$

(223,963)

$

662,030

Grain facilities

12,459

(4,654)

7,805

Groundwater

11,033

-

11,033

Irrigation improvements

41,683

(11,842)

29,841

Drainage improvements

10,315

(2,072)

8,243

Permanent plantings

42,316

-

42,316

Other

4,708

(693)

4,015

Construction in progress

1,559

-

1,559

Real estate, at cost

1,010,066

(243,224)

766,842

Less accumulated depreciation

(34,553)

4,787

(29,766)

Total real estate, net

975,513

(238,437)

737,076

Cash and cash equivalents

5,746

142,403

(c)

148,149

Assets held for sale

24

-

24

Loans and financing receivables, net

31,438

-

31,438

Right of use asset

298

-

298

Accounts receivable, net

1,128

-

1,128

Derivative asset

1,756

(1,134)

(d)

622

Inventory

3,021

-

3,021

Equity method investments

4,071

-

4,071

Intangible assets, net

2,025

-

2,025

Goodwill

2,706

-

2,706

Prepaid and other assets

765

-

765

TOTAL ASSETS

$

1,028,491

$

(97,168)

$

931,323

LIABILITIES AND EQUITY

LIABILITIES

Mortgage notes and bonds payable, net

$

391,059

$

(146,597)

(c)

$

244,462

Lease liability

298

-

298

Dividends payable

2,967

-

2,967

Accrued interest

4,702

-

4,702

Accrued property taxes

1,799

(427)

1,372

Deferred revenue

1,283

(364)

919

Accrued expenses

4,429

(3)

4,426

Total liabilities

406,537

(147,391)

259,146

Commitments and contingencies

Redeemable non-controlling interest in operating partnership, Series A preferred units

100,485

-

100,485

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EQUITY

Common stock, $0.01 par value, 500,000,000 shares authorized; 48,166,909 shares issued and outstanding at June 30, 2024, and 48,002,716 shares issued and outstanding at December 31, 2023

465

-

465

Additional paid in capital

578,166

-

578,166

Retained earnings

29,297

46,496

75,793

Cumulative dividends

(101,723)

-

(101,723)

Other comprehensive income

2,521

(1,134)

(d)

1,387

Non-controlling interests in operating partnership

12,743

4,861

17,604

Total equity

521,469

50,223

571,692

TOTAL LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS IN OPERATING PARTNERSHIP AND EQUITY

$

1,028,491

$

(97,168)

$

931,323

Refer to accompanying notes to unaudited pro forma consolidated financial statements.

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Farmland Partners Inc.

Unaudited Pro Forma Consolidated Statement of Operations

For the Six Months Ended June 30, 2024

(in thousands, except par value and share data)

Pro Forma

Pro Forma

Historical (e)

Adjustments (f)

Total

OPERATING REVENUES:

Rental income

$

19,746

$

(5,234)

$

14,512

Crop sales

1,595

-

1,595

Other revenue

2,094

-

2,094

Total operating revenues

23,435

(5,234)

18,201

OPERATING EXPENSES

Depreciation, depletion and amortization

2,911

(393)

2,518

Property operating expenses

3,668

(404)

3,264

Cost of goods sold

1,302

-

1,302

Acquisition and due diligence costs

27

-

27

General and administrative expenses

6,364

-

6,364

Legal and accounting

740

-

740

Other operating expenses

36

-

36

Total operating expenses

15,048

(797)

14,251

OTHER (INCOME) EXPENSE:

Other (income) expense

(68)

106

38

(Income) loss from equity method investment

(95)

-

(95)

(Gain) loss on disposition of assets, net

96

(26)

70

(Income) from forfeited deposits

(1,205)

-

(1,205)

Interest expense

10,285

(4,130)

(g)

6,155

Total other expense

9,013

(4,050)

4,963

Net income (loss) before income tax (benefit) expense

(626)

(387)

(1,013)

Income tax (benefit) expense

18

-

18

NET INCOME (LOSS)

(644)

(387)

(1,031)

Net (income) loss attributable to non-controlling interests in operating partnership

15

10

25

Net income (loss) attributable to the Company

(629)

(377)

(1,006)

Dividend equivalent rights allocated to performance-based unvested restricted shares

(4)

-

(4)

Nonforfeitable distributions allocated to time-based unvested restricted shares

(44)

-

(44)

Distributions on Series A Preferred Units

(1,486)

-

(1,486)

Net income (loss) available to common stockholders of Farmland Partners Inc.

$

(2,163)

$

(377)

$

(2,540)

-

Basic and diluted per common share data:

Basic net income (loss) available to common stockholders

$

(0.05)

$

(0.05)

Diluted net income (loss) available to common stockholders

$

(0.05)

$

(0.05)

Basic weighted average common shares outstanding

47,751

47,751

Diluted weighted average common shares outstanding

47,751

47,751

Refer to accompanying notes to unaudited pro forma consolidated financial statements.

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Farmland Partners Inc.

Unaudited Pro Forma Consolidated Statement of Operations

For the Year Ended December 31, 2023

(in thousands, except par value and share data)

Pro Forma

Pro Forma

Historical (h)

Adjustments (i)

Total

OPERATING REVENUES:

Rental income

$

49,185

$

(9,981)

$

39,204

Crop sales

2,257

-

2,257

Other revenue

6,024

(17)

6,007

Total operating revenues

57,466

(9,998)

47,468

OPERATING EXPENSES

Depreciation, depletion and amortization

7,499

(777)

6,722

Property operating expenses

8,660

(790)

7,870

Cost of goods sold

4,754

-

4,754

Acquisition and due diligence costs

17

-

17

General and administrative expenses

11,274

(2)

11,272

Legal and accounting

1,279

-

1,279

Impairment of assets

5,840

-

5,840

Other operating expenses

144

-

144

Total operating expenses

39,467

(1,569)

37,898

OTHER (INCOME) EXPENSE:

Other (income)

(39)

-

(39)

(Income) from equity method investment

(1)

-

(1)

(Gain) on disposition of assets, net

(36,133)

-

(36,133)

Interest expense

22,657

(7,258)

(j)

15,399

Total other expense

(13,516)

(7,258)

(20,774)

Net income before income tax (benefit) expense

31,515

(1,171)

30,344

Income tax (benefit) expense

(166)

-

(166)

NET INCOME

31,681

(1,171)

30,510

Net (income) attributable to non-controlling interests in operating partnership

(768)

29

(739)

Net income attributable to the Company

30,913

(1,142)

29,771

Nonforfeitable distributions allocated to unvested restricted shares

(157)

-

(157)

Distributions on Series A Preferred Units

(2,970)

-

(2,970)

Net income available to common stockholders of Farmland Partners Inc.

$

27,786

$

(1,142)

$

26,644

Basic and diluted per common share data:

Basic net income available to common stockholders

$

0.55

$

0.53

Diluted net income available to common stockholders

$

0.53

$

0.51

Basic weighted average common shares outstanding

50,243

50,243

Diluted weighted average common shares outstanding

58,292

58,292

Refer to accompanying notes to unaudited pro forma consolidated financial statements.

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Farmland Partners Inc.

Notes to the Unaudited Pro Forma Consolidated Financial Statements

Basis of Presentation

The unaudited pro forma consolidated balance sheet as of June 30, 2024 has been presented as if the Transaction closed on June 30, 2024. The unaudited pro forma consolidated statements of operations for the six months ended June 30, 2024 and for the year ended December 31, 2023 have been presented as if the Transaction occurred on January 1, 2023.

Unaudited Pro Forma Consolidated Balance Sheet

a) Historical financial information as of June 30, 2024 derived from the Company's Quarterly Report on Form 10-Q for the six months ended June 30, 2024.
b) Unless otherwise noted, represents adjustments to reflect the disposition of the Portfolio. The sale price of the Portfolio was $289.0 million.
c) Includes the reduction of debt from repaying $146.6 million of mortgage debt executed at closing or immediately thereafter. The Company may make further debt reductions.
d) In connection with the debt reduction on the Company's mortgage note with Rabobank, the notional value on the interest rate swap was reduced to $11.8 million. This adjustment represents the decrease to the derivative asset value as a result of the reduction to the notional value.

Unaudited Pro Forma Consolidated Statement of Operations for the Six Months Ended June 30, 2024

e) Historical financial information derived from the Company's Quarterly Report on Form 10-Q for the six months ended June 30, 2024.
f) Unless otherwise noted, amounts represent the historical operations of the Portfolio as reflected in the historical statement of operations of the Company for the six months ended June 30, 2024.
g) Represents the reduction of interest expense from repaying $146.6 million of mortgage debt.

Unaudited Pro Forma Consolidated Statement of Operations for the Year Ended December 31, 2023

h) Historical financial information derived from the Company's Annual Report on Form 10-K for the year ended December 31, 2023.
i) Unless otherwise noted, amounts represent the historical operations of the Portfolio as reflected in the historical statement of operations of the Company for the year ended December 31, 2023.
j) Represents the reduction of interest expense from repaying $146.6 million of mortgage debt.