Significantly Reduces Debt, Increases 2024 Earnings Guidance, And Projects Special Dividend Of At Least $1.00

Farmland Partners Inc. (NYSE:FPI) ("FPI" or the "Company") today reported financial results for the quarter ended September 30, 2024.

Selected Highlights

During the quarter ended September 30, 2024, the Company:

recorded net income of $1.8 million, or $0.02 per share available to common stockholders, compared to $4.3 million (which included $10.3 million of gain on disposition of assets, net), or $0.07 per share available to common stockholders for the same period in 2023;
recorded AFFO of $1.4 million, or $0.03 per share, compared to ($0.5) million, or ($0.01) per share, for the same period in 2023;
increased total operating revenues by $1.7 million, or 14.6%, despite a decrease in average gross book value of real estate from $1.08 billion to $1.01 billion from 2023 to 2024, a decrease of 6.7% as a result of dispositions that occurred during 2023, reflecting the Company's strategic balancing of maximizing farm revenue while realizing for shareholders the benefit of selling appreciated farmland;
reduced total operating expenses by approximately $3.5 million, a 30.2% decrease compared to the same period in 2023.

Subsequent to September 30, 2024, the Company:

completed 52 farm dispositions under two transactions for $308.0 million in aggregate consideration;
repaid $189.4 million of debt with a weighted average interest rate of 5.77%, eliminating the Company's exposure to floating rate debt and positioning the Company for approximately $10.9 million of projected annual interest savings going forward;
decreased debt as a percentage of gross book value from 38.8% as of September 30, 2024 to 27.1% as of October 28, 2024 and decreased ratio of total debt to EBITDAre from 10.9 to 5.8;
issued a loan under the FPI Loan Program to a former tenant and its affiliates for approximately $20.0 million; and
increased the bottom and top end of 2024 AFFO guidance range to $0.24 to $0.30 from $0.20 to $0.26.

CEO Comments

Luca Fabbri, President and Chief Executive Officer, commented: "We are pleased to report another strong operating quarter, driven by efficiencies in our core business from the portfolio improvements and cost saving measures that we began in 2023. We have meaningfully increased 2024 earnings guidance at both the top and bottom ends of the ranges based on our improvements in our core business and the completion of $308 million in asset sales and the resulting debt reductions of $189 million and interest savings, the full impact of which will be seen in the coming quarters. These sales, and their related gains of approximately $53 million, have allowed us to, again, demonstrate the strong value embedded in our portfolio, which we believe continues to be meaningfully discounted by the market. With the remaining proceeds, we intend to make further debt reductions, buy back stock, and pursue strategic acquisitions. Additionally, as we did last year, we expect to issue a special dividend to shareholders at year-end, with the amount projected to be between $1.00 and $1.10 per share."

Financial and Operating Results

The table below shows financial and operating results for the three and nine months ended September 30, 2024 and 2023.


(in thousands)	For the three months ended September 30,							For the nine months ended September 30,
Financial Results:	2024		2023			Change		2024			2023			Change
Net Income	$	1,838	$	4,315		(57.4	)%	$	1,194		$	13,927		(91.4	)%
Net income (loss) available to common stockholders ⁽¹⁾	$	0.02	$	0.07		(71.4	)%	$	(0.02	)	$	0.22		NM
AFFO⁽²⁾	$	1,399	$	(465	)	NM	%	$	4,713		$	(46	)	NM
AFFO per weighted average common share	$	0.03	$	(0.01	)	NM	%	$	0.10		$	0.00		NM
Adjusted EBITDAre ⁽²⁾	$	7,649	$	6,317		21.1	%	$	22,752		$	18,804		21.0	%

Operating Results:
Total Operating Revenues	$	13,317	$	11,617		14.6	%	$	36,752		$	35,874		2.4	%
Net Operating Income (NOI)	$	9,784	$	8,815		11.0	%	$	28,249		$	26,536		6.5	%
_________________________
NM = Not Meaningful

⁽¹⁾		Basic net income per share available to common stockholders. See "Note 9—Stockholders' Equity and Non-controlling Interests" in the Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2024, when filed, for more information.
⁽²⁾		The nine months ended September 30, 2024 includes approximately $1.2 million of income from forfeited deposits due to the termination of a repurchase agreement and excludes approximately $1.4 million of severance expense.

See "Non-GAAP Financial Measures" below for complete definitions of AFFO, Adjusted EBITDAre, and NOI and the financial tables accompanying this press release for reconciliations of net income to AFFO, Adjusted EBITDAre and NOI.

Acquisition and Disposition Activity

During the nine months ended September 30, 2024, the Company acquired three properties for total consideration of $16.3 million.
During the nine months ended September 30, 2024, there were no dispositions of properties.

Balance Sheet

The Company had total debt outstanding of approximately $394.0 million at September 30, 2024 compared to total debt outstanding of approximately $363.1 million at December 31, 2023.
At September 30, 2024, the Company had access to liquidity of $140.2 million, consisting of $8.1 million in cash and $132.1 million in undrawn availability under its credit facilities compared to cash of $5.5 million and $201.1 million in undrawn availability under its credit facilities at December 31, 2023. Subsequent to September 30, 2024, the Company has repaid debt totaling $189.4 million and increased availability under its credit facilities to $168.9 million.
As of October 25, 2024, the Company had 49,375,976 shares of common stock outstanding on a fully diluted basis.

Dividend Declarations

On October 29, 2024, the Company's Board of Directors declared a quarterly cash dividend of $0.06 per share of common stock and Class A Common OP unit. The dividends are payable on January 15, 2025 to stockholders and common unit holders of record as of January 2, 2025.

2024 Earnings Guidance and Supplemental Package

For 2024 earnings guidance, please see page 15 of the supplemental package, which can be accessed through the Investor Relations section of the Company's website.

Conference Call Information

The Company has scheduled a conference call on October 31, 2024, at 11:00 a.m. (U.S. Eastern Time) to discuss the financial results and provide a company update.

The call can be accessed live over the phone by dialing 1-800-715-9871 and using the conference ID 4868033. The conference call will also be available via a live listen-only webcast that can be accessed through the Investor Relations section of the Company's website, www.farmlandpartners.com.

A replay of the conference call will be available beginning shortly after the end of the event until November 10, 2024, by dialing 1-800-770-2030 and using the playback ID 4868033. A replay of the webcast will also be accessible on the Investor Relations section of the Company's website for a limited time following the event.

About Farmland Partners Inc.

Farmland Partners Inc. is an internally managed real estate company that owns and seeks to acquire high-quality North American farmland and makes loans to farmers secured by farm real estate. As of the date of this release, the Company owned and/or managed approximately 136,000 acres of farmland in 15 states, including Arkansas, California, Colorado, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Nebraska, North Carolina, Ohio, South Carolina, and Texas. In addition, the Company owns land and buildings for four agriculture equipment dealerships in Ohio leased to Ag Pro under the John Deere brand. The Company elected to be taxed as a real estate investment trust, or REIT, for U.S. federal income tax purposes, commencing with the taxable year ended December 31, 2014. Additional information: www.farmlandpartners.com or (720) 452-3100.

Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of the federal securities laws, including, without limitation, statements with respect to our outlook and the outlook for the farm economy generally, proposed and pending acquisitions and dispositions, financing activities, crop yields and prices and anticipated rental rates. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "should," "could," "would," "predicts," "potential," "continue," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" or similar expressions or their negatives, as well as statements in future tense. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, beliefs and expectations, such forward-looking statements are not predictions of future events or guarantees of future performance, and our actual results could differ materially from those set forth in the forward-looking statements. Some factors that might cause such a difference include the following: market factors and other considerations that could result in the Company deciding not to declare and pay a special dividend or to declare and pay a special dividend that is less than stockholders anticipate; the ongoing war in Ukraine and the ongoing conflict in the Middle East and their impacts on the world agriculture market, world food supply, the farm economy generally, and our tenants' businesses; changes in trade policies in the United States and other countries that import agricultural products from the United States; high inflation and elevated interest rates; the onset of an economic recession in the United States and other countries that impact the farm economy; extreme weather events, such as droughts, tornadoes, hurricanes or floods; the impact of future public health crises on our business and on the economy and capital markets generally; general volatility of the capital markets and the market price of the Company's common stock; changes in the Company's business strategy, availability, terms and deployment of capital; the Company's ability to refinance existing indebtedness at or prior to maturity on favorable terms, or at all; availability of qualified personnel; changes in the Company's industry, interest rates or the general economy; adverse developments related to crop yields or crop prices; the degree and nature of the Company's competition; the outcomes of ongoing litigation; the timing, price or amount of repurchases, if any, under the Company's share repurchase program; the ability to consummate acquisitions or dispositions under contract; and the other factors described in the section entitled "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, and the Company's other filings with the Securities and Exchange Commission. Any forward-looking information presented herein is made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

Farmland Partners Inc.
Consolidated Balance Sheets
As of September 30, 2024 (Unaudited) and December 31, 2023
*(in thousands)*

	September 30,			December 31,
	2024			2023
ASSETS
Land, at cost	$	886,003		$	869,848
Grain facilities		12,459			12,222
Groundwater		11,033			11,472
Irrigation improvements		41,751			41,988
Drainage improvements		10,315			10,315
Permanent plantings		42,474			39,620
Other		4,626			4,696
Construction in progress		1,818			4,453
Real estate, at cost		1,010,479			994,614
Less accumulated depreciation		(35,833	)		(33,083	)
Total real estate, net		974,646			961,531
Deposits		1			426
Cash and cash equivalents		8,090			5,489
Assets held for sale		24			28
Loans and financing receivables, net		22,239			31,020
Right of use asset		242			399
Accounts receivable, net		9,033			7,743
Derivative asset		807			1,707
Inventory		2,785			2,335
Equity method investments		4,079			4,136
Intangible assets, net		2,019			2,035
Goodwill		2,706			2,706
Prepaid and other assets		452			2,447
TOTAL ASSETS	$	1,027,123		$	1,022,002

LIABILITIES AND EQUITY
LIABILITIES
Mortgage notes and bonds payable, net	$	392,244		$	360,859
Lease liability		242			399
Dividends payable		2,970			13,286
Accrued interest		5,069			4,747
Accrued property taxes		2,341			1,898
Deferred revenue		130			2,149
Accrued expenses		3,486			7,854
Total liabilities		406,482			391,192

Commitments and contingencies

Redeemable non-controlling interest in operating partnership, Series A preferred units		101,228			101,970

EQUITY
Common stock, $0.01 par value, 500,000,000 shares authorized; 48,172,637 shares issued and outstanding at September 30, 2024, and 48,002,716 shares issued and outstanding at December 31, 2023		465			466
Additional paid in capital		579,044			577,253
Retained earnings		30,348			31,411
Cumulative dividends		(104,615	)		(95,939	)
Other comprehensive income		1,463			2,691
Non-controlling interests in operating partnership		12,708			12,958
Total equity		519,413			528,840

TOTAL LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS IN OPERATING PARTNERSHIP AND EQUITY	$	1,027,123		$	1,022,002

Farmland Partners Inc.
Consolidated Statements of Operations
Three and Nine Months Ended September 30, 2024 and 2023 (Unaudited)
(in thousands except per share amounts)

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2024			2023			2024			2023
OPERATING REVENUES:
Rental income	$	9,753		$	10,137		$	29,499		$	31,084
Crop sales		2,616			814			4,211			1,689
Other revenue		948			666			3,042			3,101
Total operating revenues		13,317			11,617			36,752			35,874

OPERATING EXPENSES
Depreciation, depletion and amortization		1,414			1,904			4,325			5,905
Property operating expenses		1,956			2,099			5,624			6,709
Cost of goods sold		1,577			703			2,879			2,629
Acquisition and due diligence costs		—			3			27			17
General and administrative expenses		2,634			2,651			8,998			8,161
Legal and accounting		502			398			1,242			924
Impairment of assets		—			3,840			—			3,840
Other operating expenses		11			4			47			81
Total operating expenses		8,094			11,602			23,142			28,266

OTHER (INCOME) EXPENSE:
Other (income) expense		(134	)		(41	)		(202	)		23
(Income) loss from equity method investment		(8	)		(5	)		(103	)		17
(Gain) on disposition of assets, net		(1,980	)		(10,293	)		(1,884	)		(23,179	)
(Income) from forfeited deposits		—			—			(1,205	)		—
Interest expense		5,496			6,230			15,781			16,998
Total other (income) expense		3,374			(4,109	)		12,387			(6,141	)

Net income before income tax (benefit) expense		1,849			4,124			1,223			13,749

Income tax (benefit) expense		11			(191	)		29			(178	)

NET INCOME		1,838			4,315			1,194			13,927

Net (income) attributable to non-controlling interests in operating partnership		(45	)		(105	)		(29	)		(331	)

Net income attributable to the Company		1,793			4,210			1,165			13,596

Dividend equivalent rights allocated to performance-based unvested restricted shares		(2	)		—			(6	)		—
Nonforfeitable distributions allocated to time-based unvested restricted shares		(20	)		(21	)		(64	)		(64	)
Distributions on Series A Preferred Units		(743	)		(743	)		(2,229	)		(2,228	)

Net income (loss) available to common stockholders of Farmland Partners Inc.	$	1,028		$	3,446		$	(1,134	)	$	11,304

Basic and diluted per common share data:
Basic net income (loss) available to common stockholders	$	0.02		$	0.07		$	(0.02	)	$	0.22
Diluted net income (loss) available to common stockholders	$	0.02		$	0.07		$	(0.02	)	$	0.22
Basic weighted average common shares outstanding		47,839			48,432			47,780			51,079
Diluted weighted average common shares outstanding		47,839			48,432			47,780			51,079
Dividends declared per common share	$	0.06		$	0.06		$	0.18		$	0.18

Note: Due to a presentation change to the consolidated statements of operations, the Company now groups tenant reimbursement into rental income. Please see "Note 2—Revenue Recognition" of the Company's Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2024, when filed, for the detailed components of rental income.

Farmland Partners Inc.
Reconciliation of Non-GAAP Measures
Three and Nine Months Ended September 30, 2024 and 2023 (Unaudited)

	For the three months ended September 30,						For the nine months ended September 30,
(in thousands except per share amounts)	2024			2023			2024			2023
Net income	$	1,838		$	4,315		$	1,194		$	13,927
(Gain) on disposition of assets, net		(1,980	)		(10,293	)		(1,884	)		(23,179	)
Depreciation, depletion and amortization		1,414			1,904			4,325			5,905
Impairment of assets		—			3,840			—			3,840
FFO⁽¹⁾	$	1,272		$	(234	)	$	3,635		$	493

Stock-based compensation and incentive		870			509			1,907			1,474
Deferred impact of interest rate swap terminations		—			—			—			198
Real estate related acquisition and due diligence costs		—			3			27			17
Distributions on Preferred units and stock		(743	)		(743	)		(2,229	)		(2,228	)
Severance expense		—			—			1,373			—
AFFO ⁽¹⁾	$	1,399		$	(465	)	$	4,713		$	(46	)

AFFO per diluted weighted average share data:

AFFO weighted average common shares		49,414			49,997			49,365			52,652

Net income (loss) available to common stockholders of Farmland Partners Inc.	$	0.02		$	0.07		$	(0.02	)	$	0.22
Income available to redeemable non-controlling interest and non-controlling interest in operating partnership		0.02			0.01			0.06			0.05
Depreciation, depletion and amortization		0.03			0.04			0.09			0.11
Impairment of assets		0.00			0.08			0.00			0.07
Stock-based compensation and incentive		0.02			0.01			0.04			0.03
(Gain) on disposition of assets, net		(0.04	)		(0.21	)		(0.04	)		(0.44	)
Distributions on Preferred units and stock		(0.02	)		(0.01	)		(0.06	)		(0.04	)
Severance expense		0.00			0.00			0.03			0.00
AFFO per diluted weighted average share ⁽¹⁾	$	0.03		$	(0.01	)	$	0.10		$	0.00


	For the three months ended September 30,						For the nine months ended September 30,
(in thousands)	2024			2023			2024			2023
Net income	$	1,838		$	4,315		$	1,194		$	13,927
Interest expense		5,496			6,230			15,781			16,998
Income tax (benefit) expense		11			(191	)		29			(178	)
Depreciation, depletion and amortization		1,414			1,904			4,325			5,905
Impairment of assets		—			3,840			—			3,840
(Gain) on disposition of assets, net		(1,980	)		(10,293	)		(1,884	)		(23,179	)
EBITDAre ⁽¹⁾	$	6,779		$	5,805		$	19,445		$	17,313

Stock-based compensation and incentive		870			509			1,907			1,474
Real estate related acquisition and due diligence costs		—			3			27			17
Severance expense		—			—			1,373			—
Adjusted EBITDAre ⁽¹⁾	$	7,649		$	6,317		$	22,752		$	18,804

⁽¹⁾

The nine months ended September 30, 2024 includes approximately $1.2 million of income from forfeited deposits due to the termination of a repurchase agreement and excludes approximately $1.4 million of severance expense.

Farmland Partners Inc.
Reconciliation of Non-GAAP Measures
Three and Nine Months Ended September 30, 2024 and 2023 (Unaudited)

	For the three months ended September 30,						For the nine months ended September 30,
($ in thousands)	2024			2023			2024			2023
OPERATING REVENUES:
Rental income	$	9,753		$	10,137		$	29,499		$	31,084
Crop sales		2,616			814			4,211			1,689
Other revenue		948			666			3,042			3,101
Total operating revenues		13,317			11,617			36,752			35,874

Property operating expenses		1,956			2,099			5,624			6,709
Cost of goods sold		1,577			703			2,879			2,629
NOI		9,784			8,815			28,249			26,536

Depreciation, depletion and amortization		1,414			1,904			4,325			5,905
Acquisition and due diligence costs		—			3			27			17
General and administrative expenses		2,634			2,651			8,998			8,161
Legal and accounting		502			398			1,242			924
Impairment of assets		—			3,840			—			3,840
Other operating expenses		11			4			47			81
Other (income) expense		(134	)		(41	)		(202	)		23
(Income) loss from equity method investment		(8	)		(5	)		(103	)		17
(Gain) on disposition of assets, net		(1,980	)		(10,293	)		(1,884	)		(23,179	)
(Income) from forfeited deposits		—			—			(1,205	)		—
Interest expense		5,496			6,230			15,781			16,998
Income tax (benefit) expense		11			(191	)		29			(178	)
NET INCOME	$	1,838		$	4,315		$	1,194		$	13,927

Note: Due to a presentation change to the consolidated statements of operations, the Company now groups tenant reimbursement into rental income. Please see "Note 2—Revenue Recognition" of the Company's Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2024, when filed, for the detailed components of rental income.

Non-GAAP Financial Measures

The Company considers the following non-GAAP measures as useful to investors as key supplemental measures of its performance: FFO, NOI, AFFO, EBITDAre and Adjusted EBITDAre. These non-GAAP financial measures should be considered along with, but not as alternatives to, net income or loss as a measure of the Company's operating performance. FFO, NOI, AFFO, EBITDAre and Adjusted EBITDAre, as calculated by the Company, may not be comparable to other companies that do not define such terms exactly as the Company.

FFO

The Company calculates FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts, or Nareit. Nareit defines FFO as net income (loss) (calculated in accordance with GAAP), excluding gains (or losses) from sales of depreciable operating property, real estate related depreciation, depletion and amortization (excluding amortization of deferred financing costs), impairment write-downs of depreciated property, and adjustments associated with impairment write-downs for unconsolidated partnerships and joint ventures. Management presents FFO as a supplemental performance measure because it believes that FFO is beneficial to investors as a starting point in measuring the Company's operational performance. Specifically, in excluding real estate related depreciation and amortization and gains and losses from sales of depreciable operating properties, which do not relate to or are not indicative of operating performance, FFO provides a performance measure that, when compared year over year, captures trends in occupancy rates, rental rates and operating costs. The Company also believes that, as a widely recognized measure of the performance of REITs, FFO will be used by investors as a basis to compare the Company's operating performance with that of other REITs. However, other equity REITs may not calculate FFO in accordance with the Nareit definition as the Company does, and, accordingly, the Company's FFO may not be comparable to such other REITs' FFO.

AFFO

The Company calculates AFFO by adjusting FFO to exclude the income and expenses that the Company believes are not reflective of the sustainability of the Company's ongoing operating performance, including, but not limited to, real estate related acquisition and due diligence costs, stock-based compensation and incentive, deferred impact of interest rate swap terminations, distributions on the Company's preferred units and severance expense.

Changes in GAAP accounting and reporting rules that were put in effect after the establishment of Nareit's definition of FFO in 1999 result in the inclusion of a number of items in FFO that do not correlate with the sustainability of the Company's operating performance. Therefore, in addition to FFO, the Company presents AFFO and AFFO per share, fully diluted, both of which are non-GAAP measures. Management considers AFFO a useful supplemental performance metric for investors as it is more indicative of the Company's operational performance than FFO. AFFO is not intended to represent cash flow or liquidity for the period and is only intended to provide an additional measure of the Company's operating performance. Even AFFO, however, does not properly capture the timing of cash receipts, especially in connection with full-year rent payments under lease agreements entered into in connection with newly acquired farms. Management considers AFFO per share, fully diluted to be a supplemental metric to GAAP earnings per share. AFFO per share, fully diluted provides additional insight into how the Company's operating performance could be allocated to potential shares outstanding at a specific point in time. Management believes that AFFO is a widely recognized measure of the operations of REITs and presenting AFFO will enable investors to assess the Company's performance in comparison to other REITs. However, other REITs may use different methodologies for calculating AFFO and AFFO per share, fully diluted and, accordingly, the Company's AFFO and AFFO per share, fully diluted may not always be comparable to AFFO and AFFO per share amounts calculated by other REITs. AFFO and AFFO per share, fully diluted should not be considered as an alternative to net income (loss) or earnings per share (determined in accordance with GAAP) as an indication of financial performance, or as an alternative to net income (loss) earnings per share (determined in accordance with GAAP) as a measure of the Company's liquidity, nor are they indicative of funds available to fund the Company's cash needs, including its ability to make distributions.

EBITDAre and Adjusted EBITDAre

The Company calculates Earnings Before Interest Taxes Depreciation and Amortization for real estate ("EBITDAre") in accordance with the standards established by Nareit in its September 2017 White Paper. Nareit defines EBITDAre as net income (calculated in accordance with GAAP) excluding interest expense, income tax, depreciation and amortization, gains or losses on disposition of depreciated property (including gains or losses on change of control), impairment write-downs of depreciated property and of investments in unconsolidated affiliates caused by a decrease in value of depreciated property in the affiliate, and adjustments to reflect the entity's pro rata share of EBITDAre of unconsolidated affiliates. EBITDAre is a key financial measure used to evaluate the Company's operating performance but should not be construed as an alternative to operating income, cash flows from operating activities or net income, in each case as determined in accordance with GAAP. The Company believes that EBITDAre is a useful performance measure commonly reported and will be widely used by analysts and investors in the Company's industry. However, while EBITDAre is a performance measure widely used across the Company's industry, the Company does not believe that it correctly captures the Company's business operating performance because it includes non-cash expenses and recurring adjustments that are necessary to better understand the Company's business operating performance. Therefore, in addition to EBITDAre, management uses Adjusted EBITDAre, a non-GAAP measure.

The Company calculates Adjusted EBITDAre by adjusting EBITDAre for certain items such as stock-based compensation and incentive, real estate related acquisition and due diligence costs and severance expense that the Company considers necessary to understand its operating performance. The Company believes that Adjusted EBITDAre provides useful supplemental information to investors regarding the Company's ongoing operating performance that, when considered with net income and EBITDAre, is beneficial to an investor's understanding of the Company's operating performance. However, EBITDAre and Adjusted EBITDAre have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of the Company's results as reported under GAAP.

In prior periods, the Company has presented EBITDA and Adjusted EBITDA. In accordance with Nareit's recommendation, beginning with the Company's reported results for the three months ended March 31, 2018, the Company is reporting EBITDAre and Adjusted EBITDAre in place of EBITDA and Adjusted EBITDA.

Net Operating Income (NOI)

The Company calculates net operating income (NOI) as total operating revenues (rental income, tenant reimbursements, crop sales and other revenue), less property operating expenses (direct property expenses and real estate taxes), less cost of goods sold. Since net operating income excludes general and administrative expenses, interest expense, depreciation and amortization, acquisition-related expenses, other income and losses and extraordinary items, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and leasing farmland real estate, providing a perspective not immediately apparent from net income. However, net operating income should not be viewed as an alternative measure of the Company's financial performance since it does not reflect general and administrative expenses, interest expense, depreciation and amortization costs, other income and losses.

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