Thank you for standing by. My name is Amy and I will be your conference operator for today. At this time, I would like to welcome everyone to the Farmland Partners First Quarter 2025 Earnings Call. All participants have been placed in a listen-only mode. After the speakers’ remarks, we will conduct a question-and-answer session. It is now my pleasure to turn the call over to Luca Fabbri, the President and CEO with Farmland Partners. You may begin.

Thank you, Amy. Good morning and welcome everybody to Farmland Partners first quarter 2025 earnings conference call and webcast. We truly appreciate your taking the time to join us for these calls because we see them as a very important opportunity to share with you our thinking and our strategy in a format less formal and more interactive than public filings and press releases. I will now turn the call over to our GC, Christine Garrison for some customary preliminary remarks.

Thank you, Luca, and thank you to everyone on the call. The press release announcing our first quarter earnings was distributed after market closed yesterday. The supplemental package has been posted to the Investor Relations section of our website under the subheader Events and Presentations. For those who listen to the recording of this presentation, we remind you that the remarks made herein are as of today May 8, 2025, and will not be updated subsequent to this call. During this call, we will make forward-looking statements, including statements related to the future performance of our portfolio, our identified and potential acquisitions and dispositions, impact of acquisitions, dispositions and financing activities, business development opportunities, as well as comments on our outlook for our business, rents and the broader agricultural market. We will also discuss certain non-GAAP financial measures including net operating income, FFO, adjusted FFO, EBITDAre and adjusted EBITDAre. Definitions of these non-GAAP measures, as well as reconciliations to the most comparable GAAP measures are included in the Company's press release announcing first quarter 2025 earnings, which is available on our website farmlandpartners.com and is furnished as an exhibit to our current report on Form 8-K dated May 7, 2025. Listeners are cautioned that these statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond our control. These risks and uncertainties can cause actual results to differ materially from our current expectations and we advise listeners to review the risk factors discussed in our press release distributed yesterday and in documents we have filed with or furnished to the SEC. I would now like to turn the call to our Executive Chairman, Paul Pittman.

Thank you, Christine, and good morning, everyone. I'm going to answer a sort of series of questions that different investors have emailed me over the past few days. And I'll basically just do them in the order that they have come in or the prevalence of the question because we get a lot of the same questions. And this is a very good opportunity to answer questions like this without creating any sort of inside information issues. So, one of the questions we're getting quite a bit is about tariffs and potentially about stagflation, which keeps getting talked about. And what might those effects be on the value of our portfolio or farmers in general. So let me start with tariffs because there's really a different answer for the two different issues. On tariffs, look, getting in a battle with one of the largest food consumers in the world, meaning China, is never good for the export market in the United States. And food is one of the things we do export quite a bit of out of the U.S. That being said, we've been through this before in the prior Trump administration. The reality is we are not in a huge surplus situation for the basic foodstuffs on a worldwide basis. So anything China doesn't buy from us, they're likely to buy from someone else: Brazil, South Africa, Argentina, et cetera. And whoever used to be buying those crops from those countries will need to shift their purchasing to us. All-in-all, we've got kind of mediocre pricing for the key commodities right now. Not really bad, but it's certainly not as good as it was a few years ago. And so, farmers are under some level of financial pressure. One – another question that I get is rent increases. I mean, we're predicting that in this calendar year on the row crop side of the portfolio, we hope to eke out very modest increases in rents. But even that will be a bit of a challenge. The fact is the better way to think about rents is to look at kind of that three to five-year long-term rolling average. And so remember, we got 20% increases in a couple of years ago, 15% a couple of years ago in a different year. So we've had some very, very strong rent increases and now we're in a little more of a pause in terms of our ability to push rents. It will come back, it always does, and we're not really concerned about it. But that's the answer to that question. Stagflation is a completely different story. The last time we saw stagflation was in the 1970s. A high inflation environment with a slow economy generally turbocharged land values. One of the probably the decade with the highest appreciation over the decade of Farmland ever was the 1970s. So if we get ourselves in a high inflation environment, it will be very, very powerful for Farmland. It's my expression, you've all heard me say before, we're essentially gold with a coupon. That’s what farmland is. And so in an inflation environment, it will be strong. Another question I'm getting is how many transactions may we do this year if we decide to sell land? And the answer is, we can do a total of approximately seven. There's some complicated tax rules under the REIT rules that relate to that 1031 exchange transactions being excluded. But big picture is we can do about seven transactions during the calendar year. Many of you may have seen that we won part of the case in the appeals courts in Texas, on the road of fortune situation from long ago. We won that case pretty strongly. It may, in fact be appealed. Basically, our view is that Saberpoint, the true perpetrator here, in our opinion, frankly, has nothing left in their arsenal except delay tactics. So I don't know if they'll appeal or not. Eventually, justice is coming their way and we are going to continue to pursue it. We spent the big money already to get to where we are, and we don't intend to let them off the hook. There is a second part of that case that got remanded. We anticipate, frankly, winning that. It's not a very complicated question. You can never say with 100% certainty since it's the courts, but we certainly have the overwhelming upper hand in that remanded piece of that case. California land values is another question I get – are they recovering, because I've made relatively negative comments about California in recent conference calls? The answer is no. They unfortunately are not recovering. They're not getting really any worse. You're starting to see capitulation on some sellers, which is a good thing. It's probably the bottom of the market starting to get put in, and at least the market will get open again and they'll start to be transactions is what we believe is going on, on California assets. Our California position is relatively large on the balance sheet, but essentially half of that position or almost half of that position is a single transaction we did long ago with Olam. That's a very long-term lease. Incredibly high quality properties with good water, good production, high returns that aren’t very volatile to us. And now additional solar income, which some of the other members of the team will talk about. We’re just – we wish California was better, but it's just the part of California that's risky to us which is the non-Olam farms is a relatively modest portion of our portfolio. We will frankly continue to lessen our exposure to California for the reasons we've talked about in the past. NAV of the portfolio, I haven't directly addressed this in the last couple of conference calls, so a couple of people asked me so I’ll do it here. We would say that the portfolio today is in the mid-14s, just kind of connecting the dots and to explain a little bit why we quit talking about it. The value of your portfolio tracked quarter-to-quarter gets a little strange when you pay out $1.15 dividend. So we’re lower than the last time I talked about this. But we gave you all $1.15 a share, which came from somewhere, obviously, reducing the overall asset value under current market prices of the portfolio. So we think we're in the kind of mid-14s in portfolio value today. And then the final thing I want to address, you'll hear more about this, you may have read it. One of the items on our proxy did not pass. The item that did not pass is the compensation advisory vote. The reason it didn't pass, in our opinion, is that ISS recommended voting against it. By the way, it was 48.5% in favor, so it was close to passing. We firmly believe ISS has that recommendation wrong. We beg you as shareholders, if you're going to vote against management and the Board's recommendation, remember that I in particular own as many shares as you do. We are not doing things that we think are detrimental to the value of shareholders because I am one of the top shareholders in the company and we are honest people doing what we believe. Please call us before you vote against the recommendation because here are the facts. ISS recommended against that because we have a single trigger in the new CFO that we put in place about a year ago, Susan Landi. If you recall, she is an internal promotion after we laid off our prior CFO. We did it as a cost-cutting measure and you can all see this if you go back and look at the proxies. Susan makes materially less than the prior CFO. Number one. She's going to come to me for a salary increase after I finish this speech, unfortunately. But number two, she makes materially less than any other CFO amongst our peers. Materially less. Number three, her change of control payment is not even a whole number. It is 0.5x her prior compensation, meaning half a year. ISS is very formulaic and got this just wrong and shareholders, without contacting us or thinking about it, went ahead and followed their recommendation and that's why it failed. So I'm not going to say anything more about that. If any investor would like to call and talk about it, we're happy to. But the ISS recommendation, I don't know what they do. They should be slightly more holistic in their recommendation against voting on that issue when we have what is probably one of the lower-paid CFOs in the entire New York Stock Exchange, it’s kind of ridiculous. So with that I'm going to turn it over to Luca to pick up on the performance of the quarter and other matters.

Thank you, Paul. This first quarter of this year was indeed very, very strong in terms of financial performance. I will let Susan Landi, who's already typing an email to Paul right now asking for a salary increase, address more details about the performance. But it was enough of a strong quarter to allow us to actually raise guidance by several cents for the full year. This reflects also our fundamental belief that remains as strong as ever, that this is an exceptionally strong asset class, especially in times of uncertainty and turbulence that we are facing right now. Building on Paul's comments, we live in a world of fundamental kind of minimal surpluses in food production and looking forward down in the next few years and decades, with the world population expected to expand and the ability to produce food not expanding nearly at the same rate. We still need to produce every single bushel, kilogram, or ton of food that we can on a worldwide basis. The world simply cannot afford the production—the food production of the largest food producer in the world, the United States, to be marked up significantly or taken out of the global market altogether. So again, remember that while farmer profitability in the short-term might be influenced by trade wars, if not offset by what the federal government has done in prior administrations, the fundamental values that all the land that we own are really dependent on long-term expectations about world population, food demand, and so on and so forth. Our strategy for this year again also remains fundamentally unchanged. We will continue to deploy capital selectively when it makes sense to do so. For example, we've done some small acquisitions. We've deployed capital in our loan program. They were both opportunities that we found very accretive, even though relatively minor in terms of size. And we will continue to evaluate dispositions from our portfolio using proceeds for general corporate purposes, including also buying back stock. When we look at the gap between the NAV, as Paul indicated, and our stock price, we continue to believe that our own stock is effectively the cheapest farmland we can buy, and we will probably continue to do so as appropriate and as it makes sense. With that, I will now turn the call over to our CFO, Susan Landi, for her overview of the company's financial performance.

Thank you, Luca. I'm going to cover a few items today, including the summary of the three months ended March 31, 2025, a review of capital structure, and updated guidance for 2025. I'll be referring to the supplemental package, which is available in the Investor Relations section of our website under the subheader Events and Presentations. First, I'll share a few financial metrics that appear on Page 2. For the three months ended March 31, 2025, net income was $2.1 million, or $0.03 per share, available to common shareholders, which was higher than the same period for 2024, largely due to higher interest income on loans under the FPI Loan Program, proceeds from a solar lease arrangement with a tenant and lower interest expense and gains on dispositions of two properties that occurred in the first quarter of 2025. AFFO was $2.3 million, or $0.05 per weighted average share, which was lower than the same period for 2024. Next, we will review some of the operating expenses and other items shown on Page 5. As a result of reductions in debt of $189.4 million that occurred in the fourth quarter of 2024, interest expense decreased $2.4 million for the three months ended in the first quarter compared to the same period in the prior year. In addition, the dispositions in 2024 resulted in lower property operating expenses and depreciation expenses in the current year. G&A expenses decreased primarily due to lower travel and consulting fees. Next, moving on to Page 12, there are a few capital structure items to point out. We had undrawn capacity on the lines of credit of approximately $167 million at the end of Q1 of 2025. We have no debt subject to interest rate recess in 2025 and as a result of our swap we don't have any exposure to variable interest rates. Page 14 breaks down different revenue categories with comments at the bottom to describe the differences between periods. A few points that I'd like to highlight are as expected, fixed farm rent decreased due to dispositions in 2024. Solar, wind and recreation increased primarily due to proceeds from a solar lease arrangement with a tenant, but that was also partially offset by dispositions that occurred in 2024. Management fees and interest income increased primarily due to the increase in loan issuances under the FPI Loan Program. Direct operations is a combination of crop sales, crop insurance, and cost of goods sold. It was up relative to 2024 largely due to the increased price of walnuts, but partially offset by higher costs on water and maintenance of permanent planting. Page 15 is our updated outlook for 2025. Assumptions are listed at the bottom of the page. On the revenue side, changes from the February guidance include an increase in solar, wind, and recreation due to the proceeds from the solar lease arrangement with the tenant, an increase in management fees and interest income as a result of increased activity under the loan program and an increase in other items due to higher amortization of points income for the loans under the loan program. On the expense side, changes from the February guidance include an increase in G&A for payroll-related costs and allowances for losses on an additional loan under the loan program, an increase in the gain-loss on disposition of assets due to two property dispositions that closed in Q1 of the current year and an increase in interest expense due to a higher weighted average interest rate. The forecasted range of AFFO is $13.3 million to $15.9 million, or $0.28 to $0.34 per share, which is an increase of $0.03 and $0.04 on the low and high end of the range, respectively from the last quarter. This summarizes where we stand today; we will keep you updated as we progress through the year. This wraps up our comments this morning. Thank you all for participating.

Thank you. The floor is now open for questions. Your first question comes from the line of Craig Kucera with Lucid Capital Markets. Your line is now open.

Yes. Hey, good morning, guys. You noted that the other revenue was up due to the amortization of FPI loan points. Can you give us a sense of what that amount is amortized here in the first quarter? And what the schedule looks like going forward?

Luca or Susan, do you want to take that question? I may make a general comment, or if you want me to make a general comment while you look up the facts.

You can make a general comment while we need to look up the information.

Yes. So we have made a – one of the things we are managing toward as we gradually shrink this portfolio is maintaining our cash flows such that our AFFO and ability to pay dividends stays high. And frankly, it's higher than it's been in most of the life of the company right now. What that means is we have shifted some of our investment to making a few more loans as opposed to property purchases because the loans of course give us quite a bit higher current yield than owning a farm. We don't get the appreciation, of course, but we do get a higher current yield, and it's helping us maintain our cash flow. So we have made a series of loans with relatively high interest rates. The headline interest rate is often in the neighborhood of 10% or so, 8% to 10% usually. And then we usually have points as well. Many of these loans are reasonably short-term, less than a couple of years. So the amortization pace of those points is pretty fast. It has a meaningful impact on quarters. And some of these loans may be getting us in the high teens, even almost 20% total return per annum. With that, Susan, if you want to give any more specific information, feel free.

Yes. So we are expecting to recognize amortization of points income for the year, approximately $2.4 million.

Okay, great. And then just to follow up on the increase in the guide on the solar, wind, and recreational rent, you mentioned that there was an arrangement with a solar tenant. Is that a recurring situation where we might see that in 2026? Or is that more of a one-time?

It's a little of both. Craig, let me answer the question. So just for everybody, it's not a solar tenant. It's in fact a large ag tenant who asked to turn some of the property into solar for their own usage and to offset their own electricity costs for running pumps and other items on the farm. We agreed with that tenant they could do that, but only under the circumstances that we got a share of the benefit of having turned a portion of the farm into solar. Just so happens with the amount of electricity they avoided paying for and electricity pricing, we got a little bit of windfall. So it is recurring, but it won't be at the same scale as my prediction that we saw in this most recent year. We're like in the ups; we're in the startup phase. So there's probably slightly more than a 12-month period in the amount that we were running through the P&L. And obviously it was a little bit speculative until it got running. So we didn't predict it; we just took it when it got paid or at least known. So recurring, yes, but not quite this quantity.

Got it. Just housekeeping item, I saw that you repaid the April 25 debt maturities. Did you use the line of credit? Or were those refinanced as similar sorts of instruments?

Yes, I can take that.

Go ahead.

Yes. We did draw on our line of credit partially to repay that, but we also used funds from our operations to pay for another portion of it. We drew about $14 million. And then the delta was just from operations.

Got it. Just one more for me. I know you had smaller acquisitions and dispositions this quarter, but can you give us any color directionally on how cap rates have moved maybe year-to-date versus maybe the last six months of last year?

So cap rates on land values on the row crop portfolio are basically staying the same. The market for row crop is not as frothy as it was, but we're not often. When I say frothy, I mean the number of $20,000 plus sales in Illinois, for example. But look, when we're making a sale to a sophisticated party, and frankly, farmer buyers are sophisticated usually unless they're in a fight with a neighbor over a piece of land right next door. And certainly buyers, other institutional buyers who buy from us are disciplined. We never were getting those frothy numbers anyway. We're getting really strong numbers. We might get $18,000 an acre, for example, on a high-quality farm, but we're not getting $20,000. So that very top end is kind of gone. But that's not the real market, never was; we never treated as the real market. But the market in that super high-quality land and our portfolio is ever more concentrated toward the best stuff in the Midwest. That market's very strong and occasionally a bargain because it's just knocked out as many buyers as it did two years ago. So we're what, that's how we end up buying farms now and then we see something that we think is going at frankly pretty cheap and we step in and buy it. I mean, that's what we do. But the market's in the same place. California, as I said, that market has been largely closed. And what we started to see is capitulation on the part of some sellers; starting to be some transactions out there. And that is incredibly property and county specific in the California Central Valley. If you're in one of the areas with really good water, prices are still pretty strong, not much going on in terms of value declines. If you're in one of the areas that's water constrained and facing what they call sigma regulation, that's their groundwater regulation regime, you're seeing prices decline. And we're now kind of finding out how far they've declined in those markets as we start to see a few transactions happen.

Okay. Thanks for the color. Appreciate it.

Yes.

Thank you. Your next question comes from the line of John Massocca with RB Securities. Your line is now open.

Thanks. Just a quick question on the buyback. Just given where the cash levels are today, how are you thinking about that versus – to hold some dry powder, if you will, for any kind of attractive land investments that may come your way, particularly given some of the uncertainty in the macro environment.

So Luca alluded to this, today when I say there's a bargain out there in the Farmland world that might be trading at a 5% or 10% below what we really think it's worth. We think our stock is trading at a 25% to 30% discount to what we think it's really worth. And so we're more likely to be stock buyback focused than land purchase focused. Obviously, you got to balance the cost of money because we do have debt, so we could be paying off debt with the cash. But there is a serious bargain. We sold a bunch of properties, for example. I would certainly be advocating that quite a bit of that money go into buybacks because there's just such a huge discount to our – to what we think the underlying value is at this point in time. And that’s driven as much by the macro environment that we're facing with sort of uncertainty in the marketplace overall. And when I say the marketplace, I don’t mean Farmland. I mean the New York Stock Exchange and the Nasdaq.

Okay. And then in terms of the portfolio and maybe future acquisitions, I mean, what's kind of the difference in the reaction to some of these tariff headwinds or tariff noise between some of the core row crop assets versus things in the permanent crop basis? And maybe, it sounded like a lot of stuff in California maybe is more to do with water than concerns about tariffs, but just was kind of interested. I feel like some of those tree nut farms are a little more reliant on export.

Actually, it's to some degree the other way around. So what you may see happen here, and it's crop by crop, but many of the specialty crops grown in the United States are consumed in the United States. We are a higher labor cost producer than many other agriculture regions. On any sort of specialty crop that requires any level of hand-picking or sorting, we're likely to have a higher cost in the production. So as you see tariffs, I'll use avocados just as an example. A huge amount of the avocados consumed in the United States come from Mexico. Those avocados are now more expensive unless they get exempted somehow from the tariff regime than they were. You have to factor in the fact that the avocados from Mexico kind of hit the grocery store shelves at a slightly different calendar time than the U.S. avocados. But a lot of those specialty crops have a chance to benefit at least temporarily from the increased tariff regime and face less competition coming in from outside the country. Pistachios in particular would be another example. A lot of import, a lot of competition from Iran and other places on pistachios. And you're going to see a lot less of that competition, particularly from Iran. So, we could see some benefit for U.S. grown citrus, which is almost entirely consumed inside the United States. U.S. grown strawberries also almost entirely consumed inside the United States. So probably a little bit of benefit there. Now remember, we don't think, and I don't think anybody thinks that the tariff regime will go on in the current format at least for an extremely long period of time. So, I don't know if that changes the value of those farms, but it may make the performance for this given year a little bit better. Hope that answers your question.

No, I appreciate all that color, and then kind of last balance sheet-related one, the Farmer Mac facility here, you got nothing outstanding on it. It matures in December. Is there a potential. You just let that roll off and is there some kind of fee saving potentially from that or given the spread on that facility, would you want to keep that and renew it?

I think we're all, Susan, Luca, feel free to add to this, but I think we're likely to leave it in place. We leave it in place for a couple of reasons. We have the upcoming repayment of the preferred at some point early next year. But also, look, just having liquidity as a somewhat large public company is a good idea. Rainy day money, as I call it. And so I would say, odds are we will leave that in place, maybe at a slightly different size or something like that, but it's probably going to continue going forward. And Susan and Luca, if you have a different opinion, feel free to share it. But that's what I think.

No, you're right on point. We see maintaining liquidity and access to liquidity as an important element of our strategy that allows us. It gives us a lot of flexibility in capital deployment and in balance sheet strategies, so we're likely to renew it.

All right. That makes sense. That's it for me. Thank you very much.

Thank you. It looks like there are no further questions. I would like to turn the call back over to Luca Fabbri for closing remarks.

Thank you, Amy and thank you, everybody. We appreciate your interest in our company and look forward to updating you on our activities and results in the coming quarters. Have a great day.

Thank you. That does conclude today's conference call. You may now disconnect.