Good morning, everyone, and thank you for being here. I'm Kelvin, your conference operator for today. I would like to welcome you all to the Farmland Partners, Inc. Q2 2025 Earnings Call. Now, I will hand the call over to Luca Fabbri, President and CEO. Please proceed.

Thank you, Kelvin. Thank you, everybody, and good morning. Thanks for joining us today for this second quarter 2025 Earnings Conference Call and Webcast. I will start as usual with some customary preliminary remarks from our General Counsel, Christine Garrison. Christine?

Thank you, Luca, and thank you to everyone on the call. The press release announcing our second quarter earnings was distributed after market closed yesterday. The supplemental package has been posted to the Investor Relations section of our website under the sub header 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, July 24, 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 rent and the broader agricultural markets. 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 second 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 July 23, 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.

Thank you, Christine. My comments will be brief this morning, and I will be available for questions later. This quarter has been strong for us, with land values remaining robust in the Midwest, as evidenced by the gains from our asset sales in that area. We have nearly completed the liquidation of our portfolio in Colorado, retaining only a small exposure, which consists of one cattle feedlot and a few row crop farms. As mentioned previously, long-term water concerns in the Eastern Plains of Colorado prompted us to exit the market, and I'm pleased to report that we did so with significant gains. California, however, continues to face challenges. As you may have seen in the recent press release, we wrote down some farms there, which Luca will elaborate on. From our perspective on write-downs, we view ourselves as long-term investors. We are not overly concerned about fluctuations in the sales of specific farms in our vicinity; instead, we assess farm values over a 2- to 5-year or longer horizon. The farms we wrote down have reached a point where, due to the crop types and regional water issues, we felt a write-down was necessary. In particular, with specialty crop farms, the notion that you can indefinitely wait for recovery is misguided. In traditional row crops, long-term appreciation benefits you, but with specialty crops, the trees age and lose productivity during waiting periods, necessitating removal and replanting, which led us to the write-down. I also want to touch briefly on the recent news regarding Coca-Cola potentially substituting high fructose corn syrup with regular cane sugar in its products and its implications for the corn market. From an overall perspective, high fructose corn syrup constitutes only about 3% of total corn production in the U.S., as indicated by recent research from the University of Illinois. Coca-Cola represents an even smaller fraction of that market. Therefore, the issue surrounding Coca-Cola is minimal in the grand scheme of corn markets. On the scientific side, I believe there is no credible research demonstrating that the type of sweetener significantly impacts health outcomes. The differences in glucose, fructose, and sucrose levels among sweeteners are not substantial, and there is no evidence suggesting health disparities tied to different sweeteners. The main issue is our collective overconsumption of sugar, regardless of its form. I hope this concern does not escalate significantly, as high fructose corn syrup remains a low-cost sweetening option compared to cane sugar in most cases. Ultimately, the science should prevail, and regardless, it is a small segment of the corn market. With that, I will hand it over to you, Luca, for your comments.

Thank you, Paul. I'd like to add a few finer points to the topic Paul was discussing. Coca-Cola is not planning to replace its regular product that uses high fructose corn syrup, but instead, it is introducing a new product that contains cane sugar. You can already find this product in many grocery stores, often referred to as Mexican Coke or Mexican Fanta, as it is produced in Mexico using cane sugar. It's important to remember that this product comes from agriculture and is produced on farmland. This reinforces the value of farmland as an asset class, showing that regardless of shifting consumer preferences—whether it is HFCS Coke versus cane sugar Coke, or organic versus conventional fruits and vegetables—everything ultimately depends on farmland. This underlines the strength of farmland as an investment, a point I'll return to shortly. Looking at the company’s performance in the last quarter, as Paul mentioned, we have carried out additional asset sales. Year-to-date, we have sold about $80 million in assets, generating approximately $25 million in gains. Most of these sales were in the High Plains, a region we planned to exit in the long run. We also sold some Class B soil farms in Illinois, which are not the highest quality farms in our corn belt portfolio. I want to highlight that the buyers of our major transactions this year were family offices—ultra-high net worth individuals and families who can invest in various assets. Their choice to invest in farmland reinforces its value as a reliable long-term store of wealth and appreciation opportunity. This aligns with our company’s mission to make farmland accessible not just to high net worth individuals but also to everyday investors, who make up the majority of our investor base. We have used part of the proceeds from these asset sales to buy back stock. So far this year, we have repurchased around 2.3 million shares, which is about 5% of our fully diluted shares outstanding before buybacks, at an average price of approximately $11.24, a price we find very appealing. Overall, we have invested about $26 million in these stock repurchases. Lastly, as Paul mentioned, we recorded some impairments this quarter on several farms, specifically four in California. Most of the $16.8 million impairment related to two specific farms. One is a pistachio farm facing serious water access issues due to California regulations, which we believe will continue to pose challenges for production. The second is our only walnut farm, which also faces water access problems. Moreover, we have a long-term concern about walnut production in the U.S., particularly due to increased competition from China. We don’t foresee these challenges improving. Those are the main points I wanted to address, and now I will pass the call over to our Chief Financial Officer, Susan Landi, for her overview of the company's financial performance.

Thank you, Luca. Today, I will discuss several items, including a summary of the financial results for the three and six months ending June 30, 2025, a review of our capital structure, comparisons of year-to-date revenue, and updated guidance for 2025. I will reference the supplemental package available in the Investor Relations section of our website under Events and Presentations. First, I will present some financial metrics from Page 2. For the three months ending June 30, 2025, our net income was $7.8 million, or $0.15 per share for common shareholders. This amount is an increase compared to the same period in 2024, primarily due to gains from the sale of 32 properties this quarter, along with reduced general and administrative costs, lower interest expenses, and increased interest income. The Adjusted Funds From Operations (AFFO) stood at $1.3 million, or $0.03 per weighted average share, which again reflects an increase compared to 2024. AFFO benefitted from significantly lower interest expenses due to our debt reductions and increased interest income owing to heightened activity under the FPI Loan Program. For the six months ending June 30, 2025, our net income was $9.9 million, or $0.18 per share for common stockholders, which again represents an increase over the previous year, driven mainly by the impact of 34 property dispositions during this period. Significant debt reductions have led to interest savings, coupled with lower general and administrative expenses and increased interest income from a higher balance on loans under the FPI Loan Program. The AFFO for this period was $3.6 million, or $0.08 per weighted average share, which is also higher than the same period in 2024, influenced by lower interest expenses, increased interest income, and proceeds from a solar lease arrangement with a tenant. Next, we'll cover some operating expenses and other items that you can find on Page 5. Gain on disposition of assets is higher due to the dispositions of the 34 properties in 2025 that had an aggregate consideration of $81.6 million, resulting in a net gain on sale of $25 million compared to a loss of $0.1 million in 2024, which was related to the sale of fixed assets. There were no property dispositions in the first half of 2024. As a result of significant reductions in debt that occurred since October of 2024, interest expense decreased $2.8 million during the quarter versus the same quarter in the prior year and $5.2 million year-to-date versus the prior year. In addition, the dispositions resulted in lower property operating expenses and depreciation expenses. General and administrative expenses decreased for the three and six months ended June 30, 2025, primarily due to a one-time severance expense of $1.4 million during the 6-month period in June of 2024, which is partially offset by slight increases in other expenses in the current period. Moving on to Page 12. There are a few capital structure items that I'd like to point out. We had undrawn capacity on the lines of credit of approximately $160 million as of June 30, 2025. We had no debt subject to interest rate resets in 2025, and as a result of our swap, no exposure to variable interest rates with the exception of whatever we draw on our line of credit. In addition, we have repaid our lines of credit in full with payments totaling $23 million in early July. Page 14 will break down the different revenue categories then along with some comments at the bottom to describe the differences between those periods. A few points to highlight are, as expected, fixed farm rent decreased largely due to dispositions in the last half of 2024 and thus far in 2025. Solar, wind and recreation changes were caused primarily by proceeds from the solar revenue sharing arrangement with the tenant that we received in the first quarter of 2025 and partially offset by dispositions. Management fees and interest income increased primarily due to the increased loan activity under the FPI Loan Program. Page 15 has our updated outlook for 2025, including the assumptions listed at the bottom of the page. On the revenue side, changes from the May guidance include the anticipated decrease in fixed farm rent, along with solar, wind, and recreation rent due to property sales that occurred recently. There is an increase in management fees and interest income due to heightened activity in the FPI Loan Program, as well as adjustments in variable payments, crop sales, and crop insurance based on the updated outlook for properties with variable rents and those we operate directly. On the expense side, changes from the May guidance include an increase in impairment expense for certain properties on the West Coast, increased gains and losses from the disposition of assets due to 32 property sales completed in Q2, a decrease in interest expense from a lower average outstanding debt balance due to principal repayments in the current quarter and subsequently in July, and a reduction in weighted average shares from our share repurchases since May. The projected range of AFFO is between $12.8 million and $15.5 million, or $0.28 to $0.34 per share. This summarizes our current position, and we will continue to update you as the year progresses. This concludes our comments for this morning, and thank you all for joining.

Ladies and gentleman, we will now begin the question and answer session. Your first question comes from the line of Robert Stevenson with Janney.

Luca, how much more can you guys sell in 2025 given the multiyear disposition program that you guys have been operating under?

So far this year, we have completed three sale transactions that count under the rules. We have four more transactions lined up, so we are primarily relying on the safe harbor based on these seven transactions rather than focusing on the dollar amount due to our sales history. Consequently, the total dollar amount will depend significantly on the size of each of the remaining four transactions, assuming we complete all of them.

Okay. And if we complete all four of those, will that lead us to potentially pay a special dividend again at the end of this year?

It's difficult to determine because it depends on the relationship between GAAP accounting and tax accounting. For instance, if we sell some of the farms where we recorded impairments, those impairments will result in a tax impact. So, it's quite challenging to provide an accurate answer at this moment.

Okay. And then I guess the opposite side of that coin, how are you guys thinking about acquisitions? Does anything really make sense at this point, especially versus repaying debt and buying back stock? How are you guys thinking about capital deployment in the back half of this year?

As far as capital deployment goes, we are very disciplined in our acquisition strategy right now. If a farm that complements something we already own becomes available, or if a particularly good deal arises, we would certainly consider it. However, we are currently slow in pursuing acquisition opportunities for the reasons mentioned. Buying back stock is usually more effective. We remain long-term believers, as evidenced by our actions over the last year or two. We are focusing primarily on the U.S. Midwest, especially Illinois, which provides a much safer and more stable portfolio than we have had in the past. The only downside is the relatively low current yield due to low cap rates in that region, but the long-term appreciation there is better than elsewhere. In summary, we are not very inclined to make acquisitions and are not likely to be.

Okay. Susan, the legal and accounting guidance went up about $300,000 at both the low and high end. Anything major driving that increase?

I'll address that. Nothing really significant. We have an ongoing tenant dispute on a Louisiana farm from a long time ago, and we don’t believe we did anything wrong. We’ve never encountered one of these disputes in the past. That being said, we thought it was appropriate to expect to pay some money at some point in the future because we’ll likely settle it eventually. So that’s what’s driving that.

All right. And then the last one for me. The preferred units are eligible for conversion in a little over six months. Any thoughts at this point on how you guys might address those?

Yes. There will be almost no chance that we convert those into shares. Given that our stock is so deeply undervalued, we will pay that off either with cash from asset sales or from borrowings under our lines of credit. I shouldn't probably say 100%, but there's a 99% probability that it is not going to be converted.

I want to circle back to the pickup in variable payment expectations. Was that entirely due to sort of an improved outlook on the citrus and avocados? Or did you restructure any leases to have a larger variable payment component like one of your competitors has been doing?

Susan or Luca, you need to take that; I don't know the specific facts.

Yes, we haven't had the need to restructure any lease arrangements. It's primarily based on crop dynamics. As we refined our views throughout the year, we gained a clearer understanding of crop yields and prices. Susan, is there anything else you would like to add?

No, I don't have anything else.

Okay. That's helpful. Changing gears, we're hearing more and more about some tighter lending to farmers and your loan portfolio has nearly tripled since the third quarter of last year. Are you seeing rising demand? And is there a ceiling on what that portfolio might be as a percentage of assets?

We are noticing an increase in inquiries about farm lending. The operating environment for farmers, particularly row crop farmers, is somewhat challenging. We would consider expanding our lending program modestly if there are good loans available. However, we want to ensure that this does not become too large a portion of our portfolio, as our core business is owning farmland, which we prefer. We appreciate the loan business for the returns it provides, as it contributes to our cash flow for dividends and operating costs, but we do not intend to significantly expand it.

Okay. Got it. I want to circle back to the impairment charges you took in California, kind of the back of the envelope, looks like it was about 6% of your sort of total cost basis there. But you mentioned most of it was at two farms. Can you give us a sense of what the write-down was on a percentage basis at those farms? Is it somewhere in the order of 30% at several?

On one farm where we took the majority of that impairment, it was actually a little over 50%. We were very aggressive. We wanted to take the hit all at once, to be honest. I don't recall all the details right now, but that's what I remember off the top of my head.

Yes. They're both in the neighborhood of about 50%, the two large ones.

When the regulatory environment significantly reduces your water supply on a California farm, it greatly harms the value. That is what is happening right now. As a result, we made substantial write-downs on those farms.

Got it. And just one more for me. I mean, just given you took the charges, I know you look longer-term, 2 to 5 years or even longer. Are you actively looking to sell some farms in California? And is there a bid?

Yes, we are actively seeking to sell some farms. We have a few farms that we took impairments on listed for sale, as we believe it’s best to hold farmland for long-term appreciation rather than trading it frequently. When we determine that a farm is facing ongoing difficulties—potentially lasting five years or more—and it’s causing financial losses when considering all costs, it's essential to divest. We are planning to sell these assets, and there are offers available; we just need to be cautious not to overprice them. Some investors may hesitate to take the write-down and then reassess the asset's value, but that's a step we've taken.

If I look at the full year outlook, like not that there were huge moves, but variable payments kind of increased versus your last providing guidance in crop sales came down a little bit. And I'm guessing I'm imagining that's just crop type mix. And maybe can you provide any color on kind of how the various pushes and pulls are there in terms of crop type, what's doing well, what's doing poorly and maybe kind of why?

Yes. Let me just address that in a very general sense. And if somebody wants to add specifics from the rest of the team, they can. What happens here is about once each quarter, we reevaluate the budget for both the farms we're operating, which is crop sales, generally speaking, a handful of farms that we directly operate. And again, for everybody's benefit, direct operate doesn't mean we have employees. It means we have a contract with some farmer, but we're taking the economic risk on the crop. And then variable payments is, of course, crop share leases or bonus leases in California. So what happens on that once-a-quarter review is the crop, you start with a good base budget based on what happened last year and what happened in average in the last five years, et cetera, et cetera. And then you refine it as you get into the crop season and you actually can see the fruit on the trees. And so all that's happening here is we're seeing certain types of farms do a little better than we expected. In the second quarter, in particular, you see the citrus harvest get essentially completed. It goes on in the first and second quarter. You now can look at the tree nuts, which are of late summer or early fall harvested crop. You can start seeing whether you've got a really high volume of nuts on the tree or not, so on and so forth. And we make some adjustments and budgeting updates based on that, and that's what's driving those numbers.

That makes sense. Specifically regarding California, how long was the outlook on the water issues for the farms where you took the write-down? Are there any other farms in your portfolio at risk of similar water access issues due to regulatory changes? How sudden are these changes, and how far into the future can you anticipate these water regulatory issues will arise?

Regarding the water regulatory issue, this stems from SGMA, a groundwater management law implemented about four to five years ago. The implementation of SGMA relies on smaller units like water districts or counties to create plans. As these plans are developed, there may be a worse water situation compared to before due to the regulations, but at least it brings predictability and certainty. This process is well underway in most water districts and counties in California. For instance, with the pistachio farm, the outcomes from the regulatory and water district processes were quite negative, which is why we recorded a significant write-down. If we felt the need to record another write-down, we would have already done so. It’s difficult to provide a definitive answer, but we don't anticipate any immediate write-downs. SGMA is roughly 75% complete, not entirely finished, so there is a possibility of changes that might lead to another write-down in the future. However, as of now, we don't foresee any need for that.

Okay. When you mention that the SGMA process is about 75% complete, does that mean that 75% of water districts have their plans in place, or is there more to it?

Yes, that's what I meant by that.

How should we consider the use of the $50 million in cash you currently have, especially in light of previous discussions regarding the Series A and the appeal of buying back stock compared to debt? Is it possible that you might maintain a substantial cash balance for the rest of the year, particularly with the possibility of needing to repay the preferred units next year?

Luca, I'm going to turn that over to you because you talk about that all the time.

Yes. My response to that question is that we are constantly managing various factors. Whenever we have available liquidity, we assess the stock price to determine how beneficial it would be to buy back shares to enhance value for our remaining shareholders, consider interest rates, and identify specific repayment opportunities for different pieces of debt. For instance, of the approximately $50 million on our balance sheet at the end of the quarter, we have already used some to reduce lines of credit. Consequently, we currently do not have any high-interest debt. While this may not provide a simple answer for your model, the reality is more complex. We continuously run an optimization model in our discussions.

Let me just add one thing to that because it's important. Right now, we're investing that cash at a positive spread above what the cost of the preferred is. So just sitting on a bunch of cash kind of waiting to pay off that preferred next year is actually making us a little bit of money right now. So that's worth keeping in mind.

There are no further questions at this time. And with that, I will turn the call back to Luca Fabbri for closing remarks. Please go ahead.

Thank you, Kelvin. We appreciate your interest in our company. Thank you again for joining us today, and we look forward to updating you on our ongoing results in the coming quarters. Have a great rest of your day.

Ladies and gentlemen, this concludes today's conference call. We thank you for participating and ask that you please disconnect your lines.