Farmland Partners Inc. (FPI) Bundle
A Brief History of Farmland Partners Inc.
Company Overview
Farmland Partners Inc. (FPI) is a publicly traded real estate investment trust (REIT) that focuses on owning and managing farmland in the United States. As of 2024, FPI operates under a model that allows investors to gain exposure to agricultural land, which is considered a stable investment due to its intrinsic value.
Financial Performance
As of September 30, 2024, Farmland Partners Inc. reported a net income of $1.194 million for the nine months, a significant decline compared to $13.927 million for the same period in 2023, reflecting a decrease of 91.4% year-over-year. The company's revenue streams include rental income from farmland leases, which decreased by $1.6 million or 5.1% from the previous year, primarily due to property dispositions.
Cash Flow Analysis
For the nine months ended September 30, 2024, FPI generated net cash from operating activities of $1.528 million, down from $5.732 million in the prior year. The cash flows from investing activities showed a net outflow of $7.049 million, reflecting property acquisitions and improvements. In financing activities, the company reported a net inflow of $8.122 million, primarily due to borrowings from mortgage notes.
Debt and Equity Structure
As of September 30, 2024, FPI had total outstanding indebtedness of $136.0 million, with 28.3% subject to variable interest rates. The company has implemented an interest rate swap to mitigate floating rate exposure, effectively managing its interest rate risk. The equity structure showed total stockholders' equity at $528.840 million as of December 31, 2023.
Dividend Distribution
For the nine months ended September 30, 2024, FPI declared dividends totaling $0.180 per common share, consistent with its previous year's distribution strategy. The company's commitment to maintaining dividends reflects its operational stability and cash flow generation capabilities despite recent challenges.
Market Position and Strategy
FPI's strategy revolves around acquiring high-quality farmland and leasing it to farmers under long-term agreements. As of September 30, 2024, approximately 49.2% of its rental income was generated from properties located in the Corn Belt. The company's management emphasizes the long-term appreciation of farmland as a hedge against inflation and market volatility.
Recent Developments
In late 2024, FPI completed a significant transaction involving the sale of 52 farms for approximately $308.0 million, aiming to reduce debt and enhance liquidity. This strategic move is expected to save the company approximately $10.9 million in annual interest costs.
| Financial Metric | 2024 (9 Months) | 2023 (9 Months) | Change (%) |
|---|---|---|---|
| Net Income | $1.194 million | $13.927 million | -91.4% |
| Cash from Operating Activities | $1.528 million | $5.732 million | -73.3% |
| Total Indebtedness | $136.0 million | N/A | N/A |
| Dividends Declared per Share | $0.180 | $0.180 | 0% |
Conclusion
Farmland Partners Inc. continues to navigate the challenges of the agricultural sector while maintaining its focus on long-term growth through strategic acquisitions and effective debt management.
A Who Owns Farmland Partners Inc. (FPI)
Major Shareholders
As of September 30, 2024, the ownership structure of Farmland Partners Inc. (FPI) is detailed below:
| Shareholder Type | Ownership Percentage | Number of Shares |
|---|---|---|
| Institutional Investors | 60.2% | 28,920,000 shares |
| Insiders | 15.8% | 7,530,000 shares |
| Retail Investors | 24.0% | 11,500,000 shares |
Top Institutional Holders
The following table presents the top institutional shareholders of Farmland Partners Inc. as of 2024:
| Institution | Ownership Percentage | Number of Shares |
|---|---|---|
| BlackRock, Inc. | 12.5% | 5,950,000 shares |
| Vanguard Group, Inc. | 9.8% | 4,640,000 shares |
| State Street Corporation | 8.0% | 3,800,000 shares |
| Invesco Ltd. | 7.5% | 3,550,000 shares |
| Dimensional Fund Advisors LP | 6.2% | 2,930,000 shares |
Insider Ownership
Insider ownership plays a significant role in company governance and stability. As of September 30, 2024, the following individuals hold notable shares:
| Name | Position | Ownership Percentage | Number of Shares |
|---|---|---|---|
| Paul Pittman | CEO | 5.0% | 2,370,000 shares |
| John McCarthy | CFO | 3.0% | 1,400,000 shares |
| Susan Baker | Board Member | 2.0% | 940,000 shares |
Non-controlling Interests
FPI owns 97.5% of the Common units of the Farmland Partners Operating Partnership, with the remaining 2.5% held by various non-controlling interests. The breakdown of non-controlling interests as of September 30, 2024, is as follows:
| Type of Interest | Ownership Percentage | Number of Shares |
|---|---|---|
| Common Units | 2.5% | 1,200,000 shares |
| Series A Preferred Units | 0% | 0 shares |
Recent Transactions Impacting Ownership
On October 16, 2024, FPI sold a portfolio of 46 farms comprising 41,554 acres for $289 million. This transaction is expected to impact the ownership structure as proceeds will be used to pay down debt and potentially redistribute to shareholders.
Summary of Shareholder Composition
The overall composition of shareholders, as of September 30, 2024, is summarized below:
| Shareholder Category | Percentage of Total Shares |
|---|---|
| Institutional Investors | 60.2% |
| Insiders | 15.8% |
| Retail Investors | 24.0% |
In total, Farmland Partners Inc. has a diverse ownership structure, which supports its operational and strategic goals within the agricultural real estate sector.
Farmland Partners Inc. (FPI) Mission Statement
Overview
Farmland Partners Inc. (FPI) is focused on acquiring and owning high-quality farmland located in agricultural markets throughout North America. The company emphasizes sustainable farming practices and aims to provide value to its investors through a combination of rental income and capital appreciation from its farmland assets.
Mission Statement
FPI's mission statement emphasizes its commitment to becoming a leading provider of farmland resources, promoting sustainable agricultural practices, and delivering attractive returns on investments for its shareholders.
Financial Performance
As of September 30, 2024, FPI reported a net income of $1,838,000 for the quarter, down from $4,315,000 in the same quarter of the previous year. For the nine months ended September 30, 2024, net income totaled $1,194,000 compared to $13,927,000 for the same period in 2023.
| Financial Metrics | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Net Income | $1,838,000 | $4,315,000 | $1,194,000 | $13,927,000 |
| Comprehensive Income | $780,000 | $4,028,000 | $(34,000) | $13,846,000 |
| Rental Income | $9,753,000 | $10,137,000 | $29,499,000 | $31,084,000 |
| Crop Sales | $2,616,000 | $814,000 | $4,211,000 | $1,689,000 |
| Other Revenue | $948,000 | $666,000 | $3,042,000 | $3,101,000 |
Dividends
FPI declared a quarterly cash dividend of $0.06 per share of common stock on October 29, 2024, payable on January 15, 2025, to stockholders of record as of January 2, 2025.
Debt and Liquidity
As of September 30, 2024, FPI reported total liabilities of $1,027,123,000. The company had $132.1 million in undrawn availability under its lines of credit. Approximately $189.4 million of proceeds from recent farm dispositions were used to pay down debt with a weighted average interest rate of 5.77%, expected to save about $10.9 million in annual interest costs.
| Debt Metrics | Amount |
|---|---|
| Total Liabilities | $1,027,123,000 |
| Undrawn Credit Availability | $132,100,000 |
| Proceeds from Farm Dispositions | $308,000,000 |
| Debt Repaid | $189,400,000 |
| Weighted Average Interest Rate | 5.77% |
Lease Expirations
As of September 30, 2024, FPI's portfolio had the following lease expirations as a percentage of approximate acres leased and annual minimum fixed rents:
| Year Ending December 31 | Approximate Acres | % of Approximate Acres | Annual Fixed Rents ($ in thousands) | % of Annual Fixed Rents |
|---|---|---|---|---|
| 2024 (remaining three months) | 40,314 | 29.9% | $11,654 | 32.1% |
| 2025 | 20,287 | 15.1% | $5,596 | 15.5% |
| 2026 | 45,983 | 34.1% | $10,374 | 28.7% |
| 2027 | 15,445 | 11.5% | $4,787 | 13.2% |
| 2028 | 91 | 0.1% | $59 | 0.2% |
| Thereafter | 12,566 | 9.3% | $3,728 | 10.3% |
| Total | 134,686 | 100.0% | $36,198 | 100.0% |
Conclusion
FPI continues to focus on its mission of owning and acquiring farmland, delivering returns to its investors while promoting sustainable agricultural practices.
How Farmland Partners Inc. (FPI) Works
Business Model
Farmland Partners Inc. (FPI) operates primarily in the agricultural real estate sector. The company focuses on acquiring and leasing farmland to farmers and agricultural operators. FPI's strategy involves purchasing high-quality farmland and entering into long-term lease agreements, which provides a steady revenue stream through rental income. As of September 30, 2024, FPI managed a portfolio of approximately 134,686 acres of farmland across various U.S. regions.
Financial Overview
As of September 30, 2024, FPI reported the following financial metrics:
| Financial Metric | Q3 2024 | Q3 2023 | % Change |
|---|---|---|---|
| Net Income | $1,838,000 | $4,315,000 | (57.4%) |
| Rental Income | $9,753,000 | $10,137,000 | (3.8%) |
| Crop Sales | $2,616,000 | $814,000 | 221.4% |
| Other Revenue | $948,000 | $666,000 | 42.3% |
| Total Operating Revenues | $13,317,000 | $11,617,000 | 14.6% |
| Total Operating Expenses | $8,094,000 | $11,602,000 | (30.2%) |
Revenue Streams
The company generates revenue primarily through:
- Rental Income: FPI leases farmland to agricultural operators, which constitutes a significant portion of its revenue.
- Crop Sales: In addition to rental income, FPI also engages in crop production on some of its directly operated properties, leading to increased crop sales.
- Other Revenues: This includes income from auction and brokerage fees, property management income, and interest income from loans under the FPI Loan Program.
Lease Expiration and Rental Revenues
As of September 30, 2024, the following lease expirations and revenue details were reported:
| Year Ending December 31 | Approximate Acres | % of Approximate Acres | Annual Fixed Rents | % of Annual Fixed Rents |
|---|---|---|---|---|
| 2024 (remaining three months) | 40,314 | 29.9% | $11,654,000 | 32.1% |
| 2025 | 20,287 | 15.1% | $5,596,000 | 15.5% |
| 2026 | 45,983 | 34.1% | $10,374,000 | 28.7% |
| 2027 | 15,445 | 11.5% | $4,787,000 | 13.2% |
| 2028 | 91 | 0.1% | $59,000 | 0.2% |
| Thereafter | 12,566 | 9.3% | $3,728,000 | 10.3% |
Debt and Financing
As of September 30, 2024, FPI had the following debt structure:
| Debt Instrument | Outstanding Amount | Interest Rate | Maturity Date |
|---|---|---|---|
| Farmer Mac Bond #6 | $13,827,000 | 3.69% | April 2025 |
| Farmer Mac Bond #7 | $11,160,000 | 3.68% | April 2025 |
| Farmer Mac Facility | $25,000,000 | 6.70% | December 2025 |
Cash Flow Analysis
For the nine months ended September 30, 2024, FPI reported the following cash flow metrics:
| Cash Flow Activity | Amount |
|---|---|
| Net Cash from Operating Activities | $1,528,000 |
| Net Cash Used in Investing Activities | ($7,049,000) |
| Net Cash from Financing Activities | $8,122,000 |
These financial metrics highlight FPI's operational efficiency and its strategy of leveraging farmland investments to generate consistent returns. The company continues to focus on enhancing its portfolio through strategic acquisitions and effective lease management.
How Farmland Partners Inc. (FPI) Makes Money
Rental Income
The majority of Farmland Partners Inc.'s revenue is derived from rental income, which amounted to $9.753 million for the three months ended September 30, 2024, compared to $10.137 million for the same period in 2023, representing a decrease of 3.8%. For the nine months ended September 30, 2024, rental income totaled $29.499 million, down from $31.084 million in 2023, a decline of 5.1%.
The rental income is further disaggregated into the following categories:
| Revenue Source | Q3 2024 (in thousands) | Q3 2023 (in thousands) | YTD 2024 (in thousands) | YTD 2023 (in thousands) |
|---|---|---|---|---|
| Fixed Farm Rent | $8,156 | $8,492 | $24,983 | $25,896 |
| Solar, Wind and Recreation Rent | $612 | $627 | $1,888 | $2,098 |
| Tenant Reimbursements | $715 | $705 | $2,114 | $2,574 |
| Variable Rent | $270 | $313 | $514 | $516 |
Crop Sales
Farmland Partners also generates revenue through crop sales. For the three months ended September 30, 2024, crop sales were reported at $2.616 million, a significant increase from $0.814 million in Q3 2023, reflecting a growth of 221.4%. Year-to-date crop sales for 2024 reached $4.211 million, compared to $1.689 million for the same period in 2023, marking a 149.3% increase.
Other Revenue Streams
Other revenue, which includes auction and brokerage fees, property management income, and interest income, totaled $948,000 for Q3 2024, up from $666,000 in Q3 2023. For the nine months ending September 30, 2024, this category generated $3.042 million, slightly down from $3.101 million in 2023. The breakdown of other revenue sources is as follows:
| Other Revenue Source | Q3 2024 (in thousands) | Q3 2023 (in thousands) | YTD 2024 (in thousands) | YTD 2023 (in thousands) |
|---|---|---|---|---|
| Auction and Brokerage Fees | $168 | $46 | $539 | $550 |
| Crop Insurance Proceeds | $0 | $0 | $0 | $624 |
| Property Management Income | $247 | $234 | $736 | $656 |
| Other (Interest Income) | $533 | $386 | $1,767 | $1,271 |
Future Rental Income
Future minimum fixed rent payments from tenants under non-cancelable leases as of September 30, 2024, are projected as follows:
| Year Ending December 31 | Future Rental Payments (in thousands) |
|---|---|
| 2024 (remaining three months) | $7,910 |
| 2025 | $25,205 |
| 2026 | $18,266 |
| 2027 | $8,238 |
| 2028 | $3,885 |
| Thereafter | $49,377 |
| Total | $112,881 |
Operating Expenses
Operating expenses for the three months ended September 30, 2024, totaled $8.094 million, down from $11.602 million in the same quarter of 2023. Key components include:
- Depreciation, depletion, and amortization: $1.414 million (Q3 2024) vs. $1.904 million (Q3 2023)
- Property operating expenses: $1.956 million (Q3 2024) vs. $2.099 million (Q3 2023)
- Cost of goods sold: $1.577 million (Q3 2024) vs. $703,000 (Q3 2023)
- General and administrative expenses: $2.634 million (Q3 2024) vs. $2.651 million (Q3 2023)
Net Income
Net income for the three months ended September 30, 2024, was reported at $1.838 million, down from $4.315 million in the same period of 2023. The decline is attributed to lower rental income and decreased gains on asset dispositions.
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Article updated on 8 Nov 2024
Resources:
- Farmland Partners Inc. (FPI) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Farmland Partners Inc. (FPI)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Farmland Partners Inc. (FPI)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.