Farmland Partners Inc

Previous wording

We make statements in this Quarterly Report on Form 10-Q that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). These forward-looking statements include, without limitation, statements concerning pending acquisitions and dispositions, projections, predictions, expectations, estimates or forecasts as to our business, financial and operational results, future stock repurchases and other transactions affecting our capitalization, our dividend policy, future economic performance, crop yields and prices and future rental rates for our properties, ongoing litigation, as well as statements of management’s goals and objectives and other similar expressions concerning matters that are not historical facts. When we use the words “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, we intend to identify forward-looking statements. Although we believe 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: the ongoing war in Ukraine and the ongoing conflict in the Middle East and their impacts on our tenants’ businesses and the farm economy generally, changes in trade policies in the United States and other countries that import U.S. agricultural products, 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 our common stock, changes in our business strategy, availability, terms and deployment of capital, our ability to refinance existing indebtedness at or prior to maturity on favorable terms, or at all, availability of qualified personnel, changes in our industry or the general economy, the degree and nature of our competition, the outcomes of ongoing litigation, our ability to identify new acquisitions or dispositions and close on pending acquisitions or dispositions and the other factors described in the risk factors described in Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2023, and in other documents that we …

Excerpt shortened here; the source contains the full paragraph.

Current wording

We make statements in this Quarterly Report on Form 10-Q that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). These forward-looking statements include, without limitation, statements concerning pending acquisitions and dispositions, projections, predictions, expectations, estimates or forecasts as to our business, financial and operational results, future stock repurchases and other transactions affecting our capitalization, our dividend policy, including any intentions with respect to the payment of special dividends, future economic performance, crop yields and prices and future rental rates for our properties, ongoing litigation, as well as statements of management’s goals and objectives and other similar expressions concerning matters that are not historical facts. When we use the words “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, we intend to identify forward-looking statements. Although we believe 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: the ongoing war in Ukraine and the ongoing conflict in the Middle East and their impacts on our tenants’ businesses and the farm economy generally, changes in trade policies in the United States and other countries that import U.S. agricultural products, 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 our common stock, changes in our business strategy, availability, terms and deployment of capital, our ability to refinance existing indebtedness at or prior to maturity on favorable terms, or at all, availability of qualified personnel, changes in our industry or the general economy, the degree and nature of our competition, the outcomes of ongoing litigation, our ability to identify new acquisitions or dispositions and close on pending acquisitions or dispositions and the other factors described in the risk factors described in Item 1A, “Risk Factors” of our Annual Report on Form…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Our primary strategic objective is to utilize our position as a leading institutional acquirer, owner and manager of high-quality farmland located in agricultural markets throughout North America to deliver strong risk adjusted returns to investors through a combination of cash dividends and asset appreciation. As of June 30, 2024, we owned farms with an aggregate of approximately 134,700 acres in Arkansas, California, Colorado, Florida, Illinois, Indiana, Kansas, Louisiana, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, South Carolina and Texas. In addition, as of June 30, 2024, we owned land and buildings for four agriculture equipment dealerships in Ohio leased to Ag Pro under the John Deere brand and served as property manager for approximately 45,400 acres, including farms in Iowa. As of June 30, 2024, approximately 70% of our portfolio (by value) was used to grow primary crops, such as corn, soybeans, wheat, rice and cotton, and approximately 30% was used to produce specialty crops, such as almonds, pistachios, citrus, strawberries, and edible beans. We believe our portfolio gives investors the economic benefit of increasing global food demand in the face of growing scarcity of high-quality farmland and will continue to reflect the approximate allocation of U.S. agricultural

Current wording

Our primary strategic objective is to utilize our position as a leading institutional acquirer, owner and manager of high-quality farmland located in agricultural markets throughout North America to deliver strong risk adjusted returns to investors through a combination of cash dividends and asset appreciation. As of September 30, 2024, we owned farms with an aggregate of approximately 134,700 acres in Arkansas, California, Colorado, Florida, Illinois, Indiana, Kansas, Louisiana, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, South Carolina and Texas. In addition, as of September 30, 2024, we owned land and buildings for four agriculture equipment dealerships in Ohio leased to Ag Pro under the John Deere brand and served as property manager for approximately 47,800 acres, including farms in Iowa. As of September 30, 2024, approximately 70% of our portfolio (by value) was used to grow primary crops, such as corn, soybeans, wheat, rice and cotton, and approximately 30% was used to produce specialty crops, such as almonds, pistachios, citrus, strawberries, and edible beans. We believe our portfolio gives investors the economic benefit of increasing global

Previous wording

output between primary crops and animal protein (whose production relies principally on primary crops as feed), on one hand, and specialty crops, on the other.

Current wording

food demand in the face of growing scarcity of high-quality farmland and will continue to reflect the approximate allocation of U.S. agricultural output between primary crops and animal protein (whose production relies principally on primary crops as feed), on one hand, and specialty crops, on the other.

Previous wording

FPI was incorporated in Maryland on September 27, 2013, and is the sole member of the sole general partner of the Operating Partnership, which is a Delaware limited partnership that was formed on September 27, 2013. All of FPI’s assets are held by, and its operations are primarily conducted through, the Operating Partnership and its wholly owned subsidiaries. As of June 30, 2024, FPI owned 97.6% of the Common units and none of the Series A preferred units. See “Note 9—Stockholders’ Equity and Non-controlling Interests” within the notes to the consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information regarding the non-controlling interests.

Current wording

FPI was incorporated in Maryland on September 27, 2013, and is the sole member of the sole general partner of the Operating Partnership, which is a Delaware limited partnership that was formed on September 27, 2013. All of FPI’s assets are held by, and its operations are primarily conducted through, the Operating Partnership and its wholly owned subsidiaries. As of September 30, 2024, FPI owned 97.5% of the Common units and none of the Series A preferred units. See “Note 9—Stockholders’ Equity and Non-controlling Interests” within the notes to the consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information regarding the non-controlling interests.

Previous wording

Our principal source of revenue is rent from tenants that conduct farming operations on our farmland. The majority of the leases that are in place as of the date of this Quarterly Report on Form 10-Q have fixed rent payments. Some of our leases have variable rents based on the revenue generated by our farm-operator tenants. We believe that this mix of fixed and variable rents will help insulate us from the variability of farming operations and reduce our credit-risk exposure to farm-operator tenants while making us an attractive landlord in certain regions where variable leases are customary. However, we may be exposed to tenant credit risk and farming operation risks, particularly with respect to leases that do not require advance payment of 100% of the fixed rent, variable rent arrangements and leases with terms greater than one year.

Current wording

leases have variable rents based on the revenue generated by our farm-operator tenants. We believe that this mix of fixed and variable rents will help insulate us from the variability of farming operations and reduce our credit-risk exposure to farm-operator tenants while making us an attractive landlord in certain regions where variable leases are customary. However, we may be exposed to tenant credit risk and farming operation risks, particularly with respect to leases that do not require advance payment of 100% of the fixed rent, variable rent arrangements and leases with terms greater than one year.

Previous wording

Most of our farming leases have lease terms of three years for row crops and up to seven years for permanent crops, pursuant to which each tenant is responsible for substantially all of the operating expenses related to the property, including maintenance, water usage and insurance. As a result, we believe that the effect on us of inflationary increases in operating expenses are borne largely by our tenants under the terms of their leases. We believe that inflationary increases in farmer profitability will continue to impact lease renegotiations upon renewals, as we experienced in the most recent renewal cycle in late 2023. Furthermore, high levels of inflation have prompted the Board of Governors of the United States Federal Reserve (the “Federal Reserve”) to increase the federal funds rate, which has led to a significant increase in market short- and long-term interest rates since the beginning of 2022. This increase in rates has significantly increased the cost of our floating rate debt and has also significantly increased the cost of certain of our MetLife debt with interest rates that have been reset since the beginning of 2022. The Federal Reserve may continue this policy of maintaining elevated rates, which would further increase interest expense for many businesses, including the Company.

Current wording

Most of our farming leases have lease terms of three years for row crops and up to seven years for permanent crops, pursuant to which each tenant is responsible for substantially all of the operating expenses related to the property, including maintenance, water usage and insurance. As a result, we believe that the effect on us of inflationary increases in operating expenses are borne largely by our tenants under the terms of their leases, and inflationary increases in farmer profitability generally lead to increased rents upon lease renewals, as we experienced in the most recent renewal cycle in late 2023. Furthermore, high levels of inflation prompted the Board of Governors of the United States Federal Reserve (the “Federal Reserve”) to increase the federal funds rate (the rate the Federal Reserve charges member banks for overnight funds) eleven times between March 2022 and July 2023, which led to a significant increase in market short- and long-term interest rates beginning in early 2022. This increase in rates has significantly increased the cost of our floating rate debt and has also significantly increased the cost of certain of our MetLife debt with interest rates that have been reset since the beginning of 2022. However, we have recently repaid most of our floating rate debt with the proceeds of the Farmland Reserve Transaction. Moreover, the Federal Reserve lowered the federal funds rate in September 2024, and has signaled the possibility of future rate cuts, which we anticipate will have a favorable impact on the cost of debt for the Company moving forward. However, interest rates remain high, and there can be no certainty as to the occurrence, timing or magnitude of future rate cuts by the Federal Reserve.

Previous wording

The principal factors affecting our operating results and the value of our farmland include long-term global demand for food relative to the global supply of food; farmland fundamentals and economic conditions in the markets in which we own farmland; and our ability to increase or maintain rental revenues while controlling expenses. We are currently in an environment of appreciating land values, driven by, among other things, inflation, strong commodity prices (further exacerbated by the war in Ukraine) and an outlook for high levels of farmer profitability. Sustained high interest rates can serve as a counter-balancing external factor to this favorable environment. Each year additional farmland in various portions of the world, including the United States, is repurposed for commercial development, thus decreasing the land acreage available for production of grains, oil seeds, permanent and specialty crops necessary to feed the world’s growing population. Although farmland prices may show a decline from time to time, we believe that any reduction in U.S. farmland values overall is likely to be short-lived as global demand for food and agricultural commodities typically exceeds global supply and quality farmland becomes scarcer.

Current wording

The principal factors affecting our operating results and the value of our farmland include long-term global demand for food relative to the global supply of food; farmland fundamentals and economic conditions in the markets in which we own farmland; and our ability to increase or maintain rental revenues while controlling expenses. We are currently in an environment of appreciating land values, driven by, among other things, inflation, strong commodity prices (further exacerbated by the war in Ukraine) and an outlook for high levels of farmer profitability. Sustained high interest rates can serve as a counter-balancing external factor to this favorable environment. Each year additional farmland in various portions of the world, including the United States, is repurposed for commercial development, thus decreasing the land acreage available for production of grains, oil seeds, permanent and specialty crops necessary to feed the world’s growing population. Although farmland prices may show a decline from time to time, we believe that any reduction in U.S. farmland

Previous wording

Despite advances in income, according to “The State of Food Security and Nutrition in the World 2023,” a report by the UN FAO, 2.4 billion people were facing moderate to severe food insecurity in 2022. The ongoing war in Ukraine has disrupted supply chains and affected the prices of grain, fertilizer, and energy, further stressing food supplies for developing countries that are dependent on food imports.

Current wording

Despite advances in income, according to “The State of Food Security and Nutrition in the World 2024,” a report by the UN FAO, 2.33 billion people were facing moderate to severe food insecurity in 2023. The ongoing war in Ukraine has disrupted supply chains and affected the prices of grain, fertilizer, and energy, further stressing food supplies for developing countries that are dependent on food imports.

Previous wording

The Federal Reserve has engaged in a series of significant increases in the federal funds rate, which is the rate the Federal Reserve charges member banks for overnight funds. These increases affect all borrowing rates, and for variable rate debt and debt with rates that reset periodically, such increases have a direct and relatively immediate impact.

Current wording

The Federal Reserve engaged in a series of significant increases in the federal funds rate between March 2022 and July 2023. The federal funds rate is the rate the Federal Reserve charges member banks for overnight funds. Changes to the federal funds rate affect all borrowing rates, and for variable rate debt and debt with rates that reset periodically, such changes have a direct and relatively immediate impact. The Federal Reserve lowered the federal funds rate from recent highs in September 2024 and has signaled the possibility of further rate cuts, but interest rates remain high, and there can be no certainty as to the occurrence, timing or magnitude of future rate cuts by the Federal Reserve.

Previous wording

As of June 30, 2024, $136.0 million of our outstanding indebtedness was subject to interest rates that reset before maturity (excluding our floating rate debt). As of January 1, 2024, $43.9 million was subject to rate resets in 2024, and $16.8 million has been reset as of June 30, 2024. The remaining $27.1 million will be reset in October and December 2024.

Current wording

As of September 30, 2024, $136.0 million of our outstanding indebtedness was subject to interest rates that reset before maturity (excluding our floating rate debt). As of January 1, 2024, $43.9 million was subject to rate resets in 2024. $16.8 million has been reset as of September 30, 2024, of which $8.4 million was repaid in October 2024. The remaining $27.1 million that was scheduled to reset in the fourth quarter was also subsequently repaid.

Previous wording

At June 30, 2024, $110.4 million, or 28.1%, of our debt had variable interest rates, however, as stated in “Note 10—Hedge Accounting” to the accompanying consolidated financial statements, the Company has an interest rate swap with Rabobank for $33.2 million, which reduces floating rate exposure to $77.2 million. After adjusting the $33.2 million of swapped Rabobank debt as fixed rate debt, the ratio of floating rate debt to total debt decreased to 19.6%. Assuming no increase in the level of our variable rate debt spreads, if SOFR increased by 1.0%, our cash flow would decrease by approximately $0.8 million per year, and if SOFR decreased by 1.0%, our cash flow would increase approximately $0.8 million per year.

Current wording

At September 30, 2024, $111.4 million, or 28.3%, of our debt had variable interest rates, however, as stated in “Note 10—Hedge Accounting” to the accompanying consolidated financial statements, the Company has an interest rate swap with Rabobank for $33.2 million, which reduces floating rate exposure to $78.2 million. After adjusting the $33.2 million of swapped Rabobank debt as fixed rate debt, the ratio of floating rate debt to total debt decreased to 19.8%.

Previous wording

We expect that future changes in interest rates will impact our overall operating performance by, among other things, affecting our borrowing costs and borrowing costs of our tenants. While we may seek to manage our exposure to future changes in rates through interest rate swap agreements or interest rate caps, portions of our overall outstanding debt will likely remain at floating rates or subject to interest rates that reset periodically. In addition, a sustained material increase in interest rates may cause farmland prices to decline if the rise in real interest rates (nominal interest rates minus the

Current wording

We expect that future changes in interest rates will impact our overall operating performance by, among other things, affecting our borrowing costs and borrowing costs of our tenants. While we may seek to manage our exposure to future changes in rates through interest rate swap agreements or interest rate caps, portions of our overall outstanding debt will likely remain at floating rates or subject to interest rates that reset periodically. In addition, if interest rates begin to rise again, farmland prices may decline if the rise in real interest rates (nominal interest rates minus the inflation rate) is not accompanied by rises in the general levels of inflation. However, our business model anticipates that over time the value of our farmland will increase, as it has in the past, at a rate that is equal to or greater than the rate of inflation, which may in part offset the impact of rising interest rates on the value of our farmland, but there can be no guarantee that this appreciation will occur to the extent that we anticipate or at all.

Previous wording

Our net income for the three months ended June 30, 2024 was affected partially by acquisitions and dispositions that occurred since the quarter ended June 30, 2023, as well as severance expense of $1.4 million, partially offset by higher crop sales, lower cost of goods sold and lower interest expense.

Current wording

Our net income for the three months ended September 30, 2024 was affected partially by acquisitions and dispositions that occurred since the quarter ended September 30, 2023, as well as higher cost of goods sold, partially offset by higher crop sales and lower interest expense.

Previous wording

Rental income decreased $0.7 million, or 6.7%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, resulting primarily from dispositions that occurred in 2023.

Current wording

Rental income decreased $0.4 million, or 3.8%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, resulting primarily from dispositions that occurred in 2023.

Previous wording

Crop sales totaled $0.9 million for the three months ended June 30, 2024 compared to $0.5 million for the three months ended June 30, 2023. This increase was the result of a higher volume of citrus sales on our directly operated properties.

Current wording

Crop sales totaled $2.6 million for the three months ended September 30, 2024 compared to $0.8 million for the three months ended September 30, 2023. This increase was the result of a higher volume of citrus sales on our directly operated properties.

Previous wording

Other revenue increased $0.1 million, or 14.4%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. This increase was primarily due to an increase in interest income of $0.2 million as a result of more outstanding loans under the FPI Loan Program, partially offset by decrease of $0.1 million in auction and brokerage income and crop insurance proceeds.

Current wording

Other revenue increased $0.3 million, or 42.3%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. This increase was primarily due to an increase in auction and brokerage income, property management income and interest income as a result of a higher average balance outstanding on loans under the FPI Loan Program.

Previous wording

Depreciation, depletion and amortization decreased $0.8 million, or 35.2%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. This decrease was a result of asset dispositions in 2023 and more assets becoming fully depreciated, partially offset by depreciable assets being placed into service.

Current wording

Depreciation, depletion and amortization decreased $0.5 million, or 25.7%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. This decrease was a result of asset dispositions in 2023 and more assets becoming fully depreciated, partially offset by depreciable assets being placed into service.

Previous wording

Property operating expenses decreased $0.6 million, or 23.0%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, resulting from lower tax expenses, insurance and repairs.

Current wording

Property operating expenses decreased $0.1 million, or 6.8%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, resulting from lower insurance and repairs.

Previous wording

Cost of goods sold totaled $0.8 million for the three months ended June 30, 2024 compared to $1.0 million for the three months ended June 30, 2023. This decrease was the result of a lower volume of crop sold on walnut farms, partially offset by an increase in citrus in the three months ended June 30, 2024 compared to the three months ended June 30, 2023.

Current wording

Cost of goods sold totaled $1.6 million for the three months ended September 30, 2024 compared to $0.7 million for the three months ended September 30, 2023. This increase was primarily the result of a higher volume of citrus sold in the three months ended September 30, 2024 compared to the three months ended September 30, 2023.

Previous wording

Other expense remained relatively flat at $0.1 million for the three months ended June 30, 2024 and 2023.

Current wording

Other income remained relatively flat at $0.1 million and $0.0 million for the three months ended September 30, 2024 and 2023, respectively.

Previous wording

(Gain) loss on disposition of assets, net changed from gain on disposition of assets of $11.1 million for the three months ended June 30, 2023 to loss on disposition of assets of $0.0 million for the three months ended June 30, 2024. The loss on sale of assets during the three months ended June 30, 2024 was attributable to dispositions of fixed assets while the gain on sale of assets during the three months ended June 30, 2023 was attributable to dispositions of 17 properties, as well as the disposal of fixed assets.

Current wording

Gain on disposition of assets decreased $8.3 million, or 80.8%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The gain on sale of assets during the three months ended September 30, 2024 was due to the recognition of gains from the sale of two properties in 2023 that had previously been deferred and the disposal of fixed assets, while the gain on sale of assets during the three months ended September 30, 2023 was attributable to dispositions of 35 properties, as well as the disposal of fixed assets.

Previous wording

Interest expense decreased $0.6 million, or 10.2%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. This decrease was the result of lower outstanding debt, partially offset by higher interest rates.

Current wording

Interest expense decreased $0.7 million, or 11.8%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. This decrease was the result of lower outstanding debt, partially offset by higher interest rates.

Previous wording

Our net income for the six months ended June 30, 2024 was affected partially by acquisitions and dispositions that occurred since the quarter ended June 30, 2023, as well as severance expense of $1.4 million, partially offset by higher crop sales, lower cost of goods sold, lower interest expense and income from forfeited deposits.

Current wording

Our net income for the nine months ended September 30, 2024 was affected partially by acquisitions and dispositions that occurred since the quarter ended September 30, 2023, as well as severance expense of $1.4 million and higher cost of good sold, partially offset by higher crop sales, lower interest expense and income from forfeited deposits.

Previous wording

Rental income decreased $1.2 million, or 5.7%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, resulting primarily from dispositions that occurred in 2023.

Current wording

Rental income decreased $1.6 million, or 5.1%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, resulting primarily from dispositions that occurred in 2023.

Previous wording

Crop sales increased $0.7 million, or 82.3%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. This increase was the result of a higher volume of walnut and citrus sales on our directly operated properties.

Current wording

Crop sales increased $2.5 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. This increase was the result of a higher volume of walnut and citrus sales on our directly operated properties.

Previous wording

Depreciation, depletion and amortization decreased $1.1 million, or 27.2%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. This decrease was a result of asset dispositions in 2023 and more assets becoming fully depreciated, partially offset by depreciable assets being placed into service.

Current wording

Depreciation, depletion and amortization decreased $1.6 million, or 26.8%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. This decrease was a result of asset dispositions in 2023 and more assets becoming fully depreciated, partially offset by depreciable assets being placed into service.

Previous wording

Property operating expenses decreased $0.9 million, or 20.4%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, resulting from lower tax expenses, insurance and repairs.

Current wording

Property operating expenses decreased $1.1 million, or 16.2%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, resulting from lower tax expenses, insurance and repairs.

Previous wording

Acquisition and due diligence costs were negligible during the six months ended June 30, 2024 and remained relatively consistent compared to the six months ended June 30, 2023.

Current wording

Acquisition and due diligence costs were negligible during the nine months ended September 30, 2024 and remained relatively consistent compared to the nine months ended September 30, 2023.

Previous wording

General and administrative expenses increased $0.8 million, or 28.7%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. This increase was driven by a one-time severance expense of $1.4 million, partially offset by lower compensation and travel expense. The severance expense was in connection with the previously announced departure of the Company’s former Chief Financial Officer and Treasurer as part of the Company's cost-cutting initiative.

Current wording

General and administrative expenses increased $0.8 million, or 10.3%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. This increase was driven by a one-time severance expense of $1.4 million during the nine months ended September 30, 2024, partially offset by lower compensation and travel expense. The severance expense was incurred in connection with the previously announced departure of the Company’s former Chief Financial Officer and Treasurer as part of the Company's cost-cutting initiative.

Previous wording

Other operating expenses remained relatively flat at $0.0 million and $0.1 million for the six months ended June 30, 2024 and 2023, respectively.

Current wording

Other operating expenses remained relatively flat at $0.0 million and $0.1 million for the nine months ended September 30, 2024 and 2023, respectively.

Previous wording

Other (income) expense changed from other expense of $0.1 million for the six months ended June 30, 2023 to other income of $0.1 million for the six months ended June 30, 2024. This change is primarily due to proceeds related to an easement, partially offset by a loss on debt modification due to the amendment of the Rutledge Facility.

Current wording

Other (income) expense changed from other expense of less than $0.1 million for the nine months ended September 30, 2023 to other income of $0.2 million for the nine months ended September 30, 2024. This change is primarily due to proceeds related to an easement, partially offset by a loss on debt modification due to the amendment of the Rutledge Facility.

Previous wording

(Income) loss from equity method investment changed from loss from equity method investment of less than $0.1 million for the six months ended June 30, 2023 to income from equity method investment of $0.1 million for the six months ended June 30, 2024.

Current wording

(Income) loss from equity method investment changed from loss from equity method investment of $0.0 million for the nine months ended September 30, 2023 to income from equity method investment of $0.1 million for the nine months ended September 30, 2024.

Previous wording

(Gain) loss on disposition of assets, net changed from gain on disposition of assets of $12.9 million for the six months ended June 30, 2023 to loss on disposition of assets of $0.1 million for the six months ended June 30, 2024. The loss on sale of assets during the six months ended June 30, 2024 was attributable to dispositions of fixed assets while the gain on sale of assets during the six months ended June 30, 2023 was attributable to dispositions of 19 properties, as well as the disposal of fixed assets.

Current wording

Gain on disposition of assets, net decreased $21.3 million, or 91.9%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The gain on sale of assets during the nine months ended September 30, 2024 was due to the recognition of gains from the sale of two properties in 2023 that had previously been deferred and the disposal of fixed assets, while the gain on sale of assets during the nine months ended September 30, 2023 was attributable to dispositions of 54 properties, as well as the disposal of fixed assets.

Previous wording

(Income) from forfeited deposits was $1.2 million for the six months ended June 30, 2024 compared to $0.0 million for the six months ended June 30, 2023, due to the termination of a repurchase agreement and the retention of $1.2 million in earnest money payments.

Current wording

(Income) from forfeited deposits was $1.2 million for the nine months ended September 30, 2024 compared to $0.0 million for the nine months ended September 30, 2023, due to the termination of a repurchase agreement and the retention of $1.2 million in earnest money payments.

Previous wording

Interest expense decreased $0.5 million, or 4.5%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. This decrease was the result of lower outstanding debt, partially offset by higher interest rates.

Current wording

Interest expense decreased $1.2 million, or 7.2%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. This decrease was the result of lower outstanding debt, partially offset by higher interest rates.

Previous wording

High levels of inflation prompted the Federal Reserve to increase interest rates which has resulted in, and may continue to result in, increased interest expense. We expect to meet our liquidity needs through cash on hand, undrawn availability under our lines of credit ($158.1 million in availability as of June 30, 2024), operating cash flows, borrowings, proceeds

Current wording

High levels of inflation prompted the Federal Reserve to increase interest rates between March 2022 and July 2023, which has resulted in increased interest expense. The Federal Reserve lowered the federal funds rate from recent highs in September 2024 and has signaled the possibility of further rate cuts, but interest rates remain high, and there can be no certainty as to the occurrence, timing or magnitude of future rate cuts by the Federal Reserve. We expect to meet our liquidity needs through cash on hand, undrawn availability under our lines of credit ($132.1 million in availability as of September 30, 2024 and $168.9 million as of the date of this report), operating cash flows, borrowings, proceeds from equity issuances and selective asset dispositions where such dispositions are deemed to be in the best interests of the Company.

Previous wording

During the six months ended June 30, 2024, we repurchased no shares of our common stock. We currently have authority to repurchase up to an aggregate of $83.3 million in additional shares of our common stock.

Current wording

During the nine months ended September 30, 2024, we repurchased no shares of our common stock. We currently have authority to repurchase up to an aggregate of $83.3 million in additional shares of our common stock.

Previous wording

The following table summarizes our cash flows for the six months ended June 30, 2024 and 2023:

Current wording

The following table summarizes our cash flows for the nine months ended September 30, 2024 and 2023:

Previous wording

As of June 30, 2024, we had $5.7 million of cash and cash equivalents compared to $11.2 million at June 30, 2023.

Current wording

As of September 30, 2024, we had $8.1 million of cash and cash equivalents compared to $6.1 million at September 30, 2023.

Previous wording

Net cash and cash equivalents provided by operating activities decreased by $3.6 million primarily as a result of the following:

Current wording

Net cash and cash equivalents provided by operating activities decreased by $4.2 million primarily as a result of the following: