Business description of Farmland-Partners-Inc from last 10-k form

 

FORWARD-LOOKING STATEMENTS

We make statements in this Annual Report on Form 10-K 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 projections, predictions, expectations, estimates, or forecasts as to our business, financial and operational results, future economic performance, crop yields and prices and future rental rates for our properties, 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: 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, availability of qualified personnel, changes in our industry, interest rates or the general economy, the degree and nature of our competition, our ability to identify new acquisitions and close on pending acquisitions, and the other factors described in the risk factors described in Item 1A herein and in other documents that we file from time to time with the Securities and Exchange Commission (the “SEC”). Given these uncertainties, undue reliance should not be placed on such statements.  We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions, or changes in other factors affecting forward-looking information, except to the extent required by law. 

PART I

Item 1. Business.

Our Company

We are an internally managed real estate company incorporated in Maryland that owns and seeks to acquire high-quality primary crop farmland located in agricultural markets throughout North America. The substantial majority of the farms in our portfolio are devoted to primary crops, such as corn, soybeans and wheat, because we believe primary crop farmland is likely to provide attractive risk-adjusted returns over time through a combination of stable rental income generation and value appreciation. We completed our initial public offering on April 16, 2014 and concurrently acquired 38 farms with approximately 7,300 acres and three grain storage facilities from affiliates of Paul A. Pittman, our Executive Chairman, President and Chief Executive Officer. As of December 31, 2014, we owned 87 farms with approximately 46,460 total acres, including 33 farms in Illinois, 20 farms in Colorado, 14 farms in Nebraska, 8 farms in Arkansas, 7 farms in South Carolina, 2 farms in Louisiana, 2 farms in Kansas and 1 farm in Mississippi, as well as 6 grain storage facilities.

We intend to continue to acquire additional farmland to achieve scale in our portfolio and to diversify our portfolio by geography, crop type and tenant. While our principal investment focus is on farmland that is suitable for primary crops, which include grains (such as corn, wheat and rice), oilseeds (such as soybeans and rapeseed), forage crops (such as alfalfa, grass hay and corn silage) and cotton, in the future we may diversify into farmland suitable for other annual crops, such as fresh produce, peanuts and biofuel feedstocks, as well as permanent crops, such as oranges and almonds. We also may acquire properties related to farming, such as grain storage facilities, grain elevators, feedlots, processing plants and distribution centers, as well as livestock farms or ranches.

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 Annual Report have fixed annual rental payments and provide that 100% of the annual rent is due and payable in advance of each spring planting season. 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 annual rent, leases for which the rent is based on a percentage of a tenant's farming revenues and leases with terms greater than one year.

We intend to elect to be taxed as REIT for U.S. federal income tax purposes commencing with our short taxable year ended December 31, 2014.

Our Competitive Strengths

We believe the following competitive strengths distinguish us from many of our competitors: