Good morning and welcome to the Farmland Partners Incorporated, First Quarter 2018 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Mr. Paul Pittman, Chairman and Chief Executive Officer. Please go ahead.

Thank you, Danielle. Good morning and welcome to Farmland Partners, First Quarter 2018 Earnings Conference Call and Webcast. We appreciate you taking the time to join us for these calls. We see them as a very important opportunity to share with you our thinking, our strategy, in a format less formal and more interactive than public filings and press releases. Please refer to the investor relations sector of our website at www.farmlandpartners.com for our Q1 2018 supplemental package, which I will be speaking to later in the call. The link for this presentation is directly below the webcast link and is also posted under the presentations section of Investor Relations. With me this morning is Luca Fabbri, the company's Chief Financial Officer and David Ronco, our Head of Investor Relations. I will now turn the call over to Luca for some customary preliminary remarks. Luca?

Thank you, Paul. First and foremost I would like to also welcome you to this conference call and webcast and thank you for joining us. The press release announcing our first quarter earnings was distributed yesterday evening. A replay of this call will be available shortly after the conclusion of the call through May 24, 2018. The phone numbers to access the replay are provided in the earnings Press Release. For those who listened to the rebroadcast of this prevention, we remind you that the remarks made herein as of today May 10, 2018 and have not been updated subsequent to the initial earnings call. During this call we will make forward-looking statements, including statements related to the future performance of our portfolio, our identified acquisitions and farm properties under evaluation, impact of acquisitions and financing activities, as well as comments on our outlook for our business, rents and the broader agricultural markets. We will also discuss certain non-GAAP financial measures, including 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 earnings, which is available on our website, www.farmlandpartners.com, and is furnished as an exhibit to our current report on Form 8-K dated May 9, 2018. 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 yesterday after market close and in documents we have filed with or furnished to the SEC. I would now like to turn the call back to our Chairman and CEO, Paul Pittman. Paul?

Thank you, Luca. Today I want address five separate topics, two of which are general about the farm economy and land value trends in general and three of which are specific to our company. So starting with number one, land value trends. What we’re basically beginning to see is that the press reports in the popular and the agriculture press are finally starting to kind of catch up with the reality of what’s going on in the market place. As I’ve said many times before, farmland values have declined slightly in the Corn Belt and have been stable to increasing in most other regions of the country. This is despite the fact that the popular press has been a steady drumbeat of negativity about agriculture and land values. If you look back at the things that we’ve said in these conference calls and in our other communications now for several years, we have taken a position that a decline in commodity price would lead to stability or slight declines in the Corn Belt and that most of the rest of the country will be stable to increasing, because there are fundamentally different factors in those regions driving land values besides commodity price. We’ve also if you recall talked many times about how commodity price doesn’t drive land value directly, but it does effect farmer income, which can gradually show up in rents and ultimately in land values. But the effect here has been frankly very muted and I’m happy as I said that the press is starting to report it. So for example, on April 9 there was an article on agweb.com quoting the Realtors Land Institute of Iowa, which basically says that after four years of declines in farmland value in Iowa the last 12 months have shown a…

Thank you, Paul. So Paul already walked you through some of the financial highlights for the quarter just a few seconds ago, but I want to kind of re-emphasize them again. In the first quarter our revenues were $11.2 million, which is a 57% year-over-year over the same quarter last year. The operating income for the first quarter was $4.8 million, a 581% increase year-over-year. Reported basic net loss to common stock holders was $0.08 per share and AFFO was zero cents per share. However I want to remind you that historically, because of the structure of some of our leases and the associated revenue recognition policies, we experienced a relatively high seasonality on the revenue side, while our cost structure is frankly relatively stable through the year and that seasonality really emphasizes the fourth quarter. This is even more true than usual in 2018 again due to some relatively large leases, so we do expect the fourth quarter to have a much higher revenue level, as well as operating income and net income and AFFO. With this quarter, the first quarter of 2018 we began reporting earnings before interest taxes, depreciation, amortization, the full real estate and the associated adjust also known as EBITDAre and the associated adjusted EBITDAre. Now EBITDAre is a new measure that has been put forward by the National Association of Real Estate Investment Trust and we decided to conform to this new recommendation of the industry association as we see other leading REITs already started doing so. Specifically what EBITDAre does, it takes EBITDA and adjusts it for a couple of other items such as gains or losses and disposition of depreciated property and payment write downs of depreciated property. These are adjustments that are particularly relevant in REIT in asset classes with a significant proportion of depreciable assets; that is not the case for us. So we expect EBITDAre and adjusted EBITDAre to fundamentally track the EBITDA and adjusted – previously reported and therefore we will not be reporting separately EBITDA and adjusted EBITDA. Having said that, the first quarter adjusted EBITDAre was $7.5 million, a 90% increase year-over-year, over the same quarter last year. In the quarter we also repurchased $6.5 million in shares of common stock and finally a quick note on that, there was no material change in that year in the quarter. I want to stress how 76% of our outstanding debt is based on fixed rate as of the end of the first quarter and we don’t see any material principal payments due in 2018 and only about $6 million due in 2019, so effectively not very much of that due in the next couple of years. This concludes my remarks on our operating performance for the first quarter of 2018. Thank you again for your time this morning and your interest in Farmland Partners. Danielle, we would like to begin the Q&A session.

[Operator Instructions] The first question comes from Dave Rodgers from Baird. Please go ahead.

Yeah, good morning guys. I wanted to maybe first ask about just kind of where your liquidity position is? Are we looking at acquisitions right now? How is that pipeline and maybe just a second follow on to that would be, have you thought about the math at sales to maybe trade out of the lower cap rate markets into some higher cap rate markets to help some of the growth in the near term?

So well, I’ll take that question. So in terms of liquidity, we’re sitting on a substantial amount of cash. I don’t remember the exact number; it’s of course in the financials. At this point in time we are not likely to make particularly significant acquisitions unless we could of course you know find a creative way to finance them. We’re not going to sell any stock at this price to raise cash. So as far as acquisitions go, we are not likely to be very active in the coming months unless we get a substantial change in the stock price. As far as asset sales, we of course consider asset sales all of the time. As you can see from the statistics, we are gradually moving the portfolio to a position where we have a higher percentage specialty crops in the portfolio. It gives you obviously higher total cash flow. That one is something we need to be careful about. I do not expect to see a wholesale selling of the commodity row crop properties. You know I personally have been doing this for 20 plus years. These things ebb and flow. Getting out of the row crop properties when everybody says you ought to get out. Everybody I should say uninforms as you ought to get out, is exactly the wrong time to exit any properties like that. We will find ourselves in the next few years, unless we do start this massive trade war with people telling me I ought to sell my specialty crops and pile into the real crops, because those are the hot things for this given couple of years. That’s not fundamentally how to invest in these assets. That’s not frankly you know how to play this game from an asset value perspective. It’s about building that balanced diversified portfolio and sticking to your fundamental principals has created you know very much long term value in the underlying assets for me and for our company through time, and so yeah, we’ll be trimming on the edges by all means. I mean we own in our portfolio as you would expect us, a few assets that we think somebody else might be able to put to better use and pay a fair price for it, but generally speaking you know we won’t be aggressive asset sellers. But I think you could expect us to see something in the neighborhood of $20 million to $40 million of asset sales in the next 12 months, but that’s not really very many assets out of the $1.2 billion or so of you know farmland overall. I hope that helps Dave.

It does. I saw you bought some stock back in the first quarter. Do you anticipate continuing to use any of that liquidity to buy stock back or are you pretty happy with just kind of waiting and seeing what happens with your capital.

I would anticipate that we will continue to pick away based on our estimate of our cash flow and cash availability at the stock that’s out there. We of course as you know have a buyback program that was announced and it still has capacity, so you know modest amounts of buyback are you know probably going to continue, but it’s hard to say. It’s all about what the price is. As you can see from you know what we – we pushed the stock price up very substantially during the four or five weeks we were doing buybacks last quarter. There is not a ton of liquidity out there at this point in the market. So if we become a serious buyer and buy much quantity at all, we’ll push the stock pretty hard, so. When we’re buying the stock back we tend to go in and out of the market a little bit, because we’re actually trying to buy that stock at inexpensive price for the benefit of all of us who stay in when we can, but yeah, we’ll still buy, but it’s not going to be a lot different than what you’ve seen in the past for all this.

Got it, and maybe last for me. I know you gave some color on the fourth quarter call, but now that we’re through the whole first quarter and given your comments that crop prices as you indicated are up from the low points, can you talk about what the total rollover was, the rent change on rollover for this year?

I don’t have that statistic at my finger tips, but David Ronco and Luca you may have you know that stat handy. I think we published it in the K, what the same store sale statistic was.

Yeah, this is Luca. The same store sales, this is kind of retrospective. I don’t think we have in the public domains physically any statistics about the rollover you know 2017 to 2018.

Does anybody know the same store number though off the top of our head, we’ll do. I can give some color about the rollover, but in a moment let me just give you that data. So we went and rolled over our rents. What we generally discovered and even to me this was a modest surprise. So the core of the Corn Belt which is – you know that in California are our biggest areas. We saw rental increases being put into the rollover that we did in the Midwest. We saw our rents start to go back up where we rolled over leases. Whenever we switched a tenant we see rents start to go back up. That’s fundamentally a positive thing, so that’s such an important region in our portfolio. In terms of the California specialty crop portfolio, we also – there is a lot of crop share in that region, but we’ve either seen or expect a modest increase in rents region wide in the specialty crop portfolio. When we go to the other regions of the country, we would see the high plains, the assets we own in Eastern Colorado. Those rentals to the extent we had very many in that area will be gradually down a little bit. That region in the country has suffered frankly more than almost anywhere else in the low commodity price environment, because not only does it get hit with low commodity prices, transportation cost for the primary commodities out of that region are expensive. There is no good river network that reaches into the high plains, certainly not the western half of the high plains. So you get more volatility in pricing, both directions frankly in that region of the country than you get other places. So you know mid west is positive. The west coast specialty positive in terms of rentable plains are down some and then in terms of the delta and the south east, broadly speaking kind of flat. You know a few downs and a few ups, they sort of balance each other out, so that’s the basic situation.

I appreciate all that color. Thank you.

[Operator Instructions] The next question comes from Marnie Georges of Raymond James. Please go ahead.

Hi, thanks for taking my question. Just to build on that a little bit, what have you been seeing lately in negotiations with some of your farmers? Have concerns about the trade work then having any effects there?

No, we haven’t really seen the potential impact of the trade war show up in terms of negotiations with tenants at all. I mean, most of the farm – I mean there’s a lot written about this topic you know if you read the sort of daily kind of commodities, blogs and articles and your really kind of focused on what people who actively trade commodities; the Ag commodities as a career. There is a lot of sort of data and commentary about that. Its broadly speaking what I said. You know people have that kind of view that the trade war is not a good thing by any means, but the impacts, the negative impacts are relatively serious long term issues, not huge short term issues and so we haven’t really seen it show up. You know one of the things that’s interesting to note is when you’ve got this trade war fear, you know clearly in the press and its roughly the beginning of the year, but the primary commodities are still moving up. It tells you that the true commercial demand for these crops from the processors has really gotten stronger and that the commercials, despite their fear of trade wars are raising prices to secure supply in the coming year. That sort of tells you two things. It tells you that most of those people and me included don’t actually think we’ll have this trade war. We think that we and the Chinese in particular will find a compromise. But it also tells you that fundamental demand must frankly be very strong or you would see prices going down with all the negative tone around about a trade war instead of prices going up. So to see prices moving up in the phase of relatively negative moves is frankly a pretty bullish statistic as it relates to commodity price and former profitability. I hope that helps Marnie.

Yeah, definitely. Thank you for the color. Another from me, turning back a little bit more onto the company. Looking at G&A just given the increased scale, given some personnel moves, you know is this quarter something that you would expect to see as a run rate moving forward or is there something else that we should pay attention to there?

Well, I think in fact our cost structure will gradually get even lower in the coming couple of quarters. You’ve seen in the press announcement some personnel changes and you know staffing reductions in the company as some people decided to move on and do other things or to retire or whatever the case was, each case has a story. Fundamentally we are and were a company built for acquisitions and we frankly aren’t doing very many acquisitions. So our staffing needs to manage the properties we already own are frankly you know substantially lower than our staffing needs to manage properties we already own and acquire at an aggressive rate. So we’ve been able – we have a very high quality or a very small team of people. I think at the maximum we might add 16 or 17 employees and now we’re down to 14 or 15 at this point, but we wouldn’t have necessarily gone out and asked those people to leave. We assumed we’ll get back on a growth strategy soon. But as people have come to me and said, ‘hey, I’d like to be doing something else with my life’ you know we can’t replace those people and add some attrition through that timeframe. So as to add the reduction of personnel cost. The other big cost savings though is of course we made a significant change in the accounting service that we use for the company and that has a very significant impact in terms of the annual cost of the company. So those are all, you know those are all positive things. We’ll continue to do that. I mean as you, of course saw at the end of last year, Luca as the CFO and me as the CEO took substantial reductions in compensation, you know not because our business isn’t doing well at the fundamental level, but I’m a big stock holder too and the stock prices is suffering as it has. You know the senior management of the company is going to take some of that pain directly and we did. So the story going forward should be cost structure is at this level or even a bit lower as you see the quarters move forward.

Great, thank you so much. I’ll turn it back over.

Let me actually add one thing. There is a new page added to the supplemental. David you might be able to quote the page number, but its towards the back of the supplement, where we report some LTM statistics over things like overheads, you know G&A, legal and accounting property operating expenses and we’ll start to do that and continue to let you kind of see it on an LTM basis, which us gives the analyst community in particular a basis you know to project going forward. The reason we did that is that each, different quarters through the year have some noise in their numbers and so using an individual quarter and trying to multiply that for is a little bit misleading. LTM will give everybody a more accurate view of the overhand and cost structure of the company. You know the reasons for that internal variation are things like, there was a lot of excess accounting and legal in the first quarter with getting our year end sort of functions that are required by the SEC down at the Annual Meeting, the proxy or that sort of stuff. Fourth quarter of course tends to have bonuses and things like that. We of course accrued through the year, through a portion of things like bonuses and accounting and anything else. But it still tends to have sort of lumpiness when those events actually occur and so we are going to start producing that LTM tracking of the sort of key line items from the PNL, and like I said, it’s close to the end of the supplemental. There is a page in there that those of you who are building models ought to take a look at.

The next question comes from Mike Pesatery [ph] a Private Investor. Please go ahead.

Good morning. Thank you for taking my call. I have just three questions as a shareholder. Paul you have been very clear about this in the past and I want to revisit it, because I think many of us are kind of fearing the same things. You guys continue to make a concerted effort to reduce cost and I can say from a couple of people that I know that hold shares, we really appreciate your diligence to take responsibility and really kind of hunker down and really, really, really buy back shares and reduce your own salary and other things. Now the question I have is, it seems like without your buys and the stock seems to – obviously it goes up like you said as soon as you buy back and then it kind of hangs around for a while. Now what’s kind of the plan here? Like we go one to two years out and for whatever reason Wall Street doesn’t have the same intrinsic value that you as a company feel. I think you quoted earlier about $11 or $12 a share. At that point…

$12. $12 is the number.

Yeah, yeah.

Well, it was a range of what $11.50 to $12.50.

So you know Wall Street has lot of crazy different ways of intrinsically valuing all this stuff and so rather than get all the loss in all the noise, and I do appreciate the fact that you are sticking to the same script and that’s refreshing. The question is, when do you begin to start making a more realistic look towards, and I think one to two years out will be a fare in saying okay, we are not even at that $10 or $11 range. I hope investor that, that people kind of wake up and see the tremendous value they have in investing in our FPI, but at the same time, I don’t really know, that’s kind of your areas of expertise. That’s one question I have for you.

Yeah, so let me actually address that. I mean it’s an incredibly fair question and I try to speak very directly but I’m not going to tell you and everybody else exactly what the timeframe is, because to be honest I don’t know and it’s a function of not just me, it’s that level of decision, it’s a forward decision. But I can tell you that our strategy is we spent a lot of money getting public. We believe that this asset class belongs in the public domain, we think it’s good for agriculture and rural America, we think it good for investors. That being said, if we do not see a stock price recovery at some point in the future, probably measured in the timeframe you are talking about, about a year or two, we are going to do something more drastic whether that’s sell the company, take it private, call out a bunch of real estate brokers, sell off individual assets and distribute the cash to shareholders. I won’t sit here with this much of my personal wealth being affected by irrational pricing behavior on the part of the public markets. But once you decide to give us being public, it’s hard to get public again, not impossible but it’s certainly expensive. So we are really playing the optionality that the market will eventually get it and recognize the fundamental underlying values. We are, as I’ve said many times I believe really misunderstood by the Street. I wish people would go back and look at what we’ve said about asset values since the beginning. What we have said is that if you have a downturn of two or three or four years you are going to gradually see rents come down, you are going to see a little…

And I want to address another thing, because I think it’s important in all fairness to you, not only being the – managing a very challenging economic climate. You did make a comment on the past call about all these posting and different articles. So I will take responsibility as a shareholder that I have at times been critical and I think that goes without saying, so I want to own that responsibility and piece. And what I do want to say to you is I would have appreciate it the changes you have made, and that’s in the cost reductions. You continue to support this company by putting your money where your mouth is and I think that speaks volumes and that’s a well differentiated approach to all this other talk about going organic and all this other talk about doing other things. So I want to own that piece, because I think it’s fair, but I also want to be fair to you and say that I appreciate your willingness to stay with the script and when your consistent messaging is very appreciated, even though sometimes you do take hits and shareholders sometimes get upset and so I do appreciate that. My second questions is, why not lower the divided down now, so you can reduce some of your already costs, you know what I am saying. That’s probably being a fare question you’ve asked before.

No, that question gets asked, that question gets discussed in our company all the time, but I’ll give you a really kind of clear answer on it. So to put this – so first thank you for the complements you gave. I mean sticking to the script is early, because my script is based on what’s going on on a fundamental asset value. The part of the company we really control is how we execute, what we buy what we sell and how we plant it and how we keep our costs structure down. What I don’t control is the stock price. I wish I did, but I don’t and so that’s just all we can do and we are going to keep doing it. But turning to the divided reduction specifically, as we said in the last conference call and I won’t reiterate it. Our board has discussed this. Of course we have a legal obligation to authorize divided every quarter. But we don’t have any intention as a board in this company to reduce this divided during this calendar year, that’s not to say we will reduce it next year, but we wanted to tell people quite clearly what our intentions were. And the reason we are again so against reducing the divided is really two-fold: First, in context we are negative, we are over distributing by literally just a few million dollars. Well that is in the context if you looked at last year’s USDA report on land values, of an appreciation of a portfolio that was probably in the neighborhood of about $23 million. That’s you know a $1 billion portfolio, about 2.3% nationwide increase in farmland. We’re roughly a balanced nationwide portfolio. So we think what we are doing is we are over – we…

Thank you for the color. My last and final question is this. There has been a little bit of confusion and people are always confused because they don’t take time to read anything nowadays. It’s all about popular pressure, message boards and perception. So, can you add and put out for the record, what was that recent filing that had do with I believe it was 300,000 shares or is this something that had to do with potentially one of your board members leaving, that own a substantial amount of shares. I can’t quite make sense of it, so I’d rather just go right straight to it.

I think what you are referring to is a filing that we put out that’s called a shelf offering filing and there was some confusion about that, but there frankly shouldn’t be, so let address it correctly. A modern practice for public companies sort of standard operating procedure of diligent public companies is to maintain a shelf offering at almost all point in time. We had a shelf of 300 million historically, it was about to expire. We put the shelf back in place. The reason you do that as a public company, and virtually every public company does it is that it rapidly accelerates your ability to issue equity anytime in the next three years when you chose to do so, to have a shelf offering in place and to have it kind of up and ready and maintained. And think about it like, you can issue stock in something like two weeks as opposed to two months or more. So what we were doing there is not indicating by any means that we have an intention that this stock price to issue a bunch of stock. We were just being diligent in our business professionals as the management of this company and the board of this company by maintaining the shelf offering which was about to expire by replacing it with one of basically the same size and that’s all that is, it’s all about being prepared. We clearly do assume the stock will recovery eventually and we will be able to grow the company again and in fact it wouldn’t have been, it wouldn’t have been prudent on our part if I left that shelf fully expire and not get a replace shelf back in place. That’s all that is.

And thank you for all your time and I would say it again, FPI, you guys it’s a great investment. I don’t care what Gladstone says, FPI is going to win it out. So that you so much.

Thank you very much. I’ve have no idea who you are, but I should send you a box of chocolates. Thank you very much.

This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Pittman for closing remarks.

Well, thank you all for joining us. We do appreciate your interest in the company and as the last questioner indicated, we are frankly very supportive of our long term shareholders and want to be supportive of our shareholders. Thank you all for having the confidence to invest in the company and hopefully we will see stock price improve. Certainly the underlying drivers of our business are improving and so we hope that continues. Thank you very much and thank you Danielle.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.