Alico Inc Midwest IDEAS Conference

John. Thank you, Phillip, and thank you all for taking time to join us for our presentation today.

We'll go through a set of slides, and then we'll do some Q&A, and I'm happy to discuss anything afterwards if anybody's got some specific questions. We've got some eye candy for the lawyers we're going to wet up here for a second. Alico is a public company. We just said that. We've been public since 1960. Went public on the pink sheets, believe it or not, back in the day. We were one of the original Nasdaq-listed companies in 1972, but our history goes back even further. We're in business for about 130 years. It started out always as a land company, but it's evolved over time based on the needs of our market. Back when we started, the needs of the market was Florida.

We started out as a railroad company that turned into a timber company, that turned into a citrus company that went basically vertical with the citrus industry, and we've now evolved today into basically a modern agricultural company with some residential and commercial real estate aspirations. But what we've always done is down on the bottom, which is we've seeked to provide you, the investor, with the benefits and stability of what conventional agriculture represents, as well as the optionality that comes with active land management. The active land management is monetizing at attractive prices to the right buyers. You'll see everything that we own is in the state of Florida. Everybody got excited last time we were at the IDEAS conference when we showed this slide because they think that everything in the shaded is what we own. We don't own that. We own the little orange parts within each of these seven counties.

We're illustrating the seven counties, otherwise we'd be worth about $400 trillion if we own that much real estate. The little orange boxes inside the seven counties, 47,300 acres in 27 different locations. The 27 different locations is actually a huge competitive advantage for us. Diversifies us and our operations against weather, but also gives us different upside potential as each of these land locations develops at its own different course and speed. The one unifying tie over the past 130 years was not necessarily our business model, but it was our conservation-oriented DNA. We've always tried to be a good steward of everything that we owned, and all that we owned was land. So we provide as much encouragement as we can for our neighbors. We try to be good corporate citizens.

We've always been really tied to the environment and trying to be good stewards for all the conservation land that we have. Most recently, we've sold almost 40,000 acres to the state of Florida between 2017 and 2024 that they're using for wildlife space, conservation areas, parks, things like that. We donated the land, if you're familiar with Florida Gulf Coast University, that became the tenth university as part of the State of Florida's university system. Most recently, we put up $5 million of our own money to build a wildlife crossing that goes across a major highway. We have a little bit of an interest in making sure that that goes well. We'll talk about that in a second. It truly is putting our money where our mouth is, where we're not looking for an immediate return. A lot of smiling faces.

You should recognize at least one of them, but the guy in the middle is the most important. The guy in the middle is a man named Mitch Hutchcraft. Mitch is a rezoning, in Florida, we call it entitlement. He is an entitlement expert in the state of Florida. What his claim to fame is he works with agricultural companies like ourselves, where all of our land is basically titled or zoned properly everywhere we own it for agricultural purposes and helps us basically get approvals to turn it into something else. You need permission from federal, state, and local governments if you're going to do anything other than what you're approved for. Mitch has been doing that for about 40 years. Most recently, we hired him a couple of years ago from King Ranch.

The reason that's extremely relevant is the largest rezoning project that we're currently working on, King Ranch, had a very similar project literally adjacent to us, right next door, and Mitch was the guy who quarterbacked that for 15 years. We have huge institutional knowledge that Mitch brought with him on how to get things done in the real estate system within the state of Florida. All the right people, the right order of operations, how to establish some credibility, his reputation. In addition to just being a terrific guy, he is an extremely competent professional, and he is a core part of our real estate strategy. Why is that important? Because our legacy over that 130 years, really, as an agricultural producer evolved to where we were the largest producer of citrus fruit, that would be oranges, for the orange juice market in the U.S.

At one point, we were growing oranges on 5.5 million trees. We were the largest producer for Tropicana. They were our major customer. Everything went great until a disease weakened our trees. More importantly, two hurricanes came in within a couple of years of each other in 2022 and 2024, and really devastated those weakened trees to the point where they were not producing enough fruit to be economically viable for us. Remember we said 5.5 million trees. You have basically a fixed cost base to take care of them every day, and then you would harvest the fruit at the end of the year. The diminished production was causing economic losses for the company.

We were able to actually hold our breath and cross our fingers for one year. By the end of 2024, it became pretty clear that production was not going to rebound to the point where there would be economic sufficiency. We made the very difficult decision to exit as a producer of oranges. We got out of operating as a citrus producer, really to focus on how we can get highest and best use from our land ourselves. Recognizing that the land was truly what the assets of the company were. It was not necessarily our market share, which was diminishing. It wasn't just us. We think we were actually the best growers in the state of Florida. We just were no longer able to make it economically viable.

Instead, we focused on a development strategy where we spent a lot of time and looked at every acre of land that we held and tried to determine what its highest and best use would be ultimately, and then how long it would take to get there, and potentially what it could be monetized for. Then we discounted all that back into a model that allowed us to basically categorize every asset that we had into three buckets. The first bucket was something that we called basically the five years, and that meant that we thought that we had acres that could be developed within the first five years. The second bucket was also going to be developable, but it would just be outside of five years, could take 5 to 15.

Everything else outside of that 15 to 20 year window, we just considered to keep in the agricultural bucket. We've got five years, we've got after five years, and then we've got 75% of the land that stayed in the agricultural bucket. That allowed us to actually put a price tag. Management was able to estimate that the value of our assets in present value dollars today, discounted between 10% and 15%, was somewhere between $650 million and $750 million. Why is this relevant? Because the stock itself was trading for about $200 million back then. Currently, it's trading for about $300 million today. We've done a decent job of narrowing the valuation gap, but we still have a ways to go to achieve what we consider true market value for these assets.

We're just going to continue to execute according to our plan and get there a little at a time. These are current numbers. We refreshed this analysis a few months ago, and some of the variables have changed, but we are making a good effort to try to narrow that valuation gap for you, the investors. A plan for every acre is the system that we just described, but the first line is the most important, that this is an ongoing process. We're constantly looking at comparable transactions that are in our vicinity. We're constantly looking at the market. We're reevaluating all of our assumptions. We're looking at our discount rates, and we're truly trying to provide you, the investors, with the best guess of what management estimates the value for these lands are going to be.

We have not provided our homework because several people asked for that. "Why don't you just give us your model?" We're going to keep that as proprietary information, but the way we constructed it is we did bring in outsiders. We had appraisers, we had market experts, we had people in the industry, real estate research professionals that actually helped us with all of those key assumptions. We went all the way out 20 or 30 years, month by month, trying to figure out exactly when we can get approvals, if it was going to be rezoned, and how we can monetize it at that point based on what the lot value would be, depending on what the density per acre of how many houses you're allowed to put on an acre. It wasn't just a simple swag that we did on the back of an envelope.