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Leases
12 Months Ended
Oct. 31, 2022
Leases [Abstract]  
Leases Leases
Lessor Arrangements
The Company enters into leasing transactions in which it rents certain of its assets and the Company is the lessor. These lease contracts are typically classified as operating leases with remaining terms ranging from one month to 20 years, with various renewal terms available. All of the residential rentals have month-to-month lease terms.
The following table presents the components of the Company’s operating lease portfolio included in property, plant and equipment, net as of October 31 (in thousands):
20222021
Land and land improvements$13,619 $3,516 
Buildings, equipment and building improvements19,983 18,712 
Orchards8,410 — 
Less: accumulated depreciation(7,912)(6,331)
Property, plant and equipment, net under operating leases$34,100 $15,897 
Depreciation expense for assets under operating leases was approximately $934,000 and $669,000 for the fiscal years 2022 and 2021, respectively.
The Company’s rental operations revenue consists of the following (in thousands):
Year ended October 31,
20222021
Operating lease revenue$4,998 $4,329 
Variable lease revenue326 317 
Total lease revenue$5,324 $4,646 
The future minimum lease payments to be received by the Company related to these operating lease agreements as of October 31, 2022 are as follows (in thousands):
2023$1,278 
2024964 
2025964 
2026222 
202774 
Thereafter672 
Total$4,174 
Lessee Arrangements
The Company enters into leasing transactions in which the Company is the lessee. These lease contracts are classified as either operating or finance leases. The Company’s lease contracts are generally for agricultural land and packinghouse facilities and equipment with remaining lease terms ranging from one to 15 years, with various term extensions available. The Company’s lease agreements do not contain any residual value guarantees or material restrictive covenants. Leases with an initial term of
12. Leases (continued)
Lessee Arrangements (continued)
12 months or less are not recorded on the balance sheet and the Company recognizes lease expense for these leases on a straight-line basis over the lease term. 
Operating lease costs were $537,000 and $606,000 and variable lease costs were $242,000 and $288,000, for the fiscal years 2022 and 2021, respectively, which are primarily included in agribusiness costs and expenses in the Company’s consolidated statements of operations. Finance lease costs and short term lease costs were $154,000 and $212,000 for fiscal year 2022, respectively, and were immaterial for fiscal year 2021.
Supplemental balance sheet information related to leases consists of the following as of October 31 (in thousands):
Classification20222021
Assets
Operating lease ROU assetsOther assets$6,190 $2,041 
Finance lease assetsOther assets1,091 1,142 
$7,281 $3,183 
Liabilities
Current operating lease liabilitiesAccrued liabilities and payables to related parties$1,892 $488 
Current finance lease liabilitiesAccrued liabilities268 249 
Non-current operating lease liabilitiesOther long-term liabilities4,347 1,648 
Non-current finance lease liabilitiesOther long-term liabilities715 884 
$7,222 $3,269 
Weighted-average remaining lease term (in years):
Operating leases5.110.9
Finance leases3.94.9
Weighted-average discount rate:
Operating leases6.1 %3.7 %
Finance leases3.5 %3.3 %
Supplemental cash flow information related to leases consists of the following (in thousands):
Year ended October 31,
20222021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases$577 $603 
Operating cash outflows from finance leases$35 $
Financing cash outflows from finance leases$219 $18 
ROU assets obtained in exchange for new operating lease liabilities$4,612 $271 
Leased assets obtained in exchange for new finance lease liabilities$68 $1,151 
12. Leases (continued)
Lessee Arrangements (continued)
Future minimum lease payments under non-cancellable leases for each of the subsequent five fiscal years and thereafter are as follows (in thousands), which excludes $470,000 of operating lease payments for leases that have been signed but not commenced:
OperatingFinanceTotal
2023$1,891 $268 $2,159 
20241,918 268 2,186 
20251,914 268 2,182 
2026218 246 464 
2027134 — 134 
Thereafter1,046 — 1,046 
Total lease payments7,121 1,050 8,171 
Less: Imputed interest(882)(67)(949)
Present value of lease liabilities$6,239 $983 $7,222 
In addition to operating and finance lease commitments, the Company also has financing transactions and a contract for pollination services, which do not meet the definition of a lease, with minimum future payments of $275,000 in fiscal year 2023, $224,000 in fiscal years 2024, 2025 and 2026 and $37,000 in fiscal year 2027.
Leases Leases
Lessor Arrangements
The Company enters into leasing transactions in which it rents certain of its assets and the Company is the lessor. These lease contracts are typically classified as operating leases with remaining terms ranging from one month to 20 years, with various renewal terms available. All of the residential rentals have month-to-month lease terms.
The following table presents the components of the Company’s operating lease portfolio included in property, plant and equipment, net as of October 31 (in thousands):
20222021
Land and land improvements$13,619 $3,516 
Buildings, equipment and building improvements19,983 18,712 
Orchards8,410 — 
Less: accumulated depreciation(7,912)(6,331)
Property, plant and equipment, net under operating leases$34,100 $15,897 
Depreciation expense for assets under operating leases was approximately $934,000 and $669,000 for the fiscal years 2022 and 2021, respectively.
The Company’s rental operations revenue consists of the following (in thousands):
Year ended October 31,
20222021
Operating lease revenue$4,998 $4,329 
Variable lease revenue326 317 
Total lease revenue$5,324 $4,646 
The future minimum lease payments to be received by the Company related to these operating lease agreements as of October 31, 2022 are as follows (in thousands):
2023$1,278 
2024964 
2025964 
2026222 
202774 
Thereafter672 
Total$4,174 
Lessee Arrangements
The Company enters into leasing transactions in which the Company is the lessee. These lease contracts are classified as either operating or finance leases. The Company’s lease contracts are generally for agricultural land and packinghouse facilities and equipment with remaining lease terms ranging from one to 15 years, with various term extensions available. The Company’s lease agreements do not contain any residual value guarantees or material restrictive covenants. Leases with an initial term of
12. Leases (continued)
Lessee Arrangements (continued)
12 months or less are not recorded on the balance sheet and the Company recognizes lease expense for these leases on a straight-line basis over the lease term. 
Operating lease costs were $537,000 and $606,000 and variable lease costs were $242,000 and $288,000, for the fiscal years 2022 and 2021, respectively, which are primarily included in agribusiness costs and expenses in the Company’s consolidated statements of operations. Finance lease costs and short term lease costs were $154,000 and $212,000 for fiscal year 2022, respectively, and were immaterial for fiscal year 2021.
Supplemental balance sheet information related to leases consists of the following as of October 31 (in thousands):
Classification20222021
Assets
Operating lease ROU assetsOther assets$6,190 $2,041 
Finance lease assetsOther assets1,091 1,142 
$7,281 $3,183 
Liabilities
Current operating lease liabilitiesAccrued liabilities and payables to related parties$1,892 $488 
Current finance lease liabilitiesAccrued liabilities268 249 
Non-current operating lease liabilitiesOther long-term liabilities4,347 1,648 
Non-current finance lease liabilitiesOther long-term liabilities715 884 
$7,222 $3,269 
Weighted-average remaining lease term (in years):
Operating leases5.110.9
Finance leases3.94.9
Weighted-average discount rate:
Operating leases6.1 %3.7 %
Finance leases3.5 %3.3 %
Supplemental cash flow information related to leases consists of the following (in thousands):
Year ended October 31,
20222021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases$577 $603 
Operating cash outflows from finance leases$35 $
Financing cash outflows from finance leases$219 $18 
ROU assets obtained in exchange for new operating lease liabilities$4,612 $271 
Leased assets obtained in exchange for new finance lease liabilities$68 $1,151 
12. Leases (continued)
Lessee Arrangements (continued)
Future minimum lease payments under non-cancellable leases for each of the subsequent five fiscal years and thereafter are as follows (in thousands), which excludes $470,000 of operating lease payments for leases that have been signed but not commenced:
OperatingFinanceTotal
2023$1,891 $268 $2,159 
20241,918 268 2,186 
20251,914 268 2,182 
2026218 246 464 
2027134 — 134 
Thereafter1,046 — 1,046 
Total lease payments7,121 1,050 8,171 
Less: Imputed interest(882)(67)(949)
Present value of lease liabilities$6,239 $983 $7,222 
In addition to operating and finance lease commitments, the Company also has financing transactions and a contract for pollination services, which do not meet the definition of a lease, with minimum future payments of $275,000 in fiscal year 2023, $224,000 in fiscal years 2024, 2025 and 2026 and $37,000 in fiscal year 2027.