XML 71 R17.htm IDEA: XBRL DOCUMENT v3.24.4
Equity in Investments
 12 Months Ended
Oct. 31, 2024
Equity Method Investments and Joint Ventures [Abstract]  
Equity in Investments Equity in Investments
Limco Del Mar, Ltd.
The Company has a 1.3% interest in Limco Del Mar, Ltd. (“Del Mar”) as a general partner and a 26.8% interest as a limited partner. Based on the terms of the partnership agreement, the Company may be removed as general partner without cause from the partnership upon the vote of the limited partners owning an aggregate of 50% or more interest in the partnership. Since the Company has significant influence, but less than a controlling interest, the Company’s investment in Del Mar is accounted for using the equity method of accounting.
7. Equity in Investments (continued)
Limco Del Mar, Ltd. (continued)
The Company provides Del Mar with farm management, orchard land development and accounting services and received farm management revenue and expense reimbursements of $128,000, $206,000 and $202,000 for fiscal years 2024, 2023 and 2022, respectively. Del Mar markets lemons through the Company pursuant to its customary marketing agreements and the amount of lemons procured from Del Mar was $1,182,000, $1,161,000 and $1,568,000 for fiscal years 2024, 2023 and 2022, respectively. Fruit proceeds due to Del Mar were $527,000 and $347,000 as of October 31, 2024 and 2023, respectively, and are included in payables to related parties and growers and suppliers payable in the accompanying consolidated balance sheets, respectively.
Romney Property Partnership
In May 2007, the Company and an individual formed the Romney Property Partnership (“Romney”) for the purpose of owning and leasing an office building and adjacent lot in Santa Paula, California. The Company paid $489,000 in 2007 for 75% interest in Romney. The terms of the partnership agreement affirm the status of the Company as a noncontrolling investor in the partnership since the Company cannot exercise unilateral control over the partnership. Since the Company has significant influence, but less than a controlling interest, the Company’s investment in Romney is accounted for using the equity method of accounting. Net profits, losses and cash flows of Romney are shared by the Company, which receives 75% and the individual, who receives 25%.
Rosales S.A.
The Company currently has a 47% equity interest in Rosales S.A. (“Rosales”) of which 35% was acquired in fiscal year 2014 and an additional 12% interest was acquired with the purchase of Fruticola Pan de Azucar S.A. (“PDA”) in fiscal year 2017. Rosales is a citrus packing, marketing and sales business located in La Serena, Chile. In addition, the Company has the right to acquire the interest of the majority shareholder of Rosales upon death or disability of Rosales’ general manager for the fair value of the interest on the date of the event as defined in the shareholders’ agreement. Since the Company has significant influence, but less than a controlling interest, the Company’s investment in Rosales is accounted for using the equity method of accounting.
Rosales’ functional currency is the Chilean Peso. The following financial information has been translated to U.S. dollars. In addition, as a result of the Company’s acquisition of its equity interest, basis differences were identified between the historical cost of the net assets of Rosales and the proportionate fair value of the net assets acquired. Such basis differences aggregated to $1,683,000 on the acquisition date and are primarily comprised of intangible assets, including $343,000 of equity method goodwill. An additional $925,000 of basis differences were identified with the February 2017 PDA acquisition, including $143,000 of equity method goodwill. The $2,122,000 in basis differences exclusive of goodwill is being amortized over the estimated life of the underlying intangible assets as a reduction in the equity investment and an expense included in equity in earnings of investments. Amortization amounted to $76,000, $87,000 and $118,000 for fiscal years 2024, 2023 and 2022, respectively, and is estimated to be immaterial thereafter.
The Company recognized lemon and orange sales to Rosales of $4,541,000, $4,581,000 and $3,615,000 for fiscal years 2024, 2023 and 2022, respectively. The aggregate amount of lemons and oranges procured from Rosales was $5,387,000, $5,826,000 and $3,821,000 for fiscal years 2024, 2023 and 2022, respectively. Net amounts due (to) from Rosales were $(629,000) and $626,000 as of October 31, 2024 and 2023, respectively, and are included in payables to related parties and in receivables/other from related parties.
7. Equity in Investments (continued)
Limoneira Lewis Community Builders, LLC (“LLCB”)
As described in Note 6 – Real Estate Development, the Company has a joint venture with Lewis for the residential development of its East Area I real estate development project. In addition to the assessment performed by the Company of its investment in LLCB under the requirements of Regulation S-X Rule 4-08(g), the Company also assessed its investment in LLCB under the requirements of Regulation S-X Rule 3-09(b). LLCB was deemed significant for the years ended October 31, 2024 and 2023 but was not significant for the year ended October 31, 2022. Therefore, the audited financial statements of LLCB for the years ended October 31, 2024, 2023 and 2022 are provided as exhibits to this document to comply with this rule. Additionally, there is a basis difference between the Company’s historical investment in the project and the amount recorded in members’ capital by LLCB of $63,581,000 as of October 31, 2024. The basis difference of $4,381,000 as of October 31, 2024 was primarily comprised of capitalized interest and certain other costs incurred by Limoneira Company during the development period. This basis difference is being amortized as lots are sold utilizing the relative sales value method and the amount amortized totaled $2,545,000, $717,000 and $77,000 for fiscal years 2024, 2023 and 2022, respectively. The Company’s share of LLCB’s net income prior to basis amortization was $20,304,000, $5,851,000 and $1,015,000 for fiscal years 2024, 2023 and 2022, respectively.
LLCB II, LLC (“LLCB II”)
As described in Note 6 - Real Estate Development, in October 2022, the Company formed a joint venture with Lewis for the residential development of its Retained Property. Control is shared with Lewis, therefore the Company's investment in LLCB II is accounted for using the equity method of accounting.
The following is financial information of the equity method investees for fiscal years 2024, 2023 and 2022 (in thousands):
2024Del MarRomneyRosalesLLCBLLCB II
Current assets$1,299 $6 $5,289 $141,660 $18,061 
Non-current assets$790 $602 $2,455 $— $— 
Current liabilities$— $3 $4,937 $15,461 $— 
Non-current liabilities$— $— $650 $— $— 
Revenues$2,331 $26 $12,168 $87,100 $— 
Operating income (loss)$1,305 $(2)$985 $38,364 $7 
Net income (loss)$1,305 $(2)$646 $38,364 $7 
2023
Current assets$— $13 $3,637 $124,939 $17,094 
Non-current assets$797 $597 $2,547 $— $— 
Current liabilities$13 $3 $3,032 $7,104 $— 
Non-current liabilities$— $— $1,085 $— $— 
Revenues$1,434 $22 $10,903 $30,933 $— 
Operating income (loss)$100 $(4)$738 $11,770 $(2)
Net income (loss)$100 $(4)$538 $11,770 $(2)
2022
Revenues$2,882 $6 $7,177 $2,500 $— 
Operating income (loss)$1,823 $(1)$272 $1,809 $— 
Net income (loss)$1,823 $(1)$26 $1,809 $— 
7. Equity in Investments (continued)
The Company’s investment and equity in earnings (losses) of the equity method investees are as follows (in thousands):
 Del MarRomneyRosalesLLCBLLCB IITotal
Investment balance October 31, 2021
$1,997 $508 $1,351 $60,216 $— $64,072 
Equity earnings (losses)510 (1)(106)938 — 1,341 
Cash distributions(483)— — — — (483)
Investment contributions— — — — 8,023 8,023 
Foreign currency adjustments— — (98)— — (98)
Investment balance October 31, 2022
2,024 507 1,147 61,154 8,023 72,855 
Equity earnings (losses)28 (5)166 5,134 (1)5,322 
Cash distributions(220)— — — — (220)
Cash contributions— — — — 525 525 
Capitalized interest— — — — 322 322 
Foreign currency adjustments— — 12 — — 12 
Investment balance October 31, 2023
1,832 502 1,325 66,288 8,869 78,816 
Equity earnings (losses)366 (1)228 17,759 4 18,356 
Cash distributions— — (148)(15,005)— (15,153)
Cash contributions— — — — 480 480 
Capitalized interest— — — — 213 213 
Fair value of loan guarantee(1,080)— (1,080)
Foreign currency adjustments— — (86)— — (86)
Investment balance October 31, 2024
$2,198 $501 $1,319 $67,962 $9,566 $81,546