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Leases | 3 Months Ended
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Jan. 31, 2020
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 23 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 the dates indicated (in thousands):
| January 31, 2020 |  | October 31, 2019
Land | $ | 1,279 |  |  | $ | 1,279 |
Buildings, equipment and building improvements | 22,841 |  |  | 22,841 |
Less accumulated depreciation | (7,717 | ) |  | (7,551 | )
Property, plant and equipment, net under operating leases | $ | 16,403 |  |  | $ | 16,569 |
Depreciation expense for assets under operating leases was approximately $166,000 for the three months ended January 31, 2020. The Company’s rental operations revenue consists of the following (in thousands):
| Three Months Ended January 31, 2020
Operating lease payments | $ | 1,096 |
Variable lease payments | 77 |
Total lease payments | $ | 1,173 |
The future minimum lease payments to be received by the Company related to these operating lease agreements as of January 31, 2020 are as follows (in thousands):
2020 (excluding the three months ended January 31, 2020) | $ | 592 |
2021 | 323 |
2022 | 133 |
2023 | 88 |
2024 | 42 |
Thereafter | 758 |
Total | $ | 1,936 |
Lessee Arrangements The Company enters into leasing transactions in which the Company is the lessee. These lease contracts are typically classified as operating leases. The Company’s lease contracts are generally for agricultural land and packinghouse equipment with remaining lease terms ranging from one to 18 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 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. As of January 31, 2020, there were no material finance leases for which the Company was a lessee. 13. Leases (continued) Operating lease costs were $137,000 for the three months ended January 31, 2020, which are primarily included in agribusiness costs and expenses in the Company’s consolidated statements of operations. Variable and short term lease costs were immaterial. Supplemental balance sheet information related to leases consists of the following (in thousands):
| Classification |  | January 31, 2020
Assets |  |  |
Operating lease ROU assets | Other assets |  | $ | 2,302 |
Liabilities and Stockholders' Equity |  |  |
Current operating lease liabilities | Accrued liabilities |  | 545 |
Non-current operating lease liabilities | Other long-term liabilities |  | 1,787 |
Total operating lease liabilities |  |  | $ | 2,332 |
Weighted-average remaining lease term (in years) |  |  | 10.9 |
Weighted-average discount rate |  |  | 3.9 | %
Supplemental cash flow information related to leases consists of the following (in thousands):
| Three Months Ended January 31, 2020
Cash paid for amounts included in the measurement of lease liabilities: |
Operating cash outflows from operating leases | $ | 184 |
ROU assets obtained in exchange for new operating lease liabilities | $ | — |
Future minimum lease payments under non-cancellable leases for the remainder of fiscal year 2020, each of the subsequent four fiscal years and thereafter are as follows (in thousands):
2020 (excluding the three months ended January 31, 2020) | $ | 362 |
2021 | 481 |
2022 | 330 |
2023 | 154 |
2024 | 134 |
Thereafter | 1,449 |
Total lease payments | 2,910 |
Less: Imputed interest | (578 | )
Total | $ | 2,332 |
In addition to operating lease commitments, the Company also has a contract for pollination services which does not meet the definition of a lease, with minimum future payments of $230,000 for the remainder of fiscal year 2020, $307,000 for each of the fiscal years 2021 and 2022 and $51,000 in fiscal year 2023. A summary of the Company’s future minimum payments for obligations under non-cancellable operating leases as of October 31, 2019 was as follows (in thousands): 13. Leases (continued)
2020 | $ | 688 |
2021 | 492 |
2022 | 291 |
2023 | 154 |
2024 | 134 |
Thereafter | 1,382 |
| $ | 3,141 |
Leases | Leases Accounting for Operating Leases as a Lessee - In its ordinary course of business, the Company enters into leases as a lessee generally for agricultural land and packinghouse equipment. The Company determines if an arrangement is a lease or contains a lease at inception. Operating leases are included in other assets, accrued liabilities and other long-term liabilities on its consolidated balance sheets. Operating lease right-of-use (“ROU”) assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease, measured on a discounted basis. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As none of the Company’s leases provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet as the Company has elected to recognize lease expense for these leases on a straight-line basis over the lease term. The Company has material leases with related parties which are further described in Note 15 - Related-Party Transactions. 2. Summary of Significant Accounting Policies (continued) Leases (continued) Certain of the Company’s agricultural land agreements contain variable costs based on a percentage of the operating results of the leased property. Such variable lease costs are expensed as incurred. These land agreements also contain costs for non-lease components, such as water usage, which the Company accounts for separately from the lease components. For all other agreements, the Company generally combines lease and non-lease components in calculating the ROU assets and lease liabilities. See Note 13 - Leases for additional information. Accounting for Leases as a Lessor - The Company’s leases in which it acts as the lessor includes land, residential and commercial units and are all classified as operating leases. Certain of the Company’s contracts contain variable income based on a percentage of the operating results of the leased asset. Certain of the Company’s contracts contain non-lease components such as water, utilities and common area services. The Company has elected to not separate lease and non-lease components for its lessor arrangements and the combined component is accounted for entirely under Accounting Standards Codification ("ASC") 842, Leases. The underlying asset in an operating lease arrangement is carried at depreciated cost within property, plant, and equipment, net on the consolidated balance sheets. Depreciation is calculated using the straight-line method over the useful life of the underlying asset. The Company recognizes operating lease revenue on a straight-line basis over the lease term. 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 23 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 the dates indicated (in thousands):
| January 31, 2020 |  | October 31, 2019
Land | $ | 1,279 |  |  | $ | 1,279 |
Buildings, equipment and building improvements | 22,841 |  |  | 22,841 |
Less accumulated depreciation | (7,717 | ) |  | (7,551 | )
Property, plant and equipment, net under operating leases | $ | 16,403 |  |  | $ | 16,569 |
Depreciation expense for assets under operating leases was approximately $166,000 for the three months ended January 31, 2020. The Company’s rental operations revenue consists of the following (in thousands):
| Three Months Ended January 31, 2020
Operating lease payments | $ | 1,096 |
Variable lease payments | 77 |
Total lease payments | $ | 1,173 |
The future minimum lease payments to be received by the Company related to these operating lease agreements as of January 31, 2020 are as follows (in thousands):
2020 (excluding the three months ended January 31, 2020) | $ | 592 |
2021 | 323 |
2022 | 133 |
2023 | 88 |
2024 | 42 |
Thereafter | 758 |
Total | $ | 1,936 |
Lessee Arrangements The Company enters into leasing transactions in which the Company is the lessee. These lease contracts are typically classified as operating leases. The Company’s lease contracts are generally for agricultural land and packinghouse equipment with remaining lease terms ranging from one to 18 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 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. As of January 31, 2020, there were no material finance leases for which the Company was a lessee. 13. Leases (continued) Operating lease costs were $137,000 for the three months ended January 31, 2020, which are primarily included in agribusiness costs and expenses in the Company’s consolidated statements of operations. Variable and short term lease costs were immaterial. Supplemental balance sheet information related to leases consists of the following (in thousands):
| Classification |  | January 31, 2020
Assets |  |  |
Operating lease ROU assets | Other assets |  | $ | 2,302 |
Liabilities and Stockholders' Equity |  |  |
Current operating lease liabilities | Accrued liabilities |  | 545 |
Non-current operating lease liabilities | Other long-term liabilities |  | 1,787 |
Total operating lease liabilities |  |  | $ | 2,332 |
Weighted-average remaining lease term (in years) |  |  | 10.9 |
Weighted-average discount rate |  |  | 3.9 | %
Supplemental cash flow information related to leases consists of the following (in thousands):
| Three Months Ended January 31, 2020
Cash paid for amounts included in the measurement of lease liabilities: |
Operating cash outflows from operating leases | $ | 184 |
ROU assets obtained in exchange for new operating lease liabilities | $ | — |
Future minimum lease payments under non-cancellable leases for the remainder of fiscal year 2020, each of the subsequent four fiscal years and thereafter are as follows (in thousands):
2020 (excluding the three months ended January 31, 2020) | $ | 362 |
2021 | 481 |
2022 | 330 |
2023 | 154 |
2024 | 134 |
Thereafter | 1,449 |
Total lease payments | 2,910 |
Less: Imputed interest | (578 | )
Total | $ | 2,332 |
In addition to operating lease commitments, the Company also has a contract for pollination services which does not meet the definition of a lease, with minimum future payments of $230,000 for the remainder of fiscal year 2020, $307,000 for each of the fiscal years 2021 and 2022 and $51,000 in fiscal year 2023. A summary of the Company’s future minimum payments for obligations under non-cancellable operating leases as of October 31, 2019 was as follows (in thousands): 13. Leases (continued)
2020 | $ | 688 |
2021 | 492 |
2022 | 291 |
2023 | 154 |
2024 | 134 |
Thereafter | 1,382 |
| $ | 3,141 |

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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- Definition The entire disclosure for lessor's operating leases. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -SubTopic 10 -Section 55 -Paragraph 40 -Subparagraph Note 1 -URI http://asc.fasb.org/extlink&oid=82846649&loc=d3e38371-112697 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -SubTopic 10 -Section 55 -Paragraph 40 -Subparagraph Note 3 -URI http://asc.fasb.org/extlink&oid=82846649&loc=d3e38371-112697 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 30 -URI http://asc.fasb.org/subtopic&trid=77888252 + Details
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