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Leases

9 Months Ended

Jul. 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):

			July 31, 2020						October 31, 2019
Land			$	1,234					$	1,279
Buildings, equipment and building improvements			18,478						22,841
Less accumulated depreciation			(5,512)						(7,551)
Property, plant and equipment, net under operating leases			$	14,200					$	16,569

Depreciation expense for assets under operating leases was approximately $159,000 and $485,000 for the three and nine months ended July 31, 2020.

The Company’s rental operations revenue consists of the following (in thousands):

			Three Months Ended July 31, 2020						Nine Months Ended July 31, 2020
Operating lease revenue			$	1,078					$	3,235
Variable lease revenue			94						242
Total lease revenue			$	1,172					$	3,477

The future minimum lease payments to be received by the Company related to these operating lease agreements as of July 31, 2020 are as follows (in thousands):

2020 (excluding the nine months ended July 31, 2020)			$	309
2021			701
2022			508
2023			379
2024			42
Thereafter			758
Total			$	2,697

13. Leases (continued)

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 July 31, 2020, there were no material finance leases for which the Company was a lessee.

Operating lease costs were $143,000 and $417,000 for the three and nine months ended July 31, 2020, respectively, 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						July 31, 2020
Assets
Operating lease ROU assets			Other assets						$	2,174
Liabilities and Stockholders' Equity
Current operating lease liabilities			Accrued liabilities						600
Non-current operating lease liabilities			Other long-term liabilities						1,637
Total operating lease liabilities									$	2,237
Weighted-average remaining lease term (in years)									10.8
Weighted-average discount rate									3.8		%

Supplemental cash flow information related to leases consists of the following (in thousands):

			Three Months Ended July 31, 2020						Nine Months Ended July 31, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases			$	126					$	432
ROU assets obtained in exchange for new operating lease liabilities			$	108					$	108

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 nine months ended July 31, 2020)			$	128
2021			509
2022			358
2023			182
2024			151
Thereafter			1,449
Total lease payments			2,777
Less: Imputed interest			(540)
Total			$	2,237

13. Leases (continued)

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 $77,000 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):

2020			$	688
2021			492
2022			291
2023			154
2024			134
Thereafter			1,382
			$	3,141

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):

			July 31, 2020						October 31, 2019
Land			$	1,234					$	1,279
Buildings, equipment and building improvements			18,478						22,841
Less accumulated depreciation			(5,512)						(7,551)
Property, plant and equipment, net under operating leases			$	14,200					$	16,569

Depreciation expense for assets under operating leases was approximately $159,000 and $485,000 for the three and nine months ended July 31, 2020.

The Company’s rental operations revenue consists of the following (in thousands):

			Three Months Ended July 31, 2020						Nine Months Ended July 31, 2020
Operating lease revenue			$	1,078					$	3,235
Variable lease revenue			94						242
Total lease revenue			$	1,172					$	3,477

The future minimum lease payments to be received by the Company related to these operating lease agreements as of July 31, 2020 are as follows (in thousands):

2020 (excluding the nine months ended July 31, 2020)			$	309
2021			701
2022			508
2023			379
2024			42
Thereafter			758
Total			$	2,697

13. Leases (continued)

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 July 31, 2020, there were no material finance leases for which the Company was a lessee.

Operating lease costs were $143,000 and $417,000 for the three and nine months ended July 31, 2020, respectively, 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						July 31, 2020
Assets
Operating lease ROU assets			Other assets						$	2,174
Liabilities and Stockholders' Equity
Current operating lease liabilities			Accrued liabilities						600
Non-current operating lease liabilities			Other long-term liabilities						1,637
Total operating lease liabilities									$	2,237
Weighted-average remaining lease term (in years)									10.8
Weighted-average discount rate									3.8		%

Supplemental cash flow information related to leases consists of the following (in thousands):

			Three Months Ended July 31, 2020						Nine Months Ended July 31, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases			$	126					$	432
ROU assets obtained in exchange for new operating lease liabilities			$	108					$	108

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 nine months ended July 31, 2020)			$	128
2021			509
2022			358
2023			182
2024			151
Thereafter			1,449
Total lease payments			2,777
Less: Imputed interest			(540)
Total			$	2,237

13. Leases (continued)

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 $77,000 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):

2020			$	688
2021			492
2022			291
2023			154
2024			134
Thereafter			1,382
			$	3,141

X

- References

No definition available.

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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

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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=121580752&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=121580752&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

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