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Equity in Investments | 12 Months Ended
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Oct. 31, 2022
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. The Company provides Del Mar with farm management, orchard land development and accounting services and received expense reimbursements of $202,000, $200,000 and $210,000 in fiscal years 2022, 2021 and 2020, respectively. Del Mar markets lemons through the Company pursuant to its customary marketing agreements and the amount of lemons procured from Del Mar was $1,568,000, $1,681,000 and $1,037,000 in fiscal years 2022, 2021 and 2020, respectively. Fruit proceeds due to Del Mar were $703,000 and $694,000 at October 31, 2022 and 2021, respectively, and are included in growers and suppliers payable in the accompanying consolidated balance sheets. 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 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 $118,000, $180,000 and $180,000 for fiscal years 2022, 2021 and 2020, respectively, and is estimated to be approximately $87,000 and $76,000 per year for years ending October 31, 2023 and 2024, respectively, and immaterial thereafter. 6. Equity in Investments (continued) Rosales (continued) The Company recognized $3,615,000, $3,405,000 and $3,975,000 of lemon sales to Rosales in fiscal years 2022, 2021 and 2020, respectively. In fiscal years 2022, 2021 and 2020, the aggregate amount of lemons and oranges procured from Rosales was $3,821,000, $5,304,000 and $3,190,000, respectively. Amounts due from Rosales were $270,000 and $1,570,000 at October 31, 2022 and 2021, respectively, and are included in receivables/other from related parties. Limoneira Lewis Community Builders, LLC (“LLCB”) As described in Note 5 – 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 not deemed significant for the years ended October 31, 2022 and 2020 but was significant for the year ended October 31, 2021. Therefore, the audited financial statements of LLCB for the years ended October 31, 2022, 2021 and 2020 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 $52,431,000 as of October 31, 2022. The basis difference of $8,723,000 at October 31, 2022 is primarily comprised of capitalized interest, amounts related to the loan guarantee 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 in fiscal years 2022, 2021 and 2020 totaled $77,000, $1,434,000 and $1,060,000, respectively. The Company's share of LLCB's net income for fiscal years 2022, 2021 and 2020 prior to basis amortization was $1,015,000, $4,508,000 and 1,386,000, respectively. LLCB II, LLC (“LLCB II”) As described in Note 5 - 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 2022, 2021 and 2020 (in thousands):
2022 | Del Mar |  | Romney |  | Rosales |  |  | LLCB |  | LLCB II
Current assets | $ | 654 |  |  | $ | — |  |  | $ | 3,478 |  |  |  | $ | 116,596 |  |  | $ | 16,051 |
Non-current assets | $ | 807 |  |  | $ | 612 |  |  | $ | 2,606 |  |  |  | $ | — |  |  | $ | — |
Current liabilities | $ | — |  |  | $ | — |  |  | $ | 3,076 |  |  |  | $ | 10,531 |  |  | $ | 5 |
Non-current liabilities | $ | — |  |  | $ | — |  |  | $ | 1,686 |  |  |  | $ | — |  |  | $ | — |
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 |  |  | $ | — |
2021 |  |  |  |  |  |  |  |  |  |
Current assets | $ | 492 |  |  | $ | — |  |  | $ | 3,544 |  |  |  | $ | 108,964 |  |  | $ | — |
Non-current assets | $ | 865 |  |  | $ | 617 |  |  | $ | 2,406 |  |  |  | $ | — |  |  | $ | — |
Current liabilities | $ | — |  |  | $ | — |  |  | $ | 2,362 |  |  |  | $ | 4,708 |  |  | $ | — |
Non-current liabilities | $ | — |  |  | $ | — |  |  | $ | 2,083 |  |  |  | $ | — |  |  | $ | — |
Revenues | $ | 2,059 |  |  | $ | 17 |  |  | $ | 9,862 |  |  |  | $ | 42,853 |  |  | $ | — |
Operating income (loss) | $ | 1,052 |  |  | $ | (4) |  |  | $ | 438 |  |  |  | $ | 9,087 |  |  | $ | — |
Net income (loss) | $ | 1,052 |  |  | $ | (4) |  |  | $ | 35 |  |  |  | $ | 9,087 |  |  | $ | — |
2020 |  |  |  |  |  |  |  |  |  |
Revenues | $ | 930 |  |  | $ | 20 |  |  | $ | 10,097 |  |  |  | $ | 25,906 |  |  | $ | — |
Operating income (loss) | $ | (109) |  |  | $ | (2) |  |  | $ | 1,216 |  |  |  | $ | 2,615 |  |  | $ | — |
Net income (loss) | $ | (109) |  |  | $ | (2) |  |  | $ | 476 |  |  |  | $ | 2,615 |  |  | $ | — |
6. Equity in Investments (continued) The Company’s investment and equity in earnings (losses) of the equity method investees are as follows (in thousands):
| Del Mar |  | Romney |  | Rosales |  | LLCB |  | LLCB II |  | Total
Investment balance October 31, 2019 | $ | 1,950 |  |  | $ | 512 |  |  | $ | 1,745 |  |  | $ | 54,016 |  |  | $ | — |  |  | $ | 58,223 |
Equity earnings (losses) | (30) |  |  | (1) |  |  | 44 |  |  | 326 |  |  | — |  |  | 339 |
Investment contributions | — |  |  | — |  |  | — |  |  | 2,800 |  |  | — |  |  | 2,800 |
Foreign currency adjustments | — |  |  | — |  |  | (148) |  |  | — |  |  | — |  |  | (148) |
Investment balance October 31, 2020 | 1,920 |  |  | 511 |  |  | 1,641 |  |  | 57,142 |  |  | — |  |  | 61,214 |
Equity earnings (losses) | 296 |  |  | (3) |  |  | (164) |  |  | 3,074 |  |  | — |  |  | 3,203 |
Cash distributions | (219) |  |  | — |  |  | (106) |  |  | — |  |  | — |  |  | (325) |
Foreign currency adjustments | — |  |  | — |  |  | (20) |  |  | — |  |  | — |  |  | (20) |
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 |

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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -URI https://asc.fasb.org/topic&trid=2196965 + Details
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