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Leases

12 Months Ended

Oct. 31, 2023

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 19 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):


	2023		2022
Land and land improvements	$	12,333	$	13,619
Buildings, equipment and building improvements	20,729		19,983
Orchards	8,410		8,410
Less: accumulated depreciation	(8,931)		(7,912)
Property, plant and equipment, net under operating leases	$	32,541	$	34,100

Depreciation expense for assets under operating leases was approximately $1,005,000 and $934,000 for fiscal years 2023 and 2022, respectively.

The Company's rental operations revenue consists of the following for the fiscal years ended October 31 (in thousands):



	2023		2022
Operating lease revenue	$	5,174	$	4,998
Variable lease revenue	346		326
Total lease revenue	$	5,520	$	5,324

The future minimum lease payments to be received by the Company related to these operating lease agreements as of October 31, 2023 are as follows (in thousands):


2024	$	1,252
2025	1,031
2026	204
2027	44
2028	44
Thereafter	627
Total	$	3,202

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 four years, with various term extensions available. 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. Lease costs are primarily included in agribusiness costs and expenses in the Company's consolidated statements of operations.

Lease costs consist of the following for the fiscal years ended October 31 (in thousands):


	2023		2022
Operating lease costs	$	2,000	$	537
Finance lease costs:
Amortization of lease assets	145		120
Interest on lease liabilities	32		34
Variable lease costs	—		242
Short-term lease costs	600		212
Total lease costs	$	2,777	$	1,145

Supplemental balance sheet information related to leases consists of the following as of October 31 (in thousands):


	Classification	2023			2022

Assets
Operating lease ROU assets	Other assets	$	3,484		$	6,190
Finance lease assets	Other assets	1,182			1,091
		$	4,666		$	7,281

Liabilities
Current operating lease liabilities	Accrued liabilities and payables to related parties	$	1,831		$	1,892
Current finance lease liabilities	Accrued liabilities	319			268
Non-current operating lease liabilities	Other long-term liabilities	1,714			4,347
Non-current finance lease liabilities	Other long-term liabilities	602			715
		$	4,466		$	7,222

Weighted-average remaining lease term (in years):
Operating leases		1.6			5.1
Finance leases		3.1			3.9
Weighted-average discount rate:
Operating leases		4.9		%	6.1		%
Finance leases		4.2		%	3.5		%

13. Leases (continued)

Lessee Arrangements (continued)

Supplemental cash flow information related to leases consists of the following for the fiscal years ended October 31 (in thousands):


	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases	$	1,931	$	577
Operating cash outflows from finance leases	$	32	$	35
Financing cash outflows from finance leases	$	297	$	219
ROU assets obtained in exchange for new operating lease liabilities	$	138	$	4,612
Leased assets obtained in exchange for new finance lease liabilities	$	235	$	68
Write off of ROU asset and operating lease liability	$	(1,206)	$	—

Future minimum lease payments under non-cancellable leases are as follows (in thousands), which excludes $870,000 of operating lease payments for leases that have been signed but not commenced:


	Operating		Finance		Total
2024	$	1,822	$	319	$	2,141
2025	1,815		319		2,134
2026	114		299		413
2027	23		46		69


Total lease payments	3,774		983		4,757
Less: Imputed interest	(229)		(62)		(291)
Present value of lease liabilities	$	3,545	$	921	$	4,466

In addition to operating and finance lease commitments, the Company also has financing transactions which do not meet the definition of a lease, with minimum future payments of $224,000 in fiscal years 2024, 2025 and 2026 and $37,000 in fiscal year 2027.

Leases