What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2020-12-08 compared with 2019-12-05 · 306 added, 289 removed, 860 unchanged (41% of the section changed)

47 unchanged sentences

Accounts receivable, net

Income tax receivable

Assets held for sale

19 unchanged sentences

Deferred income tax liabilities, net

Deferred gain on sale

Deferred retirement obligations

Other liabilities

17 unchanged sentences

Operating revenues:

Water Resources and Other Operations

Land Management and Other Operations

Total operating revenues

Operating expenses:

Water Resources and Other Operations

Land Management and Other Operations

Total operating expenses

General and administrative expenses

Income (loss) from operations

Income from operations

Other income (expense):

Investment and interest income (loss), net

Investment and interest income, net

Interest expense

1 unchanged sentence

Change in fair value of derivatives

Other (loss) income, net

Total other income (expense)

Income (loss) before income taxes

Income tax provision (benefit)

Net income (loss)

Net loss attributable to noncontrolling interests

Net income (loss) attributable to Alico, Inc.

Other (expense) income, net

Total other income, net

Income before income taxes

Income tax provision

Net (income) loss attributable to noncontrolling interests

Net income attributable to Alico, Inc.

common stockholders

1 unchanged sentence

common stockholders:

Earnings (loss) per common share:

Earnings per common share:

Weighted-average number of common shares outstanding:

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(in thousands)

Additional Paid-In

Total Alico, Inc.

Non-controlling

Balance at September 30, 2016

Treasury stock purchases

Stock-based compensation:

Balance at September 30, 2017

September 30, 2017

Net income (loss)

2 unchanged sentences

Stock-based compensation:

Balance at September 30, 2018

September 30, 2018

Net income (loss)

3 unchanged sentences

Executive forfeiture

Balance at September 30, 2019

September 30, 2019

Treasury stock purchases

Capital contribution received from noncontrolling interest funding

Stock-based compensation:

Executives and managers

September 30, 2020

See accompanying notes to the consolidated financial statements .

3 unchanged sentences

Net cash provided by operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Deferred gain on sale of sugarcane land

Depreciation, depletion and amortization

Loss on breeding herd sales

Deferred income tax expense (benefit)

1 unchanged sentence

Deferred retirement benefits

Magnolia Fund undistributed loss (earnings)

Gain on sale of real estate, property and equipment and assets held for sale

Inventory casualty loss

Inventory net realizable value adjustment

2 unchanged sentences

Impairment of long-lived assets

Impairment of right-of-use-asset

Non-cash interest expense on deferred gain on sugarcane land

Insurance proceeds received for damage to property and equipment

Bad debt expense

Stock-based compensation expense

9 unchanged sentences

Purchases of property and equipment

Return on investment in Magnolia Fund

Net proceeds from sale of property and equipment and assets held for sale

Net proceeds from sale of real estate

Net proceeds from sale of real estate, property and equipment and assets held for sale

Insurance proceeds received for damage to property and equipment

1 unchanged sentence

Advances on notes receivables, net

Net cash (used in) provided by investing activities

Net cash provided by (used in) investing activities

Cash flows from financing activities:

5 unchanged sentences

Dividends paid

Deferred financing costs

Capital contribution received from noncontrolling interest

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Supplemental disclosure of cash flow information:

Cash paid for interest;

net of amount capitalized

Cash paid (refunded) for income taxes

Cash paid for interest, net of amount capitalized

Cash paid for income taxes

Supplemental disclosure of non-cash investing and financing activities:

4 unchanged sentences

Description of Business

Alico, Inc., together with its subsidiaries (collectively, “Alico”, the “Company", "we", "us" or "our”), is a Florida agribusiness and land management company owning approximately 111,000 acres of land throughout Florida, including approximately 90,000 acres of mineral rights.

Alico, Inc., together with its subsidiaries (collectively, “Alico”, the “Company", "we", "us" or "our”), is a Florida agribusiness and land management company owning approximately 100,000 acres of land throughout Florida, holding mineral rights on approximately 90,000 of those owned acres.

The Company manages its land based upon its primary usage, and reviews its performance based upon two primary classifications:

(i) Alico Citrus and (ii) Water Resources and Other Operations .

Financial results are presented based upon its two business segments ( Alico Citrus and Water Resources and Other Operations ).

(i) Alico Citrus and (ii) Land Management and Other Operations.

Financial results are presented based upon its two business segments (Alico Citrus and Land Management and Other Operations).

Basis of Presentation

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The Company’s CODM assesses performance and allocates resources based on two operating segments:

(i) Alico Citrus and (ii) Water Resources and Other Operations .

(i) Alico Citrus and (ii) Land Management and Other Operations.

Principles of Consolidation

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Accordingly, the Company has recorded a noncontrolling interest in the equity of such entity.

Citree had net losses of approximately $ 781,783 , $ 511,854 and $ 91,432 for the fiscal years ended September 30, 2019 , 2018 and 2017 , respectively, of which $ 398,709 , $ 261,046 and $ 46,630 was attributable to the Company for the fiscal years ended September 30, 2019, 2018, and 2017, respectively.

Citree had net income of $ 107,051 for the fiscal year ended September 30, 2020 and net losses of $ 781,783 , and $ 511,854 for the fiscal years ended September 30, 2019 and 2018, respectively, of which $ 54,596 of net income and $ 398,709 and $ 261,046 of net losses was attributable to the Company for the fiscal years ended September 30, 2020, 2019 and 2018, respectively.

The shift to net income for the fiscal year ended September 30, 2020 was the result of reimbursements received under the federal relief program relating to Hurricane Irma, aggregating approximately $ 493,000 .

Recent Accounting Pronouncements

In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842).” This guidance will require entities that enter into leases as a lessee to recognize right-of-use assets and lease liabilities for those leases classified as operating leases under previous U.S.

The accounting applied by a lessor is largely unchanged from that applied under previous U.S.

The Company anticipates recording a Right of Use Asset (“ROU”) and related liability of approximately $ 511,000 upon the adoption of the new standard on October 1, 2019.

Additionally, the Company will record an impairment to the ROU for approximately $ 87,000 .

Topic 842 becomes effective for Alico beginning October 1, 2019.

In January 2017, the FASB issued ASU 2017-04, “Intangibles-Goodwill and Other” (Topic 350), which simplifies the accounting for goodwill impairment.

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Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Leases (Topic 842).

The standard is effective for us on October 1, 2020, with early adoption permitted.

The Company does not expect the adoption of ASU 2018-19 to have a material impact on the unaudited consolidated financial statements of the Company.

Information regarding the adoption of ASU 2016-02 is described above.

The standard is effective for the Company on October 1, 2020, with early adoption permitted.

The Company does not expect the adoption of ASU 2018-19 to have a material impact on the consolidated financial statements of the Company.

In December 2019, the FASB issued ASU 2019-12, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in the existing guidance for income taxes and making other minor improvements.

The amendments in the ASU are effective for the Company on October 1, 2021.

The Company does not expect the adoption of ASU 2019-12 will have a material impact on its consolidated financial statements and will adopt the standard effective October 1, 2021.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships and other transactions affected by reference rate reform.

The Company’s floating rate notes and variable funding notes bear interest at fluctuating interest rates based on LIBOR.

If LIBOR ceases to exist, the Company may need to renegotiate its loan agreements and the Company cannot predict what alternative index would be negotiated with its lenders.

ASU 2020-04 is currently effective and upon adoption may be applied prospectively to contract modifications made on or before December 31, 2022.

The Company is currently assessing the impact of adopting this standard and the impact on its consolidated financial statements.

The Company has reviewed other recently issued accounting standards which have not yet been adopted in order to determine their potential effect, if any, on the results of operations or financial condition.

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ASC 606 also provides for certain practical expedients, including the option to expense as incurred the incremental costs of obtaining a contract, if the contract period is for one year or less, and policy elections regarding shipping and handling that provides the option to account for shipping and handling costs as contract fulfillment costs.

The Company adopted ASC 606 effective October 1, 2018, the first day of our 2019 fiscal year, using the modified retrospective method.

The Company adopted ASC 606 effective October 1, 2018, the first day of its 2019 fiscal year, using the modified retrospective method.

The implementation of ASC 606 did not require an adjustment to the opening balance of retained earnings as of October 1, 2018 (see Note 2.

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This standard clarifies the scope and application of ASC 610-20 on the sale, transfer, and derecognition of nonfinancial assets and in substance nonfinancial assets to non-customers, including partial sales.

It also provides guidance on how gains and

losses on transfers of nonfinancial assets and in substance nonfinancial assets to non-customers are recognized.

It also provides guidance on how gains and losses on transfers of nonfinancial assets and in substance nonfinancial assets to non-customers are recognized.

The standard also clarifies the derecognition of businesses is under the scope of ASC 810.

The standard was required to be adopted concurrently with ASC 606, however an entity did not have to apply the same transition method as ASC 606.

The Company adopted ASC 610-20 (“ASC 610-20”) effective October 1, 2018, the first day of our 2019 fiscal year, using the modified retrospective method.

The implementation of ASC 610-20 resulted in an adjustment to increase the opening balance of retained earnings by $ 10,897,000 , net of taxes, as of October 1, 2018 (see Note 8.

“Deferred Gain on Sale”).

The Company adopted ASC 610-20 (“ASC 610-20”) effective October 1, 2018, the first day of its 2019 fiscal year, using the modified retrospective method.

The implementation of ASC 610-20 resulted in an adjustment to increase the opening balance of retained earnings by $ 10,897,000 , net of taxes, as of October 1, 2018.

As a result of the ASU 610-20, guidance specific to real estate sales in ASC 360-20 will be eliminated.

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The Company adopted ASU 360-20 effective October 1, 2018.

The new guidance did not have a material impact on our consolidated financial statements as it relates to the deferred gain on the sale of the Company’s sugarcane lands (see Note 8.

The new guidance did not have a material impact on the Company’s consolidated financial statements as it relates to the deferred gain on the sale of the Company’s sugarcane lands (see Note 8.

“Deferred Gain on Sale”).

In May 2017, the FASB issued ASU 2017-09, “Compensation-Stock Compensation” (Topic 718) which clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications.

ASU 2017-09 will reduce diversity in practice and result in fewer changes to the terms of an award being accounted for as modifications.

Under ASU 2017-09, an entity will not apply modification accounting to a share-based payment award if the award's fair value, vesting conditions and classification as an equity or liability instrument are the same immediately before and after the change.

ASU 2017-09 will be applied prospectively to awards modified on or after the adoption date.

The guidance was effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017 and thus was effective for the Company for our fiscal year beginning October 1, 2018.

The Company adopted ASU 2017-09 effective October 1, 2018.

The new guidance did not have a material impact on our consolidated financial statements

In May 2017, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230):

Restricted Cash” which clarifies the diversity in the classification and presentation of changes in restricted cash on the statement of cash flows under Topic 230, Statement of Cash Flows.

Under ASU 2016-18, an entity will be required within the statement of cash flows to explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents.

The Company adopted ASU 2016-18 effective September 30, 2018 and has properly presented restricted cash within the statement of cash flows.

The guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017 and thus is effective for the Company for our fiscal year beginning October 1, 2018.

Early adoption is permitted and the Company, as such, has adopted this guidance as of October 1, 2017.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230).” This ASU will provide guidance on the presentation and classification of specific cash flow items to improve consistency within the statement of cash flows.

1 unchanged sentence

The Company adopted ASU 2016-15 effective September 30, 2019 and the impact under this ASU is that the Company reported certain proceeds from insurance claims relating to property and equipment in the statement of cash flows as investing activities in the Consolidated Statement of Cash Flows.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” This guidance requires entities that sign leases as a lessee to recognize right-of-use assets and lease liabilities for those leases classified as operating leases under previous U.S.

The accounting applied by a lessor is largely unchanged from that applied under previous U.S.

The Company adopted ASU 2016-02 on October 1, 2019.

The Company determines whether an arrangement is a lease at inception.

The Company’s leases consist of operating lease arrangements for certain office space, tractor leases and IT facilities.

When these lease arrangements include lease and non-lease components, the Company accounts for lease components and non-lease components (e.g.

common area maintenance) separately based on their relative standalone prices.

Any lease arrangements with an initial term of 12 months or less are not recorded on the Company’s Condensed Consolidated Balance Sheets, and it recognizes lease cost for these lease arrangements on a straight-line basis over the lease term.

Many lease arrangements provide the options to exercise one or more renewal terms or to terminate the lease arrangement.

The Company includes these options when it will be reasonably certain to exercise them in the lease term used to establish the right-of-use assets and lease liabilities.

Generally, lease agreements do not include an option to purchase the leased asset, residual value guarantees or material restrictive covenants.

As most of our lease arrangements do not provide an implicit interest rate, the Company applies an incremental borrowing rate based on the information available at the commencement date of the lease arrangement to determine the present value of lease payments.

No lease costs associated with finance leases and sale-leaseback transactions occurred and our lease income associated with lessor and sublease arrangements are not material to our Consolidated Financial Statements.

Our operating leases are reported in our Consolidated Balance Sheets as follows:

(in thousands)

September 30,

Operating lease components

Classification

Right-of-use assets

Other non-current assets

Current lease liabilities

Other current liabilities

Non-current lease liabilities

Other liabilities

Our operating leases cost components are reported in our Consolidated Statements of Operations as follows:

(in thousands)

September 30,

Operating lease components

Classification

Operating lease costs

General and administrative expenses

Operating lease right-of-use asset impairment

Other expense

Future maturities of our operating lease obligations as of September 30, 2020 by fiscal year are as follows:

(in thousands)

Total noncancelable future lease obligations

Present value of lease obligations

The weighted-average remaining lease term and weighted-average discount rate for our operating leases are as follows:

September 30,

Weighted-average remaining lease term

Weighted-average discount rate

Cash flow information related to leases consists of the following:

(in thousands)

September 30,

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases

Right-of-use assets obtained in exchange for lease obligations:

Operating leases

The COVID-19 Pandemic

On March 11, 2020, the World Health Organization declared the current novel coronavirus outbreak (“COVID-19”) to be a global pandemic.

In response to this declaration and the rapid spread of COVID-19 within the United States, federal, state and local governments throughout the country have imposed varying degrees of restrictions on social and commercial activity to promote social distancing in an effort to slow the spread of the illness.

These measures have had a significant adverse impact upon many sectors of the economy, including certain agriculture businesses.

To date, the Company has experienced no material adverse impact from this pandemic.

Reclassifications

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Revenue Recognition

Revenues are derived from the sale of processed fruit, fresh fruit, other citrus revenue, leasing revenue and other water and resource revenues.

The majority of the revenue is generated from the sale of citrus fruit to processing facilities and fresh fruit sales.

The Company recognizes revenue at the amount it expects to be entitled to be paid, determined when control of the products or services is transferred to its customers, which occurs upon delivery of and acceptance of the fruit by the customer and the Company has a right to payment.

Revenues are derived from the sale of processed fruit, fresh fruit, other citrus revenue, leasing revenue and other resource revenues.

The majority of the revenue is generated from the sale of citrus fruit to processing facilities, fresh fruit sales and grove management services.

For fruit sales, the Company recognizes revenue at the amount it expects to be entitled to be paid, determined when control of the products or services is transferred to its customers, which occurs upon delivery of and acceptance of the fruit by the customer and the Company has a right to payment.

The Company has identified one performance obligation as the delivery of fruit to the processing facility (or harvesting of the citrus in the case of fresh fruit) of the customer for each separate variety of fruit identified in the contract.

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Any adjustments to pricing as a result of the cost-plus calculation are collected or paid upon finalization of the calculation and agreement by both parties.

As of September 30, 2019 , and 2018, the Company had total receivables relating to sales of citrus of $ 160,000 and $ 1,912,000 , respectively, recorded in Accounts Receivable, net, in the Condensed Consolidated Balance Sheets.

As of September 30, 2020 and 2019, the Company had total receivables relating to sales of citrus of $ 584,000 and $ 160,000 , respectively, recorded in Accounts Receivable, net, in the Consolidated Balance Sheets.

For grove management services, the Company has identified one performance obligation relating to the management of the third party’s groves.

Grove management services include caretaking of the citrus groves, harvesting and hauling of citrus, management and coordination of citrus sales and other related activities.

The Company is reimbursed for expenses incurred in the execution of its management duties and the Company receives a per acre management fee.

The Company recognizes operating revenue, including a management fee, and corresponding operating expenses when services are rendered and consumed.

Disaggregated Revenue

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Early and Mid-Season

Water Resources and Other Operations

Grove management services

Land Management and Other Operations

Land and other leasing

2 unchanged sentences

During the time that Alico was engaged in the business of raising and selling cattle, Alico recognized revenues from cattle sales at the time the cattle were delivered.

Alico Fruit Company, LLC ("AFC") operations primarily consist of providing supply chain management services to Alico, as well as to other citrus growers and processors in the state of Florida.

AFC also purchases and resells citrus fruit;

in these transactions, AFC (i) acts as a principal;

(ii) takes title to the products;

and (iii) has the risks and rewards of ownership, including the risk of loss for collection, delivery or returns.

Therefore, AFC recognizes revenues based on the gross amounts due from customers for its marketing activities.

Supply chain management services revenues are recognized when the services are performed.

Fair Value of Financial Instruments

The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities approximate their fair values due to the short term and immediate nature of these financial instruments.

The carrying amounts of our debt approximates fair value as the debt is with commercial lenders at interest rates that vary with market conditions or have fixed rates that approximate market rates for obligations with similar terms and maturities (see Note 9.

The carrying amounts of the Company’s debt approximates fair value as the debt is with commercial lenders at interest rates that vary with market conditions or have fixed rates that approximate market rates for obligations with similar terms and maturities (see Note 8.

“Fair Value Measurements”).

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Restricted Cash

Restricted cash is comprised of cash received from the sale of certain assets in which the use of funds is restricted.

Restricted cash is comprised of certain cash receipts from the sale of property which was being held specifically for the purpose of deferring a tax impact on the gain on sale of the property and other cash received from the sale of certain assets in which the use of funds were restricted.

In September 2020, the Company sold certain sections of the West Ranch, from which a portion of the net cash proceeds amounting to $ 16,524,000 were being held by a qualified intermediary in coordination to purchase a like-kind asset and defer a portion of the gain on sale of the ranch land.

Such funds were included in restricted cash.

In October 2020, the Company closed on a purchase of a like-kind asset and used all of these net cash proceeds which was being held by the intermediary (see Note 17.

“Subsequent Events”).

For certain sales transactions, the Company sells property which serves as collateral for specific debt obligations.

As a result, the sale proceeds can only be used to purchase like-kind citrus groves acceptable to the debt holder or to pay down existing debt obligations.

During fiscal year ended September 30, 2019, the Company utilized restricted cash of $ 1,800,000 towards the purchase of citrus groves.

As a result, the sale proceeds are only permitted to be used to purchase like-kind citrus groves acceptable to the debt holder or to pay down existing debt obligations and thus are included in restricted cash.

For the fiscal year ended September 30, 2019, the Company utilized restricted cash of $ 1,800,000 towards the purchase of citrus groves.

Such purchases are included as part of the collateral under certain debt obligations.

If the remaining restricted cash is not used as of September 30, 2020, it will be used to pay down principal on Company debt.

Based on the contractual uses of restricted cash, these amounts have been classified as non-current.

Additionally, in November 2019, the Company utilized restricted cash to pay down existing debt, including outstanding interest on such debt, in the amount of $ 4,489,000 .

In July 2020, the remaining restricted cash of approximately $ 719,000 relating to collateral property under debt obligations, including interest earned in the account, was released without further obligation to the Company.

Accounts receivable

Accounts receivable from customers are generated from revenues based on the sale of citrus, leasing and other transactions.

Accounts receivable from customers are generated from revenues based on the sale of citrus, grove management, leasing and other transactions.

The Company grants credit in the course of its operations to third party customers.

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Buildings and improvements

25 - 39 years

Changes in circumstances, such as technological advances or changes to our business model or capital strategy could result in the actual useful lives differing from the original estimates.

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Under the qualitative assessment, an entity is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount.

If, under the quantitative assessment, the fair value of a reporting unit is less than it's carrying amount, then the amount of the impairment loss, if any, must be measured under step two of the impairment analysis.

If, under the quantitative assessment, the fair value of a reporting unit is less than its carrying amount, then the amount of the impairment loss, if any, must be measured under step two of the impairment analysis.

In step two of the analysis, Alico would record an impairment loss equal to the excess of the carrying value of the reporting unit’s goodwill over its implied fair value, should such a circumstance arise.

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Earnings per Share

Basic earnings per share for our common stock is calculated by dividing net income attributable to Alico common stockholders by the weighted average number of shares of common stock outstanding for the period.

Basic earnings per share for the Company’s common stock is calculated by dividing net income attributable to Alico common stockholders by the weighted average number of shares of common stock outstanding for the period.

Diluted earnings per common share is similarly calculated, except that the calculation includes the dilutive effect of the assumed issuance of shares of common stock issuable under equity-based compensation plans in accordance with the treasury stock method, or any other type of securities convertible into common stock, except where the inclusion of such common shares would have an anti-dilutive effect.

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Weighted Average Common Shares Outstanding - Diluted

For the fiscal years ended September 30, 2019, 2018 and 2017, the Company issued 10,000 , 300,000 and 750,000 , respectively, stock options to certain executives of the Company.

For the fiscal years ended September 30, 2020, 2019 and 2018, respectively, the Company issued 118,000 , 10,000 , and 300,000 , respectively, stock options to certain executives and managers of the Company.

Non-vested restricted shares of common stock entitle the holder to receive non-forfeitable dividends upon issuance and are included in the calculation of diluted earnings per common share.

For the fiscal year ended September 30, 2017, the Company had stock options that were excluded from the diluted earnings per share because they were anti-dilutive.

Stock-Based Compensation

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Upon the vesting of restricted stock, the Company issues common stock from common shares held in treasury.

Total stock-based compensation expense for the three years ended September 30, 2019 in general and administrative expense was as follows:

Total stock-based compensation expense for the three years ended September 30, 2020, 2019 and 2018 in general and administrative expense was as follows:

(in thousands)

Fiscal Year Ended September 30,

Stock compensation expense:

Stock-based compensation expense:

Executive forfeitures

Board of Directors

Total stock compensation expense

Total stock-based compensation expense

Inventories consist of the following at September 30, 2020 and 2019:

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The Company records its inventory at the lower of cost or net realizable value.

For the fiscal years ended September 30, 2019 and 2018 , the Company recorded adjustments to reduce inventory to net realizable value of approximately $ 808,000 and $ 1,115,000 respectively.

These adjustments to inventory are included in operating expenses in the Consolidated Statements of Operations.

For the fiscal year ended September 30, 2019, the Company recorded adjustments of approximately $ 808,000 to reduce inventory to net realizable value.

This adjustment to inventory is included in operating expenses in the Consolidated Statement of Operations.

In September 2017, the State of Florida’s citrus business, including the Company’s unharvested citrus crop, was significantly impacted by Hurricane Irma.

The impact of Hurricane Irma resulted in the premature drop of unharvested fruit and damage to citrus trees, which will impact fruit production until such time as the citrus trees recover, potentially through the 2018/2019 harvest season.

The Company undertook a process to estimate the amount of inventory casualty loss as of the date of Hurricane Irma.

Such process included a number of factors including:

(1) touring all of the citrus groves by operational personnel to assess the estimated fruit drop by grove and the impact of damage to the citrus trees;

(2) consideration of independent estimates of the reduced citrus production for the State of Florida;

and (3) an estimate of fruit the Company expects to produce for the 2017/2018 harvest season after Hurricane Irma.

As a result, the Company recorded a casualty loss to reduce the carrying value of unharvested fruit crop on trees inventory by approximately $ 13,489,000 .

During the fiscal year ended September 30, 2019, the Company received insurance proceeds relating to Hurricane Irma of approximately $ 486,000 in additional property and casualty claims reimbursement.

There are no further property and casualty or crop insurance claims pending relating to Hurricane Irma.

During the fiscal year ended September 30, 2018, the Company received insurance proceeds relating to Hurricane Irma of approximately $ 477,000 for property and casualty damage claims and approximately $ 8,952,000 for crop claims.

These insurance proceeds are included as a reduction to operating expenses in the Consolidated Statements of Operations.

The impact of Hurricane Irma resulted in the premature drop of unharvested fruit and damage to citrus trees.

The Company is eligible for Hurricane Irma federal relief programs for block grants that are being administered through the State of Florida.

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This represents the Part 1 and a portion of the Part 2 reimbursement under the three-part program.

The timing and amount to be received under the remaining portion of the Part 2 and the Part 3 of the program has not been finalized.

For the fiscal year ended September 30, 2020, the Company received additional proceeds of approximately $ 4,629,000 under the Florida CRBG program.

This represented the remaining portion of Part 2 reimbursement under the three-part program.

The timing and amount to be received under Part 3 of the program has not been finalized.

These federal relief proceeds are included as a reduction to operating expenses in the Consolidated Statements of Operations.

On November 7, 2019 and November 18, 2019, the Company received additional proceeds of approximately $ 163,800 and approximately $ 3,973,000 , respectively, under the Florida CRBG program.

This represents another portion of the Part 2 reimbursement under the three-part program.

For the fiscal year ended September 30, 2019, the Company received insurance proceeds relating to Hurricane Irma of approximately $ 486,000 in additional property and casualty claims reimbursement.

For the fiscal year ended September 30, 2018, the Company received insurance proceeds relating to Hurricane Irma of approximately $ 477,000 for property and casualty damage claims and approximately $ 8,952,000 for crop claims.

These insurance proceeds are included as a reduction to operating expenses in the Consolidated Statements of Operations.

There are no further property and casualty or crop insurance claims pending relating to Hurricane Irma.

Assets Held for Sale

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Fiscal Year Ended September 30,

Frostproof Parcels

Total Assets Held For Sale

During the fiscal year ended September 30, 2019, the Company sold certain trailers for approximately $ 47,000 , and reclassified the remaining Assets Held for Sale to property and equipment, as management has determined not to offer for sale the remaining trailers.

On September 10, 2020, the State of Florida purchased, under the Florida Forever program, approximately 10,702 acres of the Alico Ranch for approximately $ 28,500,000 pursuant to an option agreement entered between the State of Florida and the Company.

The Company recognized a gain of approximately $ 27,470,000 , which is included in Gain on sale of real estate, property and equipment and assets held for sale in the Consolidated Statements of Operations.

The Company subsequently used a portion of the net cash proceeds to purchase a like-kind asset in October 2020, which allowed the Company to defer a portion of the tax impact of the gain on sale of the ranch land (see Note 17.

“Subsequent Events”).

On March 27, 2020, the Company sold certain sections at the East Ranch for approximately $ 2,980,000 and realized a gain of approximately $ 2,748,000 .

The Company subsequently used substantially all of the net cash proceeds to purchase a like-kind asset in May 2020, which will allow the Company to defer substantially all of the tax impact of the gain on sale of the ranch land.

For the fiscal year ended September 30, 2019, the Company sold certain trailers for approximately $ 47,000 , and reclassified the remaining Assets Held for Sale to property and equipment, as management has determined not to offer the remaining trailers for sale.

On October 30, 2018, the Company sold certain parcels at Frostproof for approximately $ 206,000 and realized a gain of approximately $ 12,000 .

1 unchanged sentence

On February 12, 2018, the Company sold its property at Chancey Bay for approximately $ 4,200,000 and realized a loss of approximately $ 51,000 .

As part of the transaction, the Company agreed to pay the purchaser rent of $ 200,000 in exchange for Alico retaining the rights of harvesting and selling of the fruit in the 2017/2018 harvest season.

As part of the transaction, the Company agreed to pay the purchaser rent of $ 200,000 in exchange for the Company retaining the rights of harvesting and selling of the fruit in the 2017/2018 harvest season.

On February 9, 2018, the Company sold its nursery located in Gainesville for approximately $ 6,500,000 and realized a gain of approximately $ 111,000 .

On January 25, 2018, the Company sold its breeding herd to a third party for approximately $ 7,800,000 and realized a gain of approximately $ 1,759,000 .

As part of this transaction, the purchaser is also leasing grazing and other rights on the Ranch from the Company at a rate of $ 100,000 per month.

As part of this transaction, the purchaser is also leasing from the Company grazing and other rights on the Alico Ranch at a rate of $ 100,000 per month.

Upon the sale of a parcel within the East Ranch, the lease rate was adjusted to $ 98,750 per month.

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Such lease is classified as an operating lease.

The Company recorded no impairment loss during the fiscal year ended September 30, 2020.

The Company recorded an impairment loss of approximately $ 152,000 and $ 150,000 for the fiscal years ended September 30, 2019 and 2018, respectively.

These impairments are included in operating expenses on the Consolidated Statements of Operations.

The Company has used a portion of the proceeds to pay down debt (see Note 6.

"Long-Term Debt and Lines of Credit") and repurchase common shares and plans to use the remaining cash proceeds from the sale of these assets to pay down debt and to fund future working capital requirements and other corporate purposes.

These impairment losses were included in operating expenses on the Consolidated Statements of Operations.

The Company has already used a portion of the proceeds from these various asset sales to pay down debt (see Note 6.

"Long-Term Debt and Lines of Credit") and to purchase citrus groves and plans to use the remaining cash proceeds from the sale of these assets to purchase other citrus groves, pay down other debt and to fund future working capital requirements and for other corporate purposes.

Property and Equipment, Net

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Property and equipment, net

During the fiscal year ended September 30, 2019 , the Company purchased 203 acres of citrus blocks for approximately $ 1,950,000 .

On June 1, 2020, the Company sold approximately 30 ranch acres to an employee for approximately $ 122,000 and recognized a gain of approximately $ 83,000 .

On May 4, 2020, the Company purchased 334 citrus acres for approximately $ 2,850,000 .

This acquisition complements the Company’s existing citrus acres as these acres are located adjacent to existing groves in the Frostproof area.

Additionally, this purchase was part of a like-kind exchange transaction, which allowed the Company to defer taxes relating to the sale of certain sections of the East Ranch.

For the fiscal year ended September 30, 2019, the Company purchased 203 acres of citrus blocks for approximately $ 1,950,000 .

These purchases were made from grove owners from within the Company’s existing grove locations.

In April 2019, the lender, PGIM Real Estate Finance, LLC (“Prudential”), agreed to accept those purchases completed through April 2019 as substitute collateral and release $ 1,800,000 from restricted cash, which was completed in the fourth quarter of fiscal year 2019.

Subsequent to April 2019, there were two additional purchases of Citrus blocks for approximately $ 100,000 that are not included as part of the substitution collateral.

After April 2019, there were two additional purchases of Citrus blocks for approximately $ 100,000 that are not included as part of the substitution collateral.

On September 27, 2019, the Company sold approximately 5,500 acres from its West Ranch for approximately $ 14,775,000 and realized a gain on sale of approximately $ 13,033,000 .

Upon the sale of these acres, the lease rate pertaining to the grazing and other rights was adjusted from $ 98,750 to $ 80,000 per month, as this space was previously being leased to a third party.

Upon the sale of these acres, the lease rate pertaining to the grazing and other rights was adjusted from $ 98,750 to $ 80,000 per month, as space on these acres was previously being leased to a third party.

On September 29, 2018, the Company sold its property at Island Pond for $ 7,900,000 .

As Island Pond was collateralized under one of the Company’s loan documents, $ 7,000,000 of the proceeds was restricted in use.

As the Island Pond property was collateralized under one of the Company’s loan documents, $ 7,000,000 of the proceeds was restricted in use.

On September 28, 2018, The Company sold a parcel within the East Ranch for approximately $ 1,920,000 and realized a gain of approximately $ 1,759,000 .

On March 30, 2018, the Company sold property located on its Winterhaven location for approximately $ 225,000 and recognized a loss of approximately $ 50,000 .

On March 30, 2018, the Company sold property located on its Winter Haven location for approximately $ 225,000 and recognized a loss of approximately $ 50,000 .

On March 15, 2018, the Company sold certain parcels comprised of citrus trees and land located on its Ranch One grove for approximately $ 586,000 and recognized a loss of approximately $ 87,000 .

On February 2, 2017, the Company sold 49 acres of land and facilities in Hendry County, Florida, to its former tenant for $ 2,200,000 , resulting in a gain of approximately $ 1,371,000 .

During fiscal year ended September 30, 2019, the Company recorded impairments approximately $ 244,000 relating to the loss of citrus trees.

During the fiscal year ended September 30, 2018, the Company recorded impairments aggregating to approximately $ 2,084,000 , which consisted of $ 1,032,000 relating to Island Pond and $ 1,052,000 relating to certain citrus trees damaged by Hurricane Irma and from other natural attrition.

For fiscal years ended September 30, 2020, 2019 and 2018, the Company recorded impairments of approximately $ 723,000 , $ 244,000 and $ 2,084,000 , respectively, relating to the loss of citrus trees.

As a result of the sale of a portion of the Alico Ranch to the State of Florida comprising approximately 10,700 acres on the western part of the ranch and because the sale of those acres affected the proposed dispersed water management project, the Company decided to suspend all permit approval activities for its dispersed water management project and the Company wrote-down approximately $ 598,000 of assets relating to this project during the fourth quarter of the fiscal year ended September 30, 2020.

Long-Term Debt and Lines of Credit

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(in thousands)

Deferred Financing Costs, Net

Long-term debt, net of current portion:

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(in thousands)

Deferred Financing Costs, Net

Lines of Credit:

Lines of Credit

Future maturities of long-term debt as of September 30, 2019 are as follows:

Future maturities of long-term debt and lines of credit as of September 30, 2020 are as follows:

(in thousands)

September 30, 2020

Due within one year

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The LIBOR spread is subject to adjustment by Met beginning May 1, 2017 and is subject to further adjustment every two years thereafter until maturity.

No adjustment was made at May 1, 2019.

No adjustment in the LIBOR spread was made at May 1, 2019.

Interest on the term loans is payable quarterly.

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During the first and second quarter of fiscal year 2018, the Company elected not to make its principal payment and utilized a portion of its 2015 prepayment to satisfy its principal payment requirements for such quarters.

At September 30, 2019 , the Company had $ 5,625,000 remaining available from its 2015 prepayment to reduce future mandatory principal payments should the Company elect to do so.

At September 30, 2020, the Company had $ 5,625,000 , available from its 2015 prepayment to reduce future mandatory principal payments should the Company elect to do so.

The Met Variable-Rate Term Loans may be prepaid without penalty.

In March 2020, as a precautionary measure, the Company drew down an aggregate of $ 70,000,000 on its revolving credit facilities;

$ 20,000,000 on its RLOC and $ 50,000,000 on its WCLC.

This decision was made to safeguard the Company’s liquidity and to increase available cash on hand in the event of a more protracted COVID-19 outbreak.

As of September 30, 2020, the Company had paid back a majority of the balances on these credit facilities.

The RLOC bears interest at a floating rate equal to 90 day LIBOR plus 165 basis points, payable quarterly.

The LIBOR spread was adjusted by the lender on May 1, 2017 and is subject to further adjustment every two years thereafter.

No adjustment was made at May 1, 2019.

No adjustment in the LIBOR spread was made at May 1, 2019.

In October 2019, the RLOC agreement was modified to extend the current maturity of November 1, 2019 to November 1, 2029.

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The RLOC is available for funding general corporate needs.

The variable interest rate was 3.91 % and 3.99 % per annum as of September 30, 2019 and September 30, 2018 , respectively.

The variable interest rate was 1.91 % per annum and 3.91 % per annum as of September 30, 2020 and September 30, 2019, respectively.

Availability under the RLOC was $ 25,000,000 as of September 30, 2020.

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The rate is currently at LIBOR plus 175 basis points.

The variable interest rate was 3.85 % and 3.85 % per annum as of September 30, 2019 and September 30, 2018 , respectively.

The WCLC agreement was amended on September 20, 2018, and the primary terms of the amendment were an extension of the maturity to November 1, 2021.

The variable interest rate was 1.90 % per annum and 3.85 % per annum as of September 30, 2020 and September 30, 2019, respectively.

The WCLC agreement was amended on August 25, 2020, and the primary terms of the amendment were an extension of the maturity to November 1, 2023.

There were no changes to the commitment amount or interest rate.

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Commitment fees to date have been charged at 20 basis points.

There were no amounts outstanding on the WCLC at September 30, 2019 .

There was approximately $ 2,942,000 outstanding on the WCLC at September 30, 2020.

The WCLC agreement provides for Rabo to issue up to $ 2,000,000 , reduced from $ 20,000,000 during fiscal year 2019, in letters of credit on the Company’s behalf.

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These costs, together with approximately $ 339,000 of costs related to the retired debt, are being amortized to interest expense over the applicable terms of the loans.

Additionally, approximately $ 133,000 and $ 123,000 of financing costs were incurred for the fiscal year ended September 30, 2019 and 2018, respectively, in connection with letters of credit.

The costs incurred during fiscal year 2019 are included in other noncurrent assets and will be moved to deferred financing and amortized to interest expense over the applicable terms of the obligations upon completion of the modified agreements, which was in October 2019.

All previous costs are included in deferred financing and being amortized to interest expense over the applicable terms of the obligations.

Additionally, approximately $ 23,000 and $ 133,000 of financing costs were incurred for the fiscal years ended September 30, 2020 and 2019, respectively, in connection with letters of credit.

All previous costs are included in deferred financing costs and being amortized to interest expense over the applicable terms of the obligations.

The unamortized balance of deferred financing costs related to the financing above was approximately $ 1,048,000 and approximately $ 1,066,000 at September 30, 2020 and September 30, 2019, respectively.

These credit facilities noted above are subject to various covenants including the following financial covenants:

(i) minimum debt service coverage ratio of 1.10 to 1.00, (ii) tangible net worth of at least $ 160,000,000 increased annually by 10 % of consolidated net income for the preceding years, or approximately $ 163,522,000 for the year ended September 30, 2019, (iii) minimum current ratio of 1.50 to 1.00, (iv) debt to total assets ratio not greater than .625 to 1.00, and, solely in the case of the WCLC, (v) a limit on capital expenditures of $ 30,000,000 per fiscal year.

(i) minimum debt service coverage ratio of 1.10 to 1.00, (ii) tangible net worth of at least $ 160,000,000 increased annually by 10 % of consolidated net income for the preceding years, or approximately $ 167,336,000 for the year ended September 30, 2020, (iii) minimum current ratio of 1.50 to 1.00, (iv) debt to total assets ratio not greater than .625 to 1.00, and, (v) solely in the case of the WCLC, a limit on capital expenditures of $ 30,000,000 per fiscal year.

As of September 30, 2020, the Company was in compliance with all of the financial covenants.

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On February 15, 2015, 734 Citrus Holdings, LLC d/b/a Silver Nip Citrus (“Silver Nip Citrus”) made a prepayment of $ 750,000 .

In addition, the Company made prepayments of approximately $ 4,453,000 in the second fiscal quarter of 2018 with proceeds from the sale of certain properties, which were collateralized under these loans.

In addition, the Company made prepayments of approximately $ 4,453,000 in the

second fiscal quarter of 2018 with proceeds from the sale of certain properties, which were collateralized under these loans.

The Company may prepay up to $5,000,000 of principal without penalty.

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Silver Nip Citrus entered into two additional fixed-rate term loans with Prudential to finance the acquisition of a 1,500 acre citrus grove on September 4, 2014.

Each loan was in the original amount of $ 5,500,000 .

Principal of $ 55,000 per loan is payable quarterly, together with accrued interest.

One loan bears interest at 3.85 % per annum (“Pru Loan E”), while the other bears interest at 3.45 % per annum (“Pru Loan F”).

Each loan was in the original amount of $ 5,500,000 with principal of $ 55,000 per loan being payable quarterly, together with accrued interest.

One loan bears interest at 3.85 % per annum (“Pru Loan E”), while the other bore interest at 3.45 % per annum (“Pru Loan F”).

The interest rate on Pru Loan E is subject to adjustment on September 1, 2019 and every year thereafter until maturity.

No adjustment was made at September 1, 2019.

Both loans are collateralized by approximately 1,500 gross acres of citrus groves in Charlotte County, Florida.

Pru Note E matures September 1, 2021, and Pru Note F matures September 1, 2039.

In November 2019, the Company prepaid one of its fixed-rate term loans with Prudential in full in the amount of $ 4,455,000 .

As a result of this prepayment, the Company’s required annual principal payments will be reduced by $ 220,000 per annum.

Both loans were collateralized by approximately 1,500 gross acres of citrus groves in Charlotte County, Florida.

Pru Loan E matures September 1, 2021, and Pru Loan F was scheduled to mature September 1, 2039.

In November 2019, the Company prepaid Pru Loan F in full by paying the then existing principal balance of $ 4,455,000 .

As a result of this prepayment, the Company’s required annual principal payments on its Pru Loans was reduced by $ 220,000 per annum.

The Silver Nip Citrus credit agreements are subject to a financial covenant whereby the consolidated current ratio requirement is 1.00 to 1.00.

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Accrued employee wages and benefits

Inventory received but not invoiced

Accrued dividends

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Accrued insurance

Accrued tender offer consulting charges

Other accrued liabilities

Total accrued liabilities

Deferred Gain on Sale

Deferred gain on sale consists of the following at September 30, 2019 and September 30, 2018:

(in thousands)

September 30,

Deferred gain on sale

Annual guarantee payment, net

Total deferred gain on sale

On November 21, 2014, the Company completed the sale of approximately 36,000 acres of land used for sugarcane production and land leasing in Hendry County, Florida to Global Ag Properties, LLC (“Global”) for approximately $ 97,900,000 in cash.

The sales price was subject to post-closing adjustments over a ten year period.

The Company realized a gain of approximately $ 42,753,000 on the sale.

Initially, $ 29,140,000 of the gain was deferred due to the Company’s continuing involvement in the property pursuant to a post-closing agreement and the potential price adjustments.

The deferral represented the Company’s estimate of the maximum exposure to loss as a result of the continuing involvement.

A net gain of approximately $ 13,613,000 was recognized at the time of the sale.

On October 1, 2018, the Company adopted ASC 610-20 and reevaluated the original post closing agreement under the guidance of ASC 610-20.

As such, the Company recorded a derivative asset and derivative liabilities, which resulted in an increase to retained earnings of $ 10,897,000 , net of taxes.

This adjustment consisted of recording a derivative asset in the amount of $ 3,553,000 relating to potential payments due Alico from Global Ag Properties USA, LLC (“Global Ag”) and a derivative liability of $ 13,864,000 relating to potential payments due Global Ag from Alico.

In the first quarter ended December 31, 2018, the Company recorded a loss of $ 956,000 , which reflects the change in fair value of the derivative asset and derivative liabilities.

In the three months ended March 31, 2019, the Company recorded an additional loss of $ 33,000 .

On December 7, 2018, the Company and Global Ag entered into a Termination of Post Closing Agreement (the “2018 Post Closing Agreement”), pursuant to which the parties thereto agreed to certain terms and conditions under which a Post Closing Agreement, dated as of November 21, 2014 (the “2014 Post Closing Agreement”), may be terminated prior to the expiration of its stated term and with the payment of certain termination payments.

The 2014 Post Closing Agreement was entered into in connection with the November 21, 2014 closing (the “Land Disposition”) of the sale by Alico to Global Ag of certain land used for sugarcane production and land leasing in Hendry County, Florida (the “Land”).

The 2014 Post Closing Agreement contained obligations, including possible payments by Alico and by Global Ag to each other over a ten year period following the closing of the Land Disposition, with the payments each year being based on the difference,

if any, between certain computed amounts.

Since the time of the closing of the Land Disposition and up through March 11, 2019, the computations have resulted in payments being made each year by Alico to Global Ag., which have aggregated approximately $ 6,518,000 .

The 2018 Post Closing Agreement provided for (i) the termination of the 2014 Post Closing Agreement following the satisfaction of certain terms and conditions set forth in the termination agreement and (ii) the deposit by wire transfer into escrow of an aggregate of $ 11,300,000 following notification by Global Ag to Alico of the closing date of a sale of the Land by Global Ag to a third party.

The conditions to the termination of the 2014 Post Closing Agreement and the payment of funds to Global Ag included (a) Global Ag’s assignment to the third party buyer, and such third party buyer’s assumption, of certain specified water management obligations, irrigation and drainage easement obligations, access easements obligations and obligations under a certain option to purchase certain railroad property owned by Alico, (b) delivery to the escrow agent of all instruments and consideration required to consummate the closing by Global Ag of the sale of the Land to the third party buyer, and (c) delivery to the escrow agent of copies of a water management project cooperation agreement running in favor of Alico and signed by Global Ag and the third party buyer.

On March 11, 2019, the 2018 Post Closing Agreement was completed.

As such, all the conditions of the termination of the 2014 Post Closing Agreement, mentioned above, were met with the sale of the sugarcane land to a third party.

As a result, the Company does not have any future liabilities or commitments to Global Ag in connection with the 2014 Post Closing Agreement.

Fair Value Measurements

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Level 3- Unobservable inputs in which there is little or no market data, such as internally developed valuation models which require the reporting entity to develop its own assumptions.

As of September 30, 2019, the Company did no t have any assets held for sale that had been measured at fair value on a non-recurring basis.

The following table represents certain assets held for sale as of September 30, 2018, which have been measured at fair value on a non-recurring basis (see Note 4.

"Assets Held for Sale"):

Fair Value Hierarchy

Carrying Value

Adjustment to Fair Value

The Company uses third-party service providers to assist in the evaluation of investments.

For investment valuations, current market interest rates, quality estimates by rating agencies and valuation estimates by active market participants were used to determine values.

Deferred retirement benefits were valued based on actuarial data, contracted payment schedules and an estimated discount rate of 4.08 % and 4.08 % as of September 30, 2019 and 2018, respectively.

As of September 30, 2020 and 2019, the Company did no t have any assets held for sale that had been measured at fair value on a non-recurring basis.

Management Security Plan

During August 2020, the Company paid out a lump sum of approximately $ 5,175,000 to all beneficiaries in the Management Security Plan, following the equivalent annuity approach.

The Company used a third-party service provider to assist in the evaluation of investments in this plan.

For prior year investment valuations, the Company used current market interest rates, quality estimates by rating agencies and valuation estimates by active market participants in order to determine values.

As of September 30, 2020, due to the lump sum payment made in August 2020, the deferred retirements benefit was zero .

As of September 30, 2019, deferred retirement benefits were valued based on actuarial data, contracted payment schedules and an estimated discount rate of 4.08 %.

Common Stock and Options

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Nonvested Shares

Weighted-Average Grant Date Fair Value

Nonvested Shares at September 30, 2017

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There was approximately $ 0 and $ 69,000 of total unrecognized stock compensation costs related to unvested stock compensation for the Restricted Stock grants at September 30, 2020 and September 30, 2019, respectively.

The total unrecognized compensation cost is expected to be recognized over a weighted-average period of 0.75 years .

During the fiscal year ended September 30, 2019, 1,667 shares vested aggregating a value of approximately $ 53,000 .

For the fiscal year ended September 30, 2020, 5,666 shares with a grant date fair value of approximately $ 251,000 became fully vested.

For the fiscal year ended September 30, 2019, 1,667 shares with a grant date fair value of approximately $ 53,000 became fully vested.

Stock Option Grant

Stock option grants of 118,000 options to certain Officers and Managers of the Company (collectively the “2020 Option Grants”) were granted on October 11, 2019.

The option exercise price was set at $ 33.96 , the closing price on October 11, 2019.

The 2020 Option Grants will vest as follows:

(i) 25 % of the options will vest if the price of the Company’s common stock during a consecutive 20-trading day period exceeds $ 35.00 ;

(ii) 25 % of the options will vest if the price of the Company’s common stock during a consecutive 20-trading day period exceeds $ 40.00 ;

(iii) 25 % of the options will vest if the price of the Company’s common stock during a consecutive 20-trading day period exceeds $ 45.00 ;

and (iv) 25 % of the options will vest if the price of the Company’s common stock during a consecutive 20-trading day period exceeds $ 50.00 .

If the applicable stock price hurdles have not been achieved by (A) the date that is 18 months following the termination of employment, if the employment is terminated due to death or disability, (B) the date that is 12 months following the termination of employment, if the employment is terminated by the Company without cause, by the employee with good reason, or due to the employee’s retirement, or (C) the date of the termination of employment for any other reason, then any unvested options will be forfeited.

In addition, if the applicable stock price hurdles have not been achieved by December 31, 2022 then any unvested options will be forfeited.

The 2020 Option Grants will also become vested to the extent that the applicable stock price hurdles are satisfied in connection with a change in control of the Company.

As of September 30, 2020, the Company’s stock closed at $ 28.62 per share.

For the fiscal year ended September 30, 2020, the Company’s common stock traded above $ 35.00 per share for twenty consecutive days.

Accordingly, 25 % of the 2020 Option Grants are vested at September 30, 2020 and the corresponding stock option expense was recognized during the fiscal year ended September 30, 2020.

Stock option grants of 10,000 options to Mr.

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In addition, if the applicable stock price hurdles have not been achieved by December 31, 2021 then any unvested options will be forfeited.

The 2019 Option Grants will also become vested to the extent that the applicable stock price hurdles are satisfied in connection

with a change in control of the Company.

As of September 30, 2019 , the Company’s stock was trading at $ 34.02 per share, and during the fiscal year ended September 30, 2019 , the stock did not trade above $ 40.00 per share;

accordingly, none of the stock options are vested at September 30, 2019 .

The 2019 Option Grants will also become vested to the extent that the applicable stock price hurdles are satisfied in connection with a change in control of the Company.

As of September 30, 2020, the Company’s common stock was trading at $ 28.62 per share, and during the fiscal year ended September 30, 2020, the stock did not trade above $ 40.00 per share;

accordingly, no ne of the stock options are vested at September 30, 2020.

Stock option grants of 210,000 options to Mr.

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The 2018 Option Grants will also become vested to the extent that the applicable stock price hurdles are satisfied in connection with a change in control of the Company.

As of September 30, 2019 , the Company’s stock was trading at $ 34.02 per share, and during the fiscal ended September 30, 2019 , the stock did not trade above $ 35.00 per share;

accordingly, none of the stock options are vested at September 30, 2019 .

As set forth below, more than a majority of the 2018 Option Grants issued to Mr.

Trafelet were forfeited and the vesting conditions of the remainder were modified, all pursuant to the Settlement Agreement, as defined below.

As of September 30, 2020, the Company’s common stock was trading at $ 28.62 per share.

For the fiscal year ended September 30, 2020, the stock traded above $ 35.00 per share for a consecutive twenty days;

accordingly, 25 % of Mr.

Kiernan's 2018 Option Grants are vested at September 30, 2020 and the corresponding stock option expense was recognized during the fiscal year ended September 30, 2020.

As set forth below, more than a majority of the 2018 original Option Grants issued to Mr.

Trafelet were forfeited and the vesting conditions of the remainder were modified, all pursuant to the Alico Settlement Agreement, as defined below, and the remaining 2018 original Option Grants, both vested and unvested, have since been forfeited or expired.

A stock option grant of 300,000 options in the case of Mr.

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and (iv) 25 % of the options will vest if such price exceeds $ 105.00 .

If the applicable stock price hurdles have not been achieved by (A) the second anniversary of the Executive’s termination of employment, if the Executive’s employment is terminated due to death or disability, (B) the date that is 18 months following the Executive’s termination of employment, if the Executive’s employment is terminated by the Company without cause, by the Executive with good reason, or due to the Executive’s retirement, or (C) the date of the termination of the Executive’s employment for any other reason, then any unvested options will be forfeited.

of the termination of the Executive’s employment for any other reason, then any unvested options will be forfeited.

In addition, if the applicable stock price hurdles have not been achieved by the fifth anniversary of the grant date (or the fourth anniversary of the grant date, in the case of the tranche described in clause (i) above), then any unvested options will be forfeited.

The 2016 Option Grants will also become vested to the extent that the applicable stock price hurdles are satisfied in connection with a change in control of the Company.

As of September 30, 2019 , the Company’s stock was trading at $ 34.02 per share, and during the fiscal year ended September 30, 2019 , the stock did not trade above $ 60.00 per share;

accordingly, none of the stock options are vested at September 30, 2019 .

As of September 30, 2020, the Company’s stock was trading at $ 28.62 per share, and since the date of grant the Company’s common stock did not trade above $ 60.00 per share;

accordingly, no ne of the 2016 Option Grants are vested at September 30, 2020.

As set forth below, all of the 2016 Option Grants issued to Mr.

Trafelet were forfeited pursuant to the Settlement Agreement, as defined below.

Trafelet were forfeited pursuant to the Alico Settlement Agreement, as defined below.

Additionally, 187,500 shares of the 2016 Option Grants made to each of Messrs.

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Under the Settlement Agreement, Mr.

Trafelet forfeited (i) all of the 2016 Option Grants granted to him and (ii) all of the 2018 Option Grants granted to him in September 2018, other than 26,250 stock options that will vest if the minimum price of Alico's common stock over 20 consecutive trading days exceeds $ 35.00 per share and 26,250 stock options that will vest if the minimum price of Alico's common stock over 20 consecutive trading days exceeds $ 40.00 per share (“2019 Modified Option Grant”), in each case, by the first anniversary of the date of the Settlement Agreement (collectively, the "Retained Options").

Any Retained Options that vest in accordance with their terms will expire on the date that is six months following the date on which the Retained Option vests, and any Retained Options that do not vest by the first anniversary of the Settlement Agreement will be forfeited as of such first anniversary.

As a result of the forfeited stock options, the Company reversed $ 823,000 of previously recorded stock compensation expense during the year ended September 30, 2019, which is recorded as a reduction of General and Administrative expense.

Trafelet forfeited (i) all of the 2016 Option Grants granted to him and (ii) all of the 2018 Option Grants granted to him in September 2018, other than 26,250 stock options that would vest if the minimum price of Alico's common stock over 20 consecutive trading days exceeds $ 35.00 per share and 26,250 stock options that would vest if the minimum price of Alico's common stock over 20 consecutive trading days exceeds $ 40.00 per share (“2019 Modified Option Grant”), but, in each case, only if such conditions were satisfied by the first anniversary of the date of the Settlement Agreement (collectively, the "Retained Options").

Any Retained Options that vested in accordance with their terms will expire on the date that is six months following the date on which the Retained Option vests, and any Retained Options that did not vest by the first anniversary of the Alico Settlement Agreement would be forfeited as of such first anniversary.

As of September 30, 2020, the Company’s stock was trading at $ 28.62 per share.

During the fiscal year ended September 30, 2020, the Company’s common stock traded above $ 35.00 per share for a consecutive twenty days ;

accordingly, 26,250 stock options from the 2019 Modified Option Grants vested, however, since these Modified Options were not exercised within six months following the date on which the Retained Option vested, they were forfeited.

Additionally, since the Company’s common stock did not trade above $ 40.00 per share for a consecutive twenty days by the first anniversary of the date of the Alico Settlement Agreement, the other 26,250 stock options from the 2019 Modified Option Grants were forfeited.

Forfeitures of all stock options were recognized as incurred.

The following table represents a summary of the Company’s stock option activity:

Weighted Average

Average Exercise

Contractual Term

Balance - September 30, 2018

Granted during fiscal year 2019

Forfeitures/expired in fiscal year 2018

Forfeitures/expired during fiscal year 2019

Exercised during fiscal year 2019

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Granted during fiscal year 2020

Forfeitures/expired in fiscal year 2019

Forfeitures/expired during fiscal year 2020

Exercised during fiscal year 2020

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At September 30, 2020 and September 30, 2019, there was approximately $ 376,000 and $ 502,000 , respectively, of total unrecognized stock compensation costs related to unvested share-based compensation for the option grants.

The total unrecognized compensation cost is expected to be recognized over a weighted-average period of 1.29 years .

The total unrecognized compensation cost as of September 30, 2020 is expected to be recognized over a weighted-average period of 1.72 years.

The fair value of the 2020, 2019, and 2018 Option Grants was estimated on the date of grant using a Monte Carlo valuation model that uses the assumptions noted in the following table.

The expected term of options granted is derived from the output of the option valuation model and represents the period of time that options granted are expected to be outstanding;

The expected term of options granted is derived from the output of the option valuation model and

represents the period of time that options granted are expected to be outstanding;

the range given below results from different timeframes for the various market conditions being met.

2019 Modified Option Grant

2020 Option Grant

Expected Volatility

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Risk Free Rate

The weighted-average grant-date fair value of the 2019 Modified Option Grant was $ 1.40 .

2019 Option Grants

The weighted-average grant-date fair value of the 2020 Option Grant was $ 3.20 .

2019 Modified Option Grant

Expected Volatility

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Risk Free Rate

The weighted-average grant-date fair value of the 2019 Option Grants was $ 7.10 .

The weighted-average grant-date fair value of the 2019 Modified Option Grant was $ 1.40 .

2019 Option Grants

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The weighted-average grant-date fair value of the 2018 Option Grants was $ 7.40 .

There were no additional stock options granted or exercised for the fiscal year ended September 30, 2019 .

As of September 30, 2020, there remained 939,500 common shares available for issuance under the 2015 Plan.

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734 Investors, Alico's largest stockholder from 2013 until November 12, 2019, participated in the tender offer by selling a small percentage of its holdings.

On October 10, 2019, the Board of Directors authorized the repurchase of up to 7,000 shares of the Company’s common stock from 734 Investors in a privately negotiated repurchase of shares.

On October 15, 2019, the Company entered into a repurchase agreement to repurchase a total of 7,000 shares of the Company’s common stock from 734 Investors, effective October 15, 2019.

In September 2013, the Board of Directors authorized the repurchase of up to 105,000 shares of the Company’s common stock beginning in November 2013 and continuing through April 2018.

In fiscal year 2016, the Board of Directors authorized the repurchase of up to 50,000 shares of the Company’s outstanding common stock beginning February 18, 2016 and continuing through February 17, 2017 (the "2016 Authorization").

In fiscal year 2015, the Board of Directors authorized the repurchase of up to 170,000 shares of the Company’s common stock beginning March 25, 2015 and continuing through December 31, 2016.

The following table illustrates the Company’s treasury stock purchases for the fiscal years ended September 30, 2020, 2019 and 2018:

(in thousands, except share amounts)

Total Number of

Shares Purchased

Average Price

Paid Per Share

Total Shares Purchased as Part of Publicly Announced Plan or Program

Total Dollar Value of Shares Purchased

Fiscal Year Ended September 30,:

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During the first quarter ended December 31, 2017, the Company made certain estimates related to the impact of the Act including the remeasurement of deferred taxes at the new expected tax rate and a revised effective tax rate for the year ended September 30, 2018.

For the fiscal year ended September 30, 2018, the Company has recorded a tax benefit of approximately $ 9,847,000 to account for these deferred tax impacts.

For the fiscal year ended September 30, 2018, the Company recorded a tax benefit of approximately $ 9,847,000 to account for these deferred tax impacts.

In October 2019, the Internal Revenue Service concluded their audit of the September 30, 2015 tax year with no changes.

The Federal and State filings remain subject to examination by tax authorities for tax periods ending after September 30, 2015.

The income tax provision (benefit) for the years ended September 30, 2019, 2018 and 2017 consists of the following:

The income tax provision for the years ended September 30, 2020, 2019 and 2018 consists of the following:

(in thousands)

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Total deferred

Income tax provision (benefit)

Income tax provision (benefit) attributable to income (loss) before income taxes differed from the amount computed by applying the statutory federal income tax rate of 21 % , 24.53 % and 35 % to income (loss) before income taxes for the fiscal years ended September 30, 2019, September 30, 2018 and September 30, 2017, respectively, as a result of the following:

Income tax provision

Income tax provision attributable to income before income taxes differed from the amount computed by applying the statutory federal income tax rate of 21 %, 21 % and 24.53 % to income before income taxes for the fiscal years ended September 30, 2020, September 30, 2019 and September 30, 2018, respectively, as a result of the following:

(in thousands)

Fiscal Year Ended September 30,

Income tax (benefit) at the statutory federal rate

Income tax at the statutory federal rate

Increase (decrease) resulting from:

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Reduction in deferred tax liability resulting from the Act

State rate change

Stock option cancellation

Income taxes provision (benefit)

Income tax provision

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of September 30, 2020, and 2019 are presented below:

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Deferred retirement benefits

Investment in Citree

Deferred gain recognition

Stock compensation

Accrued bonus

Total deferred tax assets

Deferred tax liabilities:

Revenue recognized from citrus and sugarcane

Property and equipment

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Segment Information

Operating segments are defined in the criteria established under the Financial Accounting Standards Board - Accounting Standards Codification (“FASB ASC”) Topic 280 as components of public entities that engage in business activities from which they may earn revenues and incur expenses for which separate financial information is available and which is evaluated regularly by the Company’s chief operating decision maker (“CODM”) in deciding how to assess performance and allocate resources.

Operating segments are defined in the criteria established under the FASB ASC Topic 280 as components of public entities that engage in business activities from which they may earn revenues and incur expenses for which separate financial information is available and which is evaluated regularly by the Company’s chief operating decision maker (“CODM”) in deciding how to assess performance and allocate resources.

The Company’s CODM assesses performance and allocates resources based on two operating segments:

Alico Citrus and Water Resources and Other Operations.

Alico Citrus and Land Management and Other Operations (see name change explanation below).

As a result of the Company selling approximately 10,700 acres on the western part of Alico Ranch to the State of Florida and because a sale of those acres affected the proposed dispersed water management project, the Company decided to suspend all permit approval activities for its dispersed water management project.

This has resulted in a change in the financial reporting to the CODM.

Therefore, the Company has renamed the “Water Resources and Other Operations” segment to “Land Management and Other Operations”.

Total revenues represent sales to unaffiliated customers, as reported in the Consolidated Statements of Operations.

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Fiscal Year Ended September 30,

Water Resources and Other Operations

Land Management and Other Operations

Total revenues

Operating expenses:

Water Resources and Other Operations

Land Management and Other Operations

Total operating expenses

Gross profit (loss):

Water Resources and Other Operations

Land Management and Other Operations

Total gross profit

Capital expenditures:

Water Resources and Other Operations

Land Management and Other Operations

Other Capital Expenditures

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Depreciation, depletion and amortization:

Water Resources and Other Operations

Land Management and Other Operations

Other Depreciation, Depletion and Amortization

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September 30,

Water Resources and Other Operations

Land Management and Other Operations

Other Corporate Assets

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Management Security Plan

The management security plan (“MSP”) is a nonqualified, noncontributory defined supplemental deferred retirement benefit plan for a select group of management personnel.

The MSP provides a fixed supplemental retirement benefit for 180 months.

The management security plan (“MSP”) was a nonqualified, noncontributory defined supplemental deferred retirement benefit plan for a select group of management personnel.

The MSP was set up to provide a fixed supplemental retirement benefit for 180 months.

The MSP was frozen as of September 30, 2017.

As a result, no new participants are being added to the MSP and no further benefits are accumulating.

The MSP benefit expense and the projected management security plan benefit obligation are determined using assumptions as of the end of the year.

The weighted-average discount rate used to compute the obligation was 4.08 % and 4.08 % in fiscal years 2019 and 2018, respectively.

Actuarial gains or losses are recognized when incurred;

therefore, the end of year benefit obligation is the same as the accrued benefit costs recognized in the Consolidated Balance Sheets.

As a result, no new participants were being added to the MSP and no further benefits were accumulating.

The MSP benefit expense and the projected management security plan benefit obligation were determined using assumptions as of the end of the respective year.

The weighted-average discount rate used to compute the obligation was 4.08 % in fiscal year 2019.

Actuarial gains or losses were recognized when incurred;

therefore, the end of year benefit obligation was the same as the accrued benefit costs recognized in the Consolidated Balance Sheets.

The amount of MSP benefit expense charged to costs and expenses was as follows:

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MSP termination adjustments

MSP termination benefits payment

Recognized actuarial gain adjustment

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Effective September 30, 2018, the Company terminated the MSP.

Under the MSP termination, payout for benefits covered under the applicable Internal Revenue Code regulations cannot commence until at least twelve months following plan termination decision, but must be fully paid out within twenty-four ( 24 ) months following plan termination.

The Company has determined to pay out a lump sum under the Equivalent Annuity approach, whereby the payout under this approach would mitigate participants tax burden.

In essence, the Company would be covering the amount needed to purchase an annuity providing the same after-tax benefit as if the plan was not terminated.

Under the MSP termination, payout for benefits covered utilizing the applicable Internal Revenue Code regulations were not able to be commenced until at least twelve months following plan termination decision, but needed to be fully paid out within twenty-four (24) months following plan termination.

During August 2020, the Company caused the MSP to pay the lump sum termination benefits of approximately $ 5,175,000 to all MSP beneficiaries.

During the fiscal year ended September 30, 2019, the Company determined to pay out a lump sum under the equivalent annuity approach, whereby the payout under this approach was designed to mitigate participants tax burden.

Under this approach, the Company would cover the amount needed to purchase an annuity providing the same after-tax benefit as if the plan was never terminated.

As a result, the Company recorded an additional liability of approximately $ 720,000 .

The Company has established a “Rabbi Trust” to provide for the funding of accrued benefits under the MSP.

According to the terms of the Rabbi Trust, funding is voluntary until a change of control of the Company as defined in the Management Security Plan Trust Agreement occurs.

Upon a change of control, funding is triggered.

The Company ha d established a “Rabbi Trust” to provide for the potential funding of accrued benefits under the MSP.

According to the terms of the Rabbi Trust, funding wa s voluntary until a change of control of the Company as defined in the Management Security Plan Trust Agreement occurs.

Upon a change of control, funding would be triggered.

As of September 30, 20 20 , the Rabbi Trust had no assets, and no change of control had occurred.

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The Company’s contribution to the plan was approximately $ 397,000 , $ 380,000 and $ 342,000 for the fiscal years ended September 30, 2020, 2019 and 2018, respectively.

The Profit Sharing Plan (“Plan”) is fully funded by contributions from the Company.

The Company also maintains a Profit Sharing Plan (“Plan”) that is fully funded by contributions from the Company.

Contributions to the Plan are discretionary and determined annually by the Company’s Board of Directors.

Contributions to employee accounts are based on the participant’s compensation.

The Company’s paid contribution to the Profit Sharing Plan was $ 0 , $ 0 and $ 378,000 for the fiscal years ended September 30, 2019, 2018 and 2017, respectively.

The Company did not contribute to the Plan for the fiscal years ended September 30, 2020, 2019 and 2018, respectively.

Related Party Transactions

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Slack previously served as the Executive Chairman of the Company, and Mr.

Brokaw currently serves as the Executive Vice Chairman of the Company, and each of them continues to serve on the Company’s Board of Directors.

Brokaw previously served as the Executive Vice Chairman of the Company, and each of them continues to serve on the Company’s Board of Directors.

The Employment Agreements provided for an annual base salary of $ 250,000 in the case of Mr.

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Slack resigned his employment with the Company as Executive Chairman.

Slack continues to serve on the Board of the Company.

Effective December 31, 2019, Mr.

Brokaw resigned his employment with the Company as Executive Vice Chairman.

Slack and Mr.

Brokaw continue to serve on the Board of the Company.

As described above, on February 11, 2019 and as contemplated by the Alico Settlement Agreement, Mr.

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In exchange for the consulting services, the Consultant will receive an annual consulting fee of $ 400,000 .

As of September 30, 2019 , the Company has paid approximately $ 254,000 towards these consulting fees.

If the Company terminates the consulting period (other than in certain specified

circumstances), the Company will continue to pay the consulting fees described in the immediately preceding sentence through the balance of the 24 -month term.

On March 20, 2015, Ken Smith tendered his resignation as Chief Operating Officer, and as an employee of the Company.

Smith’s resignation included a waiver of any rights to any payments under his Change-in-Control Agreement with the Company.

On March 20, 2015, the Company and Mr.

Smith also entered into a Consulting and Non-Competition Agreement under which (i) Mr.

Smith will provide consulting services to the Company during the three -year period after the resignation date, (ii) Mr.

Smith agreed to be bound by certain non-competition covenants relating to the Company’s citrus operations and non-solicitation and non-interference covenants for a period of two years after the resignation date, and (iii) the Company paid Mr.

Smith $ 925,000 for such services and covenants.

The Company expensed approximately $ 0 , $ 0 and $ 100,000 under the Consulting and Non-Competition Agreement for fiscal years ended September 30, 2019, 2018 and 2017, respectively.

The Company recorded an expense of $ 800,000 , representing the full amount due under the agreement, in fiscal year 2019 upon the execution of the agreement.

The Company has paid approximately $ 400,000 and $ 254,000 in consulting fees for the fiscal years ended September 30, 2020 and 2019, respectively.

If the Company terminates the consulting period (other than in certain specified circumstances), the Company will continue to pay the consulting fees described above.

Shared Services Agreement

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The Company expensed approximately $ 0 , $ 155,000 and $ 592,000 for the fiscal years ended September 30, 2020, 2019 and 2018, respectively.

As of September 30, 2019 and 2018 , the Company had outstanding amounts due of approximately $ 0 and $ 163,000 , respectively.

As of September 30, 2020 and 2019, the Company did no t have any outstanding amounts with TBCM.

Capital Contribution

On April 16, 2018, all operating partners of Citree received a funding notice relating to an additional Cash Capital Contribution (“Contribution”) requirement of approximately $ 2,041,000 as a result of Hurricane Irma, which reduced the amount of crop available for sale in the 2017-2018 harvest season and the Company’s adoption of a more extensive caretaking plan focused on limiting the impact of citrus greening.

On September 10, 2020, all operating partners of Citree received a funding notice relating to an additional Cash Capital Contribution (“Contribution”) requirement of approximately $ 600,000 as a result of trees producing limited revenue because they are still in early stage development, a reduction in market price for citrus fruit for the 2019/20 harvest season due to excess inventories and the adoption of a more extensive caretaking plan focused on limiting the impact of citrus greening.

The Company’s portion of the Contribution was approximately $ 306,000 and was funded on September 24, 2020.

The remaining portion of the Contribution of $ 294,000 was funded by the noncontrolling parties.

On April 16, 2018, all operating partners of Citree received a funding notice relating to an additional Cash Capital Contribution requirement of approximately $ 2,041,000 as a result of Hurricane Irma, which reduced the amount of crop available for sale in the 2017/2018 harvest season and the Company’s adoption of a more extensive caretaking plan focused on limiting the impact of citrus greening.

The Company’s portion of the Contribution was approximately $ 1,041,000 and was funded on April 27, 2018.

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On November 12, 2019, 734 Investors, the Company’s largest shareholder, distributed the 3,173,405 shares of Company common stock held by it, on a pro rata basis, to its members.

We understand this share distribution was made in anticipation of the dissolution of 734 Investors later this year.

The Company understands that this share distribution was made in anticipation of a subsequent dissolution of 734 Investors.

Transfers of these shares are not registered on any current Alico registration statement, but the shares are potentially transferable pursuant to Rule 144, subject to certain customary restrictions.

3 unchanged sentences

In addition, the Company has various obligations under other equipment leases of less than one year.

Total rent expense was approximately $ 450,000 , $ 1,062,000 and $ 725,000 for the years ended September 30, 2019 , 2018 and 2017, respectively.

Total rent expense was approximately $ 308,000 , $ 450,000 and $ 1,062,000 for the fiscal years ended September 30, 2020, 2019 and 2018, respectively.

The future minimum annual rental payments under non-cancelable operating leases are as follows:

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The Company had outstanding standby letters of credit in the total amount of approximately $ 399,000 and $ 460,000 at September 30, 2020 and September 30, 2019, respectively, to secure its various contractual obligations.

Upon the completion of the 2018 Post Closing Agreement (and corresponding termination of the 2014 Post Closing Agreement), the Company terminated its $ 9,800,000 standby letter of credit associated with the Global Ag Land Disposition transaction (see Note 8.

“Deferred Gain on Sale”).

Legal Proceedings

16 unchanged sentences

On February 11, 2019, the parties to the Florida Litigation entered into a settlement agreement (the “Alico Settlement Agreement”) wherein the parties agreed to promptly dismiss all claims in the Florida Litigation.

Pursuant to the Alico Settlement Agreement,

Pursuant to the Alico Settlement Agreement, Mr.

Trafelet agreed to voluntarily resign as President and Chief Executive Officer and as a member of the Board of Directors, effective upon the execution of the Alico Settlement Agreement.

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From time to time, Alico may be involved in litigation relating to claims arising out of its operations in the normal course of business.

There are no other current legal proceedings to which the Company is a party or of which any of its property is subject that it believes will have a material adverse effect on its financial position, results of operations or cash flows.

Subsequent Event

On December 5, 2019, the Board of Directors of the Company declared a first quarter of fiscal year 2020 cash dividend of $ 0.09 per share on its outstanding common stock to be paid to shareholders of record as of December 27, 2019, with payment expected on January 10, 2020.

There are no current legal proceedings to which the Company is a party or of which any of its property is subject that it believes will have a material adverse effect on its financial position, results of operations or cash flows.

Selected Quarterly Financial Data (unaudited)

5 unchanged sentences

Total operating expenses

Gross profit (loss)

General and administrative expenses

3 unchanged sentences

Net (loss) income

Net loss attributable to noncontrolling interests

Net (income) loss attributable to noncontrolling interests

Net income (loss) attributable to Alico Inc.

common stockholders

Earnings per share:

Total operating expenses for the fiscal quarter ended June 30, 2018 include insurance proceeds relating to Hurricane Irma of $ 477,000 for property and casualty damage claims and $ 3,726,000 for crop claims.

Total operating expenses for the fiscal quarter ended September 30, 2018 included insurance proceeds relating to the Hurricane Irma of $ 5,226,000 for crop damage claims.

Total operating expenses for the fiscal quarter ended September 30, 2019 includes insurance proceeds received of approximately $ 486,000 in additional property and casualty claims reimbursement relating to Hurricane Irma and block grants of approximately $ 15,597,000 under the Florida Citrus Recovery Block Grant (“CRBG”) program relating to Hurricane Irma.

Earnings (loss) per share:

“Inventories”) and block grants of approximately $ 15,597,000 under the Florida Citrus Recovery Block Grant (“CRBG”) program relating to Hurricane Irma.

General and administrative expenses for the fiscal quarter ended September 30, 2019 include pension expense of $ 935,000 relating to termination of employee benefit plan (see Note 13.

1 unchanged sentence

Other income for the fiscal quarter ended September 30, 2019 includes a gain on sale of assets of approximately $ 13,166,000 (see Note 4.

“Inventories”, Note 4.

“Assets Held For Sale” and Note 5.

“Property and Equipment, Net” for further information).

Operating revenues and operating expenses for the fiscal quarter ended September 30, 2020 include approximately $ 3,246,000 and approximately $ 2,951,000 , respectively, relating to the grove management services being provided to a third-party.

Other income for the fiscal quarter ended September 30, 2020 includes a gain on sale of assets of approximately $ 27,470,000 (see Note 4.

“Assets Held For Sale” and Note 5.

“Property and Equipment, Net” for further information).

Subsequent Event

On December 2, 2020, the Board of Directors of the Company declared a first quarter of fiscal year 2021 cash dividend of $ 0.18 per share on its outstanding common stock to be paid to shareholders of record as of December 24, 2020, with payment expected on January 8, 2021.

In November 2020, the Company awarded 5,885 shares of restricted stock to certain officers and managers under the 2015 Plan.

On October 30, 2020, the Company purchased approximately 3,280 gross citrus acres located in Hendry County for a purchase price of $ 16.5 million.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data